Midland Exploration Inc. press release

Centerra Gold Reports Third Quarter 2024 Results; Consistent Operating Performance Drives Continued Strong Cash Flow From Operations

2024-10-31

TSXV - TSX Venture Exchange · Lithium · Copper · Gold · Silver · Molybdenum · Nickel · Cobalt · Canada

All figures are in United States dollars. All production figures reflect payable metal quantities and are on a 100% basis, unless otherwise stated. For references denoted with NG, refer to the “Non-GAAP and Other Financial Measures” disclosure at the end of this news release for a description of these measures.

TORONTO, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and NYSE: CGAU) today reported its third quarter 2024 operating and financial results.

President and CEO, Paul Tomory, commented, “Centerra continues to deliver consistent operating performance and is on track to meet our consolidated production and cost guidance for the year. We have benefited from margin expansion driven by stable cost performance in an elevated metal price environment. As planned, we have returned to strong free cash flow generation in the third quarter. Even after spending approximately $32 million on the restart of operations at the Thompson Creek mine, we grew our cash and cash equivalents to $604 million at the end of the third quarter. We increased our share buybacks in the third quarter to $12 million, and declared a quarterly dividend, delivering on our disciplined approach of returning capital to shareholders.

“We continue to systematically execute on our strategic plan by working through the assets in our portfolio to unlock value. In February, we announced an additional agreement with Royal Gold, which allowed us to extend the mine life at Mount Milligan by two additional years and created the potential for future mine life extensions. In September, we announced the restart of operations at Thompson Creek and a progressive ramp-up of production at Langeloth, to realize value in our Molybdenum Business Unit. Looking ahead, we are progressing work at Mount Milligan on a preliminary economic assessment that is expected to illustrate the future potential at the mine and is on track to be completed towards the end of the first half of 2025. We also expect to publish an initial resource estimate at Goldfield in conjunction with our year-end reserve and resource update, expected in early 2025. By continuing to execute on our strategic plan, we expect to create value and growth for our shareholders and stakeholders,” concluded Mr. Tomory.

Third Quarter 2024 Highlights

Operations

Production: Consolidated gold production of 93,712 ounces in the quarter, including 42,993 ounces from the Mount Milligan Mine (“Mount Milligan”) and 50,719 ounces from the Öksüt Mine (“Öksüt”). Copper production in the quarter was 13.7 million pounds. Year-to-date, consolidated gold and copper production was 294,880 ounces of gold and 41.6 million pounds of copper. Consolidated full year 2024 production guidance is unchanged at 370,000 to 410,000 ounces of gold and 55 to 65 million pounds of copper. Sales: Third quarter 2024 gold sales were 96,736 ounces at an average realized gold price NG of $2,206 per ounce and copper sales were 14.2 million pounds at an average realized copper price NG of $3.37 per pound. The average realized gold and copper prices include the impact of the Mount Milligan streaming agreement with Royal Gold. Gold and copper sales were 16% and 21% higher, respectively, compared to last quarter, mainly driven by the timing of shipments at Mount Milligan. Costs: Consolidated gold production costs were $973 per ounce and all-in sustaining costs (“AISC”) on a by-product basis NG were $1,302 per ounce for the quarter. Year-to-date, gold production costs were $860 per ounce and AISC on a by-product basis NG were $1,103 per ounce. Consolidated full year 2024 cost guidance is unchanged. Consolidated gold production costs are expected to be $800 to $900 per ounce and AISC on a by-product basis NG is expected to be $1,075 to $1,175 per ounce. Capital expenditures NG : Additions to property, plant, and equipment (“PP&E”) and sustaining capital expenditures NG in the quarter were $79.7 million and $35.3 million, respectively. Sustaining capital expenditures NG in the third quarter 2024 included construction at the tailings storage facility and equipment rebuilds at Mount Milligan, as well as capitalized stripping and expansions at the heap leach pad and waste rock dump at Öksüt. Non-sustaining capital expenditures NG in the third quarter were $25.2 million related mainly to the restart of operations at the Thompson Creek mine (“Thompson Creek”).

