Investor Presentation November 2017
Investor Presentation November 2017 TSX: CG www.centerragold.com
Caution Regarding Forward-Looking Information Information contained in this presentation which are not statements of historical facts, and the documents incorporated by reference herein, may be “forward-looking information” for the purposes of Canadian securities laws. Such forward-looking information involves risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward looking information. The words “believe”, “expect”, “anticipate”, “contemplate”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”, “understand” and similar expressions identify forwardlooking information. These forward-looking statements relate to, among other things: the Company’s discussions with the Government of the Kyrgyz Republic, completion of the Strategic Agreement and future business certainty for the Kumtor Project; Work Safe Home Safe training; advancement of exploration projects; the Company’s cash on hand, working capital, future cash flows and existing credit facilities being sufficient to fund anticipated operating cash requirements; Kyrgyzaltyn’s appointment of a new purchaser bank and the resumption of full shipments from the Kumtor Project to Kyrgyzaltyn; the timing and outcomes of projects initiated at the Mount Milligan mine aimed at improving metal recovery and other opportunities; the resumption of negotiations with the Mongolian Government related to the Gatsuurt Project;; timing for development of, and gold production, from the Öksüt Project; the timing for receipt of proceeds from the sale of the ATO licenses; mining plans at Kumtor, including timing for accessing ore; and statements found under the heading, “2017 Outlook”, including forecast 2017 production and cost estimates. 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 ramp-up to design criteria of the secondary crusher at Mount Milligan; 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 2016 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. Forward-looking information is as of October 31, 2017. Centerra assumes no obligation to update or revise forward looking information to reflect changes in assumptions, changes in circumstances or any other events affecting such forward-looking information, except as required by applicable law. Except as otherwise noted herein, Gordon Reid, Professional Engineer and Centerra’s Vice President and Chief Operating Officer, has reviewed and approved the scientific and technical information contained in this presentation. Mr. Reid is a Qualified Person within the meaning of NI 43-101. For more information, please refer to the properties technical reports, which are available on SEDAR. All figures are in United States dollars unless otherwise stated. 2 November 2017
Centerra: Built For Success Consensus Asset NAV Breakdown
Corporate Highlights
US 0%
Internationally Diversified Gold Producer
Kyrgyzstan 33%
Two Cornerstone Lower-Cost Quartile Assets Canada 46%
Gold Production up to 815kozpa gold at AISC1 of $705 to $741 per ounce and ~60M lbs of copper Significant Operational Cash Flow Profile Mongolia 10%
Solid Late-Stage Development Pipeline 1,000
2,000
800
1,600
600
1,200
400
800
200
400
US$352MM2
Trading at a Discount to Peers, Potential Re-Rating
Liquidity of US$677MM2
Positive Retained Earnings of US$936MM2
Gold Price (US$/oz)
Position of
Cash Reserves2 Profile (US$)
US$ Millions
Cash2
Turkey 11%
0
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017 2
Cumulative Dividends
1. 2.
Cash Balance
Gold Price
2017e AISC: Kumtor $737 to $764/oz, Mount Milligan $483 to $523/oz. All-in sustaining costs per ounce sold is a non-GAAP measures and is discussed under “Non-GAAP Measures” in the Company’s MDA & news release October 31, 2017. As at September 30, 2017.
November 2017
3
Centerra: Q3 - 2017 Corporate Update 2017 YTD: Internally Funded Business (US$MM’s) 700
88
600
Liquidity Profile (US$MM’s) (as of September 30, 2017)
172
$50
105
500
78
409
400
Cash $125
352
$401MM
300
$352
200
US$677MM
100
$150
0
1
2016 Cash Mt Milligan Kumtor FCF Debt Other FCF Repayments (Projects, G&A, etc)
Q3 2017 Cash
Cash Reserves CBCH Revolver Credit Facility
Positive Net Cash Position2 (US$MM’s)
EBRD Revolver Credit Facility Oksut Credit Facility
Retained Earnings Profile (US$)
75 1,200
18
25
2,000
1,000
0
1,600
(25) (50)
Cash
$542MM
(75) (100)
US$ Millions
800
2016
800
400
400
200
(96)
(125)
1,200
600
0
Q3-2017
Gold Price (US$/oz)
50
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017
Retained Earnings
Cumulative Dividends
0
Gold Price
1
November 2017
Includes cash and cash equivalents, restricted cash and short-term investments at December 31, 2016. 2 At September 30, 2017.
4
Centerra: Q3 Full Year Guidance Revision 2017 Mid-Point Gold Production (oz’s)
Guidance Mid-Point Highlights
850,000
815,000 795,000
800,000
Gold Production – 3% Downward Revision
755,000 750,000
700,000
All-In Sustaining Costs – Negligible Revision
650,000 Original Guidance
2017 Mid-Point All-In Sustaining Costs (US$/oz) 1,200 975 815
845
860
900
910
940
955
1,040 1,075
Q2 Guidance
Q3 Guidance
2017 Mid-Point All-In Sustaining Costs (US$/oz) 850
965
800
784
723
750
720
723
Q2 Guidance
Q3 Guidance
700 650 Centerra
SEMAFO New Gold Eldorado Gold
November 2017
Acacia Mining
Yamana Gold
Alamos Gold
B2Gold
Silver Standard
Kinross IAMGOLD Detour Tahoe Gold Gold Resources
Original Guidance
5
Centerra: Financial Highlights Both mines generating strong positive free cash flows, $193MM YTD:
• •
$88MM from Kumtor $105MM from Mount Milligan
Increased MTM revolving credit facility to $125 Million from $75 Million • Entered into 2-year strategic hedging program, primarily zero-cost collars in H2 2018 and 2019 • Minimum average floor price: gold - $1,200 per ounce and copper $2.50 per pound Debt repayments YTD of $172MM, outstanding total debt $334MM2 and net cash $18MM at September 30, 2017 US$352MM3 Cash balance at September 30, 2017 Consolidated Year-to-Date AISC1 of $739 per ounce with 49,000 gold dore ounces on hand
YTD All-in Sustaining Costs (US$/oz)1
Debt Reduction (US$) 550
