Centerra Gold, Inc. Q2 FY2024 earnings call

Management Statement and Operational Highlights

• Paul Tomory highlighted solid operating performance, unchanged full-year 2024 guidance for production costs and CapEx. Progress on Mount Milligan's strategic plan including agreement with Royal Gold for multi-decade operation, preliminary economic assessment expected in first half 2025. Progress on site-wide optimization at Mount Milligan. Focus on maximizing Molybdenum Business Unit assets, with permitting progress at Thompson Creek and expected release of Thompson Creek FS study later this year. Progress on Goldfield property in Nevada, expecting initial resource release by end of year. Update on ESG initiatives, including 2023 Annual ESG report progress.
• Paul Chawrun discussed Mount Milligan's safety performance, production highlights, and site-wide optimization progress. Oksut's safety performance, production highlights, and cost considerations.
• Ryan Snyder walked through financial highlights: adjusted net earnings $47M ($0.23 per share) in Q2, sales of gold and copper, molybdenum sales, consolidated all-in sustaining costs, cash flow from operations ($94M before working capital and income taxes paid in Q2), share buybacks (1.4 million shares repurchased for $10M), and dividend declaration ($0.07 per share quarterly)

Segment Performance

• Mount Milligan: In the second quarter, produced over 38,000 ounces of gold and over 13 million pounds of copper. All-in-sustaining costs per ounce on a by-product basis were $1,234, higher quarter-over-quarter due to lower sales and higher sustaining CapEx. Year-to-date milling costs were $5.60 per tonne, 12% lower than the same period last year. 2024 guidance metrics remain unchanged. The site-wide optimization program is ongoing, with productivity improvements seen in the load-haul cycle and plant processing costs.
• Oksut: Second quarter production was over 51,000 ounces, less than the previous quarter due to winding down inventory from 2022-2023 shutdowns. All-in sustaining costs per ounce on a by-product basis were $943, higher quarter-over-quarter due to lower sales and higher royalty costs from elevated gold prices. 2024 production guidance unchanged, but costs could be at high end or exceed guidance if gold prices remain elevated.
• Molybdenum Business Unit: In the second quarter, approximately 2.7 million pounds of molybdenum sold at Langeloth facility at an average realized price of $22.10 per pound, representing 30% utilization of facility capacity. Plans for Langeloth commercial optimization to be outlined with Thompson Creek Mine feasibility study later this year

Guidance

• Full year 2024 consolidated guidance for production costs and CapEx unchanged. Mount Milligan and Oksut guidance metrics unchanged. Oksut costs could be at high end or exceed guidance if gold prices remain at current elevated levels. Thompson Creek feasibility study expected later this year, with Langeloth commercial optimization plan outlined then. Goldfield expected to release initial resource by end of 2024

Risks

• Forest fire seasonality in BC impacting operations at Mount Milligan. Gold price fluctuations affecting Oksut's cost guidance. Molybdenum price and market condition uncertainties. Uncertainties in completion and execution of strategic initiatives like Mount Milligan's preliminary economic assessment and Thompson Creek's feasibility study

Question and Answer

Q: Anita Soni asked about Oksut's pit sequencing and capital allocation priorities.

A: Paul Chawrun discussed waste stripping and ore sequencing adjustments; Paul Tomory talked about Thompson Creek feasibility study, Langeloth integration, and disciplined M&A approach Q: Raj Ray asked about Mount Milligan's grades, recoveries, and Molybdenum spending A: Paul Chawrun discussed mine sequencing and recovery improvements; Paul Tomory and Ryan Snyder talked about Molybdenum spending for Thompson Creek feasibility study preparation Q: John Sclodnick asked about Goldfield's resource estimate and column leach tests A: Paul Tomory discussed oxide resource, drilling progress, positive column leach test results, and gold price considerations for resource estimate Q: Mike Parkin asked about forest fires impact and Mount Milligan's cost improvement initiatives A: Paul Chawrun discussed forest fire risks and load-haul cycle improvement initiatives; Paul Tomory talked about Mount Milligan's preliminary economic assessment and resource model update Q: Brian MacArthur asked about Molybdenum operations and Langeloth integration A: Paul Tomory explained strategy of using Thompson Creek to fill Langeloth's capacity and blending with third-party molybdenum material Q: Jeremy Hoy asked about Mount Milligan's processing cost improvements and preliminary economic assessment progress A: Paul Chawrun discussed processing cost improvement initiatives and ongoing PEA progress; Paul Tomory talked about PEA scope including resource model update and tailings storage considerations