Centerra Gold Exceeds 2019 Gold Production Guidance Producing 783,308 Ounces and Announces 2020 Outlook including Öksüt Mine Production

Centerra Gold Exceeds 2019 Gold Production Guidance Producing 783,308 Ounces and Announces 2020 Outlook including Öksüt Mine Production

This news release contains forward-looking information that is subject to assumptions and risk factors set out under the headings “Material Assumptions” and “Caution Regarding Forward-looking Information”.  All production figures are on a 100% basis.  All figures are in United States dollars unless otherwise stated.
All references in this document denoted with NG, indicate a non-GAAP term which is discussed under “Non-GAAP Measures”.TORONTO, Feb. 11, 2020 (GLOBE NEWSWIRE) — Centerra Gold Inc. (“Centerra”) (TSX: CG) reports fourth quarter and annual production exceeding the upper end of 2019 annual gold production guidance.The Company has planned an earnings conference call and webcast for March 26, 2020 at 10:00 am Eastern Time to discuss 2019 financial and operational results.  In late March 2020, the Company expects to issue an updated technical report for the Mount Milligan Mine, 2019 year-end mineral reserves and resources, and 2019 fourth quarter and year-end financial results.  As discussed below, we continue to expect to report a material reduction of Mount Milligan’s mineral reserves and resources with a resultant effect on the life of the mine.2019 Fourth Quarter and Annual HighlightsGold production in the fourth quarter was 194,507 ounces including 148,523 ounces of gold produced by the Kumtor Mine and 45,984 ounces of gold produced by the Mount Milligan Mine.Full year 2019 gold production was 783,308 ounces, which exceeded the upper end of guidance, including 600,201 ounces of gold produced by the Kumtor Mine and 183,107 ounces of gold produced by the Mount Milligan Mine.Copper production of 18.1 million pounds in the fourth quarter and 71.1 million pounds for the full year 2019 was within guidance range.All-in sustaining costs on a by-product basis per ounce soldNG (“AISC”) is expected to be below the annual guidance range of $713 to $743.Repaid Debt, including $27 million promissory note with Caterpillar Financial Services in the fourth quarter resulting in liquidity of approximately $615 million at the end of 2019.  On January 30, 2020, the Company repaid the $78 million drawn balance on the Öksüt project finance facility using lower cost funds from its corporate credit facility and then cancelled the $150 million facility, which resulted in the release of $25 million of restricted cash.2020 Guidance HighlightsGold production guidance of 740,000 to 820,000 ounces reflecting the commencement and ramp up of gold production at the Öksüt Mine in Turkey.Copper production guidance of 80 to 90 million pounds reflecting expectations that Mount Milligan Mine will operate with no mill water constraints for the entire year.Cost of sales attributable to gold per ounce sold guidance of $450 to $500 per ounce (new guidance reporting metric).All-in sustaining costs on a by-product basis per ounce soldNG guidance of $820 to $870 per ounce is up from 2019 primarily due to an increase in AISC at Kumtor as it processes lower grade material from its surface stockpiles. AISC at Mount Milligan is expected to also be higher than 2019 as a result of lower grades partially offset by the effect of higher mill availability forecast for 2020 on gold and copper production. The commencement of operations at the lower cost Öksüt operation is expected to favourably impact Company-wide AISC in 2020.Total capital spending of $169 million excluding capitalized stripping is down significantly from 2019 guidance due to the majority of Öksüt spending having been completed.Total capitalized stripping of $236 million including the cash component of $173 million at Kumtor primarily for mining cut-back 20 and $20 million at Öksüt.Expanded exploration budget to $50 million which is up significantly from 2019, with 70% focused on brownfield exploration at our existing operations.As previously disclosed, the Company is completing a comprehensive technical review of the Mount Milligan Mine.  Our objective is to publish an updated NI 43-101 technical report in late March 2020. The extent of any change in mineral reserves and resources cannot be precisely determined until all of the relevant studies and modelling are completed, including studies to optimize the economics of the mine and further work to incorporate results of the Company’s exploration drilling through 2019. However, based upon the work performed to date, the Company’s expectation continues to be that Mount Milligan’s mineral reserves and resources will be materially reduced with a resultant effect on the mine life.Scott Perry, President and Chief Executive Officer of Centerra stated, “In light of the tragic event which occurred at Kumtor in December 2019, we are more than ever committed to ever-increasing our safety efforts. In early January we held our first annual Centerra Gold Safety Week.  The entire leadership team including myself travelled to all our sites for a one-day operations stand down to focus on safety at each site.”“In 2019, the Company exceeded its consolidated gold production guidance, delivering more than 783,000 ounces of gold. Given our actual gold production, our all-in sustaining costs per ounce soldNG is expected to be below the lower end of our 2019 guidance range.”“For 2020, we are estimating consolidated gold production to be in the range of 740,000 to 820,000 ounces and 80 million to 90 million pounds of payable copper production from Mount Milligan. This reflects the addition of Öksüt gold production as it ramps up during the year.  Centerra’s consolidated all-in sustaining cost on a by-product basis per ounce soldNG for 2020 is expected to be in the range of $820 to $870 per ounce.”  2020 Outlook
See “Material Assumptions” for material assumptions or factors used to forecast production and costs for 2020. 