950 36 34
850
5
15
500
129
60
$ /Oz sold
800 750
748
739
700 650
US$ Millions
900
450
470
447
409
400
401 358
334
350 250
550
200 Dec31 2016
Mar31 2017 2
Total Debt 1 2
352
300
600
500
505
Jun30 2017
Sep30 2017
Cash
Non-GAAP measure and is discussed in the Company’s MD&A and News Release dated October 31, 2017 Includes CAT finance leases ($32MM at September 30, 2017)
November 2017
6
Diversified Portfolio With Balanced Geopolitical Profile Asset NAV breakdown
Gold Reserves
Consensus Asset NAV by geography
P+P reserves by geography
US 0%
Kyrgyz Republic 32%
Kyrgyzstan 33% Canada 46%
Canada 52%
Mongolia 10%
Turkey 7% Mongolia 10%
Turkey 11%
Consensus Asset NAV by stage
M+I resources (inclusive) by geography(1)
Exploration 9% Kyrgyz Republic 33%
Development 21% Canada 48%
Producing 70% Source: Company filings and analyst estimates. (1) Resources are shown inclusive of reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
November 2017
Turkey 6% Mongolia 13% 7
Centerra: Lower-Cost-Quartile Asset Base Based on industry-wide all-in sustaining costs, Centerra ranks in the bottom quartile of global gold producers
AISC Industry Curve (By-Product Basis) $2,500
0%
25%
75%
100%
Centerra Gold (US$705-741/oz Au)
$2,250 $2,000
AISC, net (US$/oz Au)
50%
Mount Milligan (US$483-523/oz)
$1,750
Kumtor (US$737-764/oz)
$1,500 $1,250
Öksüt (US$490/oz)(1)
$1,000 $750 $500 $250 $0 730
9,100
16,008
23,666 30,082 Cumulative Gold Production (koz Au)
36,417
39,898
42,962
Source: SNL Metals. Note: Centerra AISC figures based on 2017 revised cost guidance, unless noted 1. Öksüt AISC based on LOM plan as per the NI 43-101 technical report dated September 3, 2015
November 2017
8
Mount Milligan: Long Life, Low Cost Gold Copper Mine 2016
2017E Guidance
Gold Production (koz)
205
235-255
Copper Production (Mlbs)
59
55-65
$509
$483-$523
NA
$26
All-In Sustaining Costs (US$/oz)(1) Sustaining Capital ($MM)(1) Remaining reserve life (years)
+20 Copper
5.8Moz
2,049Mlbs
0.4g/t
0.187%
35% @ US$435/oz
18.75% @ 15% of spot Cu price
P&P Reserves(2) Grade Royal Gold Stream
Significant Gold and Copper Production
Significant Open Pit Gold and Copper Production +20 years of production from existing P&P reserves(2)
300 245 250
5.8M gold reserve ounces
Low cost, long life production Stable, mining-friendly jurisdiction Restructured stream provides additional gold upside Tax loss pools, no cash taxes until 2022/2023 (1) (2)
Gold ounces (000’s)
(2)
218
80
71
70 59
205
60
200
60 50
150
40 30
100
Copper M lbs
Gold
20 50
10
0
0 2015
2016 GOLD
2017E
2015
2016 2017E COPPER
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release October 31, 2017. 2016 AISC is for the period Oct.20 to Dec.31. Refer to February 23, 2017 mineral reserves and resources news release.
November 2017
9
Mount Milligan: Resource Expansion Potential
C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. November 2017
10
Mount Milligan: Exploration Update
Q3 Drill hole Section; looking North within Ultimate Pit Boundary
Mount Milligan Q3 Drill hole Plan Map Q3 2017 Exploration Update This information should be read together with our news release of October 31, 2017. C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. November 2017
11
Mount Milligan: Exploration Targets
November 2017
12
Kumtor: World Class Open Pit Gold Mine 2015
2016
2017E Guidance
Gold Production (koz)
521
551
540-560
Adjusted Operating Costs ($/oz) (1)
$326
$342
$320-$331
All-In Sustaining Costs ($/oz) (1)
$758
$640
$737-$764
Sustaining Capital ($MM)(1)
$51
$61
$68
Growth Capital ($MM)(1)
$14
$15
$28
Projected Asset Life (years)
+9
Reserves (Moz)
5.1
Au Grade (g/t)
2.5
Resources M&I (Moz)
2.6
Au Grade (g/t)
2.8
World Class Cornerstone Asset
Significant Open Pit Gold Production to 2026
20 years of uninterrupted profitable production
650,000
4.50 4.00
Over 11M ounces produced since 1997 miners U/G miners More than 5M ounces remaining U/G in open pit reserves
207
U/G miners target of Low cost,YElong life production
4,000tpd
3.50
500,000
3.00 2.50
350,000
2.00
170opportunity (inferred 3.4Moz @ 7.3 g/t) Underground
1.50
U/G miners
Strong stable platform to grow Centerra
grade g/t
240
Ounces
240
200,000
1.00 2014 2015 2016 2017 2018 2019 2020 2021 2022
November 2017 (1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release October 31, 2017.
13
Öksüt: Funded High Margin Gold Production 2015 Feasibility Highlights Mine Type
Open Pit, Heap Leach
Avg. LOM Annual Production
110koz Au
AISC(1)
$490
(US$/oz)
Reserve Mine Life
8 years
Development Capex (US$MM) P&P
Reserves(2)(Moz)
$221 1.2
Au grade (g/t)
1.40
Life of Mine Recovery
77%
Life of Mine Strip Ratio (w:o)
Öksüt Gold Project
2:1
First Gold Pour
2019
IRR (after tax)
43%
NPV(8%) - after tax (US$MM)
>$240
Catalyst Schedule
Projected Near-Term Gold Production
EIA approval received in November 2015
Construction expected in 2017 Powerline construction completed Bought back Stratex and Teck royalties US$150MM low-cost +5-year financing in-place Significant exploration potential November 2017
Ounces (000's)
Forestry Permit & GSM License received July 2016
250
2.50
200
2.00
150
1.50
100
1.00
50
0.50
0 Years:
Process Grade (g/tonne)
Avg. LOM
0.00 0 2016
+1 2017
+2 2018
+3 2019
+4 2020
+5 2021
+6 2022
+7 2023
+8 2024
(1) Non-GAAP measure see “Non-GAAP Measures in the MDA and news release of October 31, 2017. (2) Company filings. Technical Report on the Öksüt Gold Project dated September 3, 2015.
14
Öksüt: Powerline Construction Complete
November 2017
15
Gatsuurt: Gold Development Project Highlights The Gatsuurt Project is ~90 km north of Ulaanbaatar
Boroo mill on care & maintenance awaiting Gatsuurt approval Gatsuurt declared strategic January 2015 3% royalty (versus 34% ownership) approved by government Investment & development agreements outstanding Potential production 12-18 months after approval P&P Reserves(1) of 1.3M contained ounces of gold @ 2.7 g/tonne Strip ratio of 4.7:1 and process recoveries in excess of 84% Significant exploration upside
Boroo’s Historical Cumulative Net Cash Generation (US$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 news release October 31, 2017.
