CGAU - Earnings call transcript Q1 2022

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Operator

Greetings, and welcome to the Q1 2022 Results Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions].

As a reminder, this conference is being recorded, Wednesday, May 4, 2022. to Director conference of like Caron, to now and Treasurer Investor would turn over the Toby I Relations. Please go ahead.

Toby Caron

Thank first community in quarter open to note to and each speaker's Centerra media conference to members call Web Welcome are Please is Today's Centerra's slides that you, call. presentation of accompany listen-only on site all mode. remarks. XXXX operator. results available Gold's the investment

we U.S. a will the remarks, will the question operator to and asking Please figures then otherwise the Following that the formal questions. open instructions give line dollars, phone all for noted. note are unless in

certain the Joining made forward-looking which be unknown and Chief on refer issued Chief Officer. measures today expressed Executive as certain Scott and statements subject news to MD&A implied. this such Also, call me may actual from that are release Perry, Financial President in differ to morning. measures. and known our we statements today those today are risks, of results and non-GAAP like and I may or the discuss Millman, description Darren would non-GAAP are measures Officer; cause everyone other our to will to Please caution

EDGAR our discussion of detailed Scott. other For a notes call unaudited filings, on over the turn please And the and can company's and and risks now, MD&A with the at all centerragold.com. to to uncertainties, which material found more of our assumptions, refer along release Web and SEDAR, I'll on news financial and site be statements

Scott Perry

us for everyone. to good call. joining Toby, our for and conference you, Thank very you day a QX earnings Thank

think on left, accompanying the referencing and just referencing production. terms good the I bullet another X the points Just had metal in quarter deck of Slide presentation top we of

output. XX.X in costs. see we a bullet metal period, the QX level good point just the production And some of of of you of that our some XX,XXX during ounces just sustaining produced pounds. see all-in can This in terms million gold and under copper You is third corresponding

as were low its $XXX per gold quarter, producing the a Öksüt producing contributions sustaining Mount site; terms the $XX really can low per Milligan sustaining as is the that's in strong those metric. Milligan as our mine benefitting as see ounce. copper byproduct, and $XXX very as in low price we individual from at revenues per cost the ounce per we where of gold individual For gold producing in what's all-in environment at those ounce. resulting low again its you all-in Mount the copper ounce a very parenthesis, And take and cost competitive, very

developments some Just in during of terms quarter. key the

terms Öksüt be our study stool. resource within here point looking renewable construction and this a in mercury a obviously, Nevada. leg to carbon, organic gold going just on in addition global plan the on of publish XXXX. monetizing this our most the First of of exciting arrangement likely more in and of several of be third quarter bullet the the Republic. we think very putting the us exit forward bullet the remediate under last This we we and our good think this pipeline our the bottom and agreement this a as Goldfield Centerra a project means I'll well moving as exploration as announced growth our point want just be as X to be feasibility challenge. the bullet They we'll on moving has lastly resolving We focusing is clean we important and in left, and loaded studies conduct key identifying really to I speak property for continuing decision. District future we're just government a fifth entered the be And evaluation when to with potential the was which to are of to a And the here talk Centerra solutions the key We into on The a a make and for mineralogy, forward. to forward, issue. for will We way in potential place year, business. to proverbial development future of is a position of April our will moving terms our think source in identification been point. underpin This February, slide. of Kyrgyz terms referencing Kyrgyzaltyn very the acquisition Project this the fourth development in a technical in during in in just terms then drilling alternative with is on another portfolio to to Kumtor all, in Back addition into development