Financial

Net earnings: Third quarter 2024 net earnings were $28.8 million, or $0.14 per share, and adjusted net earnings NG were $38.6 million or $0.19 per share. Adjustments to net earnings included $6.6 million of reclamation provision revaluation recovery and $1.5 million of unrealized loss on the financial asset related to the additional agreement with Royal Gold (the “Additional Royal Gold Agreement”). For additional adjustments refer to the “Non-GAAP and Other Financial Measures” disclosure at the end of this news release. Cash provided by operating activities and free cash flow NG : In the third quarter 2024, cash provided by operating activities was $103.6 million and free cash flow NG was $37.4 million. This includes $97.3 million of cash provided by mine operations and $86.8 million of free cash flow NG at Öksüt; and $40.2 million of cash provided by mine operations and $15.6 million of free cash flow NG at Mount Milligan. This is offset by cash used in operating activities and a free cash flow deficit NG from Thompson Creek expenditures. Cash and cash equivalents: Total liquidity of $1,004.3 million as at September 30, 2024, comprising a cash balance of $604.3 million and $400.0 million available under a corporate credit facility. Dividend: Quarterly dividend declared of C$0.07 per common share.

Other

Share buybacks: Under Centerra’s normal course issuer bid (“NCIB”) program, the Company repurchased 1,741,800 common shares in the third quarter 2024, for the total consideration of $12.0 million. In the first nine months of 2024, Centerra has returned $65 million to shareholders, including $32 million in share buybacks and $33 million in dividends. Thompson Creek feasibility study results and strategic plan for US Molybdenum Operations: In September 2024, Centerra announced a strategic, integrated business plan for its Molybdenum Business Unit (“MBU”) consisting of a restart of Thompson Creek and a commercially optimized ramp up plan for the Langeloth Metallurgical Facility (“Langeloth”), collectively the US Molybdenum Operations (“US Moly”). The US Moly business is expected to produce an after-tax net present value (8%) (“NPV 8% ”) of $472 million. A key contributor to this value is Langeloth, which at full capacity, integrated with Thompson Creek, has the potential to generate robust annual earnings before interest, taxes, depreciation and amortization (“EBITDA”). Intention to renew normal course issuer bid (“NCIB”): Centerra believes its share price continues to be trading in a price range that does not adequately reflect the value of its assets and future prospects. As a result, subject to the approval of the Toronto Stock Exchange (“TSX”), Centerra intends to renew its NCIB to purchase for cancellation a number of common shares in the capital of the Company (“Common Shares”), representing the greater of 5% of the issued and outstanding Common Shares or 10% of the public float. As of October 31, 2024, Centerra had 211,337,985 issued and outstanding Common Shares.

