Investor Presentation June 2018
Investor Presentation June 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, our expectations regarding: water availability at the Mount Milligan mine and mill throughput levels expected for the remainder of 2018; the closing of the Strategic Agreement entered into with the Kyrgyz Republic Government and the related resolution of outstanding matters which affect the Kumtor Project; the progress of development activities at the Öksüt Project, our expectations for drawing down on the OMAS Facility and the timing for first gold production at the Öksüt Project;; obtaining permanent amendments of Mount Milligan’s Environmental Assessment Certificate to continue drawing water from Philip Lake; currency movements and hedging transactions; operational plans at Kumtor and Mount Milligan in 2018,; discussions between GGM and First Nations groups regarding impact benefit agreements and the timing for the EIS/EA decision for the Hardrock project; the Company’s cash on hand, working capital, future cash flows and existing credit facilities being sufficient to fund anticipated operating cash requirements; , the timing for making a construction decision on the Kemess Underground project; 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; 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 risk of having sufficient water to continue operations, particularly at Mount Milligan and the ability of the Company to achieve expected mill throughput for the remainder of the year; 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 Company’s 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. 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. 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.
June 2018
2
Centerra: Built For Success Corporate Highlights
Consensus Asset NAV Breakdown Mongolia U.S. 2% 2% 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
2018 received Öksüt pastureland permit2, board approval and commenced construction Sold Royalty Portfolio and a Silver Stream on Kemess Underground for US$200MM May 20182
Retained Earnings Profile (US$)
Significant Operational Cash Flow Profile
1,200
Solid Late-Stage Development Pipeline
Positive Retained Earnings of US$1,075MM3
1,600
1,000 US$ Millions
Trading at a Discount to Peers, Potential for Re-Rating
2,000
1,400
800
1,200
600
800
400 400
200
Expected 2018 production of up to 715kozpa gold at AISC1 of $799 to $885 per ounce and 47 to 52M lbs of copper
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018
Retained Earnings
1. 2. 3.
Gold Price (US$/oz)
January 2018, completed acquisition of AuRico
Canada 54%
Kyrgyz Republic 33%
Metals2
Cumulative Dividends
0
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 May 1, 2018. 2018e AISC: Kumtor $733 to $815/oz, Mount Milligan $806 to $888/oz. Refer to Company’s news releases January 8, 11, February 12 and May 17, 2018. As at March 31, 2018.
June 2018
3
Centerra: 2017 Results 2017: Internally Funded Business (US$MM’s) 800
188
700 600
209
127
500
Liquidity Profile March 31, 2018 (US$MM’s)
98
409
400
$3353
417
US$458MM
300 200
$123
100 0
1
2016 Cash Mt Milligan Kumtor FCF Debt Other FCF Repayments (Projects, G&A, etc)
2
1
2017 Cash
Cash Reserves
2017 Positive Net Cash Position1 (US$MM’s)
3
2
Undrawn Credit Facilities
Retained Earnings Profile (US$)
119 2,000
1,400 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 Q1 2018
Retained Earnings
Cumulative Dividends
0
Gold Price
1
June 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 March 31, 2018. 3 A combination of the $150MM undrawn Öksüt credit facility and the $185MM undrawn amount from the new corporate credit facility as at March 31, 2018.
4
Centerra: Asset Breakdown 2017 Free Cash Flow (US$MM’s)(1)
Kumtor $188
Mount Milligan
Langeloth Royalties3 1% Gatsuurt
Mount Milligan $127
Consensus Asset NAV (US$MM’s)
Consensus Asset NAV
3% Greenstone 5% Other 7%
$1,001
1%
Kumtor Mt. Milligan 34%
$916 Kemess
Öksüt 8%
$290 Öksüt
Kemess 10%
$256 Greenstone
Royalty Portfolio(2) $11
Kumtor 31%
$140 Gatsuurt $40 Royalty Portfolio(3)
Source: (1) (2) (3)
Centerra Gold, analyst estimates. Mount Milligan and Kumtor free cash flow figures are non-GAAP measures discussed under “Non-GAAP Measures” in the Company’s MD&A and news release May 1, 2018. AuRico Metals Inc. acquisition closed January 8, 2018, royalty portfolio cash flow as of December 31, 2017. Royalty Portfolio sold May 17, 2018 for US$155MM see news release May 17, 2018.
June 2018
$85
5
Centerra: High-Quality Producing and Growth Assets
Mount Milligan Mine Au, Cu Canada
Greenstone Project (50%) Au Canada
Kumtor Mine Au Kyrgyz Republic
Gatsuurt Project Au Mongolia Kemess Underground and East Projects Au, Cu Canada
Operations Development Molybdenum Asset
June 2018
Öksüt Project Au Turkey
6
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 $127MM free cash flow(1) (2)
20+ years of production from existing P&P reserves 5.1M gold reserve ounces(2) Low cost, long life production Stable, mining-friendly jurisdiction
Gold ounces 000’s
250 200
70
223 205
205
59
54 50
(1) (2)
40
100
30 20
50
10 0
2016
2017 GOLD
2018E
2016
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and news release May 1, 2018. 2016 AISC is for the period Oct.20 to Dec.31, 2016. Refer to February 8, 2018 mineral reserves and resources news release.
