Investor Presentation February 2018
Investor Presentation February 2018
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”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”, “understand” and similar expressions identify forward-looking information. These forward-looking statements relate to, among other things: the development activities at the Öksüt Project and the Kemess Project; further amendments of Mount Milligan’s Environmental Certificate; currency movements and hedging transactions; operational plans at Kumtor and Mount Milligan in 2018, including as to the expected restart of the Mount Milligan mill, the timing and outcomes of projects initiated at the Mount Milligan mine aimed at improving metal recovery and other opportunities, the availability of water and consultations with regulatory and First Nations groups; discussions between GGM and First Nations groups regarding impact benefit agreements; the closing of the Strategic Agreement entered into with the Kyrgyz Republic Government and the related resolution of various civil and criminal cases in the Kyrgyz Republic which affect the Kumtor Project; the Company’s cash on hand, working capital, future cash flows and existing credit facilities being sufficient to fund anticipated operating cash requirements; AMT refund; the resumption of negotiations with the Mongolian Government related to the Gatsuurt Project; the timing for receipt of proceeds from the sale of the ATO licenses; and statements found under the heading, “2018 Outlook”, including forecast 2018 production costs, capital and exploration expenditures and taxes. 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 and Canada; risks that any of the conditions precedent to the Strategic Agreement will not be satisfied in a timely manner or at all, particularly as the Government may not bind the General Prosecutor’s Office or the Parliament of the Kyrgyz Republic; a decision by the General Prosecutor’s Office, or its successor the Anti-Corruption Service of the State Committee for National Security, to re-open at any time civil or criminal proceedings against Centerra, its subsidiaries or other stakeholders; the failure of the Government to comply with its continuing obligations under the Strategic Agreement, including the requirement that it comply at all times with its obligations under the Kumtor Project Agreements, allow for the continued operation of the Kumtor Mine by KGC and KOC and not take any expropriatory action; actions by the Government or any state agency or the General Prosecutor's Office that serve to restrict or otherwise interfere with the payment of funds by KGC and KOC to Centerra; resource nationalism including the management of external stakeholder expectations; the impact of changes in, or to the more aggressive enforcement of, laws, regulations and government practices, including with respect to the environment, 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 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; the risks related to other outstanding litigation affecting the Company’s operations in the Kyrgyz Republic and elsewhere; the impact of the delay by relevant government agencies to provide required approvals, expertises and permits; potential impact on the Kumtor Project of investigations by Kyrgyz Republic instrumentalities; the terms pursuant to which the Mongolian Government will participate in, or to take a special royalty rate in, the Gatsuurt Project; the impact of constitutional changes in Turkey; the impact of any sanctions imposed by Canada, the United States or other jurisdictions against various Russian individuals and entities; the ability of the Company to successfully negotiate agreements for the development of the Gatsuurt Project; 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; Aboriginal claims and consultative issues relating to the Company’s properties which are in proximity to Aboriginal communities; and 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, copper and other mineral 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 short-term 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 the movement of the Davidov Glacier, waste and ice movement and continued performance of the buttress at the Kumtor Project; the occurrence of further ground movements at the Kumtor Project and mechanical availability; the ability of the Company to successfully re-start full mill processing operation at Mount Milligan and achieve expected throughput; 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 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 section titled “Risks that can affect our business” in the most recently filed Annual Information Form 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 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. Mineral resources are not mineral reserves, and do not have demonstrated economic viability, but do have reasonable prospects for economic extraction. Measured and indicated resources are sufficiently well defined to allow geological and grade continuity to be reasonably assumed and permit the application of technical and economic parameters in assessing the economic viability of the resource. Inferred resources are estimated on limited information not sufficient to verify geological and grade continuity or to allow technical and economic parameters to be applied. Inferred resources are too speculative geologically to have economic considerations applied to them to enable them to be categorized as mineral reserves. There is no certainty that mineral resources of any category can be upgraded to mineral reserves through continued exploration. 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, 2018. 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 2018
2
Centerra: Built For Success Corporate Highlights
Consensus Asset NAV Breakdown Mongolia U.S. Australia 2% 2% 1% Turkey 9%
Internationally Diversified Gold Producer Two Cornerstone Lower-Cost Quartile Assets 2017 Gold Production 785koz at AISC1 of $688 per ounce and 53.6M lbs of copper
Canada 53%
Kyrgyz Republic 33%
January 2018, completed acquisition of AuRico Metals; received Öksüt pastureland permit and IIC2 Significant Operational Cash Flow Profile Solid Late-Stage Development Pipeline
Trading at a Discount to Peers, Potential for Re-Rating Positive Retained Earnings of US$1,066MM3 Expected 2018 production of up to 715kozpa gold at AISC1 of $799 to $885 per ounce and 47 to 52M lbs of copper
US$ Millions
Cash Position of US$417MM3
1,000
2,000
800
1,600
600
1,200
400
800
200
400
0
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cumulative Dividends 1. 2. 3.
Gold Price (US$/oz)
Cash Reserves3 Profile (US$)
Cash Balance 3
Gold Price
All-in sustaining costs per ounce sold (AISC) is a non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s MDA & news release Feb. 23, 2018. 2018e AISC: Kumtor $733 to $815/oz, Mount Milligan $806 to $888/oz. Refer to Company’s news releases January 8, 11 and February 12, 2018. As at December 31, 2017.
February 2018
3
Centerra: 2017 Corporate Update 2017: Internally Funded Business (US$MM’s) 800
188
700 600
209
127
500
Liquidity Profile (US$MM’s)
98
409
$3353
417
400 $2952
300
US$630MM
200 100 0
1
2016 Cash Mt Milligan Kumtor FCF Debt Other FCF Repayments (Projects, G&A, etc)
1
2017 Cash
Cash Reserves 2
Positive Net Cash Position1 (US$MM’s)
3
Undrawn Credit Facilities
Retained Earnings Profile (US$)
119 1,400
2,000
1,200
1,600
Cash
$542MM
US$ Millions
1,000 800
1,200
600
800
400 400
200 0
(96) 2016
2017
Gold Price (US$/oz)
125 100 75 50 25 0 (25) (50) (75) (100) (125)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Retained Earnings
Cumulative Dividends
0
Gold Price
1
February 2018
Includes cash and cash equivalents, restricted cash and short-term investments at December 31, 2016 and at December 31, 2017. 2 Represents the Company’s cash position at December 31, 2017 of $417 million, less approximately $122 million of cash utilized as part of the acquisition of AuRico Metals Inc. on January 8, 2018. 3 A combination of the $150MM undrawn Öksüt credit facility as at December 31, 2017 and the $185MM undrawn amount from the new corporate credit facility, see news release February 1, 2018.
4
Centerra: Full Year Actuals vs Guidance Revision Mid-Point Gold Production (oz’s)
Guidance Highlights 750,000
Gold Production – 785,000 ounces exceeded
original guidance, within revised guidance range
795,0001
785,000
Q3 Revised
Actual
755,000
650,000 550,000 450,000
All-In Sustaining Costs2 – Outperformed low-end of revised guidance by 2%
350,000 250,000 Original Guidance
2017 All-In Sustaining Costs2 (US$/oz)
Mid-Point All-In Sustaining Costs2 (US$/oz)
1,100 1,065 1,018
760
900
916 932
940
940
943
946 965
800
784 723 688
700
688
600
500 Original Guidance Centerra
New Gold Eldorado Yamana Gold
February 2018
(1) (2)
Acacia Mining
B2Gold
Alamos Gold
Semafo
Kinross Gold
SSR
Q3 Revised
Actual
IAMGOLD Detour Tahoe Gold Resources
On December 27, 2017, the Company announced gold production of approximately 225,000 ounces at Mount Milligan and approximately 560,000 ounces at Kumtor. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and the news release February 23, 2018.
5
Centerra: Asset Breakdown 2017 Free Cash Flow (US$MM’s)(1)
Kumtor $188
Mount Milligan
Langeloth Royalties 1% Gatsuurt
Mount Milligan $127
Consensus Asset NAV (US$MM’s)
Consensus Asset NAV
3% Greenstone 5% Other 7%
$1,001
1%
Kumtor $916
Mt. Milligan 34%
Kemess
Öksüt 8%
$290 Öksüt
Kemess 10%
$256 Greenstone
Royalty Portfolio(2) $11
$140
Kumtor 31%
Gatsuurt $40 Royalty Portfolio $85
Source: Centerra Gold, analyst estimates. (1) Mount Milligan and Kumtor Mine free cash flow figures are non-GAAP measures discussed under “Non-GAAP Measures” in the Company’s MD& A and news release Feb. 23, 2018. (2) AuRico Metals Inc. acquisition closed January 8, 2018, royalty portfolio cash flow as of December 31, 2017.
February 2018
6
High-Quality Free Cash Flowing Royalty Portfolio 4
19
4
Producing Royalties
Total Royalties
Countries
Top-Tier Assets
Valued Operating Partners
World-Class Mining Jurisdictions
Hemlo-Williams
Canada
0.25% NSR (Barrick Gold)
GJ & GJ Northern Block
Eagle River
1.0% & 0.5% NSRs (Skeena Resources)
0.5% NSR (Wesdome Gold Mines)
USA
Young-Davidson 1.5% NSR (Alamos Gold)
Royalty Revenue (US$MM’s) 15
$11.5 - $12.7 $11.1 10
Mexico
$8.1
Australia 5
Stawell Producing Royalty Non-Producing Royalty February 2018
1.0% NSR (Kirkland Lake Gold)
Fosterville 2.0% NSR (Kirkland Lake Gold)
0 2016
2017A
2018E 7
Centerra Royalty Portfolio: Cornerstone Royalty Assets Young-Davidson (1.5% NSR)
Fosterville (2.0% NSR)
Mine Operator
Alamos Gold
Mine Operator
Mine Type
Underground
Mine Type
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-210koz Gold 3,467koz @ 2.6 g/t 1,361koz @ 3.2 g/t 311koz @ 2.7 g/t
Highlights • 6-year operating history with strong track record • One of Canada’s largest underground mines • 14-year mine life based on year-end 2017 reserves • Large resource base and exploration potential to support mine life extension • Achieved record gold production of 56.5koz ounces in Q4/17 as the mine continues to ramp-up to 7,000 tpd throughput in 2018, having averaged 6,600 tpd in 2017.
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
Kirkland Lake Gold Underground 260-300koz Gold 1,700koz @23.1 g/t 2,150koz @ 4.8 g/t 1,900koz @ 7.1 g/t
Highlights • 12-year operating history with strong track record • 2018 production guidance of 260-300k oz up from 2017 guidance of 250-260k oz. • Achieved annual production record of 263,845 ounces in 2017. • Mineral reserves more than doubled at Fosterville with an increase in reserve grade from 9.8 g/t Au to 23.1 g/t Au. • In-mine and step-out exploration is focused on accelerating conversion in three production horizons in the Swan Zone (reserves of 1,160koz at 61.2 g/t Au)
Source: Alamos Gold and Kirkland Lake Gold filings.