Table 1 - Overview of Consolidated Financial and Operating Highlights

| ($millions, except as noted) | Three months ended September 30, | Nine months ended September 30, | | | | | | | | | | 2024 | 2023 | % Change | 2024 | 2023 | | % Change | | | | Financial Highlights | | | | | | | | | | | Revenue | 323.9 | 343.9 | (6)% | 912.1 | 754.9 | | 21 | % | | | Production costs | 183.4 | 186.8 | (2)% | 519.8 | 544.6 | | (5)% | | | | Depreciation, depletion, and amortization ("DDA") | 33.2 | 42.5 | (22)% | 93.9 | 84.4 | | 11 | % | | | Earnings from mine operations | 107.3 | 114.6 | (6)% | 298.4 | 125.9 | | 137 | % | | | Net earnings (loss) | 28.8 | 60.6 | (52)% | 132.9 | (52.5 | ) | 353 | % | | | Adjusted net earnings (loss) (1) | 38.6 | 44.4 | (13)% | 116.3 | (50.7 | ) | 329 | % | | | Cash provided by (used in) operating activities | 103.6 | 166.6 | (38)% | 205.6 | 100.2 | | 105 | % | | | Free cash flow (1) | 37.4 | 144.5 | (74)% | 91.6 | 49.2 | | 86 | % | | | Additions to property, plant and equipment (“PP&E”) | 79.7 | 25.0 | 219 | % | 132.9 | 53.8 | | 147 | % | | Capital expenditures - total (1) | 60.5 | 24.6 | 146 | % | 113.6 | 51.9 | | 119 | % | | Sustaining capital expenditures (1) | 35.3 | 23.5 | 50 | % | 82.1 | 49.0 | | 68 | % | | Non-sustaining capital expenditures (1) | 25.2 | 1.1 | 2191 | % | 31.5 | 2.9 | | 986 | % | | Net earnings (loss) per common share - $/share basic (2) | 0.14 | 0.28 | (50)% | 0.62 | (0.24 | ) | 357 | % | | | Adjusted net earnings (loss) per common share - $/share basic (1)(2) | 0.19 | 0.21 | (10)% | 0.54 | (0.23 | ) | 335 | % | | | Operating highlights | | | | | | | | | | | Gold produced (oz) | 93,712 | 126,221 | (26)% | 294,880 | 221,058 | | 33 | % | | | Gold sold (oz) | 96,736 | 130,973 | (26)% | 284,307 | 218,118 | | 30 | % | | | Average market gold price ($/oz) | 2,474 | 1,929 | 28 | % | 2,296 | 1,931 | | 19 | % | | Average realized gold price ($/oz ) (3) | 2,206 | 1,741 | 27 | % | 2,040 | 1,642 | | 24 | % | | Copper produced (000s lbs) | 13,693 | 15,026 | (9)% | 41,573 | 42,168 | | (1)% | | | | Copper sold (000s lbs) | 14,209 | 15,385 | (8)% | 41,536 | 43,548 | | (5)% | | | | Average market copper price ($/lb) | 4.18 | 3.79 | 10 | % | 4.14 | 3.89 | | 6 | % | | Average realized copper price ($/lb) (3) | 3.37 | 2.99 | 13 | % | 3.39 | 3.01 | | 13 | % | | Molybdenum sold (000s lbs) | 2,431 | 2,700 | (10)% | 8,054 | 9,077 | | (11)% | | | | Average market molybdenum price ($/lb) | 21.78 | 23.77 | (8)% | 21.17 | 26.05 | | (19)% | | | | Average realized molybdenum price ($/lb) (3) | 23.27 | 24.08 | (3)% | 21.90 | 25.71 | | (15)% | | | | Unit costs | | | | | | | | | | | Gold production costs ($/oz) (4) | 973 | 643 | 51 | % | 860 | 820 | | 5 | % | | All-in sustaining costs on a by-product basis ($/oz) (1)(4) | 1,302 | 827 | 57 | % | 1,103 | 1,122 | | (2)% | | | All-in costs on a by-product basis ($/oz) (1)(4) | 1,509 | 983 | 54 | % | 1,299 | 1,471 | | (12)% | | | Gold - All-in sustaining costs on a co-product basis ($/oz) (1)(4) | 1,401 | 858 | 63 | % | 1,218 | 1,168 | | 4 | % | | Copper production costs ($/lb) (4) | 1.99 | 2.30 | (13)% | 2.09 | 2.43 | | (14)% | | | | Copper - All-in sustaining costs on a co-product basis ($/lb) (1)(4) | 2.69 | 2.73 | (1)% | 2.61 | 2.78 | | (6)% | | |

| (1) | Non-GAAP financial measure. See discussion under “Non-GAAP and Other Financial Measures”. | | (2) | As at September 30, 2024, the Company had 211,752,347 common shares issued and outstanding. | | (3) | This supplementary financial measure within the meaning of National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure (“NI 51-112”) is calculated as a ratio of revenue from the consolidated financial statements and units of metal sold and includes the impact from the Mount Milligan Streaming Agreement, copper hedges and mark-to-market adjustments on metal sold not yet finally settled. | | (4) | All per unit costs metrics are expressed on a metal sold basis. |

2024 Outlook

The Company’s full year 2024 outlook, and comparative actual results for the nine months ended September 30, 2024 are set out in the following table:

| | Units | 2024 Guidance | Nine Months Ended September 30, 2024 | | Production | | | | | Total gold production (1) | (Koz) | 370 - 410 | 295 | | Mount Milligan Mine (2)(3)(4) | (Koz) | 180 - 200 | 130 | | Öksüt Mine | (Koz) | 190 - 210 | 165 | | Total copper production (2)(3)(4) | (Mlb) | 55 - 65 | 42 | | Unit Costs (5) | | | | | Gold production costs (1) | ($/oz) | 800 - 900 | 860 | | Mount Milligan Mine (2) | ($/oz) | 950 - 1,050 | 1,062 | | Öksüt Mine | ($/oz) | 650 - 750 | 710 | | All-in sustaining costs on a by-product basis NG(1)(3)(4) | ($/oz) | 1,075 - 1,175 | 1,103 | | Mount Milligan Mine (4) | ($/oz) | 1,075 - 1,175 | 1,064 | | Öksüt Mine | ($/oz) | 900 - 1,000 | 946 | | Capital Expenditures | | | | | Additions to PP&E (1) | ($M) | 157 - 195 | 132.9 | | Mount Milligan Mine | ($M) | 55 - 65 | 46.8 | | Öksüt Mine | ($M) | 40 - 50 | 39.5 | | Total Capital Expenditures NG(1) | ($M) | 157 - 195 | 113.6 | | Mount Milligan Mine | ($M) | 55 - 65 | 46.2 | | Öksüt Mine | ($M) | 40 - 50 | 30.6 | | Sustaining Capital Expenditures NG(1) | ($M) | 101 - 127 | 82.1 | | Mount Milligan Mine | ($M) | 55 - 65 | 46.2 | | Öksüt Mine | ($M) | 40 - 50 | 30.6 | | Non-sustaining Capital Expenditures NG(1) | ($M) | 56 - 68 | 31.5 | | Depreciation, depletion and amortization (1) | ($M) | 110 - 135 | 93.9 | | Mount Milligan Mine | ($M) | 60 - 70 | 51.4 | | Öksüt Mine | ($M) | 45 - 55 | 39.8 | | Income tax and BC mineral tax expense (1) | ($M) | 75 - 85 | 70.4 | | Mount Milligan Mine | ($M) | 1 - 5 | 2.8 | | Öksüt Mine | ($M) | 74 - 80 | 67.6 |

1. Consolidated Centerra figures. 2. The Mount Milligan Mine is subject to an arrangement with RGLD Gold AG and Royal Gold Inc. (together, “Royal Gold”) which entitles Royal Gold to purchase 35% and 18.75% of gold and copper produced, respectively, and requires Royal Gold to pay $435 per ounce of gold and 15% of the spot price per metric tonne of copper delivered (“Mount Milligan Mine Streaming Agreement”). Using an assumed market gold price of $2,500 per ounce and a blended copper price of $4.25 per pound for the fourth quarter of 2024, Mount Milligan Mine’s average realized gold and copper price for the remaining three months of 2024 would be $1,777 per ounce and $3.57 per pound, respectively, compared to average realized prices of $2,040 per ounce and $3.39 per pound in the nine-month period ended September 30, 2024, when factoring in the Mount Milligan Streaming Agreement and concentrate refining and treatment costs. The blended copper price of $4.25 per pound factors in copper hedges in place as of September 30, 2024. 3. Gold and copper production for the fourth quarter of the year at the Mount Milligan Mine assumes estimated recoveries of 63% to 65% for gold and 75% to 77% for copper compared to actual recoveries for gold of 63.8% and for copper of 75.6% achieved in the first nine months of 2024. The Company estimates full year recoveries of 65% for gold and 77% for copper. 4. Unit costs include a credit for forecasted copper sales treated as by-product for all-in sustaining costs NG and all-in costs NG . Production for copper and gold reflects estimated metallurgical losses resulting from handling of the concentrate and metal deductions levied by smelters. 5. Units noted as ($/oz) relate to gold ounces and ($/lb) relate to copper pounds.

_ Molybdenum Business Unit _

| (Expressed in millions of United States dollars) | 2024 Guidance | Nine Months Ended September 30, 2024 | | | | Langeloth Facility | | | | | | Loss from operations NG(1) | (5) - (15) | (6.1) | | | | DD&A Expense | 5 - 10 | 2.8 | | | | Other non-cash adjustments | — | | (1.8) | | | Cash (used in) provided by operations before changes in working capital | (5) - 0 | (5.1) | | | | Changes in Working Capital | (20) - 20 | (0.6) | | | | Cash (Used in) Provided by Operations | (25) - 20 | (5.7) | | | | Sustaining Capital Expenditures NG | (5) - (10) | (4.9) | | | | Free Cash Flow (Deficit) from Operations NG(2) | (30) - 10 | (10.6) | | | | Thompson Creek Mine (2) | | | | | | Project Evaluation Expenses (3) | (21.1) | | (21.1) | | | Care and Maintenance Expenses - Cash | (2.0) | | (2.0) | | | Other non-cash adjustments | 0.1 | | 0.1 | | | Cash (used in) provided by operations before changes in working capital | (23.0) | | (23.0) | | | Changes in Working Capital | 3.4 | | 3.4 | | | Cash Used in Operations | (19.6) | | (19.6) | | | Non-sustaining Capital Expenditures NG | (55) - (65) | (28.9) | | | | Free Cash Flow (Deficit) from Operations NG | (75) - (85) | (48.5) | | | | Endako Mine | | | | | | Care and Maintenance Expenses | (5) - (7) | (3.7) | | | | Reclamation Costs | (15) - (18) | (4.0) | | | | Cash Used in Operations | (20) - (25) | (7.7) | | |