June 2018
50
150
0
Tax loss pools, no cash taxes until 2022/2023
60
Copper M lbs
All-In Sustaining Costs (US$/oz)(1)
2017 COPPER
2018E
7
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
World Class Cornerstone Asset
Significant Open Pit Gold Production to 2026 650,000
2017 generated $188MM free cash flow(1)
4.50 4.00
21 years of uninterrupted profitable production U/G miners U/G miners More than 4M ounces remaining in open pit reserves
207
U/G miners target of Low cost,YElong life production
4,000tpd
3.50
500,000
3.00
grade g/t
240
Ounces
240
2.50
350,000
2.00
170opportunity (inferred 3.4Moz @ 7.3 g/t)2 Underground
1.50
U/G miners
Strong stable platform to grow Centerra June 2018
200,000
1.00 2014 2015 2016 2017 2018 2019 2020 2021 2022
(1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and news release May 1, 2018. (2) Refer to February 8, 2018 mineral reserves and resources news release.
8
Öksüt: Funded High Margin Gold Production 2015 Feasibility Highlights Mine Type
Open Pit, Heap Leach
Avg. LOM Annual Production
110koz Au
Avg. LOM AISC(1) (US$/oz)
$490
Reserve Mine Life
8 years
Development Capex (US$MM)
$221
LOM Sustaining Capital(1) (US$MM)
$10
P&P Reserves(2)(Moz)
1.2
Au grade (g/t)(2)
1.3
Life of Mine Strip Ratio (w:o)
2:1
First Gold Pour
Öksüt Gold Project
Q1-2020
Catalyst Schedule
Main Access Road Construction
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 commenced late-March 2018 Bought back Stratex and Teck royalties US$150MM low-cost +5-year financing in-place June 2018
(1) Non-GAAP measure see “Non-GAAP Measures” in the MD&A and news release of May 1, 2018. (2) Refer to February 8, 2018 news release and Technical Report on Öksüt Gold Project dated September 3, 2015.
9
Öksüt: Construction Mobilizing Construction Equipment
Site Safety Protocol
Main Access Road Construction
Pre-Shift Safety Meeting
Main Access Road Construction
Site Road Construction
June 2018
10
Kemess: Site Layout – C$1Billion of Infrastructure Fly-in, Fly-out Work Camp
Metallurgical Facility
June 2018
South Open Pit (Tailings Storage Facility)
Kemess Underground & East Deposits
11
Kemess: De-Risked Brownfield Project(1) • •
Low-risk brownfield development
•
C$1 billion of existing infrastructure − 25,000 tpd mill, road, power, tailings, rail loadout, camp, airstrip
•
(2) (3)
Advanced-stage − EA Approved, IBA in hand, FS complete
•
•
(1)
Established mining jurisdiction
Sizeable resource1 − Kemess Underground(2): P&P of 1.9Moz gold and 0.6Blbs copper and M&I (including P&P) of 3.3Moz gold and 1.2Blbs copper − Kemess East(3): M&I of 1.7Moz gold and 1.0Blbs copper Long life − 12 years at Kemess Underground plus a further 12 years at Kemess East
•
Highly marketable clean concentrate
•
Robust Kemess Underground economics with significant upside
Kwadacha (Fort Ware)
Kemess Project
Kemess Project Omineca Resource Access Road
Tsay Keh
Forest Service Road 0
100
200
Kilometers
Dawson Creek
Takla Landing
Terrace
Smithers
Prince Rupert
Mackenzie
Mount Milligan
Endako
Fort St. James Prince George
Expected Catalyst Schedule Kemess Underground EA Approval
Received – Q1 2017
First Nations IBA
Received – Q2 2017
Kemess Underground Permit Application and Normal Course Permits
Anticipated – mid-2018
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. Kemess East Project (KE) 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. Kemess Underground P&P reserves are estimated using a gold price of $1,200 per ounce, copper price of $2.50 per pound, an exchange rate of 1USD:1.33CAD and an NSR cut-off of C$17.30 per tonne. M&I resources are estimated using a gold price of $1,275 per ounce, copper price of $3.20 per pound, an exchange rate of 1USD:1.33CAD and an NSR cut-off of C$15.00 per tonne. Kemess East resources are estimated using a gold price of $1,275 per ounce, copper price of $3.20 per pound, an exchange rate of 1USD:1.32CAD and an NSR cut-off of C$17.30 per tonne.
June 2018
12
Kemess: Large, Low-Cost Production Kemess Underground – 2016 Feasibility Highlights(1) Underground Block Cave
Mine Type
Avg. LOM Gold Production (koz)
106
Avg. LOM Gold Production (koz)
Avg. LOM By-Product AISC (US$/oz)(2)
$244
Avg. LOM By-Product AISC (US$/oz)(2)
Reserve Mine Life (years)
12
Development Capex (C$MM)(3)
Reserve Mine Life (years)
$604
Development Capex (C$MM)
($69) 12 $327
1.9
M&I Au Resource (Moz)(5)
1.7
P&P Au Reserve Grade (g/t)
0.54
M&I Au Grade (g/t)
0.46
P&P Cu Reserves (Mlbs)(4)
629.6
M&I Cu Resource (Mlbs)(5)
954.0
P&P Cu Reserve Grade (%)
0.27%
M&I Cu Grade (%)
0.38%
$258
After-tax NPV5% (C$MM)
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
--
$375
KE Gold and Copper Production(1) Copper (Mlbs)
Gold (koz)
KUG Gold and Copper Production(1)
(2) (3) (4) (5)
80
P&P Au Reserves (Moz)(4)
After-tax NPV5% (C$MM)
(1)
Underground Panel Cave
160
80
120
60
80
40
40
20
--
Copper (Mlbs)
Mine Type
Kemess East– 2017 PEA Highlights(1)
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 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 Includes pre-commercial net revenue and capitalized pre-production operating expenditures. Kemess Underground reserves are estimated using a gold price of $1,200 per ounce, copper price of $2.50 per pound, an exchange rate of 1USD:1.33CAD and an NSR cut-off of C$17.30 per tonne. Kemess East resources are estimated using a gold price of $1,275 per ounce, copper price of $3.20 per pound, an exchange rate of 1USD:1.32CAD and an NSR cut-off of C$17.30 per tonne.