February 2018
8
Centerra: High-Quality Producing and Growth Assets
Mt. Milligan Mine Au, Cu Canada
Greenstone Project (50%) Au Canada
Kumtor Mine Au Kyrgyz Republic
Hemlo-Williams (0.25% NSR) Au Canada
Kemess Underground and East Projects Au, Cu Canada
Operations Development Producing Royalty Assets Molybdenum Asset
February 2018
Eagle River (0.5% NSR) Au Canada
Gatsuurt Project Au Mongolia
Young-Davidson (1.5% NSR) Au Canada
Öksüt Project Au Turkey
Fosterville (2.0% NSR) Au Australia
9
Mount Milligan: Long Life, Low Cost Gold Copper Mine 2016
2017
2018E Guidance
Gold Production (koz)
205
223
195-215
Copper Production (Mlbs)
59
54
47-52
$509
$505
$806-$888
NA
$30
$44
Sustaining Capital ($MM)(1) Remaining reserve life (years)
P&P Reserves(2) Grade Royal Gold Stream
+20 Gold
Copper
5.1Moz
1,938Mlbs
0.3g/t
0.188%
35% @ US$435/oz
18.75% @ 15% of spot Cu price
Significant Gold and Copper Production
Significant Open Pit Gold and Copper Production 2017 generated $127MM free cash flow(1)
5.1M gold reserve ounces(2) Low cost, long life production
(2)
Gold ounces 000’s
20+ years of production from existing P&P reserves
250 200
70
223 205
205
59
54
60
50
40
100
30 20
50
10
Stable, mining-friendly jurisdiction 0
Tax loss pools, no cash taxes until 2022/2023 (1) (2)
50
150
Copper M lbs
All-In Sustaining Costs (US$/oz)(1)
0
2016
2017 GOLD
2018E
2016
2017 COPPER
2018E
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and news release February 23, 2018. 2016 AISC is for the period Oct.20 to Dec.31, 2016. Refer to February 8, 2018 mineral reserves and resources news release.
February 2018
10
Kumtor: World Class Open Pit Gold Mine 2016
2017
2018E Guidance
Gold Production (koz)
551
563
450-500
All-In Sustaining Costs ($/oz) (1)
$640
$698
$733-$815
Sustaining Capital ($MM)(1)
$61
$61
$49
Growth Capital ($MM)(1)
$15
$18
$14
Projected Asset Life (years)
+8
Reserves(2) (Moz)
4.5
Au Grade (g/t)
2.4
Resources M&I(2) (Moz)
2.6
Au Grade (g/t)
2.8
Significant Open Pit Gold Production to 2026
2017 generated $188MM free cash flow(1)
4.50
650,000
4.00
21 years of uninterrupted profitable production 240
miners U/G miners More than 4M 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
Ounces
240
2.50
350,000
2.00
170opportunity (inferred 3.4Moz @ 7.3 g/t) Underground
1.50
U/G miners
Strong stable platform to grow Centerra February 2018
grade g/t
World Class Cornerstone Asset
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, 2018. (2) Refer to February 8, 2018 mineral reserves and resources news release.11
Öksüt: Funded High Margin Gold Production 2015 Feasibility Highlights Mine Type
Open Pit, Heap Leach
Avg. LOM Annual Production
110koz Au
AISC(1)
$490
Avg. LOM
(US$/oz)
Reserve Mine Life
8 years
Development Capex (US$MM) P&P
$221
Reserves(2)(Moz)
1.2
Au grade (g/t)
1.3
Life of Mine Recovery
74%
Life of Mine Strip Ratio (w:o)
Öksüt Gold Project
2:1
First Gold Pour
Q1-2020
IRR (after tax)
43%
NPV(8%) - after tax (US$MM)
>$240
Catalyst Schedule
Location of Projected Open Pits
EIA approval received in November 2015 Forestry Permit & GSM License received July 2016 PastureLand Permit received January 2018 Investment Incentive Certificate received February 2018 Construction expected to start in April 2018 Bought back Stratex and Teck royalties US$150MM low-cost +5-year financing in-place February 2018
(1) Non-GAAP measure see “Non-GAAP Measures in the MDA and news release of February 23, 2018. (2) Company filings. Technical Report on the Öksüt Gold Project dated September 3, 2015.
12
Kemess: Overview Kemess Underground (Feasibility – 2016)(1) • Reserves of 1.9Moz Au and 0.6Blbs Cu • LOM of 12 years at 106koz Au/p.a. and 47Mlbs/p.a. at AISC(2) of $244/oz on a by-product basis • Environmental approvals and IBA received • Awaiting receipt of permit application
Kemess East (PEA – May 2017)(1) • M&I resources of 1.7Moz and 1.0Blbs Cu • LOM of 12 years at 80koz Au/p.a. and 57Mlbs/p.a. at AISC(2) of (US$69/oz) on a by-product basis
Kemess South (Past Producer: 1998 – 2011) • ~C$1 billion of infrastructure in-place (including a 25,000 tpd mill, grid power, road, maintenance shop, etc.) • Past production of 3.0Moz Au and 750Mlbs Cu − Brownfields opportunity significantly reduces risk (1) (2)
Refer to National Instrument 43-101 technical report dated July 12, 2017 Technical Report for the Kemess Underground and Kemess East Project, British Columbia, Canada, available in the AuRico Metals filings on SEDAR. A preliminary economic assessment (PEA) is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. AISC is a Non-GAAP measure.
February 2018
13
Kemess: De-Risked Brownfield Project(1) • • • •
(1)
Established mining jurisdiction
Kwadacha (Fort Ware)
Kemess Project
Advanced-stage − EA Approved, IBA in hand, FS complete
Kemess Project Omineca Resource Access Road
Tsay Keh
Forest Service Road 0
Low-risk brownfield development
100
200
Kilometers
Dawson Creek
Takla Landing
C$1 billion of existing infrastructure − 25,000 tpd mill, road, power, tailings, rail loadout, camp, airstrip
Terrace
Smithers
Endako
Prince Rupert
Mackenzie
Mount Milligan Fort St. James
•
Sizeable resource − KUG: P&P of 1.9Moz gold and 0.6Blbs copper and M&I (exclusive of P&P) of 3.3Moz gold and 1.2Blbs copper − KE: M&I of 1.7Moz gold and 1.0Blbs copper
•
Long life − 12 years at Kemess Underground plus further 12 years at Kemess East
Kemess Underground EA Approval
Received – Q1 2017
First Nations IBA
Received – Q2 2017
•
Highly marketable clean concentrate
Kemess Underground Permit Application
•
Robust Kemess Underground economics with significant upside
•
Continued exploration success − Kemess East and Kemess Offset Zone
Prince George
Expected Catalyst Schedule
Anticipated – end Q2 2018
Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings on SEDAR.
February 2018
14
Kemess: Site Layout – C$1Billion of Infrastructure Fly-in, Fly-out Work Camp
Metallurgical Facility
February 2018
South Open Pit (Tailings Storage Facility)
Kemess Underground & East Deposits
15
Kemess: Large, Low-Cost Production Kemess Underground – 2016 Feasibility Highlights(1) Underground Block Cave
Mine Type
Avg. LOM Gold Production (koz)
106
Avg. LOM Gold Production (koz)
Avg. LOM By-Product AISC (US$/oz)(2)
$244
Avg. LOM By-Product AISC (US$/oz)(2)
Reserve Mine Life (years) Development Capex (C$MM)(3)
12
Reserve Mine Life (years) Development Capex (C$MM)
$604
80 ($69) 12 $327
P&P Au Reserves (Moz)
1.9
M&I Au Resource (Moz)
1.7
P&P Au Reserve Grade (g/t)
0.54
M&I Au Grade (g/t)
0.46
P&P Cu Reserves (Mlbs)
629.6
M&I Cu Resource (Mlbs)
954.0
P&P Cu Reserve Grade (%)
0.27%
M&I Cu Grade (%)
0.38%
After-tax IRR
12.6%
After-tax IRR
16.7%
After-tax NPV5% (C$MM)
After-tax NPV5% (C$MM)
$289
80
120
60
80
40
40
20 -Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Project Schedule Year Au Cu
Gold (koz)
160
--
$375
KE Gold and Copper Production(1)
Copper (Mlbs)
Gold (koz)
KUG Gold and Copper Production(1)
(1) (2) (3)
Underground Panel Cave
160
80
120
60
80
40
40
20
--
0 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Project Schedule Year Au Cu
Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings on SEDAR. AISC is a Non-GAAP measure Includes pre-commercial net revenue and capitalized pre-production operating expenditures.
February 2018
Copper (Mlbs)
Mine Type
Kemess East– 2017 PEA Highlights(1)
16
Kemess: Timeline – And Copper Outlook Kemess Timeline
Copper Outlook Deficit
25
Large ~6Mt deficit expected by 2030
Mt
20
15
10 2015 Source: Wood Mackenzie.
February 2018
2018
2021 Base
Probable Projects
2024
2027
2030
Primary Demand 17
Centerra: Potential Upside Optionality - Molybdenum Molybdenum Price Movement
Thompson Creek Mine ● Located in Idaho, is the world’s fourth largest open-pit primary
14.00
molybdenum mine
13.00
● Operations began in 1983, using conventional open-pit mining and a on-
12.00
site 25,500 tpd mill
$ USD per Pound
11.00
● In December, 2014 placed on care and maintenance
10.00
Endako Mine
9.00 8.00
● Endako Mine is a fully integrated molybdenum facility located in BC
7.00
● TCM is the operator and 75% owner; Sojitz owns 25%
6.00
● Endako consists of three adjoined pits and a fully integrated operation with on-site mill and multiple hearth roasting facility
5.00 4.00 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18
● New 55,000 tpd processing facility was completed in 2012 for~US$500MM ● In July 2015 placed on care and maintenance
Historical Molybdenum Segment EBITDA(1) (US$MM)
Langeloth Metallurgical Facility ● Located 40 km west of Pittsburgh, Pennsylvania
$444
● Operates both as a toll processor and as a purchaser of molybdenum $269
concentrates from third parties, producing a suite of premium
$265
$126
$126
molybdenum products
$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
2015
(1) Prior to intersegment eliminations. Historical EBITDA not reported, therefore calculated based on historical segment disclosure.
February 2018
18
Centerra: Lower-Cost Asset Base •
Kemess Underground represents a potential fourth Centerra mine in the bottom quartile of global gold producers
•
Royalty cash flow provides additional margin enhancement AISC Industry Curve (By-Product Basis) $2,500
0%
25%
75%
100%
Centerra Gold (US$799-885/oz Au)
$2,250 $2,000
AISC, net (US$/oz Au)
50%
Kemess Underground (US$244/oz)(1) Kumtor (US$733-774/oz)
$1,750 $1,500
Mount Milligan (US$806-888/oz)
$1,250 $1,000
Öksüt (US$490/oz)(2)
$750 $500 $250 $0 730
9,100
16,008
Source: SNL Metals. Notes: Centerra AISC figures based on 2018 cost guidance, unless noted.
1. 2.
