BMO Global Metals and Mining Conference
BMO Global Metals and Mining Conference Scott Perry - Chief Executive Officer February 2017
TSX: CG www.centerragold.com
Caution Regarding Forward-Looking Information Information contained in this presentation which are not statements of historical facts, and the documents incorporated by reference herein, may be “forward-looking information” for the purposes of 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. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward-looking information. These forward-looking statements relate to, among other things, the Company’s expectations regarding funding all planned capital and operating expenditures of the Company for 2017 from cash, short-term investments and cash generated from the Mount Milligan mine; expectations regarding continued discussions with the Government of the Kyrgyz Republic to resolve all outstanding issues affecting the Kumtor Project in a manner that is fair to all stakeholders; the continuation of negotiations with the Mongolian Government on definitive agreements related to the Gatsuurt Project; the impact of continuous improvement projects at Mount Milligan, including improvements on gold and copper recovery rates; the timing for a new technical report on the Mount Milligan Project; timing for gold production from the Öksüt Project; ability to satisfy conditions precedents to access funds under the Öksüt Facility, including the receipt of the key pastureland permit; expected time frames for an arbitral decision on the Company’s application for partial award or in the alternative, interim relief; the expectation of applying for and receiving the permit to discharge water from its tailings facility starting in the spring; plans to appeal to the Kyrgyz Republic Supreme Court any court decisions on the Kumtor environmental court claims (if needed); expectations of the resumption of the Kumtor environmental pollution claim in the Kyrgyz Republic court; timing for the closing of the sale of ATO; statements made under the heading, “2017 Outlook” including 2017 production, all-in sustaining costs per ounce sold; 2017 exploration expenditures, 2017 capital expenditures, 2017 corporate administration and community investment expenses, 2017 depreciation, depletion and amortization expenses, expectations of our hedging program, and 2017 tax expenses; planned mining activities in 2017; expectations regarding the continuation of the cash neutral basis of the Company’s molybdenum business unit; the expected time frame for the tailings dam construction at the Kumtor mine. 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. Factors that could cause actual results or events to differ materially from current expectations include, among other things: (A) strategic, legal, planning and other risks, including: political risks associated with the Company’s operations in the Kyrgyz Republic, Mongolia and Turkey; resource nationalism including the management of external stakeholder expectations; liquidity risks created by Centerra’s inability to access funds held at KGC; the impact of changes in, or to the more aggressive enforcement of, laws, regulations and government practices in the jurisdictions in which the Company operates including any delays or refusals to grant required permits and licenses, unjustified civil or criminal action against the Company, its affiliates or its current or former employees; risks that community activism may result in increased contributory demands or in business interruptions; the impact of any actions taken by the Kyrgyz Republic Government and Parliament relating to the Kumtor Project Agreements which are inconsistent with the rights of Centerra and KGC under the Kumtor Project Agreements; any impact on the purported cancellation of Kumtor’s land use rights at the Kumtor Project pursuant to a court claim commenced by the Kyrgyz Republic GPO; the risks related to other outstanding litigation affecting the Company’s operations in the Kyrgyz Republic and elsewhere; the potential impact on the Kumtor Project of investigations by Kyrgyz Republic instrumentalities and movement restrictions on KGC employees and managers; the impact of changes to, the increased enforcement of, environmental laws and regulations relating to the Company’s operations; the impact of any sanctions imposed by Canada, the United States or other jurisdictions against various Russian individuals and entities; potential defects of title in the Company’s properties that are not known as of the date hereof; the inability of the Company and its subsidiaries to enforce their legal rights in certain circumstances; the presence of a significant shareholder that is a state-owned company of the Kyrgyz Republic; risks related to anti-corruption legislation; risks related to the concentration of assets in Central Asia; Centerra’s future exploration and development activities not being successful; Centerra not being able to replace mineral reserves; difficulties with Centerra’s joint venture partners; and aboriginal claims and consultative issues relating to the Company’s properties which are in proximity to First Nations communities; potential risks related to kidnapping or acts of terrorism; (B) risks relating to financial matters, including: sensitivity of the Company’s business to the volatility of gold and copper prices, the use of provisionally-priced sales contracts for production at Mount Milligan, reliance on a few key customers for the gold-copper concentrate at Mount Milligan, use of commodity derivatives, the imprecision of the Company’s mineral reserves and resources estimates and the assumptions they rely on, the accuracy of the Company’s production and cost estimates, the impact of restrictive covenants in the Company’s credit facilities which may, among other things, restrict the Company from pursuing certain business activities or making distributions from its subsidiaries, the Company’s ability to obtain future financing, the impact of global financial conditions, the impact of currency fluctuations, the effect of market conditions on the Company’s shortterm investments, the Company’s ability to make payments including any payments of principal and interest on the Company’s debt facilities depends on the cash flow of its subsidiaries; and (C) risks related to operational matters and geotechnical issues and the Company’s continued ability to successfully manage such matters, including: movement of the Davidov Glacier and the waste and ice movement at the Kumtor Project, the continued performance of the buttress; the occurrence of further ground movements at the Kumtor Project and mechanical availability; the ability of the Company to successfully ramp-up to design criteria of the secondary crusher at the Mt. Milligan Project; the success of the Company’s future exploration and development activities, including the financial and political risks inherent in carrying out exploration activities; inherent risks associated with the use of sodium cyanide in the mining operations; the adequacy of the Company’s insurance to mitigate operational risks; mechanical breakdowns; the Company’s ability to obtain the necessary permits and authorizations to (among other things) raise the tailings dam at the Kumtor Project to the required height; the Company’s ability to replace its mineral reserves; the occurrence of any labour unrest or disturbance and the ability of the Company to successfully re-negotiate collective agreements when required; the risk that Centerra’s workforce may be exposed to widespread epidemic; seismic activity in the vicinity of the Company’s properties; long lead times required for equipment and supplies given the remote location of some of the Company’s operating properties; reliance on a limited number of suppliers for certain consumables, equipment and components; illegal mining on the Company’s Mongolian properties; the Company’s ability to accurately predict decommissioning and reclamation costs; the Company’s ability to attract and retain qualified personnel; competition for mineral acquisition opportunities; and risks associated with the conduct of joint ventures/partnerships; the Company’s ability to manage its projects effectively and to mitigate the potential lack of availability of contractors, budget and timing overruns and project resources. See “Risk Factors” in the Company’s Management’s Discussion and Analysis for the year ended December 31, 2016 and the 2015 Annual Information Form, both of which are available on SEDAR at www.sedar.com. Furthermore, market price fluctuations in gold and copper, as well as increased capital or production costs or reduced recovery rates may render mineral 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. 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 herein or incorporated by reference. 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 February 23, 2017. 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. Except as otherwise noted herein, Gordon Reid, Professional Engineer and Centerra’s Vice President and Chief Operating Officer, has reviewed and approved the scientific and technical information contained in this presentation. Mr. Reid is a Qualified Person within the meaning of NI 43-101. For more information, please refer to the properties technical reports, which are available on SEDAR. All figures are in United States dollars unless otherwise stated.
February 2017
2
Centerra: Built For Success Consensus Asset NAV Breakdown
Corporate Highlights
US 0%
Internationally Diversified Gold Producer
Kyrgyzstan 33%
Closed Thompson Creek Acquisition Canada 46%
Up to 795kozpa gold at AISC1 of $743 to $824 per ounce and 60M lbs of copper Significant operational cash flow profile
Mongolia 10%
Turkey 11%
Solid late-stage development pipeline Profitably Growing to +1Moz’s Per Annum
Cash2 Position of US$409MM2
Trading at a discount to peers, potential rerating
Positive Retained Earnings of US$856MM2
Ounces (000’s)
Projects drive +100% increase in gold production by 2020 1,000
0 Kumtor
1. 2.