June 2018
13
Kemess: Timeline – And Copper Outlook Kemess Timeline 2016
2017
2018
2019
2020
2021
2022
Federal and Provincial EA Approvals KUG Impact Benefit Agreement Signed Normal Course Permitting Detailed Engineering Access Corridor Development Decline Development Develop Panel Cave First Production
Copper Outlook Deficit
25
Large ~6Mt deficit expected by 2030
Mt
20
15
10 2015 Source: Wood Mackenzie.
June 2018
2018
2021 Base
Probable Projects
2024
2027
2030
Primary Demand 14
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
$265
concentrates from third parties, producing a suite of premium
$126
$126
$124
molybdenum products
$18 ($21) 2008
2009
2010
2011
2012
2013
2014
2015
● Cash flows from the Langeloth operations are expected to cover care and maintenance expenses associated with the molybdenum mines
(1) Prior to intersegment eliminations. Historical EBITDA not reported, therefore calculated based on historical segment disclosure.
June 2018
15
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-P roduct Basis) $2,500
0%
25%
AISC, net (US$/oz Au)
$1,750
75%
100%
Centerra Gold (US$799-885/oz Au)
$2,250 $2,000
50%
Kemess Underground (US$244/oz)(1) Kumtor (US$733-815/oz)
$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
June 2018
16
Appendix
TSX: CG www.centerragold.com
Centerra: Q1 - 2018 Corporate Highlights
1.
Safety – Kumtor achieved 1 full year & 6 million man-hours without a lost time injury Apr 11, 2018 Closed AuRico Metals Acquisition and Fully Integrated Assets Mount Milligan Mill Operating Both Ball Mill Circuits Averaging 40,000 tpd Started Construction at Öksüt Project late-March 2018 Achieved Q1 2018 Net Earnings of $9MM or $0.03 Cents Per Share, (basic) Adjusted Earnings1 in Q1 2018 $13.5MM or $0.05 Per Share Gold Production of 129,764 Ounces and Copper Production of 6.1 million pounds Centerra’s Q1 2018 All-In Sustaining Cost1 on a by-product basis $932 Per Ounce Sold Cash Provided by Operations Before Working Capital Changes1 of $67MM ($0.23 per share) Refinanced with a new $500MM Corporate Revolving Line of Credit March 31, 2018 Total Liquidity $458 MM
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and news release May 1, 2018.
June 2018
18
Q1-2018 Operating Highlights Q1 2018 gold production - Kumtor 100,220 ounces, Mount Milligan 29,544 ounces Q1 2018 copper production - Mount Milligan 6,143,000 pounds Mount Milligan operating both ball mills averaging 40,000 tpd throughput Kumtor achieved 1 full year & 6 million man-hours without a lost time injury Apr 11, 2018 Öksüt Project commenced construction late-March 2018 Q1 2018
Q1 2017
129,764
172,644
Copper produced (000’s payable lbs)(1)
6,143
12,595
Kumtor All-in Sustaining Costs per ounce sold(2)
$758
$763
$1,554
$530
$932
$750
Gold ounces produced(1)
Mt. Milligan All-in Sustaining Costs on a by-product basis per ounce sold(1),(2) Consolidated All-in Sustaining Costs on a by-product basis per ounce sold(1),(2) 1. 2. June 2018
Mount Milligan numbers 100% basis. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated May 1, 2018.
19
Q1-2018 Mount Milligan - Update
Restarted milling at partial capacity Feb.5, 2018 ramping up to approximately 30,000 tpd; Second ball mill started March 23, 2018, throughput averaging 40,000 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 downtown
June 2018
20
Mount Milligan: Q1-2018 Exploration
June 2018
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.
21
Q1-2018 Financial Highlights1
(in thousands, except ounces, per share amounts, and average realized price2)
Revenue Total gold ounces sold Total copper pounds sold (000’s) Operating cash flow before changes in working capital(2) Cash provided by (used in) operations Net earnings Adjusted earnings(2) Adjusted earnings per share, basic Average realized gold price per ounce(2) 1. 2.
Quarter Ended March 31, 2018
Quarter Ended March 31, 2017
$235,399
$285,342
132,432
187,914
4,506
13,612
$66,575
$118,105
($39,730)
$72,463
$9,045
$56,954
$13,459
$56,954
$0.05
$0.20
$1,277
$1,172
U.S. dollars Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated May 1, 2018.
June 2018
22
Q1- 2018 Other Financial Highlights Gold Sales of 132,432 ounces / Copper Sales of 4.5 million pounds in Q1, 2018 Consolidated First Quarter 2018 AISC1 of $932 per ounce Q1, 2018 AISC1 of $758 per ounce at Kumtor and $1,554 per ounce at Mount Milligan March 31, 2018 Total Liquidity $458 Million Successfully integrated AuRico Metals Inc. (acquisition closed on Jan.8, 2018) Cash and Debt Profile 600
505
US$ Millions
500
409
400
470
447 358
401
Liquidity Profile Mar 31, 2018 US$MM
417 334 352
300
298
200
347 $3353 $458MM
123
100
$123
2
0 Dec31 2016
Mar31 2017
Jun30 2017
Total Debt
Sep30 2017
Cash
Dec31 2017
Mar31 2018 Cash Reserves 2
Undrawn Credit Facilities
3
1
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated May 1, 2018. Represents the Company’s cash position at March 31, 2018. 3 A combination of the $150MM undrawn Öksüt credit facility and the $185MM undrawn amount from the new corporate credit facility as at March 31, 2018 . 2
June 2018
23
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$1 billion of infrastructure in-place (including a 25,000 tpd mill, grid power, road, maintenance shop, etc.) • Past production of 3.0Moz Au and 750Mlbs Cu − Brownfields opportunity significantly reduces risk (1) (2)
Refer to National Instrument 43-101 technical report dated July 12, 2017 Technical Report for the Kemess Underground and Kemess East Project, British Columbia, Canada, available in the AuRico Metals filings on SEDAR. A preliminary economic assessment (PEA) is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. AISC is a Non-GAAP measure.