23,666 30,082 Cumulative Gold Production (koz Au)
36,417
39,898
42,962
Kemess Underground AISC based on LOM plan as per National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings on SEDAR Öksüt AISC based on LOM plan as per the NI 43-101 Technical Report On The Öksüt Gold Project, Turkey dated September 3, 2015
February 2018
19
Appendices TSX: CG www.centerragold.com
Centerra: Enhanced Project Pipeline Öksüt: High Margin Open Pit Heap Leach Gold Project Funded, late-stage gold development project Near-term high margin gold production
Kemess: Low-Cost Brownfield Gold-Copper Project in British Columbia Over C$1 billion of surface infrastructure, EIA and First Nation agreement in place KUG and KE optimization and potential synergy opportunities
Greenstone: Large Scale Open Pit Gold Project One of Canada’s largest undeveloped open pit gold deposits Bankable feasibility study completed, final EIS/EA filed, IBA and mine permitting work underway
Gatsuurt: Open Pit Gold Project with Established Infrastructure Updated feasibility study completed Surface processing infrastructure in-place
February 2018
21
Diversified Portfolio with Balanced Geographical Profile Consensus Asset NAV by Geography(1) Mongolia U.S. Australia 2% 2% 1% Turkey 9%
Mongolia 8%
Canada 53%
Kyrgyz Republic 33%
P+P Reserves by Geography(2)
Consensus Asset NAV by Stage Exploration 7%
Turkey 7%
Kyrgyz Republic 28%
Canada 57%
M+I Resource (Inclusive) by Geography(3) Mongolia 8%
Turkey 5%
Development 24% Kyrgyz Republic 27% Producing 69%
Canada 60%
Source: Company filings and analyst estimates. (1) Does not include assets classified as ‘Other’. (2) See Reserves and Resources news release February 8, 2018, excludes royalties. (3) Resources are shown inclusive of reserves. Minerals resources that are not mineral reserves do not have demonstrated economic viability. Excludes royalties.
February 2018
22
Centerra: Q4 & 2017 Corporate Update
Safety – “Work Safe : Home Safe” Program Rolled Out Across the Company Achieved 2017 Gold Production of 785,316 Ounces and Copper Production of 53.6 Million Pounds including 562,749 Ounces at Kumtor and 222,567 Ounces at Mount Milligan 2017 All-In Sustaining Cost (AISC)1 of $688 per ounce, $17 per ounce lower than revised guidance; Kumtor AISC1 of $698 per ounce and Mount Milligan AISC1 of $505 per ounce 2017 Net Earnings $210MM or $0.72 Per Share; Q4 Net Earnings $130MM or $0.45 Per Share 2017 Adjusted Earnings1 $281MM or $0.96 Per Share; Q4 2017 Adjusted Earnings1 $109MM or $0.37 Per Share Cash Provided by Operations of $501MM ($1.72 per share) in 2017; Q4 $170MM ($0.58 per share) 2017 Free Cash Flow1 Generation of $127 Million at Mount Milligan and $188 Million at Kumtor Dec.31, 2017 Cash2 Position of $417 Million; Net Cash of $119 Million Closed Acquisition of AuRico Metals Inc. on Jan.8, 2018 Received Öksüt Pastureland Permit in early 2018; expect to commence construction in April 2018 Restarted mill processing at Mount Milligan Feb.5, 2018 ramping up to 30,000 tpd
1. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s December 31, 2017 MD&A and news release February 23, 2018. 2. Includes cash, cash equivalents, restricted cash and short-term investments at December 31, 2017. February 2018
23
Centerra: Q4 & 2017 Operating Highlights 2017 gold production - Kumtor 562,749 ounces, Mount Milligan 222,567 ounces1 2017 copper production - Mount Milligan 53,596,000 pounds1 Kumtor received all the necessary permits and approvals for 2018 operations 2018 Company-wide guidance, 645,000 – 715,000 oz gold @ AISC3 $799 - $885/oz sold and 47 – 52 Million pounds of payable copper Suspended mill operations at Mt. Milligan late-December; restarted at partial capacity Feb.5, 2018
Q4 2017
Q4 2016
2017
2016
216,752
248,479
785,316
598,677
12,261
10,399
53,596
10,399
Mt. Milligan All-in Sustaining Costs/ounce sold(2)(3)
$594
$509
$505
$509
Kumtor All-in Sustaining Costs/ounce sold(3) Consolidated All-in Sustaining Costs on a byproduct basis per ounce sold(1),(2),(3) Revenue from mining operations ($000)(2)
$526
$538
$698
$639
$571
$586
$688
$682
$358,232
$305,723
$1,199,000
$757,723
Gold ounces produced(1)(2) Copper produced
1. 2. 3.
(000’s payable lbs)(1)(2)
Gold ounces and copper produced includes results from Mt. Milligan on a 100% basis. For the three months ended and year ended December 31, 2016, production, revenues and consolidated all-in sustaining cost per ounce includes Mt. Milligan beginning October 20, 2016. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated February 23, 2018.
February 2018
24
Mount Milligan: Update
Temporary suspension of mill processing operations late-December due to low water levels; Restarted milling at partial capacity Feb.5, 2018 ramping up to approximately 30,000 tpd; Expect to return to full capacity after spring melt; 2nd half 2018 expect to average 55,000 tpd
Gold and copper recoveries continue to improve Continue to focus on optimizing the mine and mill as well as implementing improved maintenance practices and systems to increase gold and copper recoveries and decrease unplanned downtime
February 2018
25
Mount Milligan: Exploration Targets
February 2018
26
Mount Milligan: Resource Expansion Potential
C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. February 2018
27
Centerra: Q4 & 2017 Financial Highlights1 Quarter Ended Dec.31, 2017
Quarter Ended Dec.31, 2016
Year Ended Dec.31, 2017
Year Ended Dec.31, 2016
$358,232
$305,723
$1,199,028
$757,723
242,228
225,996
792,466
580,496
13,105
9,467
59,719
9,467
$170,384
$170,397
$500,896
$371,444
$0.58
$0.60
$1.72
$1.48
Net earnings
$129,980
$63,628
$209,533
$151,538
Adjusted earnings(4)
$108,700
$68,628
$281,000
$160,900
$0.37
$0.24
$0.96
$0.64
$1,197
$1,154
$1,171
$1,233
(in thousands, except ounces, per share amounts, and average realized price4)
Revenue(2) Total gold ounces sold(3) Total copper pounds sold(3) (000’s) Operating cash flow Operating cash flow per share, basic
Adjusted earnings per share(4), basic Average realized gold price per ounce(3)(4) 1. 2. 3. 4.
U.S. dollars For the three months and year ended December 31, 2016 consolidated revenue excludes any revenue from Boroo and includes results from Mt. Milligan operations on a 100% basis beginning October 20, 2016. 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. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release February 23, 2018.
February 2018
28
Centerra: Q4 & 2017 Other Financial Highlights Consolidated 2017 AISC1 of $688 per ounce; Outperform low-end of guidance by $17 per ounce Q4, 2017 AISC1 of $526 per ounce at Kumtor and $594 per ounce at Mount Milligan
-
Q4, 2017 sold all ounces which were temporarily held back at Kumtor in Q3, 2017 while Kyrgyzaltyn secured a new North American offtaker Kumtor received approximately $240 million in gold sales cash receipts in Q4, 2017
-
Q4 Consolidated All-in Sustaining Costs (per ounce sold)1 800 58
750
586
500
5 35
750
13
571
$ /Oz sold
$ /Oz sold
650
550
800
167
104
700
600
3
YTD Consolidated All-in Sustaining Costs (per ounce sold)1
700
11
70
47 682
688
650 600
450 550 400 350
1
February 2018
500
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated February 23, 2018. 29
Centerra: Q4 & 2017 Other Financial Highlights Two High Cash Generating Mines - 2017 $562.9 Million cash provided from mine operating activities before changes in working capital1 and after capital expenditures of $311.6 Million (including $196.2 million from Kumtor and $115.4 million from Mount Milligan) Debt repayments of $209 Million in 2017; $119 Million net cash at December 31, 2017 Cash balance at year-end of $417 Million Restructured debt into $500MM credit facility Feb. 2018; $315MM drawn as of February 23, 2018 Debt Reduction 550
505
500 US$ Millions
450
470
447
409
400
417
401 358
334
350
352 298
300 250 200 Dec31 2016 Non-GAAP measure and is discussed in the Company’s MD&A and News Release dated February 23, 2018 2 Includes CAT finance leases ($32MM at December 31, 2017) February 2018 1
Mar31 2017
Jun30 2017 2
Total Debt
Cash
Sep30 2017
Dec31 2017 30
Kemess: Value Creation Opportunities •
Optimization opportunities through the integration of KUG and KE − − −
−
•
Exploration Upside −
−
•
Economies of scale in ore processing, G&A, and site services Optimize tailings management Optimize mining and development of KUG and KE to access highest grade areas of both deposits during the early years Enhance recoveries by blending KUG and KE ore 2017 drill program consisting of ~12,000 metres at Kemess East commenced in July 2017 with infill drilling and growth on outer edges of deposit Drill program to also target the high-grade Kemess Offset Zone, located between Kemess Underground and Kemess East
Potential operational synergies with Centerra’s existing operations in British Columbia
Source: Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings.
February 2018
31
Gatsuurt: Gold Development Project 2017 Feasibility Highlights(1) Mine Type Avg. LOM Annual Production
111koz Au
Avg. LOM AISC(1) (US$/oz)
$870
Reserve Mine Life
10 years
LOM Development Capex (US$MM)
$245
LOM Sustaining Capital (US$MM)
$37
P&P
The Gatsuurt Project is ~90 km north of Ulaanbaatar
Open Pit
Reserves(2)(Moz)
1.3
Au grade (g/t)
2.7
Life of Mine Recovery
84%
Life of Mine Strip Ratio (w:o)
4.7:1
IRR (after tax)
9%
NPV(5%) - after tax (US$MM)
$39
Boroo’s Historical Cumulative Net Cash Generation (US$MM)
In-Place 5ktpd Processing Facility (Boroo)
600 500 US$ Millions
400 300 200 100 0 (100) 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
(1) See Gatsuurt Project Update in Company’s news release October 31, 2017 and technical report dated December 22, 2017.
February 2018
32
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
Bankable feasibility study completed in November 2016
Location: Ontario, Canada
2017, final EIS/EA filed, mine permitting and IBA work underway
Brookbank Deposit
Brookbank Jellicoe
Geraldton
11
Viper
Hardrock
Hardrock Deposit Beardmore
Beardmore – Geraldton Greenstone Belt +110 km February 2018
(1) Technical Report on the Hardrock Project dated December 21, 2016.
33
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 2017 final EIS/EA filed, mine permitting and IBA work underway
2016 Feasibility Highlights (100%) Mine Type
27,000 tpd
Avg. LOM Annual Production
288koz Au
AISC(2)
$600
(US$/oz)
Reserve Mine Life
Location: Ontario, Canada
Projected Gold Production (100%)
14.5 years
Development Capex (US$MM)
$962
Sustaining Capital(2) (US$MM)
$101
P&P
Greenstone Development Project
Open Pit, CIP Mill
Mill Throughput design Avg. LOM
Greenstone Gold Property
Reserves(1)(Moz)
Au grade (g/t)
4.7 1.02
Life of Mine Recovery
90%
Life of Mine Strip Ratio (w:o)
3.87:1
IRR (after tax)
14.4%
NPV(5%) - after tax (US$MM) February 2018
$545
(1) See Technical Report on the Hardrock Project dated December 21, 2016. (2) Non-GAAP measure, see “Non-GAAP Measures” in Company’s MDA and news release February 23, 2018.
34
Centerra: Producing Royalties Young-Davidson (1.5% NSR)
Fosterville (2.0% NSR)
Mine Operator
Alamos Gold
Mine Operator
Mine Type
Underground
Mine Type
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-210koz Gold 3,467koz @ 2.6 g/t 1,361koz @ 3.2 g/t 311koz @ 2.7 g/t
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
Kirkland Lake Gold Underground 260-300koz Gold 1,700koz @ 23.1 g/t 2,150koz @ 4.8 g/t 1,900koz @ 7.1 g/t
Highlights • One of Canada’s largest underground mines • 14-year mine life based on year-end 2017 reserves • Open at depth
Highlights • Achieved annual production record of 263,845 ounces in 2017. • Mineral reserves more than doubled at Fosterville with an increase in reserve grade from 9.8 g/t Au to 23.1 g/t Au.