Mt Milligan
Oksut
Gatsuurt
Greenstone
Total
2017e AISC: Kumtor mine $836 to $925 / oz, Mt. Milligan $457 to $508 / oz. All-in sustaining costs per ounce sold is a non-GAAP measures and is discussed under “Non-GAAP Measures” in the Company’s news release Feb.23, 2017. As at December 31, 2016; Cash includes cash, cash equivalents, short-term investments (includes restricted cash of KGC).
February 2017
3
Centerra: 2016 Corporate Update Balance Sheet (US$)
February 2017 2016: Internally Funded Business (US$) 900 8
237
800
74
318
(as of December 31, 2016)
2
Unrestricted Cash $160MM
US$ Millions
700 600
111
542
500
Debt $475MM
23
409
400
Restricted Cash $248MM
300 2015 Cash
Kumtor Cashflow
Mt Milligan Cashflow
EBRD debt proceeds
TCM Acquisition
Other (Projects, G&A, etc)
Shareholder 2016 Cash 1 Dividends
Retained Earnings Profile (US$)
Share Count 291.3
300.0
1,200 250.0
216.2 216.3 216.3
226.7
235.5 236.1 236.4 236.4 236.4 237.9
1,000
200.0
1,600
800 US$ Millions
millions
2,000
150.0
Cash
$542MM
100.0
1,200
600 800
400
Gold Price (US$/oz)
200
400
200
50.0 0 0.0 2006 1
February 2017
2
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Retained Earnings
Cumulative Dividends
0
Gold Price
Includes cash, cash equivalents, and short-term investments, (includes restricted cash of $248MM at KGC). TCM acquisition is shown net of cash received on completion of acquisition ($98MM), net proceeds from equity offering ($141MM), net proceeds from debt ($324MM).
4
Centerra: Robust Financial Margins in all Cycles 2015 Free Cash Flow Profile (US$)
1,000
2,000
800
1,600
600
1,200
400
800
200
400
Gold Price (US$/oz)
US$ Millions
Cash Reserves1 Profile (US$)
Cash Flows Invested $244 MM
Operating Cash Flows $334 MM
0
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Cumulative Dividends
Cash Balance 1
Gold Price
Retained Earnings Profile (US$) 1,200
2,000
240
800
U/G miners
1,600
240
U/G miners
1,200
600 4,000tpd
200 0
800
YE target of
400
U/G miners 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
February 2017
Cash Flows Invested $223MM
400
170
Retained Earnings
Gold Price (US$/oz)
1,000
US$ Millions
2016 Free Cash Flow Profile (US$)
Cumulative Dividends
Operating Cash Flows $371MM
0
Gold Price
1. Cash reserves and cash balance includes cash, cash equivalents and short-term investments, includes restricted cash at KGC.
5
Diversified Portfolio with Balanced Geopolitical Profile Asset NAV breakdown
Au reserves & resources
Consensus Asset NAV by geography
P+P reserves by geography
US 0%
Kyrgyz Republic 32%
Kyrgyzstan 33% Canada 46%
Canada 52%
Mongolia 10%
Turkey 7% Mongolia 10%
Turkey 11%
Consensus Asset NAV by stage
M+I resources (inclusive) by geography(1)
Exploration 9% Kyrgyz Republic 33%
Development 21% Canada 48%
Producing 70% Source: Company filings and analyst estimates. (1) Resources are shown inclusive of reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
February 2017
Turkey 6% Mongolia 13% 6
Centerra: Significant Re-Rating Potential Analyst Consensus Price / NAV(1)
7%
5%
5%
5%
5%
5%
5%
1.0x
1.0x
1.0x
1.0x
1.0x
5%
5%
5%
0.8x
0.8x
Detour Gold
5%
Median Analyst Discount Rate
Yamana Gold
Centerra vs Intermediate Gold Peers
5%
1.5x
Median: 1.0x 0.8x
Centerra
0.9x
Tahoe Resources
Kinross Gold
IAMGOLD
SEMAFO
New Gold
Alamos Gold
Acacia Mining
B2Gold
1.1x
Silver Standard
1.2x
Source: FactSet, available street research. (1) Consensus Price / Net Asset Value (“NAV”) is calculated as the share price for each respective company as at February 17, 2017 divided by the average research analyst estimate for that same company. P/NAV is based on Centerra’s share price as of February 17, 2017 and the average analyst NAV per share estimate for Centerra as at the same date.
February 2017
7
Centerra: Operational Excellence 2016 GUIDANCE vs ACTUAL: GROWING PRODUCTION AND DECLINING COSTS
Production increase: up to 7%; Costs decline: up to 26%; 2016 Gold Production exceeds mid-point of revised guidance, AISC lower than mid-point of revised guidance 2016 Kumtor Guidance Highlights Increased Gold Production Guidance - Mid-Point, Actual
600,000 550,000
550,960
Reduced All-In Sustaining Cost Per Ounce Guidance (US$/oz) - Mid Point 900
540,000
860
515,000
500,000
800
450,000 692
700
400,000
640 350,000 600 300,000 250,000
500 Original
February 2017
Revised
Actual
Original
Revised
(1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release of February 23, 2017.
Actual 8
Mount Milligan: Long Life, Low Cost Gold Copper Mine 2016
2017E Guidance
Gold Production (koz)
205
260-290
Copper Production (MMlbs)
59
55-65
All-In Sustaining Costs (US$/oz)(1)
NA
$457-$508
Remaining reserve life (years)
+20 years Copper
5.8Moz
2,049Mlbs
0.4g/t
0.187%
35% @ US$435/oz
18.75% @ 15% of spot Cu price
P&P Reserves(2) Grade Royal Gold stream
Significant Open Pit Gold and Copper Production
Significant Open Pit Gold and Copper Production
20 years of production from existing P&P reserves(2)
300 250
Low cost, long life production
200
Stable, mining-friendly jurisdiction Restructured stream provides additional gold upside
Gold ounces
5.8M gold reserve ounces(2)
275 218
80
71
70 59
205
60
50 40
150
30
100
20 50
10 0
0 2015 February 2017
60 Copper M lbs
Gold
2016 GOLD
2017E
(1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release February 23, 2017. (2) Refer to February 23, 2017 mineral reserves and resources news release.
2015
2016 2017E COPPER 9
Kumtor: World Class Open Pit Gold Mine 2015
2016
2017E
Gold Production (koz)
521
551
455-505
Adjusted Operating Costs ($/oz) (1)
$326
$342
$359-$397
All-In Sustaining Costs ($/oz) (1)
$758
$640
$836-$925
Sustaining Capital ($MM)(1)
$51
$61
$68
Growth Capital ($MM)(1)
$14
$15
$28
Projected Asset Life (years)
+9
Reserves (Moz)
5.1
Au Grade (g/t)
2.5
Resources M&I (Moz)
2.6
Au Grade (g/t)
2.8
World Class Cornerstone Asset
Significant Open Pit Gold Production to 2026
20 years of uninterrupted profitable production
650,000
4.50 4.00
Over 10.9M ounces produced since 1997 miners U/G miners More than 5M ounces remaining U/G in open pit reserves
207
U/G miners target of Low cost,YElong life production
4,000tpd
3.50
500,000
3.00 2.50
350,000
2.00
High-grade170 underground opportunity U/G miners
Strong stable platform to grow Centerra February 2017
grade g/t
240
Ounces
240
1.50 200,000
1.00 2014 2015 2016 2017 2018 2019 2020 2021 2022
(1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release February 23, 2017.
