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Centerra Gold reports 737% net earnings increase in Q1 2021, cautious about guidance

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(Kitco News) - Centerra Gold (TSX: CG and NYSE: CGAU) today reported that its net earnings in Q1 2021 were $167.4 million, a 737% increase compared to net earnings of $20 million in Q1 2020.

The company said that an increase in net earnings was due to the increase in ounces of gold sold at the Öksüt and Mount Milligan mines, a 9% higher average realized gold price, and a 69% higher average realized copper price, compared to the same prior year period, as well as a gain of $72.3 million in the current quarter, on the sale of Centerra’s 50% interest in the Greenstone Gold Mines Partnership.

Adjusted net earnings were $84.2 million after adjusting for the $72.3 million gain on the sale of Centerra’s 50% interest in the Greenstone Gold Mines Partnership and the $10.9 million gain resulting from the reduction in the reclamation liability due to favourable discount rate movements.

Free cash flow of $72.1 million was recognized in Q1 2021, compared to $77 million in the first quarter of 2020. The decrease in free cash flow was due to higher capital expenditures including the purchase of haul trucks for the life of mine extension at the Kumtor mine and major planned equipment rebuilds at the Mount Milligan mine, partially offset by higher cash provided by operations.

Centerra has also announced that its board approved a quarterly dividend of C$0.05 per common share – approximately C$14.8 million or US$12.7 million. The quarterly dividend is payable on June 10, 2021 to shareholders of record on May 27, 2021.

The company noted that there is a great deal of uncertainty regarding future production and operations at the Kumtor mine due to recent legislative changes in the Kyrgyz Republic, public rhetoric regarding nationalization, and tax and legal claims and investigations relating to the Kumtor Mine.

Accordingly, the company said, its 2021 guidance and previously disclosed 3-year outlook should be viewed with caution and may be materially different as a result of the foregoing and similar matters.

Centerra Gold operates three mines, the Kumtor mine in the Kyrgyz Republic, the Mount Milligan mine in British Columbia, Canada and the Öksüt mine in Turkey. The company is based in Toronto, Ontario, Canada.

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