November 2017
16
Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines Cornerstone Canadian Development Project
Ontario: Top Tier Mining Jurisdiction
50:50 development partnership with Premier Gold Open pit reserves(1) (100%) 4.7Moz Au @ 1.02 g/t Historic gold production of 4.12M oz (~1934-1970) Large land package covers 337km2, good infrastructure Significant exploration and underground resource potential
Greenstone Gold Property
Greenstone Development Project
Location: Ontario, Canada
2016 Feasibility Highlights (100%) Mine Type
Open Pit, CIP Mill
Mill Throughput design
27,000 tpd
Avg. LOM Annual Production
288koz Au
Avg. LOM AISC(2) (US$/oz) Reserve Mine Life
$600 14.5 years
Development Capex (US$MM)
$962
Sustaining Capital(2) (US$MM)
$101
P&P Reserves(1)(Moz)
4.7
Au grade (g/t)
1.02
Life of Mine Recovery
90%
Life of Mine Strip Ratio (w:o)
3.87:1
IRR (after tax)
14.4%
NPV(5%) - after tax (US$MM)
Projected Gold Production (100%)
$545
November 2017 (1) See Technical Report on the Hardrock Project dated December 21, 2016. (2) Non-GAAP measure, see “Non-GAAP Measures” in MDA and news release October 31, 2017.
17
Potential Upside Optionality: Molybdenum Molybdenum business
Thompson Creek Mine ● Located in Idaho, is the world’s fourth largest open-pit primary
Well-established molybdenum business
molybdenum mine Consists of the Langeloth Metallurgical Facility and two mines: Thompson Creek Mine and Endako Mine Langeloth can produce a suite of premium molybdenum products that raise the average realized price
● Operations began in 1983, using conventional open-pit mining and a onsite 25,500 tpd mill ● In December, 2014 placed on care and maintenance
Endako Mine
Significant defined resources and infrastructure in place Ability to be one of the first movers upon moly market recovery Lower cost to restart production compared to greenfield project Molybdenum business well positioned to recover once market conditions and pricing improve
Historical Molybdenum Segment EBITDA(1)
● Endako Mine is a fully integrated molybdenum facility located in BC ● TCM is the operator and 75% owner; Sojitz owns 25% ● Endako consists of three adjoined pits and a fully integrated operation with on-site mill and multiple hearth roasting facility ● New 55,000 tpd processing facility was completed in 2012 for~US$500MM ● In July 2015 placed on care and maintenance
(US$MM) $444
Langeloth Metallurgical Facility ● Located 40 km west of Pittsburgh, Pennsylvania $269
$265
● Operates both as a toll processor and as a purchaser of molybdenum
$126
$126
concentrates from third parties
$124
● Cash flows from the Langeloth operations are expected to cover care and
$18 ($21) 2008
2009
2010
2011
2012
2013
2014
maintenance expenses associated with the molybdenum mines for 2017
2015
(1) Prior to intersegment eliminations. Historical EBITDA not reported, therefore calculated based on historical segment disclosure.
November 2017
18
Centerra: Strong Low-Cost Operating Platform 2017 Gold Production Guidance (Koz)(1)
2017 All-In Sustaining Costs (US$/oz)(1)
2,600 1,200 1,040
1,140
875
723
865
815
860
845
900
910
940
955
965
1,075
975
795 575
570 415
405
400
383 287 225
Kinross Gold
Yamana Gold
Acacia Mining
IAMGOLD
Centerra
Detour Gold
B2Gold
Alamos Gold
New Gold
Tahoe Resources
Eldorado Gold
Centerra SEMAFONew GoldEldorado Acacia Gold Mining
Silver SEMAFO Standard (2)
Yamana Alamos B2Gold Silver (3) Kinross IAMGOLD Detour Tahoe Gold Gold Standard Gold Gold Resources
P+P Gold Reserves (Moz)(4) 31
21
17
16
16 15
8
8
7 6 4
Kinross Gold
Eldorado Gold
Yamana Gold
Centerra
Detour Gold
New Gold
IAMGOLD
Source: Company filings, FactSet, Available street research. (1) Guidance based on the midpoint of the guidance range. (2) Silver Standard gold guidance is from Marigold and Seabee. (3) Silver Standard AISC based on broker estimates as guidance estimates not provided. Latest available as at February 23, 2017. November 2017 (4)
Acacia Mining
B2Gold
Alamos Gold
Tahoe Resources
3
3
SEMAFO
Silver Standard
19
Appendices
TSX: CG www.centerragold.com
Q3 - 2017 Corporate Update
Safety – Continue to roll out “Work Safe : Home Safe” Program Across the Company
Q3 2017 Net Loss $0.8MM, includes $60MM one-time charge and $6.9MM gain
Comprehensive Settlement Agreement Signed: September 11, 2017
Q3 2017 Adjusted Earnings1 $52.3MM or $0.18 Per Share
Kumtor’s Cash Released
Strong Q3 Gold Production of 200,201 Ounces and Copper Production of 13.7 million pounds Centerra’s Q3 2017 All-In Sustaining Cost1 on a by-product basis $722 Per Ounce Mount Milligan achieved All-In Sustaining Cost1 on a by-product basis of $437 Per Ounce in Q3 Cash Provided by Operations of $120 Million ($0.41 per share) & YTD $331 Million ($1.14 per share) YTD: Free Cash Flow1 Generation of $105 Million at Mount Milligan & $88 Million at Kumtor September 30, 2017 Cash Position of $352 Million Following $172 Million in YTD Debt Repayments Company-wide Liquidity $677 Million at September 30, 2017
1. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated October 31, 2017. November 2017
21
Q3 – 2017 Operating Highlights Q3 2017 gold production - Kumtor 138,561 ounces, Mount Milligan 61,640 ounces1 Q3 2017 copper production - Mount Milligan 13,677,000 pounds1 Favourably revised guidance at Kumtor, increased gold production 540,000 – 560,000 oz, and lowered all-in sustaining costs on a by-product basis per ounce sold2 to $737 - $764 Lowered gold production guidance at Mount Milligan to 235,000 – 255,000 oz, and revised all-in sustaining costs on a by-product basis per ounce sold2 to $483 - $523 Completed Feasibility Study on the Gatsuurt Project Continuous Improvement Initiatives Continue at Both Operations
Gold ounces produced(1) Copper produced
(000’s payable lbs)(1)
Kumtor All-in Sustaining Costs on a by-product basis per ounce sold(2) 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)
Q3 2017
Q3 20161
200,201
166,030
13,677
-
$807
$555
$437
-
$722
$591
1.