Hemlo – Williams (0.25% NSR)
Eagle River (0.5% NSR)
Mine Operator
Barrick Gold
Mine Operator:
Mine Type
Underground
Mine Type
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-220koz Gold 1,774koz @ 2.21 g/t 1,858koz @ 1.40 g/t 442koz @ 2.78 g/t
Highlights • 73% increase in reserves announced in February 2017 • Has been producing for 30+ consecutive years • Royalty only applicable on production from the Williams mine.
2018 Production Guidance P&P Reserves Inferred
Wesdome Gold Mines Open Pit 55-59koz Gold 344koz @ 9.2 g/t 85koz @ 8.1 g/t
Highlights • Continuous production since 1995 (>1Moz) • Significant upside from continued exploration of identified ore zones (incl. 300 Zone)
Source: Alamos Gold, Kirkland Lake Gold, Barrick Gold and Wesdome Gold Mines filings.
February 2018
35
Centerra: Non-Producing Royalties Date Acquired(1)
Primary Metal
Location
NSR Rate
Operator
Notes
Boulevard
Mar-17
Gold
Yukon
1.00%
Independence Gold
Adjacent to Goldcorp’s Coffee project
Cumobabi
Mar-17
Copper
Mexico
0.50%
Evrim Resources
Under option to First Majestic Silver
East Timmins
Mar-17
Gold
Ontario
0.50%
Kirkland Lake Gold
19 near-mine targets & 81 regional targets (claim progressing in court)
Eskay Creek Area
Dec-16
Gold/Silver
British Columbia
0.50%
Eskay Mining Corp
Area surrounding past producing Eskay Creek mine and near to Brucejack and KSM
GJ / GJ Northern Block
Dec-16
Gold/Copper
British Columbia
0.98% / 0.49%
Skeena Resources
PEA released April 2017; M&I resources of 2.1Moz Au and 1.2Blbs Cu
Goodpaster
Mar-17
Gold
Alaska
1.00%
Millrock Resources
Eligible for advanced royalty payments
Grizzly
Sept-17
Copper/Gold
British Columbia
1.00%
International Samuel Exploration
Located in BC’s Golden Triangle
Hemlo – David Bell
Sept-15
Gold
Ontario
1.50%
Barrick Gold
Historic operation – adjacent to Williams (on strike)
Leviathan
Jul-15
Gold
Australia
1.00%
Kirkland Lake Gold
Exploration stage
Madsen Area
Dec-16
Gold
Ontario
1.00%
Frontline Gold
Exploration stage
Mt. Dunn
Mar-17
Copper/Gold
British Columbia
2.00%
Metallis Resources
Located in BC’s Golden Triangle
Rainy River Area
Feb-17
Gold
Ontario
0.75%
Private
Exploration stage
RDN
Mar-17
Gold
British Columbia
1.33%
Aben Resources
Located in BC’s Golden Triangle
Red Lake Area
Mar-17
Gold
Ontario
1.00%
Frontline Gold
Exploration stage
Stawell
Jul-15
Gold
Australia
1.00%
Kirkland Lake Gold
Care & Maintenance / “operationally ready”; P&P of 132koz and M&I of 114koz
Asset
Source: AuRico Metals filings. (1) Date AuRico Metals acquired the royalty.
February 2018
36
Centerra: 2018 Guidance 2018 Production Guidance Gold Total Gold Payable Production(2) Copper Total Copper Payable Production(3)
Units
Kumtor
Mount Milligan(1)
Centerra
(Koz)
450 – 500
195 – 215
645 – 715
(Mlb)
–
47 – 52
47 – 52
2018 All-in Sustaining Unit Costs (5) Ounces sold forecast All-in sustaining costs on a by-product basis(2), (5)
Kumtor 450,000 – 500,000 $733 – $815
Mount Milligan(1) 195,000 – 215,000 $806 – $888
Centerra(1) 645,000-715,000 $799 – $885
171 – 190 $904 – $1,005
19 – 21 $825 – $909
125 – 139 $924 – $1,024
$733 – $815 –
$847 – $932 $1.90 – $2.10
$812 – $900 $1.90 – $2.10
Revenue-based tax(3) and taxes(3) All-in sustaining costs on a by-product basis including taxes (1), (4), (5) Gold - All-in sustaining costs on a co-product basis ($/ounce) (1),(5) Copper - All-in sustaining costs on a co-product basis ($/pound) (1),(5)
2018 Sustaining Capital(5) ($ millions) 49 44 -
2018 Growth Capital(5) ($ millions) 14 82
Kemess Underground Project
-
36
Greenstone Gold Property Other (Thompson Creek mine, Endako mine (75%), Langeloth facility and Corporate) Consolidated Total
-
10
7
-
$100
$142
Capital Expenditures Kumtor Mine Mount Milligan Mine Öksüt Project
1) Mount Milligan payable production and ounces sold are on a 100% basis (the Mount Milligan Streaming Arrangement entitles Royal Gold to 35% and 18.75% of gold and copper sales, respectively and Royal Gold will pay $435 per ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered). The copper sales are based on a copper price assumption of $2.90 per pound sold for Centerra’s 81.25% share of copper production and the remaining 18.75% of copper revenue at $0.435 per pound (15% of spot price, assuming spot at $2.90 per pound), representing the Mount Milligan Streaming Arrangement. Payable production for copper and gold reflects estimated metallurgical losses resulting from handling of the concentrate and payable metal deductions, subject to metal content, levied by smelters. 2) Gold production assumes 79% recovery at Kumtor and 61% recovery at Mount Milligan. 3) Copper production assumes 79% recovery for copper at Mount Milligan. 4) Includes revenue-based tax at Kumtor and the British Columbia mineral tax at Mount Milligan based on a forecast gold price assumption of $1,275 per ounce sold 5) Non-GAAP measures and are discussed under “Non-GAAP Measures” in the MD&A and news release of February 23, 2018
February 2018
37
Centerra: 2018 Guidance Sensitivities Impact on ($ millions) Change
Impact on ($ per ounce sold)
Costs
Revenues
Cash flows
Net Earnings (after tax)
AISC(3) on by-product basis
$50/oz
3.2 – 3.7
22.0 – 25.2
18.8 – 21.5
18.8 – 21.5
0-1
Copper price(1)
10%
1.9 – 2.3
6.6 – 7.9
4.7 – 5.6
4.7 – 5.6
10 – 11
Diesel fuel
10%
4.5 - 5.0
-
6.0 - 7.0
4.5 - 5.0
9 – 10
1 som
1.0 - 2.0
-
1.0 - 2.0
1.0 - 2.0
1-2
10 cents
30.0 - 32.0
-
30.0 - 32.0
25.0 - 27.0
35 – 40
Gold price(1)
Kyrgyz som(2) Canadian dollar(2) 1 Gold
and copper price sensitivities include the impact of the hedging program set up in order to mitigate gold and copper price risks. 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. 3 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, 2018. 2
Material Assumptions and Risks1 Material assumptions or factors used to forecast production and costs for 2018 include the following: • a gold price of $1,275 per ounce, • a copper price of $2.90 per pound, • exchange rates: • $1USD:$1.25 CAD, • $1USD:71.0 Kyrgyz som, • $1USD:3.5 Turkish lira, • $1USD:0.84 Euro, • diesel fuel price assumption: • $0.45/litre at Kumtor, • $0.69/litre at Mount Milligan. 1 Other
February 2018
material assumptions and risks are discussed under “Material Assumptions and Risks” in the Company’s MD&A and news release February 23, 2018. 38
Centerra: Mineral Reserves - Proven & Probable1 Proven and Probable Gold Mineral Reserves Increase to 16.3 million ounces Proven and Probable Copper Mineral Reserves are 2,568 million pounds Gold Mineral Reserves Proven
Total Proven and Probable
Grade (g/t)
Contained Gold (koz)
Tonnes (kt)
Grade (g/t)
Contained Gold (koz)
Tonnes (kt)
Grade (g/t)
Contained Gold (koz)
236,533
0.4
2,996
231,405
0.3
2,141
467,939
0.3
5,138
Kumtor
10,278
1.5
490
46,849
2.7
3,999
496,209
2.4
4,489
Öksüt
-
-
-
28,163
1.3
1,187
28,163
1.3
1,187
Gatsuurt
-
-
-
15,356
2.7
1,316
15,356
2.7
1,316
Hardrock Open Pit
-
-
-
70,858
1.0
2,324
70,858
1.0
2,324
Kemess Underground
-
-
-
107,381
0.5
1,868
107,381
0.5
1,868
0.4
3,486
500,012
0.8
12,835
746,824
0.7
16,321
Property Mount Milligan
Tonnes (kt)
Probable
246,812
Total
Copper Mineral Reserves Proven Property Mount Milligan Kemess Underground Total February 2018
Probable
Total Proven and Probable
Tonnes (kt) 236,533
Grade (%) 0.187
Contained Copper (Mlbs) 974
Tonnes (kt) 231,405
Grade (%) 0.189
Contained Copper (Mlbs) 964
Tonnes (kt) 467,939
Grade (%) 0.188
Contained Copper (Mlbs) 1,938
-
-
-
107,381
0.266
630
107,381
0.266
630
236,533
0.187
974
338,786
0.213
1,594
575,320
0.202
2,568
1) As at December 31, 2017, includes Kemess Project following the completion of the AuRico Metals acquisition, see Mineral Reserves and Resources News Release February 8, 2018.