June 2018
24
Gatsuurt: Gold Development Project 2017 Feasibility Highlights(1) Mine Type Avg. LOM Annual Production
111koz Au
Avg. LOM AISC(1) (US$/oz)
$870
Reserve Mine Life
10 years
LOM Development Capex (US$MM)
$245
LOM Sustaining Capital (US$MM)
$37
P&P
The Gatsuurt Project is ~90 km north of Ulaanbaatar
Open Pit
Reserves(2)(Moz)
1.3
Au grade (g/t)
2.7
Life of Mine Recovery
84%
Life of Mine Strip Ratio (w:o)
4.7:1
NPV(5%) - after tax (US$MM)
~$39
Boroo’s Historical Cumulative Net Cash Generation (US$MM)
In-Place 5ktpd Processing Facility (Boroo)
600
US$ Millions
500 400 300 200 100 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.
June 2018
25
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 June 2018
(1) Technical Report on the Hardrock Project dated December 21, 2016.
26
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
$962
Sustaining Capital(2) (US$MM)
$101
Reserves(1)(Moz)
Au grade (g/t)
Projected Gold Production (100%)
4.7 1.02
Life of Mine Recovery
90%
Life of Mine Strip Ratio (w:o)
3.87:1
NPV(5%) - after tax (US$MM)
~$545
June 2018
Location: Ontario, Canada
14.5 years
Development Capex (US$MM) P&P
Greenstone Development Project
Open Pit, CIP Mill
Mill Throughput design Avg. LOM
Greenstone Gold Property
(1) See Technical Report on the Hardrock Project dated December 21, 2016. (2) Non-GAAP measure, see “Non-GAAP Measures” in Company’s MD&A and news release May 1, 2018.
27
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
-
31
Greenstone Gold Property Other (Thompson Creek mine, Endako mine (75%), Langeloth facility and Corporate) Consolidated Total
-
10
7
-
$100
$137
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 $1,275 per ounce sold 5) Non-GAAP measures and are discussed under “Non-GAAP Measures” in the MD&A and news release of May 1, 2018
June 2018
28
Centerra: 2018 Guidance Sensitivities Impact on ($ millions) Change
Impact on ($ per ounce sold)
Costs
Revenues
Cash flows
Net Earnings (after tax)
AISC(3) on by-product basis
$50/oz
3.7 – 4.3
21.5 – 24.7
17.8 – 20.4
17.8 – 20.4
0-1
Copper price(1)
10%
2.1 – 2.5
7.5 – 8.7
5.4 – 6.2
5.4 – 6.2
11 – 12
Diesel fuel
10%
3.9 - 4.3
-
5.3 - 5.8
3.9 - 4.3
8–9
1 som
1.0 - 2.0
-
1.0 - 2.0
1.0 - 2.0
1-2
10 cents
24.0 - 27.0
-
24.0 - 27.0
21.0 - 24.0
28 – 31
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 May 1, 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, • a molybdenum price of $12 per pound, • exchange rates: • $1USD:$1.25 CAD, • $1USD:71.0 Kyrgyz som, • $1USD:3.5 Turkish lira, • $1USD:0.87 Euro, • diesel fuel price assumption: • $0.45/litre at Kumtor, • $0.82/litre at Mount Milligan. 1 Other
June 2018
material assumptions and risks are discussed under “Material Assumptions and Risks” in the Company’s MD&A and news release May 1, 2018. 29
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 June 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.
30
Centerra: Investor Relations Highlights Research Coverage Brokerage Firms
Rating
Top Ten (10) Institutional Shareholders Target
1. BMO Capital Markets
Buy
C$10.00
Institution/Firm
2. BofA Merrill Lynch
Neutral
C$8.75
1. Blackrock
12.03%
3. Canaccord Genuity
Hold
C$8.00
2. Van Eck Associates
8.64%
4. CIBC World Markets
Hold
C$9.00 C$11.50
3. Paulson & Co
7.80%
5. Cormark Securities
Buy
6. Credit Suisse
Outperform
C$8.50
4. Dimensional Fund Advisors
3.32%
7. Global Mining Research
Speculative Buy
C$10.70
5. Franklin Advisors
2.22%
8. Halyk Finance
Buy
C$8.55
6. Vanguard Group
1.57%
9. Macquarie Capital Markets
Outperform
C$12.00
7. Kopernik Global
1.47%
10. National Bank Financial
Outperform
C$10.75 C$9.00
8. BMO Asset Management
1.27%
11. RBC Capital Markets
Sector Perform
12. Scotiabank
Outperform
C$9.00
9. USAA
1.20%
13. TD Securities
Hold
C$7.50
10. Heartland Advisors
1.03%
Average
June 2018
C$9.48
TOTAL
Q1-2018
40.55%
31
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
ASKAR OSKOMBAEV
Director
Appointed Director of Centerra’s Board, May 2018
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
BEKTUR SAGYNOV
Director
Appointed Director of Centerra’s Board, March 2016
SUSAN YURKOVICH
Director
Appointed Director of Centerra’s Board, March 2018
June 2018
32
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, our expectations regarding: water availability at the Mount Milligan mine and mill throughput levels expected for the remainder of 2018; the closing of the Strategic Agreement entered into with the Kyrgyz Republic Government and the related resolution of outstanding matters which affect the Kumtor Project; the progress of development activities at the Öksüt Project, our expectations for drawing down on the OMAS Facility and the timing for first gold production at the Öksüt Project;; obtaining permanent amendments of Mount Milligan’s Environmental Assessment Certificate to continue drawing water from Philip Lake; currency movements and hedging transactions; operational plans at Kumtor and Mount Milligan in 2018,; discussions between GGM and First Nations groups regarding impact benefit agreements and the timing for the EIS/EA decision for the Hardrock project; the Company’s cash on hand, working capital, future cash flows and existing credit facilities being sufficient to fund anticipated operating cash requirements; , the timing for making a construction decision on the Kemess Underground project; 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; 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 risk of having sufficient water to continue operations, particularly at Mount Milligan and the ability of the Company to achieve expected mill throughput for the remainder of the year; 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 Company’s 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. 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. 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.