1. Additions to PP&E calculations for calculating Free Cash Flow (Deficit) from Operations NG include only cash expenditures for PP&E additions. 2. Reflects updated outlook range for the Thompson Creek Mine for the full year of 2024. 3. Project evaluation expenses are recognized as expense in the consolidated statements of earnings (loss).

_ Project Evaluation, Exploration, and Other Costs _

| (Expressed in millions of United States dollars) | 2024 Guidance | Nine Months Ended September 30, 2024 | | Project Exploration and Evaluation Costs | | | | Goldfield Project | 9 - 13 | 5.7 | | Thompson Creek Mine (1) | 21 - 27 | 21.1 | | Kemess Project | 3 - 5 | 0.5 | | Total Project Evaluation Costs | 33 - 45 | 27.3 | | Brownfield Exploration (2) | 17 - 22 | 18.6 | | Greenfield and Generative Exploration | 18 - 23 | 11.2 | | Total Exploration Costs (2) | 35 - 45 | 29.8 | | Total Exploration and Project Evaluation Costs | 68 - 90 | 57.1 | | Other Costs | | | | Kemess Project Care & Maintenance | 12 - 14 | 9.8 | | Corporate Administration Costs | 37 - 42 | 30.7 | | Stock-based Compensation | 8 - 10 | 6.0 | | Other Corporate Administration Costs | 29 - 32 | 24.7 |

1. Thompson Creek Mine’s project evaluation costs updated revised outlook for the full year of 2024. 2. Total exploration costs include capitalized exploration costs at the Mount Milligan Mine of $1.5 million for the nine months ended September 30, 2024..

Mount Milligan

Mount Milligan produced 42,993 ounces of gold and 13.7 million pounds of copper in the third quarter of 2024. In the first nine months of 2024, Mount Milligan produced 129,919 ounces of gold and 41.6 million pounds of copper. Mining activities were carried out in phases 5, 6, 7, and 9 with a total of 11.8 million tonnes mined in the third quarter of 2024. Process plant throughput for the third quarter of 2024 was 5.6 million tonnes, averaging 58,520 tonnes per day. Gold sales were 45,968 ounces and copper sales were 14.2 million pounds in the third quarter, up 46% and 21% respectively, compared to last quarter. The higher sales volumes were anticipated due to the timing of shipments. Metal production in the fourth quarter is expected to be slightly higher compared to the previous nine months of 2024 due to higher projected mill throughput and higher expected gold grades. The 2024 production guidance metrics at Mount Milligan remain unchanged at 180,000 to 200,000 ounces of gold and 55 to 65 million pounds of copper, with gold production trending towards the lower end of the range.

Gold production costs in the third quarter 2024 were $1,138 per ounce. AISC on a by-product basis NG was $1,318 per ounce, higher than last quarter due to increased sustaining capital expenditures. In the first nine months of 2024, gold production costs were $1,062 per ounce and AISC on a by-product basis NG was $1,064 per ounce. The Company expects AISC on a by-product basis NG to be lower in the fourth quarter, compared to the second and third quarters, driven by higher expected sales and lower expected sustaining capital expenditures. 2024 cost guidance metrics at Mount Milligan remain unchanged. Gold production costs are expected to be $950 to $1,050 per ounce, and AISC on a by-product basis NG is expected to be $1,075 to $1,175 per ounce. The Company expects AISC on a by-product basis NG at Mount Milligan to be at the lower end of the costs guidance range.

In the third quarter 2024, sustaining capital expenditures NG at Mount Milligan were $24.7 million, focused on the tailings storage facility dam construction and equipment rebuilds. Full year 2024 guidance for sustaining capital expenditures NG is unchanged at $55 to $65 million.

In the third quarter of 2024, Mount Milligan generated solid cash flow from operations of $40.2 million and $15.6 million of free cash flow NG .