Centerra Gold Reports Second Quarter Results,
Net Earnings of $71 million or 30 cents per share
This news release contains forward-looking information that is subject to the risk factors and assumptions set out on page 19 and in our Cautionary Note Regarding Forward-looking Information on page 27. The financial figures in this news release are presented under International Financial Reporting Standards (�IFRS�) see �Conversion to IFRS� on page 21. All figures are in United States dollars.
To view the Management�s Discussion and Analysis and the Financial Statements and Notes for the three and six month periods ended June 30, 2011, please visit the following link:
http://file.marketwire.com/release/CCG728FS.pdf
Toronto, ON - July 28, 2011 - Centerra Gold Inc. (TSX: CG) today reported net earnings of $71.1 million or $0.30 per common share on revenues of $243.8 million compared to a net earnings of $30.7 million or $0.13 per common share based on revenues of $152.2 million in the same quarter last year.
Consolidated gold production for the second quarter of 2011 totaled 155,166 ounces at a total cash cost of $513 per ounce produced compared to 121,728 ounces at a total cash cost of $616 per ounce produced in the corresponding quarter of 2010. Cash provided by operations, net of working capital changes, was $118.5 million compared to $76.5 million in the second quarter of 2010. (Total cash cost is a non-GAAP measure and is discussed under �Non-GAAP Measures� in this news release.)
Second Quarter Highlights
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Special and annual dividend payment of $99.3 million
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Consolidated gold production of 155,166 ounces
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Cash provided by operations of $118.5 million or $0.50 per share
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Maintaining consolidated gold production and cost guidance for 2011
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Exploration discovery in Eastern Mongolia, the ATO property, additional 35 drill holes completed in June and five holes were deepened.
Commentary
Steve Lang, President and CEO of Centerra Gold stated, �We are maintaining our gold production and cost guidance for the year after another solid quarter of operating performance at our mines. During the quarter, Centerra's Board declared a special dividend and increased our annual dividend based on our strong cash flow and the continuing high gold price. The Company�s cash balances are growing even after significant capital investment.�
�On July 11, we announced a significant discovery in Eastern Mongolia at our Altan Tsagaan Ovoo (ATO) property.
We are very excited about this new discovery in what we view as a new emerging mineral district. The 35 additional drill holes completed in June continue to demonstrate high-grade mineralization from surface and that there is good continuity in the mineralization and also the drilling continues to expand Pipe #4. As indicated in our earlier news release our Board has approved a $6 million increase in the Company's 2011 exploration budget from $34 million to $40 million, with $4 million of this additional funding allocated for further work on the ATO property,� he concluded.
THIS PRESS RELEASE CONTAINS TABLES AND FINANCIAL STATEMENTS, CLICK HERE TO VIEW THE ENTIRE DOCUMENT IN PDF FORMAT.
About Centerra
Centerra Gold Inc. is a gold mining company focused on operating, developing, exploring and acquiring gold properties primarily in Asia, the former Soviet Union and other emerging markets worldwide. Centerra is a leading North American-based gold producer and is the largest Western-based gold producer in Central Asia. Centerra�s shares trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is headquartered in Toronto, Canada.
Conference Call
Centerra invites you to join its 2011 second quarter conference call on Friday, July 29, 2011 at 10:30am Eastern Time. The call is open to all investors and the media. To join the call, please dial toll-free in North America (800) 682-8921 or International participants dial +1 (303) 223-2680. Alternatively, an audio feed web cast will be available on www.centerragold.com. A recording of the call will be available on www.centerragold.com shortly after the call and via telephone until midnight on Friday August 5, 2011 by calling (416) 626-4100 or (800) 558-5253 and using passcode 21528563.
Additional information on Centerra is available on the Company�s web site at www.centerragold.com and at SEDAR at www.sedar.com.
To view the Management�s Discussion and Analysis and the Financial Statements and Notes for the three and six month periods ended June 30, 2011, please visit the following link:
http://file.marketwire.com/release/CCG728FS.pdf
THIS PRESS RELEASE CONTAINS TABLES AND FINANCIAL STATEMENTS, CLICK HERE TO VIEW THE ENTIRE DOCUMENT IN PDF FORMAT.
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Cautionary Note Regarding Forward-looking Information
This news release and the documents referred to herein contain statements which are not statements of current or historical facts and are �forward-looking information� within the meaning of applicable Canadian securities laws. Such forward-looking information involves risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Wherever possible, words such as �believe�, �expect�, �anticipate�, �contemplate�, �target�, �plan�, �intends�, �continue�, �budget�, �forecast�, �projections�, �estimate�, �may�, �will�, �schedule�, �potential�, �strategy� and other similar expressions have been used to identify forward-looking information. These forward-looking statements relate to, among other things, Centerra�s expectations regarding processing the remaining refractory in-situ ore at Boroo through a bio-oxidation facility, the impact of the Water and Forest Law on the Company�s Mongolian operations and the potential need to write off the Company�s investments in Gatsuurt and Boroo or reclassify mineral reserves if the Water and Forest Law is not repealed or amended, the timing of the discussion of the Water and Forest Law amendment in the Mongolian Parliament, the application of the Graduated Royalty Fee on the Company�s Boroo operations, future growth, results of operations (including, without limitation, future production and sales, and operating and capital expenditures), performance (both operational and financial), business and political environment and business prospects (including the timing and development of new deposits (including the ATO (Altan Tsagaan Ovoo) deposit) and the success of exploration activities), outcome of litigation involving Centerra, the timing for the preparation of an initial resource statement for the Company�s ATO property, the timing for mill maintenance and repair work at Boroo, the expected impact on the Company�s financial statements as a result of adopting IFRS standards, the timing of the scheduled SAG mill discharge liners at Kumtor and its impact on production and opportunities and the discussion under the heading �Outlook for 2011�, including the forecasted gold production and cash costs, exploration expenditures and exploration plans.