Mount Milligan numbers 100% basis, 2016 numbers for gold ounces produced excludes any ounces from the Boroo mine and results exclude Mt. Milligan, since the Company closed the Thompson Creek acquisition in October 2016, therefore no comparative numbers. 2. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated October 31, 2017. November 2017
22
Q3 – 2017 Financial Highlights1 Quarter Ended September 30, 2017
Quarter Ended September 30, 20162
$276,237
$218,745
174,099
164,847
18,644
-
Operating cash flow before changes in working capital(3)
$108,027
$119,265
Cash provided by operations
$119,454
$134,375
Net (loss) earnings
($841)
$66,938
Adjusted earnings
$52,298
$66,938
$0.18
$0.28
$1,142
$1,327
(in thousands, except ounces, per share amounts, and average realized price3)
Revenue Total gold ounces sold Total copper pounds sold (000’s)
Adjusted earnings per share, basic Average realized gold price per ounce(3) 1. 2. 3.
U.S. dollars No comparative results from Thompson Creek operations presented. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated October 31, 2017.
November 2017
23
Centerra: 2017 Revised Guidance 2017 All-in Sustaining 2017 Gold Production 2017 Copper Production Costs on a By-product basis1 (ounces)
(millions pounds)
(per ounce sold)
Kumtor Mine
540,000 – 560,000
-
$737 – $764
Mount Milligan
235,000 – 255,000
55 – 65
$483 – $523
775,000 – 815,000
55 – 65
$705-$741
Centerra Projects
2017 Sustaining Capital1
2017 Growth Capital1
(millions)
(millions)
Kumtor Mine
$68
$28
Mount Milligan Mine
$26
-
Öksüt Project
-
$11
Mongolia/Gatsuurt Project
-
$5
Greenstone Property2
-
$8
$2
-
$96
$52
Corporate and other Consolidated Total
2017 (millions) Exploration Corporate Administration
$35
Community Investment
$5
1
November 2017
$10.5
2
Non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s MD&A and news release dated October 31, 2017. Greenstone growth capital includes capitalized amounts for Premier’s 50% share of the Greenstone costs funded in full by Centerra.
24
Centerra: 2017 Guidance Sensitivities Change
Costs
Gold Price Copper Price(3) Diesel Fuel
$50/oz 10% 10%
1.3 – 1.6 0.4 2.1
Kyrgyz som(1)
1 som
0.5
Impact on ($ millions) Revenues Cash flows Net Earnings (after tax) 8.9 – 10.5 7.6 – 8.9 7.6 – 8.9 0.1 – 1.6 0.1 – 1.2 0.1 – 1.2 2.1 2.1 -
0.5
0.5
Impact on ($ per ounce sold) AISC(2) on byproduct basis 0.1 – 1.9 2.6 – 2.7 0.6 – 0.7
Canadian 6.0 6.0 6.0 7.3 – 7.6 10 cents dollar(1) 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. 1 Appreciation
dollar results in decreased costs and increased cash flow and earnings. 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 October 31, 2017. 3 The Company has recalculated the sensitivities for its revenues, earnings and cash flows for the remaining three months of 2017 to movements in copper price changes following the commencement in the first quarter of 2017 of a hedging program to mitigate copper price risk by purchasing fixed price forward sales contracts and zero-cost collar. 2
Material Assumptions and Risks Material assumptions or factors used to forecast production and costs for the remaining three months of 2017 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:68.5 Kyrgyz som, • $1USD:0.84 Euro, • diesel fuel price assumption: • $0.44/litre at Kumtor, • $0.65/litre at Mount Milligan. November 2017
25
Centerra: Mineral Reserves - Proven & Probable1 Proven and Probable Gold Mineral Reserves Increase to 16 million ounces Proven and Probable Copper Mineral Reserves are 2,049 million pounds
Copper Mineral Reserves Proven Property Mt Milligan
November 2017
Probable
Total Proven and Probable
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
256,847
0.187
1,059
239,362
0.188
991
496,209
0.187
2,049
1) As at December 31, 2016, see Mineral Reserves and Resources News Release February 23, 2017.
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
Greenstone Gold Property
Significant exploration and underground resource potential
Greenstone Development Project
Location: Ontario, Canada
Bankable feasibility study completed in November 2016
Brookbank Deposit
Brookbank Jellicoe
Geraldton
11
Viper
Hardrock
Hardrock Deposit Beardmore
Beardmore – Geraldton Greenstone Belt +110 km November 2017
(1) Technical Report on the Hardrock Project dated December 21, 2016.