Slide slide the of here. I Just them speak on on a next X, to won't number all. to highlights

good actually an a first And can of bullet below the quarter operate of we we operating safety a from harm. Just zero our target. point, us gives confidence that we had the also All-Injury which milestones terms very number in Frequency in perspective, of quarter a environment just had during Rate, we're

million particular hours achieved X milestones incident-free lost at was Now one operations. where time the we of of Öksüt

number commend again, We're of the a and third unit ounce. per levels to want at all-in cost And per definitely operating very you the cost highlights strong the reiterate efficiency. the we're ounce, good low, I'll leadership competitive terms Again, of I seeing $XXX in very metal output, in team sustaining last given just can bullet just at productivity result Öksüt. So see of here. very point. Again, a

we obviously first safety, is in and the bullet on achieved the of Again, bullet Governance providing Just terms the to Slide and Centerra this milestone key focus number is indicative moving point. is updates the member that during Öksüt the some Council. World points think in of on bullet profile, I point a on of of here want Social slide, our last to key the next I environment. harm X, just a again, of Gold third Environmental, zero our absolutely at paramount. initiatives Gold of quarter. a obtaining touch that And terms do on just

some an of these And principles. to as to we the we Council and three years which demonstrate ago, Governance responsible two Environmental, World its full are essentially principles, Gold set compliance mining Social association, principles XXXX. looking And gold an as industry by out a with rolled is XX

in report program, achieving so two with So year stead did deadlines. as we and that our establishing at principles, compliance excellent very and the targeted good our we're assurance stead of in site these this pleased part to for

a Just looking little more moving on Mount Milligan bit at just to in detail. Slide X,

terms the copper and you fortuitous, per as byproduct The copper low in again prevailing the of earlier, ounce, we're revenues especially was first of sustaining from production, recognizing. Milligan cost which I And price this terms very a copper the so given environment. had regards per copper level really mentioned the point, as so Mount corresponding good strong see of producing quarter metal price benefiting as quantum environment bullet ounce. production, again all-in strong metal of that in $XX output, that our to gold just with strong But

in rationale Third working can circuit new been additional is is The Milligan the bullet on installing on at on in now, projects a our circuit phase flotation commissioning of and actually Mount point, expect we X have percentage to of has one of have QX of we Construction recovery reactors. some for think year. the stage gold we're copper. this X to points now add key here commissioned time and this we here this capital been this circuit underway and

beneficial terms of gold forward. underpinning efficiency So that rates and copper moving stronger recovery should here in be just

to technical of this Milligan's reserve that underpin as copper reserve mineralization of is asset we're we Just on on new gold or convert continues resources in follow our in bullet at study last life. Milligan. Mount fourth as with plan much point, meaningful a our and Mount we category, terms who now of Those study the growing to to team Centerra new going had the that's What we're may extension resources. for that new year Mount think life delineated the Milligan looking success mine XX-XXX recall a lot focusing the work and into

be So and to we that period. publishing in study here the expect QX reporting that on is track,

Just the onto next slide, Slide X. on

point, it our touched Just now, full on the activities, I Öksüt this leaching irrigation, first crushing, stockpiling we be and At capacity; bullet stacking, operating activities, the are right activities. mining outset. at at

continuing the manner. in currently that and is we full our is several our in on terms team In interim, we storing engineering facility carbon at ADR is convert into solutions do where how gold sort what working stockpiling All to upgrade ore in processing. of technical we're the securitized continuing a here capacity form, the which potential of we're loaded and of can gold

carbon looking potential we're at that remediating that means of pour gold looking with continue discussions on gold term. site. in these is treatment we're alternative at the challenges can our some also of to looking we're monetizing and sort in sure So But solution to we in make a facilities, here of offsite in some short at the mercury in and remove parallel, discussions

forward and this to think meaningful look update going I shortly. on we're to back have quarter, more that reporting a during on the we'll

fourth the here, point, our continue of on trying our bullet focus unit lower at further to to point all on Öksüt. cost bullet we last the even big productivity, efficiencies, Just focus our costs

produced ounces resulted continues of all-in strong $XXX perform early the would as have QX. you did quarter have a competitive As seen, sustaining They that's well ounce. speak XX,XXX QX mine really very we of per The gold some during in in the again and to period. here Öksüt costs what

With Darren now unit to little highlights call line the productivity, financial we're cost et Financial some Chief our more. I'm will operating Officer, efficiencies, into down if Darren pass gold in absorbed target. Millman, of a bit over of to with that, not and drill the cetera, Our ahead target going

