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: whether the arrangement to acquire AuRico Metals Inc. (“AMI”) and the related debt financing will be consummated, including whether conditions to the consummation of the proposed transactions will be satisfied, expectations regarding the assets of AMI, including pro forma financial and operational forecasts, and potential improvements to the Kemess property. 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) the ability to consummate the proposed arrangement to acquire AMI and the related debt financing; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other conditions to the consummation of the proposed arrangement to acquire AMI and the related debt financing on the proposed terms and schedule, and to the extent, anticipated the potential impact of the announcement or consummation of the proposed transactions on relationships, including with regulatory authorities, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; significant competition that Centerra and AMI face; compliance with extensive government regulation; and the diversion of management time on the proposed arrangement to acquire AMI and the related debt financing (B) 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; (C) 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 (D) 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 Centerra’s 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 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 November 7, 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
Centerra: Built For Success Corporate Highlights
Pro-forma Consensus Asset NAV Breakdown Australia 2% Turkey 9%
Internationally Diversified Gold Producer Two Cornerstone Lower-Cost Quartile Assets
Mongolia U.S. 1% 0%
Gold Production up to 815kozpa gold at AISC1 of $705 to $741 per ounce and ~60M lbs of copper
Significant Operational Cash Flow Profile
2,000
800
1,600
600
1,200
400
800
200
400
US$352MM3
Trading at a Discount to Peers, Potential Re-Rating Liquidity of US$802MM3
US$ Millions
Position of
1,000
0
Positive Retained Earnings of US$936MM3
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017 3
Cumulative Dividends
1. 2. 3.
Gold Price (US$/oz)
Cash Reserves2 Profile (US$)
Solid Late-Stage Development Pipeline Cash2
Canada 55%
Kyrgyz Republic 33%
Entered into a friendly acquisition of AuRico Metals; de-risked brownfield project and a high quality free-cash flow generating royalty portfolio2
Cash Balance
Gold Price
2017e AISC: Kumtor $737 to $764/oz, Mount Milligan $483 to $523/oz. All-in sustaining costs per ounce sold is a non-GAAP measures and is discussed under “Non-GAAP Measures” in the Company’s MDA & news release October 31, 2017. Refer to Company’s news release November 7, 2017. As at September 30, 2017. Liquidity based on September 30, 2017 balance sheet and new credit facility; excluding AuRico Metals cash balance
November 2017
3
Centerra: Q3 - 2017 Corporate Update 2017 YTD: Internally Funded Business (US$MM’s) 700
88
600
Liquidity Profile (US$MM’s)(2)
172
$50
$125
105
500
78
409
400
352
US$802MM $150
300
$352
200 100
$125
0
1
2016 Cash Mt Milligan Kumtor FCF Debt Other FCF Repayments (Projects, G&A, etc)
Q3 2017 Cash
Cash Reserves CBCH Revolver Credit Facility New Credit Facility
Positive Net Cash Position2 (US$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
$542MM
(75) (100)
(96)
(125)
2016
US$ Millions
800
1,200
600 800
400
400
200 0
Q3-2017
Gold Price (US$/oz)
50
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017
Retained Earnings
Cumulative Dividends
0
Gold Price
1
November 2017
Includes cash and cash equivalents, restricted cash and short-term investments at December 31, 2016. 2 Based on September 30, 2017 balance sheet and new credit facility; excluding AuRico Metals cash balance.
4
Centerra: Q3 Full Year Guidance Revision 2017 Mid-Point Gold Production (oz’s)
Guidance Mid-Point Highlights
850,000
815,000 795,000
800,000
Gold Production – 3% Downward Revision
755,000 750,000
700,000
All-In Sustaining Costs – Negligible Revision
650,000 Original Guidance
2017 Mid-Point All-In Sustaining Costs (US$/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: AuRico Metals Transaction1 Rationale Acquiring a de-risked brownfield project in British Columbia and cash flowing royalty portfolio
•
•
Enhances Centerra’s high-quality asset base in a world-class jurisdiction −
Kemess can be a future cornerstone asset that will further bolster Centerra’s strong development pipeline
−
Cash flowing royalty portfolio underpinned by the high-quality Fosterville and Young-Davidson mines
Near-term de-risked growth −
•
Numerous value creation upside opportunities at Kemess −
•
Integration of Kemess Underground (“KUG”) and Kemess East (“KE”) has the potential to become a 20+ year mining operation through optimization studies and potential synergy opportunities
High-quality, free cash flowing royalty portfolio −
1.