June 2018
2
Centerra: Built For Success Corporate Highlights
Consensus Asset NAV Breakdown Mongolia U.S. 2% 2% 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
2018 received Öksüt pastureland permit2, board approval and commenced construction Sold Royalty Portfolio and a Silver Stream on Kemess Underground for US$200MM May 20182
Retained Earnings Profile (US$)
Significant Operational Cash Flow Profile
1,200
Solid Late-Stage Development Pipeline
Positive Retained Earnings of US$1,075MM3
1,600
1,000 US$ Millions
Trading at a Discount to Peers, Potential for Re-Rating
2,000
1,400
800
1,200
600
800
400 400
200
Expected 2018 production of up to 715kozpa gold at AISC1 of $799 to $885 per ounce and 47 to 52M lbs of copper
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018
Retained Earnings
1. 2. 3.
Gold Price (US$/oz)
January 2018, completed acquisition of AuRico
Canada 54%
Kyrgyz Republic 33%
Metals2
Cumulative Dividends
0
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 May 1, 2018. 2018e AISC: Kumtor $733 to $815/oz, Mount Milligan $806 to $888/oz. Refer to Company’s news releases January 8, 11, February 12 and May 17, 2018. As at March 31, 2018.
June 2018
3
Centerra: 2017 Results 2017: Internally Funded Business (US$MM’s) 800
188
700 600
209
127
500
Liquidity Profile March 31, 2018 (US$MM’s)
98
409
400
$3353
417
US$458MM
300 200
$123
100 0
1
2016 Cash Mt Milligan Kumtor FCF Debt Other FCF Repayments (Projects, G&A, etc)
2
1
2017 Cash
Cash Reserves
2017 Positive Net Cash Position1 (US$MM’s)
3
2
Undrawn Credit Facilities
Retained Earnings Profile (US$)
119 2,000
1,400 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 Q1 2018
Retained Earnings
Cumulative Dividends
0
Gold Price
1
June 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 March 31, 2018. 3 A combination of the $150MM undrawn Öksüt credit facility and the $185MM undrawn amount from the new corporate credit facility as at March 31, 2018.
4
Centerra: Asset Breakdown 2017 Free Cash Flow (US$MM’s)(1)
Kumtor $188
Mount Milligan
Langeloth Royalties3 1% Gatsuurt
Mount Milligan $127
Consensus Asset NAV (US$MM’s)
Consensus Asset NAV
3% Greenstone 5% Other 7%
$1,001
1%
Kumtor Mt. Milligan 34%
$916 Kemess
Öksüt 8%
$290 Öksüt
Kemess 10%
$256 Greenstone
Royalty Portfolio(2) $11
Kumtor 31%
$140 Gatsuurt $40 Royalty Portfolio(3)
Source: (1) (2) (3)
Centerra Gold, analyst estimates. Mount Milligan and Kumtor free cash flow figures are non-GAAP measures discussed under “Non-GAAP Measures” in the Company’s MD&A and news release May 1, 2018. AuRico Metals Inc. acquisition closed January 8, 2018, royalty portfolio cash flow as of December 31, 2017. Royalty Portfolio sold May 17, 2018 for US$155MM see news release May 17, 2018.
June 2018
$85
5
Centerra: High-Quality Producing and Growth Assets
Mount Milligan Mine Au, Cu Canada
Greenstone Project (50%) Au Canada
Kumtor Mine Au Kyrgyz Republic
Gatsuurt Project Au Mongolia Kemess Underground and East Projects Au, Cu Canada
Operations Development Molybdenum Asset
June 2018
Öksüt Project Au Turkey
6
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 $127MM free cash flow(1) (2)
20+ years of production from existing P&P reserves 5.1M gold reserve ounces(2) Low cost, long life production Stable, mining-friendly jurisdiction
Gold ounces 000’s
250 200
70
223 205
205
59
54 50
(1) (2)
40
100
30 20
50
10 0
2016
2017 GOLD
2018E
2016
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and news release May 1, 2018. 2016 AISC is for the period Oct.20 to Dec.31, 2016. Refer to February 8, 2018 mineral reserves and resources news release.