Darren Millman

Scott, all. good morning and Thank you,

XXX from Mount X. sold deck, revenue in and Molybdenum the on of in Milligan mine, the Milligan during Molybdenum For gold, gold XX,XXX million unit. the our of unit. XX quarter, ounces the and those gold ounces million million sales from the mine. following Öksüt business Öksüt XXX sales, copper slide Centerra Mount attributable XX,XXX on operation ounces in the business XX consisted we're million our consisting the to mine and continued XX,XXX In of quarter, Slide Revenue recorded

also copper We XX.X sold the in pounds million of quarter.

the the the the ounce payment During operating This again streaming with we the flow the average negative continuing receipt, arrangements fourth the forecast line. existing X.X from incorporates $X.XX per pound cash the at Free in by quarter, million was MD&A, positive operations costs. whilst $X.X flow. cash the reduced cash Mount In Milligan up free Mount million, million. three of free quarter. operations generated the realized and copper/gold unit. sales by plans our in price net operating in over business activities receive in was the net timing in recorded. Öksüt And payments. per capital with to The the noted million move quarter. At business the fourth quarter, an Öksüt crushing, mine earnings flow Slide perform. of XX together the I'll working mining, of $X,XXX as share from stacking XX. only was contributed quarter Milligan cash quarter. stockpiling, mine Mount for the accordance four Milligan level, receiving in The continuing The second Milligan for cash $X.XX operations cash quarter Cash of quarter operations over mine for at contributed earnings million gold the the of until was the mine to operational net free XX.X and Mount in The leaching were continuing business and million earnings just XX.X in XX.X Molybdenum generated quarter earnings Öksüt the cash provisional the We recognized the will the Mount release unit. of loss XX.X XX.X from million gold per quarter once company's carbon was flow in 'XX provisional Molybdenum activities operations the activities from cash adjusted mine continuing the copper. million adjusted shipment mine, Molybdenum XX.X from shipment provided the the million attributable The in the X.X for remainder Milligan shipment year, for from flow from of million unit the with free XX.X with impacted million

of and items costs the primarily other sites adjusting risk-free and the there liabilities. related legal of that on care slide. were quarter, mine million provision X.X the interest For particular, adjustment this of significance a XX underlying of In to are applied several million, the reclamation noted and on result maintenance Kumtor rates

all-in a to level sustaining on the moving a XX. over per at basis $X,XXX At operations recorded million The per all-in million with XXX,XXX copper. contributor of XX.X ounce. costs the this of for in all-in $XXX a cost Slide Just ounce gold targeted of million credit ounces per perspective, continued of byproduct at Mount Mount sustaining cost the copper per was for ounce, From performance. quarter per sustaining $XX a asset basis Milligan production unchanged of guidance recorded costs year, byproduct Centerra's low we an $XXX $XXX costs on between significant a Milligan, recorded and in ounce. gold, to quarter. $XXX Öksüt production remains XX to XXX,XXX to XX for pounds very of cost ounce of

and to the balance The life noted the currently is review short cash in million, in attributable Project in the a reduction of a options technical the with Nevada. together Öksüt term balance of the compared in This potentially QX. of both As QX company exited acquisition under MD&A, to monetization mine. with options guidance Goldfield $XXX with cash being evaluated review million several XXX is

share. financial Given Board declared quarterly flow our performance, dividend $X.XX expectations, of our with per strong a the cash free together

the guidance in with it expects company at levels production plans these on Scott. reporting. to at carbon together Finally, planning gold issues middle gold form Milligan in company I in Mount operational Öksüt table experienced The mine. the that, is announce The to the slide. at in concentrate I'll the mine address gold QX draw of and to updated to back this With your attention mercury pass

Scott Perry

you, Thank Darren.

last XX. the here, on slide on just Slide So

bullet I So again, as on terms was points top quarter just good earlier, spoke the I to left, at it in looking output. metal a the of think

we've strong see that performing costs in the as fiscal per that's you can think ounce, really reported the got very I business quarter. And competitive really all-in the think obviously third Again, underpinning low perspective. sustaining a of a foundation we've what's and point, the then here. profitability bullet also, I we well $XXX financial from is during very strong highlighted,

to of of us finished we approximately quarter our In terms they the business of to bottom on the here last just $X.XX balance new operate billion. here developments in I million. of we fully points credit US$XXX advocate sheet, And we line think allows be undrawn certainly addition in with an cash The had internally two with revolving bullet forward. to table the that this that continuing the net some funded to also will on left, of speak here facility, expecting report model moving some That QX. liquidity

going to here what terms that we're of be solution is and embarking in the Öksüt Firstly, on.