Although the forward-looking information in this news release reflects Centerra�s current beliefs as of the date of this news release based on information currently available to management and based upon what management believes to be reasonable assumptions, Centerra cannot be certain that actual results, performance, achievements, prospects and opportunities, either expressed or implied will be consistent with such forward-looking information. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by Centerra, are inherently subject to significant political, business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking information.
Material assumptions used to forecast production and costs include those described under the heading �Outlook for 2011�. Other factors that could cause actual results or events to differ materially from current expectations include, among other things: the sensitivity of the Company�s business to the volatility of gold prices; the political risks associated with the Company�s operations in the Kyrgyz Republic and Mongolia; the impact of changes in, or more oppressive enforcement of, laws, regulations and government practices in the jurisdictions in which the Company operates; the effect of the November 2010 amendments to the 2006 Mongolian Minerals Law on the royalty payments payable in connection with the Company�s Mongolian operations; the effect of the Water and Forest Law on the Company�s operations in Mongolia; the impact of continued scrutiny from Mongolian regulatory authorities; in the Kyrgyz Republic the impact of changes to, or the increased enforcement of, environmental laws and regulations relating to the Company�s operations; the Company�s ability to replace its reserves; ground movements at the Kumtor Mine; waste and ice movement at the Kumtor Mine; litigation; the accuracy of the Company�s reserves and resources estimate; the accuracy of the Company�s production and cost estimates; the success of the Company�s future exploration and development activities; competition for mineral acquisition opportunities; the adequacy of the Company�s insurance; environmental, health and safety risks; defects in title in connection with the Company�s properties; the impact of restrictive covenants in the Company�s revolving credit facility; the Company�s ability to successfully negotiate an investment agreement for the Gatsuurt development property to complete the development of the mine and the Company�s ability to obtain all necessary permits and commissions needed to commence mining activity at the Gatsuurt development property; seismic activity in the vicinity of the Company�s operations in the Kyrgyz Republic and Mongolia; long lead times required for equipment and supplies given the remote location of the Company�s properties; illegal mining on the Company�s Mongolian properties; the Company�s ability to enforce its legal rights; the Company�s ability to accurately predict decommissioning and reclamation costs; the Company�s ability to obtain future financing; the impact of current global financial conditions; the impact of currency fluctuations; the effect of recent market conditions on the Company�s short-term investments; the Company�s ability to attract and retain qualified personnel; the Company�s ability to make payments including payments of principal and interest on the Company�s debt facilities; risks associated with the conduct of joint ventures; risks associated with the Company�s largest shareholder, the Kyrgyz government; and possible director conflicts of interest. There may be other factors that cause results, assumptions, performance, achievements, prospects or opportunities in future periods not to be as anticipated, estimated or intended. See �Risk Factors� in the Company�s most recently filed AIF available on SEDAR at www.sedar.com.
Furthermore, market price fluctuations in gold, as well as increased capital or production costs or reduced recovery rates may render ore reserves containing lower grades of mineralization uneconomic and may ultimately result in a restatement of reserves. The extent to which resources may ultimately be reclassified as proven or probable reserves is dependent upon the demonstration of their profitable recovery. Economic and technological factors which may change over time always influence the evaluation of reserves or resources. Centerra has not adjusted mineral resource figures in consideration of these risks and, therefore, Centerra can give no assurances that any mineral resource estimate will ultimately be reclassified as proven and probable reserves.
Centerra�s mineral reserve and mineral resource figures are estimates and Centerra can provide no assurances that the indicated levels of gold will be produced or that Centerra will receive the gold price assumed in determining its mineral reserves. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While Centerra believes that these mineral reserve and mineral resource estimates are well established and the best estimates of Centerra�s management, by their nature mineral reserve and mineral resource estimates are imprecise and depend, to a certain extent, upon analysis of drilling results and statistical inferences which may ultimately prove unreliable. If Centerra�s reserve or reserve estimates for its properties are inaccurate or are reduced in the future, this could have an adverse impact on Centerra�s future cash flows, earnings, results or operations and financial condition.
Centerra estimates the future mine life of its operations. Centerra can give no assurance that mine life estimates will be achieved. Failure to achieve these estimates could have an adverse impact on Centerra�s future cash flows, earnings, results of operations and financial condition.
There can be no assurances that forward-looking information and statements will prove to be accurate, as many factors and future events, both known and unknown could cause actual results, performance or achievements to vary or differ materially from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this news release. Accordingly, all such factors should be considered carefully when making decisions with respect to Centerra, and prospective investors should not place undue reliance on forward-looking information. Forward-looking information is as of July 28, 2011. Centerra assumes no obligation to update or revise forward-looking information to reflect changes in assumptions, changes in circumstances or any other events affecting such forward-looking information, except as required by applicable law. |
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