Over C$1 billion of surface infrastructure, EIA and first nation agreements in place
Acquisition of a high-quality, free-cash flow generating royalties provides immediate incremental cash flow and potential for long-term upside from high-quality underlying assets
•
Accretive to NAV, reserves and resources
•
Strong balance sheet maintained −
Centerra holds in excess of US$350 million in cash to fund the acquisition and has secured a new US$125 million acquisition facility
−
Positioned to build out Centerra’s pipeline of development projects
−
Centerra plans to restructure its current debt facilities upon close of this transaction
Refer to Company’s news release November 7, 2017.
November 2017
6
Pro-Forma High-Quality Producing and Growth Assets
Mt. Milligan Mine Au, Cu Canada
Greenstone Project (50%) Au Canada
Kumtor Mine Au Kyrgyz Republic
Hemlo-Williams (0.25% NSR) Au Canada
Kemess Underground and East Projects Au, Cu Canada
Operations Development Producing Royalty Assets Molybdenum Asset
Eagle River (0.5% NSR) Au Canada
Gatsuurt Project Au Mongolia
Young-Davidson (1.5% NSR) Au Canada
Öksüt Project Au Turkey
Fosterville (2.0% NSR) Au Australia
Source: Company Filings. Gold: Au; Copper: Cu.
November 2017
7
High-Quality Free Cash Flowing Royalty Portfolio 4
19
4
Producing Royalties
Total Royalties
Countries
Top-Tier Assets
Valued Operating Partners
World-Class Mining Jurisdictions
Hemlo-Williams
Canada
0.25% NSR (Barrick Gold)
GJ & GJ Northern Block
Eagle River
1.0% & 0.5% NSRs (Skeena Resources)
0.5% NSR (Wesdome Gold Mines)
USA
Young-Davidson
Royalty Revenue (US$MM’s)
1.5% NSR (Alamos Gold)
$10.5 - $11.0 $8.1
Mexico Australia
Stawell Producing Royalty Non-Producing Royalty Source: AuRico Metals filings.
November 2017
1.0% NSR (Kirkland Lake Gold)
2016A
2017 Guidance
Fosterville 2.0% NSR (Kirkland Lake Gold)
8
Diversified Portfolio with Balanced Geographical Profile Pro-forma Consensus Asset NAV by Geography(1) Australia 2% Turkey 9%
Pro-forma P+P Reserves by Geography(2)
Mongolia U.S. 1% 0%
Turkey 7%
Canada 55%
Kyrgyz Republic 33%
Pro-forma Consensus Asset NAV by Stage Exploration 4%
Mongolia 7%
Kyrgyz Republic 29%
Canada 57%
Pro-forma M+I Resource (Inclusive) by Geography(3) Turkey 5%
Mongolia 8%
Development 26%
Kyrgyz Republic 28%
Canada 59%
Producing 70% Source: Company filings, AuRico Metals filings, and analyst estimates. (1) Does not include assets classified as ‘Other’. (2) See Reserves and Resources details on slides 23 and 43 in the appendix, excludes royalties. (3) Resources are shown inclusive of reserves. Minerals resources that are not mineral reserves do not have demonstrated economic viability. Excludes royalties.
November 2017
9
Centerra: Lower-Cost-Quartile Asset Base •
Kemess underground represents a potential fourth Centerra mine in the bottom quartile of global gold producers
•
Royalty cash flow provides additional margin enhancement AISC Industry Curve (By-Product Basis) $2,500
0%
25%
75%
100%
Centerra Gold (US$705-741/oz Au)
$2,250 $2,000
AISC, net (US$/oz Au)
50%
Kemess Underground (US$244/oz)(1)
$1,750 $1,500
Kumtor (US$737-764/oz)
Mount Milligan (US$483-523/oz)
$1,250 $1,000
Öksüt (US$490/oz)(2)
$750 $500 $250 $0 730
9,100
16,008
23,666
30,082
36,417
39,898
42,962
Source: SNL Metals. Cumulative Gold Production (koz Au) Notes: Centerra AISC figures based on 2017 revised cost guidance, unless noted. (1) Kemess Underground based on LOM plan as per National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings. (2) Öksüt AISC based on LOM plan as per the NI 43-101 technical report dated September 3, 2015.
November 2017
10
Centerra: Pro-Forma Asset Breakdown Pro-Forma Free Cash Flow (US$MM’s)(1)
Pro-Forma Free Cash Flow by Asset (1) Royalties 4%
Consensus Asset NAV (US$MM’s)
Mount Milligan
Mount Milligan
$138M
$945M Kumtor 43%
Kumtor $855M
Mt. Milligan 53%
Kemess $270M
Kumtor $113M
Pro-Forma Consensus Asset NAV Other Gatsuurt Royalties 4% 1% 4% Greenstone 6% Öksüt 8%
Öksüt $230M Greenstone
Mt. Milligan 35%
$160M Gatsuurt
Kemess 10%
$40M
Royalty Portfolio $10.5 to $11.0M
Royalty Portfolio Kumtor 32%
$110M
Source: Centerra Gold and AuRico Metals filings, analyst estimates. (1) Mount Milligan and Kumtor Mine free cash flow figures based on Q3 2017 year-to-date operating cash flow less capital expenditures annualized for full-year 2017; AuRico Metals royalties cash flow is based on published 2017E guidance.