10
Öksüt: Funded High Margin Gold Production 2015 Feasibility Highlights Mine Type
Open Pit, Heap Leach
Avg. LOM Annual Production
110koz Au
AISC(1)
$490
(US$/oz)
Reserve Mine Life
8 years
Development Capex (US$MM) P&P
$221
Reserves(2)(Moz)
1.2
Au grade (g/t)
1.40
Life of Mine Recovery
77%
Life of Mine Strip Ratio (w:o)
Öksüt Gold Project
2:1
First Gold Pour
Mid-2018
IRR (after tax)
43%
NPV(8%) - after tax (US$MM)
>$240
Catalyst Schedule
Projected Near-Term Gold Production (2015 Study)
EIA approval received in November 2015
Major construction expected in 2017 2 stage crushing, stack at 11,000 tpd Bought back Stratex and Teck royalties US$150MM low-cost +5-year financing in-place Significant exploration potential February 2017
Gold Production (000's)
Forestry Permit Approved and Received July 2016
250
2.50
200
2.00
150
1.50
100
1.00
50
0.50
0 Years:
Process Grade (g/tonne)
Avg. LOM
0.00 0 2016
+1 2017
+2 2018
+3 2019
+4 2020
+5 2021
+6 2022
+7 2023
+8 2024
(1) Non-GAAP measure see “Non-GAAP Measures in the MDA and news release of February 23, 2017. (2) Company filings. Technical Report on the Öksüt Gold Project dated September 3, 2015.
11
Gatsuurt: Gold Development Project Highlights The Gatsuurt Project is ~90 km north of Ulaan Baatar
Boroo mill on care & maintenance awaiting Gatsuurt approval Gatsuurt declared strategic January 2015 3% royalty (versus 34% ownership) approved by government Investment development agreement negotiations underway Potential production 12-18 months after approval P&P Reserves(1) of 1.6M contained ounces of gold @ 2.9 g/tonne Strip ratio of 6:1 and process recoveries in excess of 76% Significant exploration upside
Boroo’s Historical Cumulative Net Cash Generation (US$MM)
In-Place 5ktpd Processing Facility (Boroo)
600 500 400 300 200 100 0 (100) 2004
2005
2006
2007
2008
2009
(1) See mineral reserves news release February 23, 2017. February 2017
2010
2011
2012
2013
2014 12
Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines Cornerstone Canadian Development Project
Ontario: Top Tier Mining Jurisdiction
50:50 development partnership with Premier Gold Open pit reserves(1) (100%) 4.7Moz Au @ 1.02 g/t Historic gold production of 4.12M oz (~1934-1970) Large land package covers 337km2, good infrastructure Significant exploration and underground resource potential
Greenstone Gold Property
Greenstone Development Project
Location: Ontario, Canada
2016 Feasibility Highlights (100%) Mine Type
Open Pit, CIP Mill
Mill Throughput design
27,000 tpd
Avg. LOM Annual Production
288koz Au
Avg. LOM AISC(2) (US$/oz) Reserve Mine Life
$600 14.5 years
Development Capex (US$MM)
$962
Sustaining Capital(2) (US$MM)
$101
P&P Reserves(1)(Moz)
4.7
Au grade (g/t)
1.02
Life of Mine Recovery
90%
Life of Mine Strip Ratio (w:o)
3.87:1
IRR (after tax)
14.4%
NPV(5%) - after tax (US$MM) February 2017
Projected Gold Production (100%)
$545
(1) Technical Report on the Hardrock Project dated December 21, 2016. (2) Non-GAAP measure, see “Non-GAAP measures” in MDA and news release Feb. 23, 2017.
13
Potential Upside Optionality: Molybdenum Molybdenum business
Thompson Creek Mine ● Located in Idaho, is the world’s fourth largest open-pit primary
Well-established molybdenum business
molybdenum mine Consists of the Langeloth Metallurgical Facility and two mines: Thompson Creek Mine and Endako Langeloth can produce a suite of premium molybdenum products that raise the average realized price
● Operations began in 1983, using conventional open-pit mining and a onsite 25,500 tpd mill ● In December, 2014 placed on care and maintenance
Endako Mine
Significant defined resources and infrastructure in place Ability to be one of the first movers upon moly market recovery Lower cost to restart production compared to greenfield project Molybdenum business well positioned to recover once market conditions and pricing improve
Historical Molybdenum Segment EBITDA(1) (US$MM) $444
● Endako Mine is a fully integrated molybdenum facility located in BC ● TCM is the operator and 75% owner; Sojitz owns 25% ● Endako consists of three adjoined pits and a fully integrated operation with on-site mill and multiple hearth roasting facility ● New mill processing facility that was completed in 2012 for ~US$500MM ● In July 2015 placed on care and maintenance
Langeloth Metallurgical Facility ● Located 40 km west of Pittsburgh, Pennsylvania $269
$265
● Operates both as a toll processor and as a purchaser of molybdenum
$126
$126
concentrates from third parties
$124
● Cash flows from the Langeloth operations are expected to cover care and
$18 ($21) 2008
2009
2010
2011
2012
2013
2014
maintenance expenses associated with the molybdenum mines for 2016
2015
(1) Prior to intersegment eliminations. Historical EBITDA not reported, therefore calculated based on historical segment disclosure. February 2017
14
Centerra: Strong Low-cost Operating Platform 2017 Gold production guidance (Koz)(1)
2017 All-in sustaining costs (US$/oz)(1)
2,600
1,200 1,040
1,140
875
865
744
785
815
860
845
900
910
Acacia Mining
Yamana Gold
940
955
Alamos Gold
B2Gold
965
1,075
975
755
575
570
540 415
405
400
383 287 225
Kinross Gold
Yamana Gold
Acacia IAMGOLD New Mining Centerra
Detour Gold
B2Gold
Prior Centerra
Alamos Gold
New Gold
Prior New SEMAFO New Gold Eldorado Centerra Centerra Gold
Tahoe Eldorado Silver SEMAFO Resources Gold Standard(2)
Silver Kinross IAMGOLD Detour (3) Standard Gold Gold
Tahoe Resources
P+P Gold Reserves (Moz)(4) 31
21
17
16
16 15
8
8
7 6 4
Kinross Gold
February 2017
Source: (1) (2) (3) (4)
Eldorado Gold
Yamana Gold
Centerra
Detour Gold
New Gold
Company filings, FactSet, Available street research. Guidance based on the midpoint of the guidance range. Silver Standard gold guidance is from Marigold and Seabee. Silver Standard AISC based on broker estimates as guidance estimates not provided. Latest available as at February 17, 2017.
IAMGOLD
Acacia Mining
B2Gold
Alamos Gold
Tahoe Resources
3
3
SEMAFO
Silver Standard
15
The New Centerra: Built For Success Kumtor: World Class Open Pit Gold Mine
Producing
Cornerstone asset underpinning the Company’s growing production portfolio Long life, low cost asset generating significant positive cash flow Mount Milligan: Long Life, Low Cost Open Pit Gold-Copper Mine in British Columbia Large scale, low cost mine that recently ramped-up; expected to generate significant free cash flow Amended gold stream positions Mount Milligan as a premier gold asset Öksüt: High Margin Open Pit Heap Leach Gold Mine Funded, late-stage gold development project
Development
Near-term high margin gold production Gatsuurt: Open Pit Gold Mine with established infrastructure Investment agreement negotiations underway; anticipated production ~12-18 months after approval Surface processing infrastructure in-place Greenstone: Large Scale Open Pit Gold project One of Canada’s largest undeveloped open pit gold deposits Bankable feasibility study completed and mine permitting work underway February 2017
16
Appendices
TSX: CG www.centerragold.com
Q4 & 2016 Corporate Update
Safety – Continue to roll out “Work Safe : Home Safe” Program Across the Company Strong Gold Production of 598,677 Ounces, including 550,960 Ounces at Kumtor
2016 All-In Sustaining Cost1 of $682 Per Ounce, Kumtor achieved $640 Per Ounce, both lower
2016 Net Earnings of $151.5 Million ($0.60 Cents Per Share, basic), including Q4 Net Earnings of
than revised guidance
$63.6 Million ($0.23 Cents Per Share, basic) Cash Flow From Operations of $371.4 Million ($1.48 Cents Per Share, basic) Kumtor Generated $237 Million and Mount Milligan Generated $8 Million Cash December 31, 2016 Cash2 Position of $409 Million2 Closed Acquisition of Thompson Creek Metals Entered into New US$325 Million 5-year Credit Agreement to Finance Acquisition
1. All-in sustaining costs per ounce sold is a non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A December 31, 2016 and news release February 23, 2017. 2. Includes cash, cash equivalents and short-term investments, including restricted cash at December 31, 2016. 18 February 2017
Financial Highlights1
(in thousands, except ounces, per share amounts, and average realized price3)
Revenue(2) Total gold ounces sold(3) Total copper pounds sold(3) (000’s) Operating cash flow Operating cash flow per share, basic Net earnings (loss) Earnings (loss) per share, basic Average realized gold price per ounce(3)(4) 1. 2. 3. 4.
