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, Feb. 22, 2024 (GLOBE NEWSWIRE) — Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and NYSE: CGAU) today reported its fourth quarter and full year 2023 operating and financial results.
President and CEO, Paul Tomory, commented, “Centerra delivered a strong finish to 2023, producing 350,317 ounces of gold and 61.9 million pounds of copper in the full year, with Mount Milligan achieving the highest mill throughput since the start of operations in August 2013. We met our revised 2023 production and cost guidance, and ended the year with robust cash and cash equivalents of over $600 million. The fourth quarter of 2023 was our second consecutive quarter of significant free cash flow, spearheaded by the re-start at Öksüt in June 2023. In 2024, we expect to produce between 370,000 and 410,000 ounces of gold, which the midpoint is 11% higher than last year’s production, and copper production is expected to be between 55 and 65 million pounds. We are well-positioned for a strong 2024 as we continue to deliver on our strategic plan and maximize the value of the assets in our portfolio.”
Fourth Quarter 2023 Highlights
Operations
- Production: Fourth quarter 2023 consolidated gold production of 129,259 ounces, including production of 40,503 ounces of gold from the Mount Milligan Mine (“Mount Milligan”) and 88,756 ounces of gold from the Öksüt Mine (“Öksüt”). Copper production in the quarter was 19.7 million pounds.
- Sales: Fourth quarter 2023 gold sales of 130,281 ounces at an average realized gold price NG of $1,846 per ounce and copper sales of 16.6 million pounds at an average realized copper price NG of $3.00 per pound. The average realized gold and copper prices include the impact from the Mount Milligan streaming agreement.
- Costs: Consolidated gold production costs were $595 per ounce and all-in sustaining costs (“AISC”) on by-product basis NG were $831 per ounce for the quarter.
- Capital expenditures NG : Fourth quarter 2023 additions to property, plant, equipment (“PPE”) and sustaining capital expenditures NG were $67.9 million and $34.5 million, respectively. Sustaining capital expenditures NG in the fourth quarter 2023 primarily included construction of a water pumping system at Mount Milligan, and deferred stripping and heap leach expansion at Öksüt.
Financial
- Net earnings: Fourth quarter 2023 net loss of $28.8 million or a loss of $0.13 per share and adjusted net earnings NG of $61.2 million or $0.28 per share. Main adjustments include $50.0 million of reclamation provision revaluation expense and $34.1 million of impairment loss relating to the Kemess Project and Berg property. For additional adjustments refer to the “Non-GAAP and Other Financial Measures” disclosure at the end of this news release.
- Free cash flow NG : In the fourth quarter 2023, cash provided by operating activities was $145.4 million and free cash flow NG was $111.0 million. This includes $144.3 million of cash provided by mine operations and $127.9 million of free cash flow at Öksüt.
- Cash and cash equivalents: Total liquidity of $1,011.0 million, representing a cash balance of $612.9 million and $398.1 million available under a corporate credit facility as at December 31,2023.
- 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 and cancelled 361,500 common shares in the fourth quarter 2023, for the total consideration of $2.1 million.
- Corporate development updates: In the fourth quarter 2023, Centerra received a milestone payment of $25 million from a subsidiary of the Orion Mine Finance Group in relation to the sale of its 50% interest in the Greenstone Gold Mines Partnership (“Greenstone Project”) in 2021.
Full Year 2023 Highlights
Operations
- Production: Full year 2023 consolidated gold production was 350,317 ounces, achieving the mid-point of the 2023 gold production guidance range, including production of 154,391 ounces of gold from Mount Milligan and 195,926 ounces of gold from Öksüt. Copper production for the full year was 61.9 million pounds, in line with the 2023 copper production guidance range.
- Sales: Full year 2023 gold sales of 348,399 ounces at an average realized gold price of $1,718 per ounce and copper sales of 60.1 million pounds at an average realized copper price of $3.01 per pound.
- Costs: Full year 2023 consolidated gold production costs were $733 per ounce and AISC on by-product basis NG were $1,013 per ounce, in line with the 2023 gold production cost and AISC on by-product basis NG guidance ranges.
- Capital expenditures NG : Full year 2023 additions to property, plant, equipment (“PPE”) and sustaining capital expenditures NG were $121.7 million and $83.5 million, respectively. Sustaining capital expenditures NG for the full year were below the 2023 guidance range as a result of lower capitalization to the tailings storage facility (“TSF”) at Mount Milligan and the deferral of some capital spending to 2024.
- 2024 Guidance: As published on February 14, 2024, Centerra’s 2024 consolidated gold production guidance is between 370,000 and 410,000 ounces, an 11% increase from the midpoint of guidance over last year’s production, and copper production guidance is between 55 and 65 million pounds of copper. 2024 consolidated gold production cost guidance is between $800 and $900 per ounce and consolidated AISC on a by-product basis NG guidance is between $1,075 and $1,175 per ounce.
Financial
- Net earnings: Full year 2023 net loss of $81.3 million or a loss of $0.37 per share and adjusted net earnings NG of $10.5 million or $0.05 per share. Main adjustments include $34.2 million of reclamation provision revaluation recovery, $34.1 million of impairment loss relating to the Kemess Project and Berg property, $19.7 million of income tax expense resulting from the effect of foreign exchange rate changes on monetary assets and liabilities in the determination of taxable income related to Öksüt and Mount Milligan as well as a one-time income tax levied on taxpayers eligible to claim Turkish Investment Incentive Certificate benefits in 2022. For additional adjustments refer to the “Non-GAAP and Other Financial Measures” disclosure at the end of this news release.
- Free cash flow NG : Full year 2023 cash provided by operating activities of $245.6 million and free cash flow NG of $160.2 million.
Other
- Share buybacks: During the year-ended December 31, 2023, Centerra repurchased and cancelled 3,475,800 common shares for a total consideration of $20.4 million under its NCIB program.
- Öksüt: On May 31, 2023, the Turkish Ministry of Environment, Urbanization and Climate Change approved an amended Environmental Impact Assessment for Öksüt and the Company resumed full operations at the mine on June 5, 2023.
- Corporate credit facility: In September 2023, the Company announced the extension of its $400 million revolving credit facility, which is currently undrawn, with a renewed four-year term maturing on September 8, 2027.
- Strategic plan: In September 2023, Centerra announced its strategic plan for each asset in the Company’s portfolio along with its approach to capital allocation. The strategic plan identifies the opportunities at each asset that will maximize the value and drive future growth for the Company. In conjunction with the execution of the strategic plan, Centerra developed a capital allocation strategy that is currently focused on returning capital to shareholders through dividends and share buybacks, investing in internal projects and exploration within the current portfolio, and evaluating external opportunities for growth.
- Renewal of NCIB: In November 2023, Centerra renewed its NCIB to purchase for cancellation up to an aggregate of 18,293,896 common shares in the capital of the Company (“Common Shares”), representing 10% of the public float.
Highlights Subsequent to Year End 2023
- Mount Milligan mine life extension and additional agreement with Royal Gold: Centerra announced an additional agreement with Royal Gold related to Mount Milligan, which resulted in a life of mine extension to 2035, and established favourable parameters for potential future mine life extensions. This is a key first step in the Company’s strategy to realize the full potential of this cornerstone asset in a top-tier mining jurisdiction. For additional details, please refer to the announcement entitled “ Centerra Gold Announces Mount Milligan Mine Life Extension and Additional Agreement with Royal Gold ”, issued on February 14, 2024.