27
Centerra: Investor Relations Highlights Research Coverage Brokerage Firms
Top Ten (10) Institutional Shareholders
Rating
Target
1. BMO Capital Markets
Market Perform
C$10.50
Institution/Firm
2. BofA Merrill Lynch
Neutral
C$10.50
1. Blackrock
13.10%
3. Canaccord Genuity
Hold
C$10.00
2. Van Eck
8.65%
4. CIBC World Markets
Neutral
C$9.50
3. Paulson & Co
7.80%
5. Cormark Securities
Buy
C$12.00 C$10.50
4. Dimensional
2.39%
6. Credit Suisse
Outperform
7. Global Mining Research
Speculative Buy
C$10.70
5. Capital Research
1.75%
8. Macquarie Capital Markets
Outperform
C$12.00
6. Kopernik Global
1.61%
9. National Bank Financial
Sector Perform
C$10.00
7. Vanguard Group
1.50%
10. RBC Capital Markets
Sector Perform
C$10.00
8. Franklin Advisors
1.42%
11. Scotiabank
Sector Outperform
C$11.00
9. USAA
1.36%
12. TD Securities
Hold
C$10.00
10. Newton
1.33%
C$10.56
TOTAL
Average
November 2017
Q3-2017
40.91%
28
Centerra: Senior Management Industry Experience
SCOTT PERRY Chief Executive Officer
FRANK HERBERT President
GORDON REID Chief Operating Officer
DARREN MILLMAN Chief Financial Officer
November 2017
20 years
25 years
30 years
18 years
Background
•
Appointed Chief Executive Officer in November, 2015
•
Former Chief Executive Officer at AuRico Gold
•
Appointed President in November, 2015
•
Joined Centerra in 2004
•
Appointed Chief Operating Officer in January, 2013
•
Joined Centerra in 2004
•
Appointed Chief Financial Officer in April, 2016
•
Joined Centerra in 2013
29
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
November 2017
30
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 forwardlooking information. These forward-looking statements relate to, among other things: the Company’s discussions with the Government of the Kyrgyz Republic, completion of the Strategic Agreement and future business certainty for the Kumtor Project; Work Safe Home Safe training; advancement of exploration projects; the Company’s cash on hand, working capital, future cash flows and existing credit facilities being sufficient to fund anticipated operating cash requirements; Kyrgyzaltyn’s appointment of a new purchaser bank and the resumption of full shipments from the Kumtor Project to Kyrgyzaltyn; the timing and outcomes of projects initiated at the Mount Milligan mine aimed at improving metal recovery and other opportunities; the resumption of negotiations with the Mongolian Government related to the Gatsuurt Project;; timing for development of, and gold production, from the Öksüt Project; the timing for receipt of proceeds from the sale of the ATO licenses; mining plans at Kumtor, including timing for accessing ore; and statements found under the heading, “2017 Outlook”, including forecast 2017 production and cost estimates. 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 ramp-up to design criteria of the secondary crusher at Mount Milligan; 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 2016 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. Forward-looking information is as of October 31, 2017. Centerra assumes no obligation to update or revise forward looking information to reflect changes in assumptions, changes in circumstances or any other events affecting such forward-looking information, except as required by applicable law. Except as otherwise noted herein, Gordon Reid, Professional Engineer and Centerra’s Vice President and Chief Operating Officer, has reviewed and approved the scientific and technical information contained in this presentation. Mr. Reid is a Qualified Person within the meaning of NI 43-101. For more information, please refer to the properties technical reports, which are available on SEDAR. All figures are in United States dollars unless otherwise stated. 2 November 2017
Centerra: Built For Success Consensus Asset NAV Breakdown
Corporate Highlights
US 0%
Internationally Diversified Gold Producer
Kyrgyzstan 33%
Two Cornerstone Lower-Cost Quartile Assets Canada 46%
Gold Production up to 815kozpa gold at AISC1 of $705 to $741 per ounce and ~60M lbs of copper Significant Operational Cash Flow Profile Mongolia 10%
Solid Late-Stage Development Pipeline 1,000
2,000
800
1,600
600
1,200
400
800
200
400
US$352MM2
Trading at a Discount to Peers, Potential Re-Rating
Liquidity of US$677MM2
Positive Retained Earnings of US$936MM2
Gold Price (US$/oz)
Position of
Cash Reserves2 Profile (US$)
US$ Millions
Cash2
Turkey 11%
0
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017 2
Cumulative Dividends
1. 2.
Cash Balance
Gold Price
2017e AISC: Kumtor $737 to $764/oz, Mount Milligan $483 to $523/oz. All-in sustaining costs per ounce sold is a non-GAAP measures and is discussed under “Non-GAAP Measures” in the Company’s MDA & news release October 31, 2017. As at September 30, 2017.
November 2017
3
Centerra: Q3 - 2017 Corporate Update 2017 YTD: Internally Funded Business (US$MM’s) 700
88
600
Liquidity Profile (US$MM’s) (as of September 30, 2017)
172
$50
105
500
78
409
400
Cash $125
352
$401MM
300
$352
200
US$677MM
100
$150
0
1
2016 Cash Mt Milligan Kumtor FCF Debt Other FCF Repayments (Projects, G&A, etc)
Q3 2017 Cash
Cash Reserves CBCH Revolver Credit Facility
Positive Net Cash Position2 (US$MM’s)
EBRD Revolver Credit Facility Oksut Credit Facility
Retained Earnings Profile (US$)
75 1,200
18
25
2,000
1,000
0
1,600
(25) (50)
Cash
$542MM
(75) (100)
US$ Millions
800
2016
800
400
400
200
(96)
(125)
1,200
600
0
Q3-2017
Gold Price (US$/oz)
50
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017
Retained Earnings
Cumulative Dividends
0
Gold Price
1
November 2017
Includes cash and cash equivalents, restricted cash and short-term investments at December 31, 2016. 2 At September 30, 2017.
4
Centerra: Q3 Full Year Guidance Revision 2017 Mid-Point Gold Production (oz’s)
Guidance Mid-Point Highlights
850,000
815,000 795,000
800,000
Gold Production – 3% Downward Revision
755,000 750,000
700,000
All-In Sustaining Costs – Negligible Revision
650,000 Original Guidance
2017 Mid-Point All-In Sustaining Costs (US$/oz) 1,200 975 815
845
860
900
910
940
955
1,040 1,075
Q2 Guidance
Q3 Guidance
2017 Mid-Point All-In Sustaining Costs (US$/oz) 850
965
800
784
723
750
720
723
Q2 Guidance
Q3 Guidance
700 650 Centerra
SEMAFO New Gold Eldorado Gold
November 2017
Acacia Mining
Yamana Gold
Alamos Gold
B2Gold
Silver Standard
Kinross IAMGOLD Detour Tahoe Gold Gold Resources
Original Guidance
5
Centerra: Financial Highlights Both mines generating strong positive free cash flows, $193MM YTD:
• •
$88MM from Kumtor $105MM from Mount Milligan