Quarter Ended Dec.31, 2016
Quarter Ended Dec.31, 2015
Year Ended Dec.31, 2016
Year Ended Dec.31, 2015
$305,723
$148,332
$760,758
$623,950
225,996
135,064
580,496
536,842
10,399
-
10,399
-
$170,397
$47,534
$371,444
$333,566
$0.60
$0.20
$1.48
$1.41
$63,628
($2,877)
$151,538
$41,629
$0.23
($0.01)
$0.60
$0.18
$1,154
$1,098
$1,233
$1,162
U.S. dollars For the three months and year ended December 31, 2016 consolidated revenue excludes any revenue from Boroo and includes results from Thompson Creek operations on a 100% basis beginning October 20, 2016 with no comparative results included in both periods of 2015. 2016 numbers for gold ounces sold exclude any sales from the Boroo mine and includes gold and copper sales on a 100% basis from Mt. Milligan beginning October 20, 2016 with no comparative results included in 2015. Average realized gold price per ounce is a non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release February 23, 2017.
February 2017
19
Mineral Reserves - Proven & Probable Proven and Probable Gold Mineral Reserves Increase to 16 million ounces Proven and Probable Copper Mineral Reserves are 2,049 million pounds
Copper Mineral Reserves Proven Property Mt Milligan
February 2017
Probable
Total Proven and Probable
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
256,847
0.187
1,059
239,362
0.188
991
496,209
0.187
2,049
See Mineral Reserves and Resources News Release February 23, 2017.
20
Centerra: 2017 Guidance 2017 All-in Sustaining 2017 Gold Production 2017 Copper Production Costs on a By-product basis1 (ounces)
(millions pounds)
(per ounce sold)
Kumtor Mine
455,000 – 505,000
-
$836 – $925
Mount Milligan
260,000 – 290,000
55 – 65
$457 – $508
715,000 – 795,000
55 – 65
$743-$824
Centerra
Projects
2017 Sustaining Capital1
2017 Growth Capital1
(millions)
(millions)
Kumtor Mine
$68
$28
Mount Milligan Mine
$26
-
Öksüt Project
-
$11
Mongolia/Gatsuurt Project
-
$5
-
$8
$2
-
$96
$52
Greenstone
Property2
Corporate and other Consolidated Total
1
Non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s news release dated February 23, 2017.
2
Greenstone growth capital includes capitalized amounts for Premier’s 50% share of the Greenstone costs funded in full by Centerra.
February 2017
21
2017 Guidance: Sensitivities Change Gold Price Copper Price(3) Diesel Fuel Kyrgyz som(1) Canadian dollar(1)
Costs
Impact on ($ millions) Revenues Cash flows
$50/oz 10% 10% 1 som
3.4 - 3.8 0.1 - 0.2 3.5 0.9
31.2 – 34.7 4.6 – 6.7 -
27.7 - 30.7 4.5 – 6.6 8.3 1.4
Net Earnings (after tax) 27.7 - 30.7 4.5 – 6.6 3.5 0.9
10 cents
21.0
-
22.7
21.0
Impact on ($ per ounce sold) AISC(2) on byproduct basis 1.0 6.3 – 8.3 10.4 – 11.6 1.8 – 2.0 28.5 – 31.7
Appreciation of currency against the U.S. dollar will result in higher costs and lower cash flow and earnings, depreciation of currency against the U.S. dollar results in decreased costs and increased cash flow and earnings.
1
All-in sustaining costs per ounce sold (“AISC”) on a by-product basis is a non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s news release February 23, 2017.
2
3 The Company has recalculated the sensitivities for its revenues, earnings and cash flows for 2017 to copper price changes following a commencement in the first quarter of 2017 of a program to mitigate copper price risk by purchasing fixed price forward sales contracts and zero-cost collar.
February 2017
Material Assumptions and Risks Material assumptions or factors used to forecast production and costs for 2017 include the following: • a gold price of $1,200 per ounce, • a copper price of $2.50 per pound, • a molybdenum price of $7.35 per pound, • exchange rates: • $1USD:$1.32 CAD, • $1USD:67.0 Kyrgyz som, • $1USD:0.90 Euro, • diesel fuel price assumption: • $0.50/litre at Kumtor, • $0.65/litre at Mount Milligan.
22
Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines Cornerstone Canadian Development Project
Ontario: Top Tier Mining Jurisdiction
50:50 development partnership with Premier Gold Open pit reserves(1) (100%) 4.7Moz Au @ 1.02 g/t Historic gold production of 4.12M oz (~1934-1970) Large land package covers 337km2, good infrastructure
Greenstone Gold Property
Significant exploration and underground resource potential
Greenstone Development Project
Location: Ontario, Canada
Bankable feasibility study completed in November 2016
Brookbank Deposit
Brookbank Jellicoe
Geraldton
11
Viper
Hardrock
Hardrock Deposit Beardmore
Beardmore – Geraldton Greenstone Belt +110 km February 2017
(1) Technical Report on the Hardrock Project dated December 21, 2016.