QX think news shortly have on mentioned, the I here As in period. that we've we'll

in I with period. resolution Republic, as I'll the the that expect Mount just reporting that to to we we've draw the Kyrgyz the as disclosures study underway on here the mentioned XX-XXX is other Again, we Milligan. be well publishing QX that at finalizing and that is QX in our think thing agreement period. in here closing the today, be And With expect

in Öksüt two the company fully has mine. release, his the has Officer, recently, in the gratitude leadership, under first investment Gold from and update more to as time we Under joined production. thanks a certainly since just XXXX. direction commercial many today's and and have enduring was Chief of Officer. years upfront Vice the Dan leadership Operating mine on since as of the first management the and within dedication, company's that Centerra Company of Dan passion repaid sincere its company, perspective, President and years his Dan President as Operating his continuous and status. for really for delivered our President would budget the you of to elevated seen announced retired subsequently Kumtor service Dan's improvement, world-class during construction to Desjardins Vice certainly then and Lastly, And we strategic and through Chief offer of contributions Kumtor Obviously, This was its

and go his I'll lastly, the retirement. again, the search So an successor. identify on Dan international Dan's I company we record want in contributions say engaged note, to the just to Dan for best many his all thanks years, Centerra the wish over has been and firm And to certainly

pass to our our the if really with sort can session the prepared Beatrice, of operator, remarks. to Q&A over concludes call that So I facilitate that, please. back you And

Operator

Thank Instructions]. you. [Operator

comes with first Scotiabank. line the from your proceed Turnbull question. Our with question Please of Trevor

Trevor Turnbull

Mount Thank you. With for Scott. water deposit any mentioned the of And wondered, on respect to or project. just potential does up the the life thank plan? at that secured the that include changes mine come long-term you And Congratulations EA amendment you, I for EA, Milligan. new the might statement now that that is with

Scott Perry

thanks I question. think here going the new Trevor, to And, does that life XX-XXX. with that's statement yes, additional allow that for be for mine Yes, any delineated

the is answer So yes.

Trevor Turnbull

on question a then Öksüt. And great. Okay,

costs production therefore of QX? until costs to defer high gold As really I and there, some able I and should a tied about for how sales we like how the just the for lower be you'll in place, you to account will take of be kind sales the wondered, for kind solution you the out of QX. wondered or are think abnormally going mercury potentially work cost to

Scott Perry

that? to you I'm at do to looking Darren. Darren, want respond

Darren Millman

Trevor. Yes,

inventory. of buildup a really just envisage we So

costs don't flowing statement. will carbon we but our material. don't might So through or gold There idle room, too and that profit with loss the be a feel sheet. income much inventory be balance gold some in associated on We imagine our

just that's of you'll in So see sort how through flow the QX. hopefully

Trevor Turnbull

for that's And the picture I Öksüt. be boiler the just a statements wondered we mine statements deposits that respect of support I updated I to plan fine. of maybe Okay, with noticed sometime question plan. resource know was or of -- an of you And kind resource updated mine kind then the in and didn't plate watching term. forward-looking should if is talked life about near forward-looking new that in bigger and if an and in the

Scott Perry

resource Scott. life it's Yes, the any plan term. providing we'll Trevor, new No, mine in of short don't publishing or or I think be

Trevor Turnbull

Okay. question maybe the what thoughts just be I again with of kind that And the it you then could share Moly a statements, forward-looking there of restart on reference maybe pointing my very about if divesting business operations. was route. was if type wondering went mining, those last a need would of mining you your what the and for timing to to is restarting of to or or potentially investments kind potential required respect might of