39
Centerra: Investor Relations Highlights Research Coverage Brokerage Firms
Rating
Top Ten (10) Institutional Shareholders Target Institution/Firm
Q4-2017
1. BMO Capital Markets
Hold
C$10.00
2. BofA Merrill Lynch
Neutral
C$9.25
1. Blackrock
13.00%
3. Canaccord Genuity
Hold
C$7.00
2. Van Eck
8.64%
4. CIBC World Markets
Neutral
C$9.00
3. Paulson & Co
7.80%
5. Cormark Securities
Buy
C$11.20 C$8.50
4. Dimensional
3.15%
6. Credit Suisse
Outperform
7. Global Mining Research
Speculative Buy
C$10.70
5. Franklin Advisors
2.22%
8. Macquarie Capital Markets
Outperform
C$12.00
6. Kopernik Global
1.61%
9. National Bank Financial
Sector Perform
C$7.75
7. Vanguard Group
1.54%
10. RBC Capital Markets
Sector Perform
C$8.00
8. Capital Research
1.42%
11. Scotiabank
Outperform
C$9.00
9. USAA
1.20%
12. TD Securities
Hold
C$8.00
10. Oppenheimer Funds
1.15%
Average
February 2018
C$9.20
TOTAL
41.73%
40
Centerra: Senior Management Industry Experience
SCOTT PERRY Chief Executive Officer
GORDON REID Chief Operating Officer
DARREN MILLMAN Chief Financial Officer
February 2018
20 years
30 years
18 years
Background
•
Appointed Chief Executive Officer in November, 2015
•
Former Chief Executive Officer at AuRico Gold
•
Appointed Chief Operating Officer in January, 2013
•
Joined Centerra in 2004
•
Appointed Chief Financial Officer in April, 2016
•
Joined Centerra in 2013
41
Centerra: Directors Board of Directors
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
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
February 2018
42
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”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”, “understand” and similar expressions identify forward-looking information. These forward-looking statements relate to, among other things: the development activities at the Öksüt Project and the Kemess Project; further amendments of Mount Milligan’s Environmental Certificate; currency movements and hedging transactions; operational plans at Kumtor and Mount Milligan in 2018, including as to the expected restart of the Mount Milligan mill, the timing and outcomes of projects initiated at the Mount Milligan mine aimed at improving metal recovery and other opportunities, the availability of water and consultations with regulatory and First Nations groups; discussions between GGM and First Nations groups regarding impact benefit agreements; the closing of the Strategic Agreement entered into with the Kyrgyz Republic Government and the related resolution of various civil and criminal cases in the Kyrgyz Republic which affect the Kumtor Project; the Company’s cash on hand, working capital, future cash flows and existing credit facilities being sufficient to fund anticipated operating cash requirements; AMT refund; the resumption of negotiations with the Mongolian Government related to the Gatsuurt Project; the timing for receipt of proceeds from the sale of the ATO licenses; and statements found under the heading, “2018 Outlook”, including forecast 2018 production costs, capital and exploration expenditures and taxes. 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 and Canada; risks that any of the conditions precedent to the Strategic Agreement will not be satisfied in a timely manner or at all, particularly as the Government may not bind the General Prosecutor’s Office or the Parliament of the Kyrgyz Republic; a decision by the General Prosecutor’s Office, or its successor the Anti-Corruption Service of the State Committee for National Security, to re-open at any time civil or criminal proceedings against Centerra, its subsidiaries or other stakeholders; the failure of the Government to comply with its continuing obligations under the Strategic Agreement, including the requirement that it comply at all times with its obligations under the Kumtor Project Agreements, allow for the continued operation of the Kumtor Mine by KGC and KOC and not take any expropriatory action; actions by the Government or any state agency or the General Prosecutor's Office that serve to restrict or otherwise interfere with the payment of funds by KGC and KOC to Centerra; resource nationalism including the management of external stakeholder expectations; the impact of changes in, or to the more aggressive enforcement of, laws, regulations and government practices, including with respect to the environment, 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 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; the risks related to other outstanding litigation affecting the Company’s operations in the Kyrgyz Republic and elsewhere; the impact of the delay by relevant government agencies to provide required approvals, expertises and permits; potential impact on the Kumtor Project of investigations by Kyrgyz Republic instrumentalities; the terms pursuant to which the Mongolian Government will participate in, or to take a special royalty rate in, the Gatsuurt Project; the impact of constitutional changes in Turkey; the impact of any sanctions imposed by Canada, the United States or other jurisdictions against various Russian individuals and entities; the ability of the Company to successfully negotiate agreements for the development of the Gatsuurt Project; 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; Aboriginal claims and consultative issues relating to the Company’s properties which are in proximity to Aboriginal communities; and 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, copper and other mineral 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 short-term 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 the movement of the Davidov Glacier, waste and ice movement and continued performance of the buttress at the Kumtor Project; the occurrence of further ground movements at the Kumtor Project and mechanical availability; the ability of the Company to successfully re-start full mill processing operation at Mount Milligan and achieve expected throughput; 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 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 section titled “Risks that can affect our business” in the most recently filed Annual Information Form 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 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. Mineral resources are not mineral reserves, and do not have demonstrated economic viability, but do have reasonable prospects for economic extraction. Measured and indicated resources are sufficiently well defined to allow geological and grade continuity to be reasonably assumed and permit the application of technical and economic parameters in assessing the economic viability of the resource. Inferred resources are estimated on limited information not sufficient to verify geological and grade continuity or to allow technical and economic parameters to be applied. Inferred resources are too speculative geologically to have economic considerations applied to them to enable them to be categorized as mineral reserves. There is no certainty that mineral resources of any category can be upgraded to mineral reserves through continued exploration. 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, 2018. 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 2018
2
Centerra: Built For Success Corporate Highlights
Consensus Asset NAV Breakdown Mongolia U.S. Australia 2% 2% 1% Turkey 9%
Internationally Diversified Gold Producer Two Cornerstone Lower-Cost Quartile Assets 2017 Gold Production 785koz at AISC1 of $688 per ounce and 53.6M lbs of copper
Canada 53%
Kyrgyz Republic 33%
January 2018, completed acquisition of AuRico Metals; received Öksüt pastureland permit and IIC2 Significant Operational Cash Flow Profile Solid Late-Stage Development Pipeline
Trading at a Discount to Peers, Potential for Re-Rating Positive Retained Earnings of US$1,066MM3 Expected 2018 production of up to 715kozpa gold at AISC1 of $799 to $885 per ounce and 47 to 52M lbs of copper
US$ Millions
Cash Position of US$417MM3
1,000
2,000
800
1,600
600
1,200
400
800
200
400
0
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cumulative Dividends 1. 2. 3.
Gold Price (US$/oz)
Cash Reserves3 Profile (US$)
Cash Balance 3
Gold Price
All-in sustaining costs per ounce sold (AISC) is a non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s MDA & news release Feb. 23, 2018. 2018e AISC: Kumtor $733 to $815/oz, Mount Milligan $806 to $888/oz. Refer to Company’s news releases January 8, 11 and February 12, 2018. As at December 31, 2017.
February 2018
3
Centerra: 2017 Corporate Update 2017: Internally Funded Business (US$MM’s) 800
188
700 600
209
127
500
Liquidity Profile (US$MM’s)
98
409
$3353
417
400 $2952
300
US$630MM
200 100 0
1
2016 Cash Mt Milligan Kumtor FCF Debt Other FCF Repayments (Projects, G&A, etc)
1
2017 Cash
Cash Reserves 2
Positive Net Cash Position1 (US$MM’s)
3
Undrawn Credit Facilities
Retained Earnings Profile (US$)
119 1,400
2,000
1,200
1,600
Cash
$542MM
US$ Millions
1,000 800
1,200
600
800
400 400
200 0
(96) 2016
2017
Gold Price (US$/oz)
125 100 75 50 25 0 (25) (50) (75) (100) (125)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Retained Earnings
Cumulative Dividends
0
Gold Price
1
February 2018
Includes cash and cash equivalents, restricted cash and short-term investments at December 31, 2016 and at December 31, 2017. 2 Represents the Company’s cash position at December 31, 2017 of $417 million, less approximately $122 million of cash utilized as part of the acquisition of AuRico Metals Inc. on January 8, 2018. 3 A combination of the $150MM undrawn Öksüt credit facility as at December 31, 2017 and the $185MM undrawn amount from the new corporate credit facility, see news release February 1, 2018.
4
Centerra: Full Year Actuals vs Guidance Revision Mid-Point Gold Production (oz’s)
Guidance Highlights 750,000
Gold Production – 785,000 ounces exceeded
original guidance, within revised guidance range
795,0001
785,000
Q3 Revised
Actual
755,000
650,000 550,000 450,000
All-In Sustaining Costs2 – Outperformed low-end of revised guidance by 2%
350,000 250,000 Original Guidance
2017 All-In Sustaining Costs2 (US$/oz)
Mid-Point All-In Sustaining Costs2 (US$/oz)
1,100 1,065 1,018
760
900
916 932
940
940
943
946 965
800
784 723 688
700
688
600
500 Original Guidance Centerra
New Gold Eldorado Yamana Gold
February 2018
(1) (2)
Acacia Mining
B2Gold
Alamos Gold
Semafo
Kinross Gold
SSR
Q3 Revised
Actual
IAMGOLD Detour Tahoe Gold Resources
On December 27, 2017, the Company announced gold production of approximately 225,000 ounces at Mount Milligan and approximately 560,000 ounces at Kumtor. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and the news release February 23, 2018.
5
Centerra: Asset Breakdown 2017 Free Cash Flow (US$MM’s)(1)
Kumtor $188
Mount Milligan
Langeloth Royalties 1% Gatsuurt
Mount Milligan $127
Consensus Asset NAV (US$MM’s)
Consensus Asset NAV
3% Greenstone 5% Other 7%
$1,001
1%
Kumtor $916
Mt. Milligan 34%
Kemess
Öksüt 8%
$290 Öksüt
Kemess 10%
$256 Greenstone
Royalty Portfolio(2) $11
$140
Kumtor 31%
Gatsuurt $40 Royalty Portfolio $85
Source: Centerra Gold, analyst estimates. (1) Mount Milligan and Kumtor Mine free cash flow figures are non-GAAP measures discussed under “Non-GAAP Measures” in the Company’s MD& A and news release Feb. 23, 2018. (2) AuRico Metals Inc. acquisition closed January 8, 2018, royalty portfolio cash flow as of December 31, 2017.
February 2018
6
High-Quality Free Cash Flowing Royalty Portfolio 4
19
4
Producing Royalties
Total Royalties
Countries
Top-Tier Assets
Valued Operating Partners
World-Class Mining Jurisdictions
Hemlo-Williams
Canada
0.25% NSR (Barrick Gold)
GJ & GJ Northern Block
Eagle River
1.0% & 0.5% NSRs (Skeena Resources)
0.5% NSR (Wesdome Gold Mines)
USA
Young-Davidson 1.5% NSR (Alamos Gold)
Royalty Revenue (US$MM’s) 15
$11.5 - $12.7 $11.1 10
Mexico
$8.1
Australia 5
Stawell Producing Royalty Non-Producing Royalty February 2018
1.0% NSR (Kirkland Lake Gold)
Fosterville 2.0% NSR (Kirkland Lake Gold)
0 2016
2017A
2018E 7
Centerra Royalty Portfolio: Cornerstone Royalty Assets Young-Davidson (1.5% NSR)
Fosterville (2.0% NSR)
Mine Operator
Alamos Gold
Mine Operator
Mine Type
Underground
Mine Type
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-210koz Gold 3,467koz @ 2.6 g/t 1,361koz @ 3.2 g/t 311koz @ 2.7 g/t
Highlights • 6-year operating history with strong track record • One of Canada’s largest underground mines • 14-year mine life based on year-end 2017 reserves • Large resource base and exploration potential to support mine life extension • Achieved record gold production of 56.5koz ounces in Q4/17 as the mine continues to ramp-up to 7,000 tpd throughput in 2018, having averaged 6,600 tpd in 2017.
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
Kirkland Lake Gold Underground 260-300koz Gold 1,700koz @23.1 g/t 2,150koz @ 4.8 g/t 1,900koz @ 7.1 g/t
Highlights • 12-year operating history with strong track record • 2018 production guidance of 260-300k oz up from 2017 guidance of 250-260k oz. • Achieved annual production record of 263,845 ounces in 2017. • Mineral reserves more than doubled at Fosterville with an increase in reserve grade from 9.8 g/t Au to 23.1 g/t Au. • In-mine and step-out exploration is focused on accelerating conversion in three production horizons in the Swan Zone (reserves of 1,160koz at 61.2 g/t Au)
Source: Alamos Gold and Kirkland Lake Gold filings.