23
Centerra: Senior Management Industry Experience
SCOTT PERRY Chief Executive Officer
FRANK HERBERT President
GORDON REID Chief Operating Officer
DARREN MILLMAN Chief Financial Officer
February 2017
20 years
25 years
30 years
18 years
Background
•
Appointed Chief Executive Officer in November, 2015
•
Former Chief Executive Officer at AuRico Gold
•
Appointed President in November, 2015
•
Joined Centerra in 2004
•
Appointed Chief Operating Officer in January, 2013
•
Joined Centerra in 2004
•
Appointed Chief Financial Officer in April, 2016
•
Joined Centerra in 2013
24
Centerra: Directors
Board of Directors
February 2017
Background
STEPHEN A. LANG
Chairman
Appointed Director of Centerra’s Board, June 2008
BRUCE V. WALTER
Vice Chair
Appointed Director of Centerra’s Board, May 2008
SCOTT G. PERRY
Director
Appointed Director of Centerra’s Board, January 2016
RICHARD W. CONNOR
Director
Appointed Director of Centerra’s Board, June 2012
RAPHAEL A. GIRARD
Director
Appointed Director of Centerra’s Board, August 2010
EDUARD KUBATOV
Director
Appointed Director of Centerra’s Board, March 2016
NURLAN KYSHTOBAEV
Director
Appointed Director of Centerra’s Board, May 2016
MICHAEL S. PARRETT
Director
Appointed Director of Centerra’s Board, May 2014
JACQUES PERRON
Director
Appointed Director of Centerra’s Board, October 2016
SHERYL K. PRESSLER
Director
Appointed Director of Centerra’s Board, May 2008
TERRY V. ROGERS
Director
Appointed Director of Centerra’s Board, February 2003
BEKTUR SAGYNOV
Director
Appointed Director of Centerra’s Board, March 2016
25
TSX: CG www.centerragold.com
TSX: CG www.centerragold.com
Caution Regarding Forward-Looking Information Information contained in this presentation which are not statements of historical facts, and the documents incorporated by reference herein, may be “forward-looking information” for the purposes of 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. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward-looking information. These forward-looking statements relate to, among other things, the Company’s expectations regarding funding all planned capital and operating expenditures of the Company for 2017 from cash, short-term investments and cash generated from the Mount Milligan mine; expectations regarding continued discussions with the Government of the Kyrgyz Republic to resolve all outstanding issues affecting the Kumtor Project in a manner that is fair to all stakeholders; the continuation of negotiations with the Mongolian Government on definitive agreements related to the Gatsuurt Project; the impact of continuous improvement projects at Mount Milligan, including improvements on gold and copper recovery rates; the timing for a new technical report on the Mount Milligan Project; timing for gold production from the Öksüt Project; ability to satisfy conditions precedents to access funds under the Öksüt Facility, including the receipt of the key pastureland permit; expected time frames for an arbitral decision on the Company’s application for partial award or in the alternative, interim relief; the expectation of applying for and receiving the permit to discharge water from its tailings facility starting in the spring; plans to appeal to the Kyrgyz Republic Supreme Court any court decisions on the Kumtor environmental court claims (if needed); expectations of the resumption of the Kumtor environmental pollution claim in the Kyrgyz Republic court; timing for the closing of the sale of ATO; statements made under the heading, “2017 Outlook” including 2017 production, all-in sustaining costs per ounce sold; 2017 exploration expenditures, 2017 capital expenditures, 2017 corporate administration and community investment expenses, 2017 depreciation, depletion and amortization expenses, expectations of our hedging program, and 2017 tax expenses; planned mining activities in 2017; expectations regarding the continuation of the cash neutral basis of the Company’s molybdenum business unit; the expected time frame for the tailings dam construction at the Kumtor mine. 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. Factors that could cause actual results or events to differ materially from current expectations include, among other things: (A) strategic, legal, planning and other risks, including: political risks associated with the Company’s operations in the Kyrgyz Republic, Mongolia and Turkey; resource nationalism including the management of external stakeholder expectations; liquidity risks created by Centerra’s inability to access funds held at KGC; the impact of changes in, or to the more aggressive enforcement of, laws, regulations and government practices in the jurisdictions in which the Company operates including any delays or refusals to grant required permits and licenses, unjustified civil or criminal action against the Company, its affiliates or its current or former employees; risks that community activism may result in increased contributory demands or in business interruptions; the impact of any actions taken by the Kyrgyz Republic Government and Parliament relating to the Kumtor Project Agreements which are inconsistent with the rights of Centerra and KGC under the Kumtor Project Agreements; any impact on the purported cancellation of Kumtor’s land use rights at the Kumtor Project pursuant to a court claim commenced by the Kyrgyz Republic GPO; the risks related to other outstanding litigation affecting the Company’s operations in the Kyrgyz Republic and elsewhere; the potential impact on the Kumtor Project of investigations by Kyrgyz Republic instrumentalities and movement restrictions on KGC employees and managers; the impact of changes to, the increased enforcement of, environmental laws and regulations relating to the Company’s operations; the impact of any sanctions imposed by Canada, the United States or other jurisdictions against various Russian individuals and entities; potential defects of title in the Company’s properties that are not known as of the date hereof; the inability of the Company and its subsidiaries to enforce their legal rights in certain circumstances; the presence of a significant shareholder that is a state-owned company of the Kyrgyz Republic; risks related to anti-corruption legislation; risks related to the concentration of assets in Central Asia; Centerra’s future exploration and development activities not being successful; Centerra not being able to replace mineral reserves; difficulties with Centerra’s joint venture partners; and aboriginal claims and consultative issues relating to the Company’s properties which are in proximity to First Nations communities; potential risks related to kidnapping or acts of terrorism; (B) risks relating to financial matters, including: sensitivity of the Company’s business to the volatility of gold and copper prices, the use of provisionally-priced sales contracts for production at Mount Milligan, reliance on a few key customers for the gold-copper concentrate at Mount Milligan, use of commodity derivatives, the imprecision of the Company’s mineral reserves and resources estimates and the assumptions they rely on, the accuracy of the Company’s production and cost estimates, the impact of restrictive covenants in the Company’s credit facilities which may, among other things, restrict the Company from pursuing certain business activities or making distributions from its subsidiaries, the Company’s ability to obtain future financing, the impact of global financial conditions, the impact of currency fluctuations, the effect of market conditions on the Company’s shortterm investments, the Company’s ability to make payments including any payments of principal and interest on the Company’s debt facilities depends on the cash flow of its subsidiaries; and (C) risks related to operational matters and geotechnical issues and the Company’s continued ability to successfully manage such matters, including: movement of the Davidov Glacier and the waste and ice movement at the Kumtor Project, the continued performance of the buttress; the occurrence of further ground movements at the Kumtor Project and mechanical availability; the ability of the Company to successfully ramp-up to design criteria of the secondary crusher at the Mt. Milligan Project; the success of the Company’s future exploration and development activities, including the financial and political risks inherent in carrying out exploration activities; inherent risks associated with the use of sodium cyanide in the mining operations; the adequacy of the Company’s insurance to mitigate operational risks; mechanical breakdowns; the Company’s ability to obtain the necessary permits and authorizations to (among other things) raise the tailings dam at the Kumtor Project to the required height; the Company’s ability to replace its mineral reserves; the occurrence of any labour unrest or disturbance and the ability of the Company to successfully re-negotiate collective agreements when required; the risk that Centerra’s workforce may be exposed to widespread epidemic; seismic activity in the vicinity of the Company’s properties; long lead times required for equipment and supplies given the remote location of some of the Company’s operating properties; reliance on a limited number of suppliers for certain consumables, equipment and components; illegal mining on the Company’s Mongolian properties; the Company’s ability to accurately predict decommissioning and reclamation costs; the Company’s ability to attract and retain qualified personnel; competition for mineral acquisition opportunities; and risks associated with the conduct of joint ventures/partnerships; the Company’s ability to manage its projects effectively and to mitigate the potential lack of availability of contractors, budget and timing overruns and project resources. See “Risk Factors” in the Company’s Management’s Discussion and Analysis for the year ended December 31, 2016 and the 2015 Annual Information Form, both of which are available on SEDAR at www.sedar.com. Furthermore, market price fluctuations in gold and copper, as well as increased capital or production costs or reduced recovery rates may render mineral 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. 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 herein or incorporated by reference. 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 February 23, 2017. 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. Except as otherwise noted herein, Gordon Reid, Professional Engineer and Centerra’s Vice President and Chief Operating Officer, has reviewed and approved the scientific and technical information contained in this presentation. Mr. Reid is a Qualified Person within the meaning of NI 43-101. For more information, please refer to the properties technical reports, which are available on SEDAR. All figures are in United States dollars unless otherwise stated.
February 2017
2
Centerra: Built For Success Consensus Asset NAV Breakdown
Corporate Highlights
US 0%
Internationally Diversified Gold Producer
Kyrgyzstan 33%
Closed Thompson Creek Acquisition Canada 46%
Up to 795kozpa gold at AISC1 of $743 to $824 per ounce and 60M lbs of copper Significant operational cash flow profile
Mongolia 10%
Turkey 11%
Solid late-stage development pipeline Profitably Growing to +1Moz’s Per Annum
Cash2 Position of US$409MM2
Trading at a discount to peers, potential rerating
Positive Retained Earnings of US$856MM2
Ounces (000’s)
Projects drive +100% increase in gold production by 2020 1,000
0 Kumtor
1. 2.