Scott Perry

now. team, prevailing pound. really be of upfront sure capital studies good been on trading is, What's of would terminology Moly the it's and be the going the we per $XX the benefits that. quite Endako potential at just Trevor, what myself to feasibility they've what consistently we understand want a have the our But studies you Yes, the understanding value working very team I'm look generating really both Really to is these mine. sort or make reactivation are use $XX at technical you preliminary the cost, prices, as is proposition, if right what Mine We to trying and Creek what Thompson studies, here, mentioned? at economic now just new looking and and for required to would

could of this are external sort pricing that we more of of more sort seeing suggesting analysis supply that level demand In and continue. addition, Moly

if is there accept prevailing sort price value within could some environment, you unit. Moly deep it here, Molybdenum So that business of suggest that our

price, that's want those understand are and that's complete studies. doing once then Molybdenum finalized, studies third And we this So need we we'll something mentioned strong the kind with unit, those parties potentially seen as divesting sure why again, that we of discuss to from well. But so likewise, you business interest that, make and of the to have more that kind prevailing we're Board. Moly

have understand third we the So, engaging parties. in important again, it's do on here, we ourselves or any what value we with view a if discussions find that is

answer, on understand think studies hand. but those Trevor, you to value I next what here embark have need any that's need So steps. I'm we to why We giving we before a really in proposition is long the can

Trevor Turnbull

have long would Do that a Yes, timing available? studies how makes for be sense until of the sense. you

Scott Perry

not hopefully. we're management that focused externally. committed is can publishing would we organization. of Board of the like that so next the I that sort four with internally This our we've final product more will something three think on and have broader It's to something as to myself an be to that discussing But in sort a months, team

Trevor Turnbull

Okay. follow a give quick of does process compared bit to say Thompson being of terms just Endako? Creek, potentially or up closer you through one an product that continue And to edge reactivating in terms some in it simpler of little on that. Because a

Darren Millman

concentrates Metallurgical mine the that in of in the product produced be mine and to Thompson Langeloth enables high facility Endako Pittsburgh. were Creek historically both that additional were the margins Yes, and from recognized

either benefits of is So there mine.

those mine we selling and the studies, mentioned. I as still would to existing make for Scott expectations continue decision to we're restart in chemical model So that purchasing elevate doing industry. The of industry, either those steel or business we with think bettering party our if were concentrates that third

facility, get margins the Langeloth we a can unit. higher achieve So business we throughput as overall can the more through the

add-on, Trevor, of it's how more is I look So at still an it.

Trevor Turnbull

up with. come you. really appreciate what to color look Thank Okay. and forward hearing I the you

Operator

Our Please from with Capital Markets. proceed RBC with Michael of your question. line the Siperco next question comes

Michael Siperco

on clear. cash we of couple maybe that increase understated that received in follow reversal this QX. much, in questions. be cash ballpark? on that number flow my first but received Milligan? Scott had the that been of expecting timing ups, cash to free is taking Is flow be in something words, very the number million. This want should Mount it just correct, XX Thanks correct? to for And other quarter, number, I the and QX, free be closer A assuming of an team, would at a the Is In just

Darren Millman

that's Yes, ballpark. the in

Michael Siperco

questions I this Okay, terms stand Is Öksüt, am today? right? pour, understanding QX. of expecting very so carbon the shouldn't that And inventory on In production gold QX, good. on then of gold following where basically we correct in the we any just buildup in for up be

Scott Perry

Michael, it's Scott here. That's a difficult question for me to answer right now.

about discussions, here, that sort like. those not in would what gold quarter. reassured they've And we're gold our look I in think with Öksüt. be listen, we his providing remarks, loaded we be the to further are the now question your Darren looking doing gold with we're update prepared to it final option in is actually close. depth. certainly during infrastructure, capacity monetizing offsite If should But come of And all would we're treatment we're in quarter there discussions what a find got is difficult principle right technology installations, carbon fruition yet. expect said then carbon. one the loaded to the right really, the answer we're But operational I deal that the negotiations our facility. at within We've But is in why the producing do an shortly of and it on to reason at been that now we stages

articulated I'm mean? well, I've to why what going if if struggling myself see your question, just pause and to that's I'm I So you answer Michael. know

Michael Siperco

the Yes. I mean? that everything sense. carbon can No, that suppose the this can within something that this is, shipping question tomorrow I you makes works start is I the be doing think something in then if quarter? initiated out, gold Is