Increased MTM revolving credit facility to $125 Million from $75 Million • Entered into 2-year strategic hedging program, primarily zero-cost collars in H2 2018 and 2019 • Minimum average floor price: gold - $1,200 per ounce and copper $2.50 per pound Debt repayments YTD of $172MM, outstanding total debt $334MM2 and net cash $18MM at September 30, 2017 US$352MM3 Cash balance at September 30, 2017 Consolidated Year-to-Date AISC1 of $739 per ounce with 49,000 gold dore ounces on hand
YTD All-in Sustaining Costs (US$/oz)1
Debt Reduction (US$) 550
950 36 34
850
5
15
500
129
60
$ /Oz sold
800 750
748
739
700 650
US$ Millions
900
450
470
447
409
400
401 358
334
350 250
550
200 Dec31 2016
Mar31 2017 2
Total Debt 1 2
352
300
600
500
505
Jun30 2017
Sep30 2017
Cash
Non-GAAP measure and is discussed in the Company’s MD&A and News Release dated October 31, 2017 Includes CAT finance leases ($32MM at September 30, 2017)
November 2017
6
Diversified Portfolio With Balanced Geopolitical Profile Asset NAV breakdown
Gold Reserves
Consensus Asset NAV by geography
P+P reserves by geography
US 0%
Kyrgyz Republic 32%
Kyrgyzstan 33% Canada 46%
Canada 52%
Mongolia 10%
Turkey 7% Mongolia 10%
Turkey 11%
Consensus Asset NAV by stage
M+I resources (inclusive) by geography(1)
Exploration 9% Kyrgyz Republic 33%
Development 21% Canada 48%
Producing 70% Source: Company filings and analyst estimates. (1) Resources are shown inclusive of reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
November 2017
Turkey 6% Mongolia 13% 7
Centerra: Lower-Cost-Quartile Asset Base Based on industry-wide all-in sustaining costs, Centerra ranks in the bottom quartile of global gold producers
AISC Industry Curve (By-Product Basis) $2,500
0%
25%
75%
100%
Centerra Gold (US$705-741/oz Au)
$2,250 $2,000
AISC, net (US$/oz Au)
50%
Mount Milligan (US$483-523/oz)
$1,750
Kumtor (US$737-764/oz)
$1,500 $1,250
Öksüt (US$490/oz)(1)
$1,000 $750 $500 $250 $0 730
9,100
16,008
23,666 30,082 Cumulative Gold Production (koz Au)
36,417
39,898
42,962
Source: SNL Metals. Note: Centerra AISC figures based on 2017 revised cost guidance, unless noted 1. Öksüt AISC based on LOM plan as per the NI 43-101 technical report dated September 3, 2015
November 2017
8
Mount Milligan: Long Life, Low Cost Gold Copper Mine 2016
2017E Guidance
Gold Production (koz)
205
235-255
Copper Production (Mlbs)
59
55-65
$509
$483-$523
NA
$26
All-In Sustaining Costs (US$/oz)(1) Sustaining Capital ($MM)(1) Remaining reserve life (years)
+20 Copper
5.8Moz
2,049Mlbs
0.4g/t
0.187%
35% @ US$435/oz
18.75% @ 15% of spot Cu price
P&P Reserves(2) Grade Royal Gold Stream
Significant Gold and Copper Production
Significant Open Pit Gold and Copper Production +20 years of production from existing P&P reserves(2)
300 245 250
5.8M gold reserve ounces
Low cost, long life production Stable, mining-friendly jurisdiction Restructured stream provides additional gold upside Tax loss pools, no cash taxes until 2022/2023 (1) (2)
Gold ounces (000’s)
(2)
218
80
71
70 59
205
60
200
60 50
150
40 30
100
Copper M lbs
Gold
20 50
10
0
0 2015
2016 GOLD
2017E
2015
2016 2017E COPPER
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release October 31, 2017. 2016 AISC is for the period Oct.20 to Dec.31. Refer to February 23, 2017 mineral reserves and resources news release.
November 2017
9
Mount Milligan: Resource Expansion Potential
C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. November 2017
10
Mount Milligan: Exploration Update
Q3 Drill hole Section; looking North within Ultimate Pit Boundary
Mount Milligan Q3 Drill hole Plan Map Q3 2017 Exploration Update This information should be read together with our news release of October 31, 2017. C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. November 2017
11
Mount Milligan: Exploration Targets
November 2017
12
Kumtor: World Class Open Pit Gold Mine 2015
2016
2017E Guidance
Gold Production (koz)
521
551
540-560
Adjusted Operating Costs ($/oz) (1)
$326
$342
$320-$331
All-In Sustaining Costs ($/oz) (1)
$758
$640
$737-$764
Sustaining Capital ($MM)(1)
$51
$61
$68
Growth Capital ($MM)(1)
$14
$15
$28
Projected Asset Life (years)
+9
Reserves (Moz)
5.1
Au Grade (g/t)
2.5
Resources M&I (Moz)
2.6
Au Grade (g/t)
2.8
World Class Cornerstone Asset
Significant Open Pit Gold Production to 2026
20 years of uninterrupted profitable production
650,000
4.50 4.00
Over 11M ounces produced since 1997 miners U/G miners More than 5M ounces remaining U/G in open pit reserves
207
U/G miners target of Low cost,YElong life production
4,000tpd
3.50
500,000
3.00 2.50
350,000
2.00
170opportunity (inferred 3.4Moz @ 7.3 g/t) Underground
1.50
U/G miners
Strong stable platform to grow Centerra
grade g/t
240
Ounces
240
200,000
1.00 2014 2015 2016 2017 2018 2019 2020 2021 2022
November 2017 (1) Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release October 31, 2017.
13
Öksüt: Funded High Margin Gold Production 2015 Feasibility Highlights Mine Type
Open Pit, Heap Leach
Avg. LOM Annual Production
110koz Au
AISC(1)
$490
(US$/oz)
Reserve Mine Life
8 years
Development Capex (US$MM) P&P
Reserves(2)(Moz)
$221 1.2
Au grade (g/t)
1.40
Life of Mine Recovery
77%
Life of Mine Strip Ratio (w:o)
Öksüt Gold Project
2:1
First Gold Pour
2019
IRR (after tax)
43%
NPV(8%) - after tax (US$MM)
>$240
Catalyst Schedule
Projected Near-Term Gold Production
EIA approval received in November 2015
Construction expected in 2017 Powerline construction completed Bought back Stratex and Teck royalties US$150MM low-cost +5-year financing in-place Significant exploration potential November 2017
Ounces (000's)
Forestry Permit & GSM License received July 2016
250
2.50
200
2.00
150
1.50
100
1.00
50
0.50
0 Years:
Process Grade (g/tonne)
Avg. LOM
0.00 0 2016
+1 2017
+2 2018
+3 2019
+4 2020
+5 2021
+6 2022
+7 2023
+8 2024
(1) Non-GAAP measure see “Non-GAAP Measures in the MDA and news release of October 31, 2017. (2) Company filings. Technical Report on the Öksüt Gold Project dated September 3, 2015.
14
Öksüt: Powerline Construction Complete
November 2017
15
Gatsuurt: Gold Development Project Highlights The Gatsuurt Project is ~90 km north of Ulaanbaatar
Boroo mill on care & maintenance awaiting Gatsuurt approval Gatsuurt declared strategic January 2015 3% royalty (versus 34% ownership) approved by government Investment & development agreements outstanding Potential production 12-18 months after approval P&P Reserves(1) of 1.3M contained ounces of gold @ 2.7 g/tonne Strip ratio of 4.7:1 and process recoveries in excess of 84% Significant exploration upside
Boroo’s Historical Cumulative Net Cash Generation (US$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 news release October 31, 2017.
