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Centerra Reports 2Q Profit, Hikes Gold-Output Guidance

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(Kitco News) - Centerra Gold Inc. (TSX: CG) reported a jump in second-quarter adjusted earnings late Tuesday and hiked guidance for full-year gold production.

April-June net and adjusted earnings were $33.4 million, or 11 cents per share. In the same period a year ago, adjusted earnings – excluding special factors – were $1 million, or zero cents per share, while net earnings were $43.5 million, or 15 cents. The year-ago adjustment was for gains on the sales of Mongolian operations and a royalty portfolio.

The company produced 199,578 ounces of gold in second quarter, up from 130,183 in the same period a year ago. The company also produced 20.4 million pounds of copper, up from 16.4 million. Consolidated AISC per gold ounce sold for the second quarter were $716, including $562 at Kumtor and $938 at Mount Milligan, the company added.

“With our second quarter earnings release today, the company tightened the range and modestly increased its gold-production guidance for Kumtor for the year to 550,000 [to] 575,000 ounces and company-wide gold production to 705,000 to 750,000 ounces from 535,000-565,000 ounces and 690,000-740,000 ounces, respectively,” said Scott Perry, president and chief executive officer.

He also commented that Centerra lowered its expected all-in sustaining costs on a by-product basis, before taxes, at Kumtor to $635 to $685 per ounce sold. This reduces the company’s consolidated AISC to $713 to $743 per ounce sold.

‘Kumtor had another strong quarter producing 151,065 ounces of gold, which was attributable to milling higher grades and achieving higher recoveries as compared to the comparative period,” Perry said.

He later added, “Mount Milligan achieved production of 48,513 ounces of gold and 20.4 million pounds of copper during the quarter, as the mill returned to targeted full capacity (55,000 tonnes per day) in early May due to increased water availability from the spring melt, even though we experienced a less robust spring melt than anticipated. We continue to explore for additional groundwater sources as we work towards a long-term water solution.”

Mount Milligan’s water capture from the 2019 spring melt runoff was less than anticipated, creating a risk to the level of production in early 2020 until the spring melt occurs, similar to 2019, Centerra said.

Meanwhile, construction at the Öksüt Project in Turkey is now 64% complete and remains on schedule, with first gold pour expected in January, Centerra reported. The cost of construction cost is expected to be $20 million under budget, the company added.

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