Mt Milligan
Oksut
Gatsuurt
Greenstone
Total
2017e AISC: Kumtor mine $836 to $925 / oz, Mt. Milligan $457 to $508 / oz. All-in sustaining costs per ounce sold is a non-GAAP measures and is discussed under “Non-GAAP Measures” in the Company’s news release Feb.23, 2017. As at December 31, 2016; Cash includes cash, cash equivalents, short-term investments (includes restricted cash of KGC).
February 2017
3
Centerra: 2016 Corporate Update Balance Sheet (US$)
February 2017 2016: Internally Funded Business (US$) 900 8
237
800
74
318
(as of December 31, 2016)
2
Unrestricted Cash $160MM
US$ Millions
700 600
111
542
500
Debt $475MM
23
409
400
Restricted Cash $248MM
300 2015 Cash
Kumtor Cashflow
Mt Milligan Cashflow
EBRD debt proceeds
TCM Acquisition
Other (Projects, G&A, etc)
Shareholder 2016 Cash 1 Dividends
Retained Earnings Profile (US$)
Share Count 291.3
300.0
1,200 250.0
216.2 216.3 216.3
226.7
235.5 236.1 236.4 236.4 236.4 237.9
1,000
200.0
1,600
800 US$ Millions
millions
2,000
150.0
Cash
$542MM
100.0
1,200
600 800
400
Gold Price (US$/oz)
200
400
200
50.0 0 0.0 2006 1
February 2017
2
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Retained Earnings
Cumulative Dividends
0
Gold Price
Includes cash, cash equivalents, and short-term investments, (includes restricted cash of $248MM at KGC). TCM acquisition is shown net of cash received on completion of acquisition ($98MM), net proceeds from equity offering ($141MM), net proceeds from debt ($324MM).
4
Centerra: Robust Financial Margins in all Cycles 2015 Free Cash Flow Profile (US$)
1,000
2,000
800
1,600
600
1,200
400
800
200
400
Gold Price (US$/oz)
US$ Millions
Cash Reserves1 Profile (US$)
Cash Flows Invested $244 MM
Operating Cash Flows $334 MM
0
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Cumulative Dividends
Cash Balance 1
Gold Price
Retained Earnings Profile (US$) 1,200
2,000
240
800
U/G miners
1,600
240
U/G miners
1,200
600 4,000tpd
200 0
800
YE target of
400
U/G miners 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
February 2017
Cash Flows Invested $223MM
400
170
Retained Earnings
Gold Price (US$/oz)
1,000
US$ Millions
2016 Free Cash Flow Profile (US$)
Cumulative Dividends
Operating Cash Flows $371MM
0
Gold Price
1. Cash reserves and cash balance includes cash, cash equivalents and short-term investments, includes restricted cash at KGC.
5
Diversified Portfolio with Balanced Geopolitical Profile Asset NAV breakdown
Au reserves & resources
Consensus Asset NAV by geography
P+P reserves by geography
US 0%
Kyrgyz Republic 32%
Kyrgyzstan 33% Canada 46%
Canada 52%
Mongolia 10%
Turkey 7% Mongolia 10%
Turkey 11%
Consensus Asset NAV by stage
M+I resources (inclusive) by geography(1)
Exploration 9% Kyrgyz Republic 33%
Development 21% Canada 48%
Producing 70% Source: Company filings and analyst estimates. (1) Resources are shown inclusive of reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
February 2017
Turkey 6% Mongolia 13% 6
Centerra: Significant Re-Rating Potential Analyst Consensus Price / NAV(1)
7%
5%
5%
5%
5%
5%
5%
1.0x
1.0x
1.0x
1.0x
1.0x
5%
5%
5%
0.8x
0.8x
Detour Gold
5%
Median Analyst Discount Rate
Yamana Gold
Centerra vs Intermediate Gold Peers
5%
1.5x
Median: 1.0x 0.8x
Centerra
0.9x
Tahoe Resources
Kinross Gold
IAMGOLD
SEMAFO
New Gold
Alamos Gold
Acacia Mining
B2Gold
1.1x
Silver Standard
1.2x
Source: FactSet, available street research. (1) Consensus Price / Net Asset Value (“NAV”) is calculated as the share price for each respective company as at February 17, 2017 divided by the average research analyst estimate for that same company. P/NAV is based on Centerra’s share price as of February 17, 2017 and the average analyst NAV per share estimate for Centerra as at the same date.
February 2017
7
Centerra: Operational Excellence 2016 GUIDANCE vs ACTUAL: GROWING PRODUCTION AND DECLINING COSTS
Production increase: up to 7%; Costs decline: up to 26%; 2016 Gold Production exceeds mid-point of revised guidance, AISC lower than mid-point of revised guidance 2016 Kumtor Guidance Highlights Increased Gold Production Guidance - Mid-Point, Actual
600,000 550,000
550,960
Reduced All-In Sustaining Cost Per Ounce Guidance (US$/oz) - Mid Point 900
540,000
860
515,000
500,000
800
450,000 692
700
400,000
640 350,000 600 300,000 250,000
500 Original
February 2017
Revised
Actual
Original
Revised
(1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release of February 23, 2017.
Actual 8
Mount Milligan: Long Life, Low Cost Gold Copper Mine 2016
2017E Guidance
Gold Production (koz)
205
260-290
Copper Production (MMlbs)
59
55-65
All-In Sustaining Costs (US$/oz)(1)
NA
$457-$508
Remaining reserve life (years)
+20 years Copper
5.8Moz
2,049Mlbs
0.4g/t
0.187%
35% @ US$435/oz
18.75% @ 15% of spot Cu price
P&P Reserves(2) Grade Royal Gold stream
Significant Open Pit Gold and Copper Production
Significant Open Pit Gold and Copper Production
20 years of production from existing P&P reserves(2)
300 250
Low cost, long life production
200
Stable, mining-friendly jurisdiction Restructured stream provides additional gold upside
Gold ounces
5.8M gold reserve ounces(2)
275 218
80
71
70 59
205
60
50 40
150
30
100
20 50
10 0
0 2015 February 2017
60 Copper M lbs
Gold
2016 GOLD
2017E
(1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release February 23, 2017. (2) Refer to February 23, 2017 mineral reserves and resources news release.
2015
2016 2017E COPPER 9
Kumtor: World Class Open Pit Gold Mine 2015
2016
2017E
Gold Production (koz)
521
551
455-505
Adjusted Operating Costs ($/oz) (1)
$326
$342
$359-$397
All-In Sustaining Costs ($/oz) (1)
$758
$640
$836-$925
Sustaining Capital ($MM)(1)
$51
$61
$68
Growth Capital ($MM)(1)
$14
$15
$28
Projected Asset Life (years)
+9
Reserves (Moz)
5.1
Au Grade (g/t)
2.5
Resources M&I (Moz)
2.6
Au Grade (g/t)
2.8
World Class Cornerstone Asset
Significant Open Pit Gold Production to 2026
20 years of uninterrupted profitable production
650,000
4.50 4.00
Over 10.9M ounces produced since 1997 miners U/G miners More than 5M ounces remaining U/G in open pit reserves
207
U/G miners target of Low cost,YElong life production
4,000tpd
3.50
500,000
3.00 2.50
350,000
2.00
High-grade170 underground opportunity U/G miners
Strong stable platform to grow Centerra February 2017
grade g/t
240
Ounces
240
1.50 200,000
1.00 2014 2015 2016 2017 2018 2019 2020 2021 2022
(1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release February 23, 2017.