June 2018
50
150
0
Tax loss pools, no cash taxes until 2022/2023
60
Copper M lbs
All-In Sustaining Costs (US$/oz)(1)
2017 COPPER
2018E
7
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
World Class Cornerstone Asset
Significant Open Pit Gold Production to 2026 650,000
2017 generated $188MM free cash flow(1)
4.50 4.00
21 years of uninterrupted profitable production U/G miners U/G miners More than 4M ounces remaining in open pit reserves
207
U/G miners target of Low cost,YElong life production
4,000tpd
3.50
500,000
3.00
grade g/t
240
Ounces
240
2.50
350,000
2.00
170opportunity (inferred 3.4Moz @ 7.3 g/t)2 Underground
1.50
U/G miners
Strong stable platform to grow Centerra June 2018
200,000
1.00 2014 2015 2016 2017 2018 2019 2020 2021 2022
(1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and news release May 1, 2018. (2) Refer to February 8, 2018 mineral reserves and resources news release.
8
Öksüt: Funded High Margin Gold Production 2015 Feasibility Highlights Mine Type
Open Pit, Heap Leach
Avg. LOM Annual Production
110koz Au
Avg. LOM AISC(1) (US$/oz)
$490
Reserve Mine Life
8 years
Development Capex (US$MM)
$221
LOM Sustaining Capital(1) (US$MM)
$10
P&P Reserves(2)(Moz)
1.2
Au grade (g/t)(2)
1.3
Life of Mine Strip Ratio (w:o)
2:1
First Gold Pour
Öksüt Gold Project
Q1-2020
Catalyst Schedule
Main Access Road Construction
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 commenced late-March 2018 Bought back Stratex and Teck royalties US$150MM low-cost +5-year financing in-place June 2018
(1) Non-GAAP measure see “Non-GAAP Measures” in the MD&A and news release of May 1, 2018. (2) Refer to February 8, 2018 news release and Technical Report on Öksüt Gold Project dated September 3, 2015.
9
Öksüt: Construction Mobilizing Construction Equipment
Site Safety Protocol
Main Access Road Construction
Pre-Shift Safety Meeting
Main Access Road Construction
Site Road Construction
June 2018
10
Kemess: Site Layout – C$1Billion of Infrastructure Fly-in, Fly-out Work Camp
Metallurgical Facility
June 2018
South Open Pit (Tailings Storage Facility)
Kemess Underground & East Deposits
11
Kemess: De-Risked Brownfield Project(1) • •
Low-risk brownfield development
•
C$1 billion of existing infrastructure − 25,000 tpd mill, road, power, tailings, rail loadout, camp, airstrip
•
(2) (3)
Advanced-stage − EA Approved, IBA in hand, FS complete
•
•
(1)
Established mining jurisdiction
Sizeable resource1 − Kemess Underground(2): P&P of 1.9Moz gold and 0.6Blbs copper and M&I (including P&P) of 3.3Moz gold and 1.2Blbs copper − Kemess East(3): M&I of 1.7Moz gold and 1.0Blbs copper Long life − 12 years at Kemess Underground plus a further 12 years at Kemess East
•
Highly marketable clean concentrate
•
Robust Kemess Underground economics with significant upside
Kwadacha (Fort Ware)
Kemess Project
Kemess Project Omineca Resource Access Road
Tsay Keh
Forest Service Road 0
100
200
Kilometers
Dawson Creek
Takla Landing
Terrace
Smithers
Prince Rupert
Mackenzie
Mount Milligan
Endako
Fort St. James Prince George
Expected Catalyst Schedule Kemess Underground EA Approval
Received – Q1 2017
First Nations IBA
Received – Q2 2017
Kemess Underground Permit Application and Normal Course Permits
Anticipated – mid-2018
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. Kemess East Project (KE) 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. Kemess Underground P&P reserves are estimated using a gold price of $1,200 per ounce, copper price of $2.50 per pound, an exchange rate of 1USD:1.33CAD and an NSR cut-off of C$17.30 per tonne. M&I resources are estimated using a gold price of $1,275 per ounce, copper price of $3.20 per pound, an exchange rate of 1USD:1.33CAD and an NSR cut-off of C$15.00 per tonne. Kemess East resources are estimated using a gold price of $1,275 per ounce, copper price of $3.20 per pound, an exchange rate of 1USD:1.32CAD and an NSR cut-off of C$17.30 per tonne.
June 2018
12
Kemess: Large, Low-Cost Production Kemess Underground – 2016 Feasibility Highlights(1) Underground Block Cave
Mine Type
Avg. LOM Gold Production (koz)
106
Avg. LOM Gold Production (koz)
Avg. LOM By-Product AISC (US$/oz)(2)
$244
Avg. LOM By-Product AISC (US$/oz)(2)
Reserve Mine Life (years)
12
Development Capex (C$MM)(3)
Reserve Mine Life (years)
$604
Development Capex (C$MM)
($69) 12 $327
1.9
M&I Au Resource (Moz)(5)
1.7
P&P Au Reserve Grade (g/t)
0.54
M&I Au Grade (g/t)
0.46
P&P Cu Reserves (Mlbs)(4)
629.6
M&I Cu Resource (Mlbs)(5)
954.0
P&P Cu Reserve Grade (%)
0.27%
M&I Cu Grade (%)
0.38%
$258
After-tax NPV5% (C$MM)
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
--
$375
KE Gold and Copper Production(1) Copper (Mlbs)
Gold (koz)
KUG Gold and Copper Production(1)
(2) (3) (4) (5)
80
P&P Au Reserves (Moz)(4)
After-tax NPV5% (C$MM)
(1)
Underground Panel Cave
160
80
120
60
80
40
40
20
--
Copper (Mlbs)
Mine Type
Kemess East– 2017 PEA Highlights(1)
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 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 Includes pre-commercial net revenue and capitalized pre-production operating expenditures. Kemess Underground reserves are estimated using a gold price of $1,200 per ounce, copper price of $2.50 per pound, an exchange rate of 1USD:1.33CAD and an NSR cut-off of C$17.30 per tonne. Kemess East resources are estimated using a gold price of $1,275 per ounce, copper price of $3.20 per pound, an exchange rate of 1USD:1.32CAD and an NSR cut-off of C$17.30 per tonne.