February 2018
8
Centerra: High-Quality Producing and Growth Assets
Mt. Milligan Mine Au, Cu Canada
Greenstone Project (50%) Au Canada
Kumtor Mine Au Kyrgyz Republic
Hemlo-Williams (0.25% NSR) Au Canada
Kemess Underground and East Projects Au, Cu Canada
Operations Development Producing Royalty Assets Molybdenum Asset
February 2018
Eagle River (0.5% NSR) Au Canada
Gatsuurt Project Au Mongolia
Young-Davidson (1.5% NSR) Au Canada
Öksüt Project Au Turkey
Fosterville (2.0% NSR) Au Australia
9
Mount Milligan: Long Life, Low Cost Gold Copper Mine 2016
2017
2018E Guidance
Gold Production (koz)
205
223
195-215
Copper Production (Mlbs)
59
54
47-52
$509
$505
$806-$888
NA
$30
$44
Sustaining Capital ($MM)(1) Remaining reserve life (years)
P&P Reserves(2) Grade Royal Gold Stream
+20 Gold
Copper
5.1Moz
1,938Mlbs
0.3g/t
0.188%
35% @ US$435/oz
18.75% @ 15% of spot Cu price
Significant Gold and Copper Production
Significant Open Pit Gold and Copper Production 2017 generated $127MM free cash flow(1)
5.1M gold reserve ounces(2) Low cost, long life production
(2)
Gold ounces 000’s
20+ years of production from existing P&P reserves
250 200
70
223 205
205
59
54
60
50
40
100
30 20
50
10
Stable, mining-friendly jurisdiction 0
Tax loss pools, no cash taxes until 2022/2023 (1) (2)
50
150
Copper M lbs
All-In Sustaining Costs (US$/oz)(1)
0
2016
2017 GOLD
2018E
2016
2017 COPPER
2018E
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and news release February 23, 2018. 2016 AISC is for the period Oct.20 to Dec.31, 2016. Refer to February 8, 2018 mineral reserves and resources news release.
February 2018
10
Kumtor: World Class Open Pit Gold Mine 2016
2017
2018E Guidance
Gold Production (koz)
551
563
450-500
All-In Sustaining Costs ($/oz) (1)
$640
$698
$733-$815
Sustaining Capital ($MM)(1)
$61
$61
$49
Growth Capital ($MM)(1)
$15
$18
$14
Projected Asset Life (years)
+8
Reserves(2) (Moz)
4.5
Au Grade (g/t)
2.4
Resources M&I(2) (Moz)
2.6
Au Grade (g/t)
2.8
Significant Open Pit Gold Production to 2026
2017 generated $188MM free cash flow(1)
4.50
650,000
4.00
21 years of uninterrupted profitable production 240
miners U/G miners More than 4M 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
Ounces
240
2.50
350,000
2.00
170opportunity (inferred 3.4Moz @ 7.3 g/t) Underground
1.50
U/G miners
Strong stable platform to grow Centerra February 2018
grade g/t
World Class Cornerstone Asset
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, 2018. (2) Refer to February 8, 2018 mineral reserves and resources news release.11
Öksüt: Funded High Margin Gold Production 2015 Feasibility Highlights Mine Type
Open Pit, Heap Leach
Avg. LOM Annual Production
110koz Au
AISC(1)
$490
Avg. LOM
(US$/oz)
Reserve Mine Life
8 years
Development Capex (US$MM) P&P
$221
Reserves(2)(Moz)
1.2
Au grade (g/t)
1.3
Life of Mine Recovery
74%
Life of Mine Strip Ratio (w:o)
Öksüt Gold Project
2:1
First Gold Pour
Q1-2020
IRR (after tax)
43%
NPV(8%) - after tax (US$MM)
>$240
Catalyst Schedule
Location of Projected Open Pits
EIA approval received in November 2015 Forestry Permit & GSM License received July 2016 PastureLand Permit received January 2018 Investment Incentive Certificate received February 2018 Construction expected to start in April 2018 Bought back Stratex and Teck royalties US$150MM low-cost +5-year financing in-place February 2018
(1) Non-GAAP measure see “Non-GAAP Measures in the MDA and news release of February 23, 2018. (2) Company filings. Technical Report on the Öksüt Gold Project dated September 3, 2015.
12
Kemess: Overview Kemess Underground (Feasibility – 2016)(1) • Reserves of 1.9Moz Au and 0.6Blbs Cu • LOM of 12 years at 106koz Au/p.a. and 47Mlbs/p.a. at AISC(2) of $244/oz on a by-product basis • Environmental approvals and IBA received • Awaiting receipt of permit application
Kemess East (PEA – May 2017)(1) • M&I resources of 1.7Moz and 1.0Blbs Cu • LOM of 12 years at 80koz Au/p.a. and 57Mlbs/p.a. at AISC(2) of (US$69/oz) on a by-product basis
Kemess South (Past Producer: 1998 – 2011) • ~C$1 billion of infrastructure in-place (including a 25,000 tpd mill, grid power, road, maintenance shop, etc.) • Past production of 3.0Moz Au and 750Mlbs Cu − Brownfields opportunity significantly reduces risk (1) (2)
Refer to National Instrument 43-101 technical report dated July 12, 2017 Technical Report for the Kemess Underground and Kemess East Project, British Columbia, Canada, available in the AuRico Metals filings on SEDAR. A preliminary economic assessment (PEA) is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. AISC is a Non-GAAP measure.
February 2018
13
Kemess: De-Risked Brownfield Project(1) • • • •
(1)
Established mining jurisdiction
Kwadacha (Fort Ware)
Kemess Project
Advanced-stage − EA Approved, IBA in hand, FS complete
Kemess Project Omineca Resource Access Road
Tsay Keh
Forest Service Road 0
Low-risk brownfield development
100
200
Kilometers
Dawson Creek
Takla Landing
C$1 billion of existing infrastructure − 25,000 tpd mill, road, power, tailings, rail loadout, camp, airstrip
Terrace
Smithers
Endako
Prince Rupert
Mackenzie
Mount Milligan Fort St. James
•
Sizeable resource − KUG: P&P of 1.9Moz gold and 0.6Blbs copper and M&I (exclusive of P&P) of 3.3Moz gold and 1.2Blbs copper − KE: M&I of 1.7Moz gold and 1.0Blbs copper
•
Long life − 12 years at Kemess Underground plus further 12 years at Kemess East
Kemess Underground EA Approval
Received – Q1 2017
First Nations IBA
Received – Q2 2017
•
Highly marketable clean concentrate
Kemess Underground Permit Application
•
Robust Kemess Underground economics with significant upside
•
Continued exploration success − Kemess East and Kemess Offset Zone
Prince George
Expected Catalyst Schedule
Anticipated – end Q2 2018
Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings on SEDAR.
February 2018
14
Kemess: Site Layout – C$1Billion of Infrastructure Fly-in, Fly-out Work Camp
Metallurgical Facility
February 2018
South Open Pit (Tailings Storage Facility)
Kemess Underground & East Deposits
15
Kemess: Large, Low-Cost Production Kemess Underground – 2016 Feasibility Highlights(1) Underground Block Cave
Mine Type
Avg. LOM Gold Production (koz)
106
Avg. LOM Gold Production (koz)
Avg. LOM By-Product AISC (US$/oz)(2)
$244
Avg. LOM By-Product AISC (US$/oz)(2)
Reserve Mine Life (years) Development Capex (C$MM)(3)
12
Reserve Mine Life (years) Development Capex (C$MM)
$604
80 ($69) 12 $327
P&P Au Reserves (Moz)
1.9
M&I Au Resource (Moz)
1.7
P&P Au Reserve Grade (g/t)
0.54
M&I Au Grade (g/t)
0.46
P&P Cu Reserves (Mlbs)
629.6
M&I Cu Resource (Mlbs)
954.0
P&P Cu Reserve Grade (%)
0.27%
M&I Cu Grade (%)
0.38%
After-tax IRR
12.6%
After-tax IRR
16.7%
After-tax NPV5% (C$MM)
After-tax NPV5% (C$MM)
$289
80
120
60
80
40
40
20 -Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Project Schedule Year Au Cu
Gold (koz)
160
--
$375
KE Gold and Copper Production(1)
Copper (Mlbs)
Gold (koz)
KUG Gold and Copper Production(1)
(1) (2) (3)
Underground Panel Cave
160
80
120
60
80
40
40
20
--
0 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Project Schedule Year Au Cu
Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings on SEDAR. AISC is a Non-GAAP measure Includes pre-commercial net revenue and capitalized pre-production operating expenditures.
February 2018
Copper (Mlbs)
Mine Type
Kemess East– 2017 PEA Highlights(1)
16
Kemess: Timeline – And Copper Outlook Kemess Timeline
Copper Outlook Deficit
25
Large ~6Mt deficit expected by 2030
Mt
20
15
10 2015 Source: Wood Mackenzie.
February 2018
2018
2021 Base
Probable Projects
2024
2027
2030
Primary Demand 17
Centerra: Potential Upside Optionality - Molybdenum Molybdenum Price Movement
Thompson Creek Mine ● Located in Idaho, is the world’s fourth largest open-pit primary
14.00
molybdenum mine
13.00
● Operations began in 1983, using conventional open-pit mining and a on-
12.00
site 25,500 tpd mill
$ USD per Pound
11.00
● In December, 2014 placed on care and maintenance
10.00
Endako Mine
9.00 8.00
● Endako Mine is a fully integrated molybdenum facility located in BC
7.00
● TCM is the operator and 75% owner; Sojitz owns 25%
6.00
● Endako consists of three adjoined pits and a fully integrated operation with on-site mill and multiple hearth roasting facility
5.00 4.00 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18
● New 55,000 tpd processing facility was completed in 2012 for~US$500MM ● In July 2015 placed on care and maintenance
Historical Molybdenum Segment EBITDA(1) (US$MM)
Langeloth Metallurgical Facility ● Located 40 km west of Pittsburgh, Pennsylvania
$444
● Operates both as a toll processor and as a purchaser of molybdenum $269
concentrates from third parties, producing a suite of premium
$265
$126
$126
molybdenum products
$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
2015
(1) Prior to intersegment eliminations. Historical EBITDA not reported, therefore calculated based on historical segment disclosure.
February 2018
18
Centerra: Lower-Cost Asset Base •
Kemess Underground represents a potential fourth Centerra mine in the bottom quartile of global gold producers
•
Royalty cash flow provides additional margin enhancement AISC Industry Curve (By-Product Basis) $2,500
0%
25%
75%
100%
Centerra Gold (US$799-885/oz Au)
$2,250 $2,000
AISC, net (US$/oz Au)
50%
Kemess Underground (US$244/oz)(1) Kumtor (US$733-774/oz)
$1,750 $1,500
Mount Milligan (US$806-888/oz)
$1,250 $1,000
Öksüt (US$490/oz)(2)
$750 $500 $250 $0 730
9,100
16,008
Source: SNL Metals. Notes: Centerra AISC figures based on 2018 cost guidance, unless noted.
1. 2.