10
Öksüt: Funded High Margin Gold Production 2015 Feasibility Highlights Mine Type
Open Pit, Heap Leach
Avg. LOM Annual Production
110koz Au
AISC(1)
$490
(US$/oz)
Reserve Mine Life
8 years
Development Capex (US$MM) P&P
$221
Reserves(2)(Moz)
1.2
Au grade (g/t)
1.40
Life of Mine Recovery
77%
Life of Mine Strip Ratio (w:o)
Öksüt Gold Project
2:1
First Gold Pour
Mid-2018
IRR (after tax)
43%
NPV(8%) - after tax (US$MM)
>$240
Catalyst Schedule
Projected Near-Term Gold Production (2015 Study)
EIA approval received in November 2015
Major construction expected in 2017 2 stage crushing, stack at 11,000 tpd Bought back Stratex and Teck royalties US$150MM low-cost +5-year financing in-place Significant exploration potential February 2017
Gold Production (000's)
Forestry Permit Approved and Received July 2016
250
2.50
200
2.00
150
1.50
100
1.00
50
0.50
0 Years:
Process Grade (g/tonne)
Avg. LOM
0.00 0 2016
+1 2017
+2 2018
+3 2019
+4 2020
+5 2021
+6 2022
+7 2023
+8 2024
(1) Non-GAAP measure see “Non-GAAP Measures in the MDA and news release of February 23, 2017. (2) Company filings. Technical Report on the Öksüt Gold Project dated September 3, 2015.
11
Gatsuurt: Gold Development Project Highlights The Gatsuurt Project is ~90 km north of Ulaan Baatar
Boroo mill on care & maintenance awaiting Gatsuurt approval Gatsuurt declared strategic January 2015 3% royalty (versus 34% ownership) approved by government Investment development agreement negotiations underway Potential production 12-18 months after approval P&P Reserves(1) of 1.6M contained ounces of gold @ 2.9 g/tonne Strip ratio of 6:1 and process recoveries in excess of 76% Significant exploration upside
Boroo’s Historical Cumulative Net Cash Generation (US$MM)
In-Place 5ktpd Processing Facility (Boroo)
600 500 400 300 200 100 0 (100) 2004
2005
2006
2007
2008
2009
(1) See mineral reserves news release February 23, 2017. February 2017
2010
2011
2012
2013
2014 12
Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines Cornerstone Canadian Development Project
Ontario: Top Tier Mining Jurisdiction
50:50 development partnership with Premier Gold Open pit reserves(1) (100%) 4.7Moz Au @ 1.02 g/t Historic gold production of 4.12M oz (~1934-1970) Large land package covers 337km2, good infrastructure Significant exploration and underground resource potential
Greenstone Gold Property
Greenstone Development Project
Location: Ontario, Canada
2016 Feasibility Highlights (100%) Mine Type
Open Pit, CIP Mill
Mill Throughput design
27,000 tpd
Avg. LOM Annual Production
288koz Au
Avg. LOM AISC(2) (US$/oz) Reserve Mine Life
$600 14.5 years
Development Capex (US$MM)
$962
Sustaining Capital(2) (US$MM)
$101
P&P Reserves(1)(Moz)
4.7
Au grade (g/t)
1.02
Life of Mine Recovery
90%
Life of Mine Strip Ratio (w:o)
3.87:1
IRR (after tax)
14.4%
NPV(5%) - after tax (US$MM) February 2017
Projected Gold Production (100%)
$545
(1) Technical Report on the Hardrock Project dated December 21, 2016. (2) Non-GAAP measure, see “Non-GAAP measures” in MDA and news release Feb. 23, 2017.
13
Potential Upside Optionality: Molybdenum Molybdenum business
Thompson Creek Mine ● Located in Idaho, is the world’s fourth largest open-pit primary
Well-established molybdenum business
molybdenum mine Consists of the Langeloth Metallurgical Facility and two mines: Thompson Creek Mine and Endako Langeloth can produce a suite of premium molybdenum products that raise the average realized price
● Operations began in 1983, using conventional open-pit mining and a onsite 25,500 tpd mill ● In December, 2014 placed on care and maintenance
Endako Mine
Significant defined resources and infrastructure in place Ability to be one of the first movers upon moly market recovery Lower cost to restart production compared to greenfield project Molybdenum business well positioned to recover once market conditions and pricing improve
Historical Molybdenum Segment EBITDA(1) (US$MM) $444
● Endako Mine is a fully integrated molybdenum facility located in BC ● TCM is the operator and 75% owner; Sojitz owns 25% ● Endako consists of three adjoined pits and a fully integrated operation with on-site mill and multiple hearth roasting facility ● New mill processing facility that was completed in 2012 for ~US$500MM ● In July 2015 placed on care and maintenance
Langeloth Metallurgical Facility ● Located 40 km west of Pittsburgh, Pennsylvania $269
$265
● Operates both as a toll processor and as a purchaser of molybdenum
$126
$126
concentrates from third parties
$124
● Cash flows from the Langeloth operations are expected to cover care and
$18 ($21) 2008
2009
2010
2011
2012
2013
2014
maintenance expenses associated with the molybdenum mines for 2016
2015
(1) Prior to intersegment eliminations. Historical EBITDA not reported, therefore calculated based on historical segment disclosure. February 2017
14
Centerra: Strong Low-cost Operating Platform 2017 Gold production guidance (Koz)(1)
2017 All-in sustaining costs (US$/oz)(1)
2,600
1,200 1,040
1,140
875
865
744
785
815
860
845
900
910
Acacia Mining
Yamana Gold
940
955
Alamos Gold
B2Gold
965
1,075
975
755
575
570
540 415
405
400
383 287 225
Kinross Gold
Yamana Gold
Acacia IAMGOLD New Mining Centerra
Detour Gold
B2Gold
Prior Centerra
Alamos Gold
New Gold
Prior New SEMAFO New Gold Eldorado Centerra Centerra Gold
Tahoe Eldorado Silver SEMAFO Resources Gold Standard(2)
Silver Kinross IAMGOLD Detour (3) Standard Gold Gold
Tahoe Resources
P+P Gold Reserves (Moz)(4) 31
21
17
16
16 15
8
8
7 6 4
Kinross Gold
February 2017
Source: (1) (2) (3) (4)
Eldorado Gold
Yamana Gold
Centerra
Detour Gold
New Gold
Company filings, FactSet, Available street research. Guidance based on the midpoint of the guidance range. Silver Standard gold guidance is from Marigold and Seabee. Silver Standard AISC based on broker estimates as guidance estimates not provided. Latest available as at February 17, 2017.
IAMGOLD
Acacia Mining
B2Gold
Alamos Gold
Tahoe Resources
3
3
SEMAFO
Silver Standard
15
The New Centerra: Built For Success Kumtor: World Class Open Pit Gold Mine
Producing
Cornerstone asset underpinning the Company’s growing production portfolio Long life, low cost asset generating significant positive cash flow Mount Milligan: Long Life, Low Cost Open Pit Gold-Copper Mine in British Columbia Large scale, low cost mine that recently ramped-up; expected to generate significant free cash flow Amended gold stream positions Mount Milligan as a premier gold asset Öksüt: High Margin Open Pit Heap Leach Gold Mine Funded, late-stage gold development project
Development
Near-term high margin gold production Gatsuurt: Open Pit Gold Mine with established infrastructure Investment agreement negotiations underway; anticipated production ~12-18 months after approval Surface processing infrastructure in-place Greenstone: Large Scale Open Pit Gold project One of Canada’s largest undeveloped open pit gold deposits Bankable feasibility study completed and mine permitting work underway February 2017
16
Appendices
TSX: CG www.centerragold.com
Q4 & 2016 Corporate Update
Safety – Continue to roll out “Work Safe : Home Safe” Program Across the Company Strong Gold Production of 598,677 Ounces, including 550,960 Ounces at Kumtor
2016 All-In Sustaining Cost1 of $682 Per Ounce, Kumtor achieved $640 Per Ounce, both lower
2016 Net Earnings of $151.5 Million ($0.60 Cents Per Share, basic), including Q4 Net Earnings of
than revised guidance
$63.6 Million ($0.23 Cents Per Share, basic) Cash Flow From Operations of $371.4 Million ($1.48 Cents Per Share, basic) Kumtor Generated $237 Million and Mount Milligan Generated $8 Million Cash December 31, 2016 Cash2 Position of $409 Million2 Closed Acquisition of Thompson Creek Metals Entered into New US$325 Million 5-year Credit Agreement to Finance Acquisition
1. All-in sustaining costs per ounce sold is a non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A December 31, 2016 and news release February 23, 2017. 2. Includes cash, cash equivalents and short-term investments, including restricted cash at December 31, 2016. 18 February 2017
Financial Highlights1
(in thousands, except ounces, per share amounts, and average realized price3)
Revenue(2) Total gold ounces sold(3) Total copper pounds sold(3) (000’s) Operating cash flow Operating cash flow per share, basic Net earnings (loss) Earnings (loss) per share, basic Average realized gold price per ounce(3)(4) 1. 2. 3. 4.