2020 Gold Production Guidance
Centerra’s 2020 gold production is expected to be between 740,000 to 820,000 ounces. 
Kumtor’s gold production is expected to be in the range of 520,000 to 560,000 ounces. A comprehensive mill shutdown for the planned replacement of the SAG Mill girth gear, SAG Mill pinion and Ball Mill electrical motor occurred in December 2019 and the mill was successfully restarted in early-January. This is expected to lower production levels in the first quarter of 2020, which will ramp up quarter-over-quarter with the delivery of ore from current stockpiles on surface.    At Mount Milligan, the Company expects to achieve an average daily throughput of approximately 55,000 tonnes per calendar day for the full year.  Crusher maintenance was completed during January.  Further mill maintenance downtime is scheduled for the first quarter (9-days) and third quarter (8-days) to complete SAG Mill relines and other maintenance work.  Mount Milligan’s total (streamed and unstreamed) payable gold production is forecast to be in the range of 140,000 to 160,000 ounces. During the first half of 2020, lower than the expected 2020 average gold and copper grades are planned to be processed resulting in lower first half production. Copper and gold grades and metal production is expected to increase over the second half of 2020.At Öksüt, first gold pour occurred on January 31 and 2020 gold production is expected to be in the range of 80,000 to 100,000 ounces with gold production expected to ramp up over the course of the year.2020 Copper Production
Centerra expects total (streamed and unstreamed) payable copper production from the Mount Milligan Mine to be in the range of 80 to 90 million pounds. 
Centerra’s 2020 production is currently forecast as follows:The Mount Milligan Streaming Arrangement entitles Royal Gold to 35% and 18.75% of gold and copper sales, respectively, from the Mount Milligan mine.  Under the Mount Milligan Streaming Arrangement, Royal Gold will pay $435 per ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered.Gold production assumes recoveries of 82.4% at Kumtor, 64% at Mount Milligan and approximately 60% at Öksüt.Copper production assumes 81.9% recovery for copper at Mount Milligan.2020 All-in Sustaining Unit Costs NGCenterra’s 2020 sales and all-in sustaining costs per ounce sold NG, calculated on a by-product basis, are forecasted as follows:All-in sustaining costs per ounce sold, all-in sustaining costs per ounce sold on a by-product basis, all-in sustaining costs on a by-product basis including taxes per ounce sold and all-in sustaining costs on a co-product basis (gold and copper) on a per unit basis are non-GAAP measures and are discussed under “Non-GAAP Measures”.Mount Milligan payable production and ounces sold are on a 100% basis (the Mount Milligan Streaming Arrangement entitles Royal Gold to 35% and 18.75% of gold and copper sales, respectively).  Unit costs and consolidated unit costs include a credit for forecasted copper sales treated as by-product for all-in sustaining costs and all-in sustaining costs plus taxes. The copper sales are based on a copper price assumption of $2.60 per pound sold for Centerra’s 81.25% share of copper production and the remaining 18.75% of copper revenue at $0.39 per pound (15% of spot price, assuming spot at $2.60 per pound), representing the Mount Milligan Streaming Arrangement.  Payable production for copper and gold reflects estimated metallurgical losses resulting from handling of the concentrate and payable metal deductions, subject to metal content, levied by smelters.Includes revenue-based tax at Kumtor, British Columbia mineral tax at Mount Milligan and income tax at Öksüt based on a forecast gold price assumption of $1,350 per ounce sold.Results in chart may not add due to rounding. 
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