Scott Perry

fully what So compare period. yes, at solution and down this tradeoff are on a there, answer it's potential think associated and our to what that right But within again, So tradeoff where obviously, QX But is just treating the -- it landed facility value yes. report they until compare can on with doing does But does that I to how option? the be market period. the have that remediating QX site? the money, capacity. we come et looking And, come a going you the how study, be we've have to that's could yes, of time cetera? initiated with now. back that. the What's economics we're It on ADR to again, wait And the within

Michael Siperco

And enough. on Öksüt. more fair guess Okay, one I

referenced term You anything change of the shipping comes does of solution Either what of the studies, these the in realize I gold potential way, in depending mine. life you're carbon and over this or it of in exploration, sorts about your thinking on of middle were of you in things about to tell? out the deposit early talking terms too sort longer life allocation, capital mine extension, year that those of last is

Scott Perry

view how the we're I of mine the If I'm don't with reserves, the remains I life the profile, changes to phase, everything sequence, to our develop your same. going resource, understanding anything that regards deposit? think question, context of the think the of

Michael Siperco

thinking question. lines? those you the potential Kemess. terms about I for along I project it. Kemess Moly can just suppose about If ask got Okay, updated anything or a Any in one more of business. I'll either Maybe Trevor ask divestment, covered

Scott Perry

got We've no No. Michael. update,

Michael Siperco

are Got questions. Copy. very my it. Thanks much. Those

Scott Perry

Thank you.

Operator

Our next with question. line question Anita CIBC. comes from your with the of proceed Please Soni

Anita Soni

Good my taking call [indiscernible]. morning. Thanks, Scott, for

Scott Perry

apologize. Anita, I

that your Operator, well? up You're was really end at at end. up our breaking as breaking

Operator

Yes, it was.

Anita Soni

hear sorry. Can me? you Okay,

Scott Perry

getting better You're now, much I think. Anita,

Anita Soni

Okay.

was [indiscernible]. I just asking So whether

Scott Perry

I'm frustrate Anita, you. going sorry. to I'm

up started You again. breaking

Anita Soni

take We'll okay. it offline. It's worries. No

Scott Perry

Okay.

Anita. Sorry,

Anita Soni

No problem.

Operator

proceed of Raymond with from Brian the Please line question question. James. comes next MacArthur with your Our

Brian MacArthur

free year. year. the the your questions There was be to was if cash Good was the Again, made, for I XX right quarter, my the for and consuming Moly I It up of XX negative a statement think I morning. positive guidance have follow calculate most rest been sort answered. first business. But of originally this just the it's going flow in in of can

be So positive Has you're you're forecast of going changed to the quarterly recover that of when cash whole you positive same? that changed rest it's business, i.e. it year for flow a you the say is year, the or basis, on full million. the the out that to actually XX to means positive still going haven't be going your for something

Darren Millman

don't guidance. we The additional anticipate change capital. of working now only real our changing So is we're the anticipating release

have quarterly in reference capital. million. the in might working $XXX excess make It's we of You Brian, analysis, noted, to

So year. really that releasing than a for more XXXX lot planned we're of the just

So that's flow just took working to of lot more free cash about generation, when I release looking a talk capital. it's

flow. be anticipate pretty to we So cash close to breakeven do

So that's we're sort of what referencing there.

Brian MacArthur

cash. get I money was restarts cost current actual of Great, just assumes at, anything. release no on that business to capital, that's what being I assume maintenance covering working care right? the all And the That's plus or and the ongoing trying spent

Darren Millman

right. That's

Brian MacArthur

very you Thank much.

Operator

Mr. are further you. to call time. turn continue your or I'll the at presentation remarks. Perry, closing Please this back with questions no there

Scott Perry

you conclude it Okay. soon. Thank everyone joining for thank for to there, forward day. you, good Look We'll everyone I and and catching operator, call. wish you. a us very the up Thank

Operator

disconnect for thank ask That please conference does conclude line. your for that today. you We your you participation and the call

Centerra Gold (CGAU) 8 May 222022 Q1 Earnings call transcript