23,666 30,082 Cumulative Gold Production (koz Au)
36,417
39,898
42,962
Kemess Underground AISC based on LOM plan as per National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings on SEDAR Öksüt AISC based on LOM plan as per the NI 43-101 Technical Report On The Öksüt Gold Project, Turkey dated September 3, 2015
February 2018
19
Appendices TSX: CG www.centerragold.com
Centerra: Enhanced Project Pipeline Öksüt: High Margin Open Pit Heap Leach Gold Project Funded, late-stage gold development project Near-term high margin gold production
Kemess: Low-Cost Brownfield Gold-Copper Project in British Columbia Over C$1 billion of surface infrastructure, EIA and First Nation agreement in place KUG and KE optimization and potential synergy opportunities
Greenstone: Large Scale Open Pit Gold Project One of Canada’s largest undeveloped open pit gold deposits Bankable feasibility study completed, final EIS/EA filed, IBA and mine permitting work underway
Gatsuurt: Open Pit Gold Project with Established Infrastructure Updated feasibility study completed Surface processing infrastructure in-place
February 2018
21
Diversified Portfolio with Balanced Geographical Profile Consensus Asset NAV by Geography(1) Mongolia U.S. Australia 2% 2% 1% Turkey 9%
Mongolia 8%
Canada 53%
Kyrgyz Republic 33%
P+P Reserves by Geography(2)
Consensus Asset NAV by Stage Exploration 7%
Turkey 7%
Kyrgyz Republic 28%
Canada 57%
M+I Resource (Inclusive) by Geography(3) Mongolia 8%
Turkey 5%
Development 24% Kyrgyz Republic 27% Producing 69%
Canada 60%
Source: Company filings and analyst estimates. (1) Does not include assets classified as ‘Other’. (2) See Reserves and Resources news release February 8, 2018, excludes royalties. (3) Resources are shown inclusive of reserves. Minerals resources that are not mineral reserves do not have demonstrated economic viability. Excludes royalties.
February 2018
22
Centerra: Q4 & 2017 Corporate Update
Safety – “Work Safe : Home Safe” Program Rolled Out Across the Company Achieved 2017 Gold Production of 785,316 Ounces and Copper Production of 53.6 Million Pounds including 562,749 Ounces at Kumtor and 222,567 Ounces at Mount Milligan 2017 All-In Sustaining Cost (AISC)1 of $688 per ounce, $17 per ounce lower than revised guidance; Kumtor AISC1 of $698 per ounce and Mount Milligan AISC1 of $505 per ounce 2017 Net Earnings $210MM or $0.72 Per Share; Q4 Net Earnings $130MM or $0.45 Per Share 2017 Adjusted Earnings1 $281MM or $0.96 Per Share; Q4 2017 Adjusted Earnings1 $109MM or $0.37 Per Share Cash Provided by Operations of $501MM ($1.72 per share) in 2017; Q4 $170MM ($0.58 per share) 2017 Free Cash Flow1 Generation of $127 Million at Mount Milligan and $188 Million at Kumtor Dec.31, 2017 Cash2 Position of $417 Million; Net Cash of $119 Million Closed Acquisition of AuRico Metals Inc. on Jan.8, 2018 Received Öksüt Pastureland Permit in early 2018; expect to commence construction in April 2018 Restarted mill processing at Mount Milligan Feb.5, 2018 ramping up to 30,000 tpd
1. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s December 31, 2017 MD&A and news release February 23, 2018. 2. Includes cash, cash equivalents, restricted cash and short-term investments at December 31, 2017. February 2018
23
Centerra: Q4 & 2017 Operating Highlights 2017 gold production - Kumtor 562,749 ounces, Mount Milligan 222,567 ounces1 2017 copper production - Mount Milligan 53,596,000 pounds1 Kumtor received all the necessary permits and approvals for 2018 operations 2018 Company-wide guidance, 645,000 – 715,000 oz gold @ AISC3 $799 - $885/oz sold and 47 – 52 Million pounds of payable copper Suspended mill operations at Mt. Milligan late-December; restarted at partial capacity Feb.5, 2018
Q4 2017
Q4 2016
2017
2016
216,752
248,479
785,316
598,677
12,261
10,399
53,596
10,399
Mt. Milligan All-in Sustaining Costs/ounce sold(2)(3)
$594
$509
$505
$509
Kumtor All-in Sustaining Costs/ounce sold(3) Consolidated All-in Sustaining Costs on a byproduct basis per ounce sold(1),(2),(3) Revenue from mining operations ($000)(2)
$526
$538
$698
$639
$571
$586
$688
$682
$358,232
$305,723
$1,199,000
$757,723
Gold ounces produced(1)(2) Copper produced
1. 2. 3.
(000’s payable lbs)(1)(2)
Gold ounces and copper produced includes results from Mt. Milligan on a 100% basis. For the three months ended and year ended December 31, 2016, production, revenues and consolidated all-in sustaining cost per ounce includes Mt. Milligan beginning October 20, 2016. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated February 23, 2018.
February 2018
24
Mount Milligan: Update
Temporary suspension of mill processing operations late-December due to low water levels; Restarted milling at partial capacity Feb.5, 2018 ramping up to approximately 30,000 tpd; Expect to return to full capacity after spring melt; 2nd half 2018 expect to average 55,000 tpd
Gold and copper recoveries continue to improve Continue to focus on optimizing the mine and mill as well as implementing improved maintenance practices and systems to increase gold and copper recoveries and decrease unplanned downtime
February 2018
25
Mount Milligan: Exploration Targets
February 2018
26
Mount Milligan: Resource Expansion Potential
C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. February 2018
27
Centerra: Q4 & 2017 Financial Highlights1 Quarter Ended Dec.31, 2017
Quarter Ended Dec.31, 2016
Year Ended Dec.31, 2017
Year Ended Dec.31, 2016
$358,232
$305,723
$1,199,028
$757,723
242,228
225,996
792,466
580,496
13,105
9,467
59,719
9,467
$170,384
$170,397
$500,896
$371,444
$0.58
$0.60
$1.72
$1.48
Net earnings
$129,980
$63,628
$209,533
$151,538
Adjusted earnings(4)
$108,700
$68,628
$281,000
$160,900
$0.37
$0.24
$0.96
$0.64
$1,197
$1,154
$1,171
$1,233
(in thousands, except ounces, per share amounts, and average realized price4)
Revenue(2) Total gold ounces sold(3) Total copper pounds sold(3) (000’s) Operating cash flow Operating cash flow per share, basic
Adjusted earnings per share(4), basic Average realized gold price per ounce(3)(4) 1. 2. 3. 4.
U.S. dollars For the three months and year ended December 31, 2016 consolidated revenue excludes any revenue from Boroo and includes results from Mt. Milligan operations on a 100% basis beginning October 20, 2016. 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. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release February 23, 2018.
February 2018
28
Centerra: Q4 & 2017 Other Financial Highlights Consolidated 2017 AISC1 of $688 per ounce; Outperform low-end of guidance by $17 per ounce Q4, 2017 AISC1 of $526 per ounce at Kumtor and $594 per ounce at Mount Milligan
-
Q4, 2017 sold all ounces which were temporarily held back at Kumtor in Q3, 2017 while Kyrgyzaltyn secured a new North American offtaker Kumtor received approximately $240 million in gold sales cash receipts in Q4, 2017
-
Q4 Consolidated All-in Sustaining Costs (per ounce sold)1 800 58
750
586
500
5 35
750
13
571
$ /Oz sold
$ /Oz sold
650
550
800
167
104
700
600
3
YTD Consolidated All-in Sustaining Costs (per ounce sold)1
700
11
70
47 682
688
650 600
450 550 400 350
1
February 2018
500
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated February 23, 2018. 29
Centerra: Q4 & 2017 Other Financial Highlights Two High Cash Generating Mines - 2017 $562.9 Million cash provided from mine operating activities before changes in working capital1 and after capital expenditures of $311.6 Million (including $196.2 million from Kumtor and $115.4 million from Mount Milligan) Debt repayments of $209 Million in 2017; $119 Million net cash at December 31, 2017 Cash balance at year-end of $417 Million Restructured debt into $500MM credit facility Feb. 2018; $315MM drawn as of February 23, 2018 Debt Reduction 550
505
500 US$ Millions
450
470
447
409
400
417
401 358
334
350
352 298
300 250 200 Dec31 2016 Non-GAAP measure and is discussed in the Company’s MD&A and News Release dated February 23, 2018 2 Includes CAT finance leases ($32MM at December 31, 2017) February 2018 1
Mar31 2017
Jun30 2017 2
Total Debt
Cash
Sep30 2017
Dec31 2017 30
Kemess: Value Creation Opportunities •
Optimization opportunities through the integration of KUG and KE − − −
−
•
Exploration Upside −
−
•
Economies of scale in ore processing, G&A, and site services Optimize tailings management Optimize mining and development of KUG and KE to access highest grade areas of both deposits during the early years Enhance recoveries by blending KUG and KE ore 2017 drill program consisting of ~12,000 metres at Kemess East commenced in July 2017 with infill drilling and growth on outer edges of deposit Drill program to also target the high-grade Kemess Offset Zone, located between Kemess Underground and Kemess East
Potential operational synergies with Centerra’s existing operations in British Columbia
Source: Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings.
February 2018
31
Gatsuurt: Gold Development Project 2017 Feasibility Highlights(1) Mine Type Avg. LOM Annual Production
111koz Au
Avg. LOM AISC(1) (US$/oz)
$870
Reserve Mine Life
10 years
LOM Development Capex (US$MM)
$245
LOM Sustaining Capital (US$MM)
$37
P&P
The Gatsuurt Project is ~90 km north of Ulaanbaatar
Open Pit
Reserves(2)(Moz)
1.3
Au grade (g/t)
2.7
Life of Mine Recovery
84%
Life of Mine Strip Ratio (w:o)
4.7:1
IRR (after tax)
9%
NPV(5%) - after tax (US$MM)
$39
Boroo’s Historical Cumulative Net Cash Generation (US$MM)
In-Place 5ktpd Processing Facility (Boroo)
600 500 US$ Millions
400 300 200 100 0 (100) 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
(1) See Gatsuurt Project Update in Company’s news release October 31, 2017 and technical report dated December 22, 2017.
February 2018
32
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
Bankable feasibility study completed in November 2016
Location: Ontario, Canada
2017, final EIS/EA filed, mine permitting and IBA work underway
Brookbank Deposit
Brookbank Jellicoe
Geraldton
11
Viper
Hardrock
Hardrock Deposit Beardmore
Beardmore – Geraldton Greenstone Belt +110 km February 2018
(1) Technical Report on the Hardrock Project dated December 21, 2016.
33
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 2017 final EIS/EA filed, mine permitting and IBA work underway
2016 Feasibility Highlights (100%) Mine Type
27,000 tpd
Avg. LOM Annual Production
288koz Au
AISC(2)
$600
(US$/oz)
Reserve Mine Life
Location: Ontario, Canada
Projected Gold Production (100%)
14.5 years
Development Capex (US$MM)
$962
Sustaining Capital(2) (US$MM)
$101
P&P
Greenstone Development Project
Open Pit, CIP Mill
Mill Throughput design Avg. LOM
Greenstone Gold Property
Reserves(1)(Moz)
Au grade (g/t)
4.7 1.02
Life of Mine Recovery
90%
Life of Mine Strip Ratio (w:o)
3.87:1
IRR (after tax)
14.4%
NPV(5%) - after tax (US$MM) February 2018
$545
(1) See Technical Report on the Hardrock Project dated December 21, 2016. (2) Non-GAAP measure, see “Non-GAAP Measures” in Company’s MDA and news release February 23, 2018.
34
Centerra: Producing Royalties Young-Davidson (1.5% NSR)
Fosterville (2.0% NSR)
Mine Operator
Alamos Gold
Mine Operator
Mine Type
Underground
Mine Type
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-210koz Gold 3,467koz @ 2.6 g/t 1,361koz @ 3.2 g/t 311koz @ 2.7 g/t
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
Kirkland Lake Gold Underground 260-300koz Gold 1,700koz @ 23.1 g/t 2,150koz @ 4.8 g/t 1,900koz @ 7.1 g/t
Highlights • One of Canada’s largest underground mines • 14-year mine life based on year-end 2017 reserves • Open at depth
Highlights • Achieved annual production record of 263,845 ounces in 2017. • Mineral reserves more than doubled at Fosterville with an increase in reserve grade from 9.8 g/t Au to 23.1 g/t Au.