November 2017
16
Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines Cornerstone Canadian Development Project
Ontario: Top Tier Mining Jurisdiction
50:50 development partnership with Premier Gold Open pit reserves(1) (100%) 4.7Moz Au @ 1.02 g/t Historic gold production of 4.12M oz (~1934-1970) Large land package covers 337km2, good infrastructure Significant exploration and underground resource potential
Greenstone Gold Property
Greenstone Development Project
Location: Ontario, Canada
2016 Feasibility Highlights (100%) Mine Type
Open Pit, CIP Mill
Mill Throughput design
27,000 tpd
Avg. LOM Annual Production
288koz Au
Avg. LOM AISC(2) (US$/oz) Reserve Mine Life
$600 14.5 years
Development Capex (US$MM)
$962
Sustaining Capital(2) (US$MM)
$101
P&P Reserves(1)(Moz)
4.7
Au grade (g/t)
1.02
Life of Mine Recovery
90%
Life of Mine Strip Ratio (w:o)
3.87:1
IRR (after tax)
14.4%
NPV(5%) - after tax (US$MM)
Projected Gold Production (100%)
$545
November 2017 (1) See Technical Report on the Hardrock Project dated December 21, 2016. (2) Non-GAAP measure, see “Non-GAAP Measures” in MDA and news release October 31, 2017.
17
Potential Upside Optionality: Molybdenum Molybdenum business
Thompson Creek Mine ● Located in Idaho, is the world’s fourth largest open-pit primary
Well-established molybdenum business
molybdenum mine Consists of the Langeloth Metallurgical Facility and two mines: Thompson Creek Mine and Endako Mine Langeloth can produce a suite of premium molybdenum products that raise the average realized price
● Operations began in 1983, using conventional open-pit mining and a onsite 25,500 tpd mill ● In December, 2014 placed on care and maintenance
Endako Mine
Significant defined resources and infrastructure in place Ability to be one of the first movers upon moly market recovery Lower cost to restart production compared to greenfield project Molybdenum business well positioned to recover once market conditions and pricing improve
Historical Molybdenum Segment EBITDA(1)
● Endako Mine is a fully integrated molybdenum facility located in BC ● TCM is the operator and 75% owner; Sojitz owns 25% ● Endako consists of three adjoined pits and a fully integrated operation with on-site mill and multiple hearth roasting facility ● New 55,000 tpd processing facility was completed in 2012 for~US$500MM ● In July 2015 placed on care and maintenance
(US$MM) $444
Langeloth Metallurgical Facility ● Located 40 km west of Pittsburgh, Pennsylvania $269
$265
● Operates both as a toll processor and as a purchaser of molybdenum
$126
$126
concentrates from third parties
$124
● Cash flows from the Langeloth operations are expected to cover care and
$18 ($21) 2008
2009
2010
2011
2012
2013
2014
maintenance expenses associated with the molybdenum mines for 2017
2015
(1) Prior to intersegment eliminations. Historical EBITDA not reported, therefore calculated based on historical segment disclosure.
November 2017
18
Centerra: Strong Low-Cost Operating Platform 2017 Gold Production Guidance (Koz)(1)
2017 All-In Sustaining Costs (US$/oz)(1)
2,600 1,200 1,040
1,140
875
723
865
815
860
845
900
910
940
955
965
1,075
975
795 575
570 415
405
400
383 287 225
Kinross Gold
Yamana Gold
Acacia Mining
IAMGOLD
Centerra
Detour Gold
B2Gold
Alamos Gold
New Gold
Tahoe Resources
Eldorado Gold
Centerra SEMAFONew GoldEldorado Acacia Gold Mining
Silver SEMAFO Standard (2)
Yamana Alamos B2Gold Silver (3) Kinross IAMGOLD Detour Tahoe Gold Gold Standard Gold Gold Resources
P+P Gold Reserves (Moz)(4) 31
21
17
16
16 15
8
8
7 6 4
Kinross Gold
Eldorado Gold
Yamana Gold
Centerra
Detour Gold
New Gold
IAMGOLD
Source: Company filings, FactSet, Available street research. (1) Guidance based on the midpoint of the guidance range. (2) Silver Standard gold guidance is from Marigold and Seabee. (3) Silver Standard AISC based on broker estimates as guidance estimates not provided. Latest available as at February 23, 2017. November 2017 (4)
Acacia Mining
B2Gold
Alamos Gold
Tahoe Resources
3
3
SEMAFO
Silver Standard
19
Appendices
TSX: CG www.centerragold.com
Q3 - 2017 Corporate Update
Safety – Continue to roll out “Work Safe : Home Safe” Program Across the Company
Q3 2017 Net Loss $0.8MM, includes $60MM one-time charge and $6.9MM gain
Comprehensive Settlement Agreement Signed: September 11, 2017
Q3 2017 Adjusted Earnings1 $52.3MM or $0.18 Per Share
Kumtor’s Cash Released
Strong Q3 Gold Production of 200,201 Ounces and Copper Production of 13.7 million pounds Centerra’s Q3 2017 All-In Sustaining Cost1 on a by-product basis $722 Per Ounce Mount Milligan achieved All-In Sustaining Cost1 on a by-product basis of $437 Per Ounce in Q3 Cash Provided by Operations of $120 Million ($0.41 per share) & YTD $331 Million ($1.14 per share) YTD: Free Cash Flow1 Generation of $105 Million at Mount Milligan & $88 Million at Kumtor September 30, 2017 Cash Position of $352 Million Following $172 Million in YTD Debt Repayments Company-wide Liquidity $677 Million at September 30, 2017
1. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated October 31, 2017. November 2017
21
Q3 – 2017 Operating Highlights Q3 2017 gold production - Kumtor 138,561 ounces, Mount Milligan 61,640 ounces1 Q3 2017 copper production - Mount Milligan 13,677,000 pounds1 Favourably revised guidance at Kumtor, increased gold production 540,000 – 560,000 oz, and lowered all-in sustaining costs on a by-product basis per ounce sold2 to $737 - $764 Lowered gold production guidance at Mount Milligan to 235,000 – 255,000 oz, and revised all-in sustaining costs on a by-product basis per ounce sold2 to $483 - $523 Completed Feasibility Study on the Gatsuurt Project Continuous Improvement Initiatives Continue at Both Operations
Gold ounces produced(1) Copper produced
(000’s payable lbs)(1)
Kumtor All-in Sustaining Costs on a by-product basis per ounce sold(2) 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)
Q3 2017
Q3 20161
200,201
166,030
13,677
-
$807
$555
$437
-
$722
$591
1.