June 2018
13
Kemess: Timeline – And Copper Outlook Kemess Timeline 2016
2017
2018
2019
2020
2021
2022
Federal and Provincial EA Approvals KUG Impact Benefit Agreement Signed Normal Course Permitting Detailed Engineering Access Corridor Development Decline Development Develop Panel Cave First Production
Copper Outlook Deficit
25
Large ~6Mt deficit expected by 2030
Mt
20
15
10 2015 Source: Wood Mackenzie.
June 2018
2018
2021 Base
Probable Projects
2024
2027
2030
Primary Demand 14
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
$265
concentrates from third parties, producing a suite of premium
$126
$126
$124
molybdenum products
$18 ($21) 2008
2009
2010
2011
2012
2013
2014
2015
● Cash flows from the Langeloth operations are expected to cover care and maintenance expenses associated with the molybdenum mines
(1) Prior to intersegment eliminations. Historical EBITDA not reported, therefore calculated based on historical segment disclosure.
June 2018
15
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-P roduct Basis) $2,500
0%
25%
AISC, net (US$/oz Au)
$1,750
75%
100%
Centerra Gold (US$799-885/oz Au)
$2,250 $2,000
50%
Kemess Underground (US$244/oz)(1) Kumtor (US$733-815/oz)
$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
June 2018
16
Appendix
TSX: CG www.centerragold.com
Centerra: Q1 - 2018 Corporate Highlights
1.
Safety – Kumtor achieved 1 full year & 6 million man-hours without a lost time injury Apr 11, 2018 Closed AuRico Metals Acquisition and Fully Integrated Assets Mount Milligan Mill Operating Both Ball Mill Circuits Averaging 40,000 tpd Started Construction at Öksüt Project late-March 2018 Achieved Q1 2018 Net Earnings of $9MM or $0.03 Cents Per Share, (basic) Adjusted Earnings1 in Q1 2018 $13.5MM or $0.05 Per Share Gold Production of 129,764 Ounces and Copper Production of 6.1 million pounds Centerra’s Q1 2018 All-In Sustaining Cost1 on a by-product basis $932 Per Ounce Sold Cash Provided by Operations Before Working Capital Changes1 of $67MM ($0.23 per share) Refinanced with a new $500MM Corporate Revolving Line of Credit March 31, 2018 Total Liquidity $458 MM
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and news release May 1, 2018.
June 2018
18
Q1-2018 Operating Highlights Q1 2018 gold production - Kumtor 100,220 ounces, Mount Milligan 29,544 ounces Q1 2018 copper production - Mount Milligan 6,143,000 pounds Mount Milligan operating both ball mills averaging 40,000 tpd throughput Kumtor achieved 1 full year & 6 million man-hours without a lost time injury Apr 11, 2018 Öksüt Project commenced construction late-March 2018 Q1 2018
Q1 2017
129,764
172,644
Copper produced (000’s payable lbs)(1)
6,143
12,595
Kumtor All-in Sustaining Costs per ounce sold(2)
$758
$763
$1,554
$530
$932
$750
Gold ounces produced(1)
Mt. Milligan All-in Sustaining Costs on a by-product basis per ounce sold(1),(2) Consolidated All-in Sustaining Costs on a by-product basis per ounce sold(1),(2) 1. 2. June 2018
Mount Milligan numbers 100% basis. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated May 1, 2018.
19
Q1-2018 Mount Milligan - Update
Restarted milling at partial capacity Feb.5, 2018 ramping up to approximately 30,000 tpd; Second ball mill started March 23, 2018, throughput averaging 40,000 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 downtown
June 2018
20
Mount Milligan: Q1-2018 Exploration
June 2018
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.
21
Q1-2018 Financial Highlights1
(in thousands, except ounces, per share amounts, and average realized price2)
Revenue Total gold ounces sold Total copper pounds sold (000’s) Operating cash flow before changes in working capital(2) Cash provided by (used in) operations Net earnings Adjusted earnings(2) Adjusted earnings per share, basic Average realized gold price per ounce(2) 1. 2.
Quarter Ended March 31, 2018
Quarter Ended March 31, 2017
$235,399
$285,342
132,432
187,914
4,506
13,612
$66,575
$118,105
($39,730)
$72,463
$9,045
$56,954
$13,459
$56,954
$0.05
$0.20
$1,277
$1,172
U.S. dollars Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated May 1, 2018.
June 2018
22
Q1- 2018 Other Financial Highlights Gold Sales of 132,432 ounces / Copper Sales of 4.5 million pounds in Q1, 2018 Consolidated First Quarter 2018 AISC1 of $932 per ounce Q1, 2018 AISC1 of $758 per ounce at Kumtor and $1,554 per ounce at Mount Milligan March 31, 2018 Total Liquidity $458 Million Successfully integrated AuRico Metals Inc. (acquisition closed on Jan.8, 2018) Cash and Debt Profile 600
505
US$ Millions
500
409
400
470
447 358
401
Liquidity Profile Mar 31, 2018 US$MM
417 334 352
300
298
200
347 $3353 $458MM
123
100
$123
2
0 Dec31 2016
Mar31 2017
Jun30 2017
Total Debt
Sep30 2017
Cash
Dec31 2017
Mar31 2018 Cash Reserves 2
Undrawn Credit Facilities
3
1
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated May 1, 2018. Represents the Company’s cash position at March 31, 2018. 3 A combination of the $150MM undrawn Öksüt credit facility and the $185MM undrawn amount from the new corporate credit facility as at March 31, 2018 . 2
June 2018
23
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$1 billion of infrastructure in-place (including a 25,000 tpd mill, grid power, road, maintenance shop, etc.) • Past production of 3.0Moz Au and 750Mlbs Cu − Brownfields opportunity significantly reduces risk (1) (2)
Refer to National Instrument 43-101 technical report dated July 12, 2017 Technical Report for the Kemess Underground and Kemess East Project, British Columbia, Canada, available in the AuRico Metals filings on SEDAR. A preliminary economic assessment (PEA) is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. AISC is a Non-GAAP measure.