Quarter Ended Dec.31, 2016
Quarter Ended Dec.31, 2015
Year Ended Dec.31, 2016
Year Ended Dec.31, 2015
$305,723
$148,332
$760,758
$623,950
225,996
135,064
580,496
536,842
10,399
-
10,399
-
$170,397
$47,534
$371,444
$333,566
$0.60
$0.20
$1.48
$1.41
$63,628
($2,877)
$151,538
$41,629
$0.23
($0.01)
$0.60
$0.18
$1,154
$1,098
$1,233
$1,162
U.S. dollars For the three months and year ended December 31, 2016 consolidated revenue excludes any revenue from Boroo and includes results from Thompson Creek operations on a 100% basis beginning October 20, 2016 with no comparative results included in both periods of 2015. 2016 numbers for gold ounces sold exclude any sales from the Boroo mine and includes gold and copper sales on a 100% basis from Mt. Milligan beginning October 20, 2016 with no comparative results included in 2015. Average realized gold price per ounce is a non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release February 23, 2017.
February 2017
19
Mineral Reserves - Proven & Probable Proven and Probable Gold Mineral Reserves Increase to 16 million ounces Proven and Probable Copper Mineral Reserves are 2,049 million pounds
Copper Mineral Reserves Proven Property Mt Milligan
February 2017
Probable
Total Proven and Probable
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
256,847
0.187
1,059
239,362
0.188
991
496,209
0.187
2,049
See Mineral Reserves and Resources News Release February 23, 2017.
20
Centerra: 2017 Guidance 2017 All-in Sustaining 2017 Gold Production 2017 Copper Production Costs on a By-product basis1 (ounces)
(millions pounds)
(per ounce sold)
Kumtor Mine
455,000 – 505,000
-
$836 – $925
Mount Milligan
260,000 – 290,000
55 – 65
$457 – $508
715,000 – 795,000
55 – 65
$743-$824
Centerra
Projects
2017 Sustaining Capital1
2017 Growth Capital1
(millions)
(millions)
Kumtor Mine
$68
$28
Mount Milligan Mine
$26
-
Öksüt Project
-
$11
Mongolia/Gatsuurt Project
-
$5
-
$8
$2
-
$96
$52
Greenstone
Property2
Corporate and other Consolidated Total
1
Non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s news release dated February 23, 2017.
2
Greenstone growth capital includes capitalized amounts for Premier’s 50% share of the Greenstone costs funded in full by Centerra.
February 2017
21
2017 Guidance: Sensitivities Change Gold Price Copper Price(3) Diesel Fuel Kyrgyz som(1) Canadian dollar(1)
Costs
Impact on ($ millions) Revenues Cash flows
$50/oz 10% 10% 1 som
3.4 - 3.8 0.1 - 0.2 3.5 0.9
31.2 – 34.7 4.6 – 6.7 -
27.7 - 30.7 4.5 – 6.6 8.3 1.4
Net Earnings (after tax) 27.7 - 30.7 4.5 – 6.6 3.5 0.9
10 cents
21.0
-
22.7
21.0
Impact on ($ per ounce sold) AISC(2) on byproduct basis 1.0 6.3 – 8.3 10.4 – 11.6 1.8 – 2.0 28.5 – 31.7
Appreciation of currency against the U.S. dollar will result in higher costs and lower cash flow and earnings, depreciation of currency against the U.S. dollar results in decreased costs and increased cash flow and earnings.
1
All-in sustaining costs per ounce sold (“AISC”) on a by-product basis is a non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s news release February 23, 2017.
2
3 The Company has recalculated the sensitivities for its revenues, earnings and cash flows for 2017 to copper price changes following a commencement in the first quarter of 2017 of a program to mitigate copper price risk by purchasing fixed price forward sales contracts and zero-cost collar.
February 2017
Material Assumptions and Risks Material assumptions or factors used to forecast production and costs for 2017 include the following: • a gold price of $1,200 per ounce, • a copper price of $2.50 per pound, • a molybdenum price of $7.35 per pound, • exchange rates: • $1USD:$1.32 CAD, • $1USD:67.0 Kyrgyz som, • $1USD:0.90 Euro, • diesel fuel price assumption: • $0.50/litre at Kumtor, • $0.65/litre at Mount Milligan.
22
Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines Cornerstone Canadian Development Project
Ontario: Top Tier Mining Jurisdiction
50:50 development partnership with Premier Gold Open pit reserves(1) (100%) 4.7Moz Au @ 1.02 g/t Historic gold production of 4.12M oz (~1934-1970) Large land package covers 337km2, good infrastructure
Greenstone Gold Property
Significant exploration and underground resource potential
Greenstone Development Project
Location: Ontario, Canada
Bankable feasibility study completed in November 2016
Brookbank Deposit
Brookbank Jellicoe
Geraldton
11
Viper
Hardrock
Hardrock Deposit Beardmore
Beardmore – Geraldton Greenstone Belt +110 km February 2017
(1) Technical Report on the Hardrock Project dated December 21, 2016.
23
Centerra: Senior Management Industry Experience
SCOTT PERRY Chief Executive Officer
FRANK HERBERT President
GORDON REID Chief Operating Officer
DARREN MILLMAN Chief Financial Officer
February 2017
20 years
25 years
30 years
18 years
Background
•
Appointed Chief Executive Officer in November, 2015
•
Former Chief Executive Officer at AuRico Gold
•
Appointed President in November, 2015
•
Joined Centerra in 2004
•
Appointed Chief Operating Officer in January, 2013
•
Joined Centerra in 2004
•
Appointed Chief Financial Officer in April, 2016
•
Joined Centerra in 2013
24
Centerra: Directors
Board of Directors
February 2017
Background
STEPHEN A. LANG
Chairman
Appointed Director of Centerra’s Board, June 2008
BRUCE V. WALTER
Vice Chair
Appointed Director of Centerra’s Board, May 2008
SCOTT G. PERRY
Director
Appointed Director of Centerra’s Board, January 2016
RICHARD W. CONNOR
Director
Appointed Director of Centerra’s Board, June 2012
RAPHAEL A. GIRARD
Director
Appointed Director of Centerra’s Board, August 2010
EDUARD KUBATOV
Director
Appointed Director of Centerra’s Board, March 2016
NURLAN KYSHTOBAEV
Director
Appointed Director of Centerra’s Board, May 2016
MICHAEL S. PARRETT
Director
Appointed Director of Centerra’s Board, May 2014
JACQUES PERRON
Director
Appointed Director of Centerra’s Board, October 2016
SHERYL K. PRESSLER
Director
Appointed Director of Centerra’s Board, May 2008
TERRY V. ROGERS
Director
Appointed Director of Centerra’s Board, February 2003
BEKTUR SAGYNOV
Director
Appointed Director of Centerra’s Board, March 2016
25
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