Mount Milligan numbers 100% basis, 2016 numbers for gold ounces produced excludes any ounces from the Boroo mine and results exclude Mt. Milligan, since the Company closed the Thompson Creek acquisition in October 2016, therefore no comparative numbers. 2. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated October 31, 2017. November 2017
22
Q3 – 2017 Financial Highlights1 Quarter Ended September 30, 2017
Quarter Ended September 30, 20162
$276,237
$218,745
174,099
164,847
18,644
-
Operating cash flow before changes in working capital(3)
$108,027
$119,265
Cash provided by operations
$119,454
$134,375
Net (loss) earnings
($841)
$66,938
Adjusted earnings
$52,298
$66,938
$0.18
$0.28
$1,142
$1,327
(in thousands, except ounces, per share amounts, and average realized price3)
Revenue Total gold ounces sold Total copper pounds sold (000’s)
Adjusted earnings per share, basic Average realized gold price per ounce(3) 1. 2. 3.
U.S. dollars No comparative results from Thompson Creek operations presented. Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MD&A and News Release dated October 31, 2017.
November 2017
23
Centerra: 2017 Revised Guidance 2017 All-in Sustaining 2017 Gold Production 2017 Copper Production Costs on a By-product basis1 (ounces)
(millions pounds)
(per ounce sold)
Kumtor Mine
540,000 – 560,000
-
$737 – $764
Mount Milligan
235,000 – 255,000
55 – 65
$483 – $523
775,000 – 815,000
55 – 65
$705-$741
Centerra Projects
2017 Sustaining Capital1
2017 Growth Capital1
(millions)
(millions)
Kumtor Mine
$68
$28
Mount Milligan Mine
$26
-
Öksüt Project
-
$11
Mongolia/Gatsuurt Project
-
$5
Greenstone Property2
-
$8
$2
-
$96
$52
Corporate and other Consolidated Total
2017 (millions) Exploration Corporate Administration
$35
Community Investment
$5
1
November 2017
$10.5
2
Non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s MD&A and news release dated October 31, 2017. Greenstone growth capital includes capitalized amounts for Premier’s 50% share of the Greenstone costs funded in full by Centerra.
24
Centerra: 2017 Guidance Sensitivities Change
Costs
Gold Price Copper Price(3) Diesel Fuel
$50/oz 10% 10%
1.3 – 1.6 0.4 2.1
Kyrgyz som(1)
1 som
0.5
Impact on ($ millions) Revenues Cash flows Net Earnings (after tax) 8.9 – 10.5 7.6 – 8.9 7.6 – 8.9 0.1 – 1.6 0.1 – 1.2 0.1 – 1.2 2.1 2.1 -
0.5
0.5
Impact on ($ per ounce sold) AISC(2) on byproduct basis 0.1 – 1.9 2.6 – 2.7 0.6 – 0.7
Canadian 6.0 6.0 6.0 7.3 – 7.6 10 cents dollar(1) 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. 1 Appreciation
dollar results in decreased costs and increased cash flow and earnings. 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 October 31, 2017. 3 The Company has recalculated the sensitivities for its revenues, earnings and cash flows for the remaining three months of 2017 to movements in copper price changes following the commencement in the first quarter of 2017 of a hedging program to mitigate copper price risk by purchasing fixed price forward sales contracts and zero-cost collar. 2
Material Assumptions and Risks Material assumptions or factors used to forecast production and costs for the remaining three months of 2017 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:68.5 Kyrgyz som, • $1USD:0.84 Euro, • diesel fuel price assumption: • $0.44/litre at Kumtor, • $0.65/litre at Mount Milligan. November 2017
25
Centerra: Mineral Reserves - Proven & Probable1 Proven and Probable Gold Mineral Reserves Increase to 16 million ounces Proven and Probable Copper Mineral Reserves are 2,049 million pounds
Copper Mineral Reserves Proven Property Mt Milligan
November 2017
Probable
Total Proven and Probable
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
Tonnes (kt)
Grade (%)
Contained Copper (Mlbs)
256,847
0.187
1,059
239,362
0.188
991
496,209
0.187
2,049
1) As at December 31, 2016, see Mineral Reserves and Resources News Release February 23, 2017.
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
Greenstone Gold Property
Significant exploration and underground resource potential
Greenstone Development Project
Location: Ontario, Canada
Bankable feasibility study completed in November 2016
Brookbank Deposit
Brookbank Jellicoe
Geraldton
11
Viper
Hardrock
Hardrock Deposit Beardmore
Beardmore – Geraldton Greenstone Belt +110 km November 2017
(1) Technical Report on the Hardrock Project dated December 21, 2016.
27
Centerra: Investor Relations Highlights Research Coverage Brokerage Firms
Top Ten (10) Institutional Shareholders
Rating
Target
1. BMO Capital Markets
Market Perform
C$10.50
Institution/Firm
2. BofA Merrill Lynch
Neutral
C$10.50
1. Blackrock
13.10%
3. Canaccord Genuity
Hold
C$10.00
2. Van Eck
8.65%
4. CIBC World Markets
Neutral
C$9.50
3. Paulson & Co
7.80%
5. Cormark Securities
Buy
C$12.00 C$10.50
4. Dimensional
2.39%
6. Credit Suisse
Outperform
7. Global Mining Research
Speculative Buy
C$10.70
5. Capital Research
1.75%
8. Macquarie Capital Markets
Outperform
C$12.00
6. Kopernik Global
1.61%
9. National Bank Financial
Sector Perform
C$10.00
7. Vanguard Group
1.50%
10. RBC Capital Markets
Sector Perform
C$10.00
8. Franklin Advisors
1.42%
11. Scotiabank
Sector Outperform
C$11.00
9. USAA
1.36%
12. TD Securities
Hold
C$10.00
10. Newton
1.33%
C$10.56
TOTAL
Average
November 2017
Q3-2017
40.91%
28
Centerra: Senior Management Industry Experience
SCOTT PERRY Chief Executive Officer
FRANK HERBERT President
GORDON REID Chief Operating Officer
DARREN MILLMAN Chief Financial Officer
November 2017
20 years
25 years
30 years
18 years
Background
•
Appointed Chief Executive Officer in November, 2015
•
Former Chief Executive Officer at AuRico Gold
•
Appointed President in November, 2015
•
Joined Centerra in 2004
•
Appointed Chief Operating Officer in January, 2013
•
Joined Centerra in 2004
•
Appointed Chief Financial Officer in April, 2016
•
Joined Centerra in 2013
29
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
November 2017
30
TSX: CG www.centerragold.com