June 2018
24
Gatsuurt: Gold Development Project 2017 Feasibility Highlights(1) Mine Type Avg. LOM Annual Production
111koz Au
Avg. LOM AISC(1) (US$/oz)
$870
Reserve Mine Life
10 years
LOM Development Capex (US$MM)
$245
LOM Sustaining Capital (US$MM)
$37
P&P
The Gatsuurt Project is ~90 km north of Ulaanbaatar
Open Pit
Reserves(2)(Moz)
1.3
Au grade (g/t)
2.7
Life of Mine Recovery
84%
Life of Mine Strip Ratio (w:o)
4.7:1
NPV(5%) - after tax (US$MM)
~$39
Boroo’s Historical Cumulative Net Cash Generation (US$MM)
In-Place 5ktpd Processing Facility (Boroo)
600
US$ Millions
500 400 300 200 100 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.
June 2018
25
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 June 2018
(1) Technical Report on the Hardrock Project dated December 21, 2016.
26
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
$962
Sustaining Capital(2) (US$MM)
$101
Reserves(1)(Moz)
Au grade (g/t)
Projected Gold Production (100%)
4.7 1.02
Life of Mine Recovery
90%
Life of Mine Strip Ratio (w:o)
3.87:1
NPV(5%) - after tax (US$MM)
~$545
June 2018
Location: Ontario, Canada
14.5 years
Development Capex (US$MM) P&P
Greenstone Development Project
Open Pit, CIP Mill
Mill Throughput design Avg. LOM
Greenstone Gold Property
(1) See Technical Report on the Hardrock Project dated December 21, 2016. (2) Non-GAAP measure, see “Non-GAAP Measures” in Company’s MD&A and news release May 1, 2018.
27
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
-
31
Greenstone Gold Property Other (Thompson Creek mine, Endako mine (75%), Langeloth facility and Corporate) Consolidated Total
-
10
7
-
$100
$137
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 $1,275 per ounce sold 5) Non-GAAP measures and are discussed under “Non-GAAP Measures” in the MD&A and news release of May 1, 2018
June 2018
28
Centerra: 2018 Guidance Sensitivities Impact on ($ millions) Change
Impact on ($ per ounce sold)
Costs
Revenues
Cash flows
Net Earnings (after tax)
AISC(3) on by-product basis
$50/oz
3.7 – 4.3
21.5 – 24.7
17.8 – 20.4
17.8 – 20.4
0-1
Copper price(1)
10%
2.1 – 2.5
7.5 – 8.7
5.4 – 6.2
5.4 – 6.2
11 – 12
Diesel fuel
10%
3.9 - 4.3
-
5.3 - 5.8
3.9 - 4.3
8–9
1 som
1.0 - 2.0
-
1.0 - 2.0
1.0 - 2.0
1-2
10 cents
24.0 - 27.0
-
24.0 - 27.0
21.0 - 24.0
28 – 31
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 May 1, 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, • a molybdenum price of $12 per pound, • exchange rates: • $1USD:$1.25 CAD, • $1USD:71.0 Kyrgyz som, • $1USD:3.5 Turkish lira, • $1USD:0.87 Euro, • diesel fuel price assumption: • $0.45/litre at Kumtor, • $0.82/litre at Mount Milligan. 1 Other
June 2018
material assumptions and risks are discussed under “Material Assumptions and Risks” in the Company’s MD&A and news release May 1, 2018. 29
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 June 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.
30
Centerra: Investor Relations Highlights Research Coverage Brokerage Firms
Rating
Top Ten (10) Institutional Shareholders Target
1. BMO Capital Markets
Buy
C$10.00
Institution/Firm
2. BofA Merrill Lynch
Neutral
C$8.75
1. Blackrock
12.03%
3. Canaccord Genuity
Hold
C$8.00
2. Van Eck Associates
8.64%
4. CIBC World Markets
Hold
C$9.00 C$11.50
3. Paulson & Co
7.80%
5. Cormark Securities
Buy
6. Credit Suisse
Outperform
C$8.50
4. Dimensional Fund Advisors
3.32%
7. Global Mining Research
Speculative Buy
C$10.70
5. Franklin Advisors
2.22%
8. Halyk Finance
Buy
C$8.55
6. Vanguard Group
1.57%
9. Macquarie Capital Markets
Outperform
C$12.00
7. Kopernik Global
1.47%
10. National Bank Financial
Outperform
C$10.75 C$9.00
8. BMO Asset Management
1.27%
11. RBC Capital Markets
Sector Perform
12. Scotiabank
Outperform
C$9.00
9. USAA
1.20%
13. TD Securities
Hold
C$7.50
10. Heartland Advisors
1.03%
Average
June 2018
C$9.48
TOTAL
Q1-2018
40.55%
31
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
ASKAR OSKOMBAEV
Director
Appointed Director of Centerra’s Board, May 2018
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
BEKTUR SAGYNOV
Director
Appointed Director of Centerra’s Board, March 2016
SUSAN YURKOVICH
Director
Appointed Director of Centerra’s Board, March 2018
June 2018
32
TSX: CG www.centerragold.com
