Centerra sees eight-fold quarterly increase, ups 2017 guidance

JOHANNESBURG (miningweekly.com) – TSX-listed Centerra Gold has upped its second-quarter net earnings by a whopping 706% year-on-year, according to a release published Monday.

The Canadian gold major reported net earnings of $23.4-million, or $0.08 per common share, on revenues of $279.2-million for the three months ended June 30, 2017, compared with net earnings of $2.9-million, or $0.01 per common share, on revenues of $160.4-million for the same period in 2016.

"Financially, both operations generated a significant amount of cash from operations, before working capital changes, during the quarter,” commented CEO Scott Perry. The company’s Canada-based Mount Milligan operation, in British Columbia, generated 29.9-million, while its Kumtor gold mine, in the Issyk-Kul region of Kyrgyzstan, generated $102.6-million.

Cash generated from operations totalled $142.8-million while cash, cash equivalents and short-term investments as at June 30, 2017 amounted to $401.4-million – including $299.2-million of restricted cash and investments at Kumtor.

Centerra also announced that it has favourably increased its company-wide gold production guidance for the year to between 785 000 and 845 000 oz, with Kumtor contributing between 525 000 oz and 555 000 oz.

“We also lowered our expected all-in sustaining cost (AISC) guidance at Kumtor to $751 to $795 per ounce sold and company-wide AISC guidance, on a by-product basis per ounce sold, to $693 to $747. We are well positioned to achieve our revised gold production and cost guidance for the year, ranking the company in the bottom quartile on the global gold producers AISC curve," noted Perry.

In the quarter under review, Centerra’s company-wide AISC on a by-product basis per ounce sold amounted to $742, excluding revenue-based tax in the Kyrgyz Republic and income tax.

The gold major produced a total of 195 719 oz of gold, including 57 096 oz at Mount Milligan and 138 623 oz at Kumtor, up 42% from the same period in 2016.

Centerra also sold a total of 188 225 oz of gold in the quarter, including 52 990 oz from Mount Milligan and 135 235 oz from Kumtor.

Moreover, Mount Milligan produced 15.1-million pounds of copper during the period and sold 14.4-million pounds of copper.

Also in the period under review, the company adjusted its Mongolian assets carrying value and recorded a pre-tax asset impairment of $41.3-million, or $0.14 per common share.

The company's results include its Idaho-based Thompson Creek operations for the three and six months ended June 30, 2017. Comparative results for the same periods in 2016 do not include Thompson Creek operations, as the company closed the acquisition of Thompson Creek Metals on October 20, 2016.

Meanwhile, Perry concluded that the company continues to advance its discussions with the government of the Kyrgyz Republic to resolve all outstanding issues affecting the Kumtor project “in a manner that will be fair to all of its stakeholders".