Hemlo – Williams (0.25% NSR)
Eagle River (0.5% NSR)
Mine Operator
Barrick Gold
Mine Operator:
Mine Type
Underground
Mine Type
2018 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-220koz Gold 1,774koz @ 2.21 g/t 1,858koz @ 1.40 g/t 442koz @ 2.78 g/t
Highlights • 73% increase in reserves announced in February 2017 • Has been producing for 30+ consecutive years • Royalty only applicable on production from the Williams mine.
2018 Production Guidance P&P Reserves Inferred
Wesdome Gold Mines Open Pit 55-59koz Gold 344koz @ 9.2 g/t 85koz @ 8.1 g/t
Highlights • Continuous production since 1995 (>1Moz) • Significant upside from continued exploration of identified ore zones (incl. 300 Zone)
Source: Alamos Gold, Kirkland Lake Gold, Barrick Gold and Wesdome Gold Mines filings.
February 2018
35
Centerra: Non-Producing Royalties Date Acquired(1)
Primary Metal
Location
NSR Rate
Operator
Notes
Boulevard
Mar-17
Gold
Yukon
1.00%
Independence Gold
Adjacent to Goldcorp’s Coffee project
Cumobabi
Mar-17
Copper
Mexico
0.50%
Evrim Resources
Under option to First Majestic Silver
East Timmins
Mar-17
Gold
Ontario
0.50%
Kirkland Lake Gold
19 near-mine targets & 81 regional targets (claim progressing in court)
Eskay Creek Area
Dec-16
Gold/Silver
British Columbia
0.50%
Eskay Mining Corp
Area surrounding past producing Eskay Creek mine and near to Brucejack and KSM
GJ / GJ Northern Block
Dec-16
Gold/Copper
British Columbia
0.98% / 0.49%
Skeena Resources
PEA released April 2017; M&I resources of 2.1Moz Au and 1.2Blbs Cu
Goodpaster
Mar-17
Gold
Alaska
1.00%
Millrock Resources
Eligible for advanced royalty payments
Grizzly
Sept-17
Copper/Gold
British Columbia
1.00%
International Samuel Exploration
Located in BC’s Golden Triangle
Hemlo – David Bell
Sept-15
Gold
Ontario
1.50%
Barrick Gold
Historic operation – adjacent to Williams (on strike)
Leviathan
Jul-15
Gold
Australia
1.00%
Kirkland Lake Gold
Exploration stage
Madsen Area
Dec-16
Gold
Ontario
1.00%
Frontline Gold
Exploration stage
Mt. Dunn
Mar-17
Copper/Gold
British Columbia
2.00%
Metallis Resources
Located in BC’s Golden Triangle
Rainy River Area
Feb-17
Gold
Ontario
0.75%
Private
Exploration stage
RDN
Mar-17
Gold
British Columbia
1.33%
Aben Resources
Located in BC’s Golden Triangle
Red Lake Area
Mar-17
Gold
Ontario
1.00%
Frontline Gold
Exploration stage
Stawell
Jul-15
Gold
Australia
1.00%
Kirkland Lake Gold
Care & Maintenance / “operationally ready”; P&P of 132koz and M&I of 114koz
Asset
Source: AuRico Metals filings. (1) Date AuRico Metals acquired the royalty.
February 2018
36
Centerra: 2018 Guidance 2018 Production Guidance Gold Total Gold Payable Production(2) Copper Total Copper Payable Production(3)
Units
Kumtor
Mount Milligan(1)
Centerra
(Koz)
450 – 500
195 – 215
645 – 715
(Mlb)
–
47 – 52
47 – 52
2018 All-in Sustaining Unit Costs (5) Ounces sold forecast All-in sustaining costs on a by-product basis(2), (5)
Kumtor 450,000 – 500,000 $733 – $815
Mount Milligan(1) 195,000 – 215,000 $806 – $888
Centerra(1) 645,000-715,000 $799 – $885
171 – 190 $904 – $1,005
19 – 21 $825 – $909
125 – 139 $924 – $1,024
$733 – $815 –
$847 – $932 $1.90 – $2.10
$812 – $900 $1.90 – $2.10
Revenue-based tax(3) and taxes(3) All-in sustaining costs on a by-product basis including taxes (1), (4), (5) Gold - All-in sustaining costs on a co-product basis ($/ounce) (1),(5) Copper - All-in sustaining costs on a co-product basis ($/pound) (1),(5)
2018 Sustaining Capital(5) ($ millions) 49 44 -
2018 Growth Capital(5) ($ millions) 14 82
Kemess Underground Project
-
36
Greenstone Gold Property Other (Thompson Creek mine, Endako mine (75%), Langeloth facility and Corporate) Consolidated Total
-
10
7
-
$100
$142
Capital Expenditures Kumtor Mine Mount Milligan Mine Öksüt Project
1) Mount Milligan payable production and ounces sold are on a 100% basis (the Mount Milligan Streaming Arrangement entitles Royal Gold to 35% and 18.75% of gold and copper sales, respectively and Royal Gold will pay $435 per ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered). The copper sales are based on a copper price assumption of $2.90 per pound sold for Centerra’s 81.25% share of copper production and the remaining 18.75% of copper revenue at $0.435 per pound (15% of spot price, assuming spot at $2.90 per pound), representing the Mount Milligan Streaming Arrangement. Payable production for copper and gold reflects estimated metallurgical losses resulting from handling of the concentrate and payable metal deductions, subject to metal content, levied by smelters. 2) Gold production assumes 79% recovery at Kumtor and 61% recovery at Mount Milligan. 3) Copper production assumes 79% recovery for copper at Mount Milligan. 4) Includes revenue-based tax at Kumtor and the British Columbia mineral tax at Mount Milligan based on a forecast gold price assumption of $1,275 per ounce sold 5) Non-GAAP measures and are discussed under “Non-GAAP Measures” in the MD&A and news release of February 23, 2018
February 2018
37
Centerra: 2018 Guidance Sensitivities Impact on ($ millions) Change
Impact on ($ per ounce sold)
Costs
Revenues
Cash flows
Net Earnings (after tax)
AISC(3) on by-product basis
$50/oz
3.2 – 3.7
22.0 – 25.2
18.8 – 21.5
18.8 – 21.5
0-1
Copper price(1)
10%
1.9 – 2.3
6.6 – 7.9
4.7 – 5.6
4.7 – 5.6
10 – 11
Diesel fuel
10%
4.5 - 5.0
-
6.0 - 7.0
4.5 - 5.0
9 – 10
1 som
1.0 - 2.0
-
1.0 - 2.0
1.0 - 2.0
1-2
10 cents
30.0 - 32.0
-
30.0 - 32.0
25.0 - 27.0
35 – 40
Gold price(1)
Kyrgyz som(2) Canadian dollar(2) 1 Gold
and copper price sensitivities include the impact of the hedging program set up in order to mitigate gold and copper price risks. 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. 3 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, 2018. 2
Material Assumptions and Risks1 Material assumptions or factors used to forecast production and costs for 2018 include the following: • a gold price of $1,275 per ounce, • a copper price of $2.90 per pound, • exchange rates: • $1USD:$1.25 CAD, • $1USD:71.0 Kyrgyz som, • $1USD:3.5 Turkish lira, • $1USD:0.84 Euro, • diesel fuel price assumption: • $0.45/litre at Kumtor, • $0.69/litre at Mount Milligan. 1 Other
February 2018
material assumptions and risks are discussed under “Material Assumptions and Risks” in the Company’s MD&A and news release February 23, 2018. 38
Centerra: Mineral Reserves - Proven & Probable1 Proven and Probable Gold Mineral Reserves Increase to 16.3 million ounces Proven and Probable Copper Mineral Reserves are 2,568 million pounds Gold Mineral Reserves Proven
Total Proven and Probable
Grade (g/t)
Contained Gold (koz)
Tonnes (kt)
Grade (g/t)
Contained Gold (koz)
Tonnes (kt)
Grade (g/t)
Contained Gold (koz)
236,533
0.4
2,996
231,405
0.3
2,141
467,939
0.3
5,138
Kumtor
10,278
1.5
490
46,849
2.7
3,999
496,209
2.4
4,489
Öksüt
-
-
-
28,163
1.3
1,187
28,163
1.3
1,187
Gatsuurt
-
-
-
15,356
2.7
1,316
15,356
2.7
1,316
Hardrock Open Pit
-
-
-
70,858
1.0
2,324
70,858
1.0
2,324
Kemess Underground
-
-
-
107,381
0.5
1,868
107,381
0.5
1,868
0.4
3,486
500,012
0.8
12,835
746,824
0.7
16,321
Property Mount Milligan
Tonnes (kt)
Probable
246,812
Total
Copper Mineral Reserves Proven Property Mount Milligan Kemess Underground Total February 2018
Probable
Total Proven and Probable
Tonnes (kt) 236,533
Grade (%) 0.187
Contained Copper (Mlbs) 974
Tonnes (kt) 231,405
Grade (%) 0.189
Contained Copper (Mlbs) 964
Tonnes (kt) 467,939
Grade (%) 0.188
Contained Copper (Mlbs) 1,938
-
-
-
107,381
0.266
630
107,381
0.266
630
236,533
0.187
974
338,786
0.213
1,594
575,320
0.202
2,568
1) As at December 31, 2017, includes Kemess Project following the completion of the AuRico Metals acquisition, see Mineral Reserves and Resources News Release February 8, 2018.
39
Centerra: Investor Relations Highlights Research Coverage Brokerage Firms
Rating
Top Ten (10) Institutional Shareholders Target Institution/Firm
Q4-2017
1. BMO Capital Markets
Hold
C$10.00
2. BofA Merrill Lynch
Neutral
C$9.25
1. Blackrock
13.00%
3. Canaccord Genuity
Hold
C$7.00
2. Van Eck
8.64%
4. CIBC World Markets
Neutral
C$9.00
3. Paulson & Co
7.80%
5. Cormark Securities
Buy
C$11.20 C$8.50
4. Dimensional
3.15%
6. Credit Suisse
Outperform
7. Global Mining Research
Speculative Buy
C$10.70
5. Franklin Advisors
2.22%
8. Macquarie Capital Markets
Outperform
C$12.00
6. Kopernik Global
1.61%
9. National Bank Financial
Sector Perform
C$7.75
7. Vanguard Group
1.54%
10. RBC Capital Markets
Sector Perform
C$8.00
8. Capital Research
1.42%
11. Scotiabank
Outperform
C$9.00
9. USAA
1.20%
12. TD Securities
Hold
C$8.00
10. Oppenheimer Funds
1.15%
Average
February 2018
C$9.20
TOTAL
41.73%
40
Centerra: Senior Management Industry Experience
SCOTT PERRY Chief Executive Officer
GORDON REID Chief Operating Officer
DARREN MILLMAN Chief Financial Officer
February 2018
20 years
30 years
18 years
Background
•
Appointed Chief Executive Officer in November, 2015
•
Former Chief Executive Officer at AuRico Gold
•
Appointed Chief Operating Officer in January, 2013
•
Joined Centerra in 2004
•
Appointed Chief Financial Officer in April, 2016
•
Joined Centerra in 2013
41
Centerra: Directors Board of Directors
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
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
February 2018
42
TSX: CG www.centerragold.com