November 2017
11
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 • Additional ~12,000m of drilling planned for 2017
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 for Kemess Underground and Kemess East available in the AuRico Metals filings. AISC is a Non-GAAP measure
November 2017
12
Kemess: Site Layout – C$1Billion of Infrastructure Fly-in, Fly-out Work Camp
Metallurgical Facility
South Open Pit (Tailings Storage Facility)
Kemess Underground & East Deposits
13
Kemess: Large, Low-Cost Production Kemess Underground – 2016 Feasibility Highlights(1) Underground Block Cave
Mine Type
Avg. LOM Gold Production (koz)
106
Avg. LOM Gold Production (koz)
Avg. LOM By-Product AISC (US$/oz)(2)
$244
Avg. LOM By-Product AISC (US$/oz)(2)
Reserve Mine Life (years) Development Capex (C$MM)(3)
12
Reserve Mine Life (years) Development Capex (C$MM)
$604
80 ($69) 12 $327
P&P Au Reserves (Moz)
1.9
M&I Au Resource (Moz)
1.7
P&P Au Reserve Grade (g/t)
0.54
M&I Au Grade (g/t)
0.46
P&P Cu Reserves (Mlbs)
629.6
M&I Cu Resource (Mlbs)
954.0
P&P Cu Reserve Grade (%)
0.27%
M&I Cu Grade (%)
0.38%
After-tax IRR
12.6%
After-tax IRR
16.7%
After-tax NPV5% (C$MM)
After-tax NPV5% (C$MM)
$289
80
120
60
80
40
40
20 -Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Project Schedule Year Au Cu
Gold (koz)
160
--
$375
KE Gold and Copper Production(1)
Copper (Mlbs)
Gold (koz)
KUG Gold and Copper Production(1)
(1) (2) (3)
Underground Panel Cave
160
80
120
60
80
40
40
20
--
0 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Project Schedule Year Au Cu
Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings. AISC is a Non-GAAP measure Includes pre-commercial net revenue and capitalized pre-production operating expenditures.
November 2017
Copper (Mlbs)
Mine Type
Kemess East– 2017 PEA Highlights(1)
14
Centerra: Significant Leverage to Gold Company Gold M&I Resources per US$1,000 Invested (Gold Ounces)(1)
16
16
13 11
11
11 9 7 6
6
6
2
Yamana
Pro-Forma Centerra
Centerra
New Gold
Detour
Kinross
IAMGOLD
Alamos
SEMAFO
SSR Mining
B2Gold
Randgold
Source: Company filings, AuRico Metals filings. (1) Calculated as total M&I gold resource (inclusive of P&P gold reserves) / market capitalization as at November 16, 2017. Based on Centerra current equity value.
November 2017
15
Kemess: Timeline – And Copper Outlook Kemess Timeline
Copper Outlook Deficit
25
Large ~6Mt deficit expected by 2030
Mt
20
15
10 2015 Source: Wood Mackenzie.
November 2017
2018
2021 Base
Probable Projects
2024
2027
2030
Primary Demand 16
Centerra: Enhanced Project Pipeline Öksüt: High Margin Open Pit Heap Leach Gold Project Funded, late-stage gold development project Near-term high margin gold production
Kemess: Low-Cost Brownfield Gold-Copper Project in British Columbia Over C$1 billion of surface infrastructure, EIA and First Nation agreement in place KUG and KE optimization and potential synergy opportunities
Greenstone: Large Scale Open Pit Gold Project One of Canada’s largest undeveloped open pit gold deposits Bankable feasibility study completed, final EIS/EA filed, IBA and mine permitting work underway
Gatsuurt: Open Pit Gold Project with Established Infrastructure Updated feasibility study completed Surface processing infrastructure in-place
November 2017
17
Appendices TSX: CG www.centerragold.com
Centerra: AuRico Metals Transaction1 Summary Transaction Summary
• Total transaction value of C$310 million • Each existing AuRico share outstanding at closing will be exchanged for C$1.80 in cash pursuant to a plan of
Consideration
arrangement
• 38% premium to AuRico’s closing price on November 6, 2017 and a 37% premium based on AuRico’s 20-day volume-weighted average price
Financing of Acquisition
Conditions
• Cash on hand • New US$125 million acquisition credit facility • AuRico shareholder approval (66⅔% of shareholder votes cast) • Customary regulatory and court approvals • Unanimous support from AuRico’s Board of Directors (subject to abstentions)
Other
• AuRico’s Officers, AuRico’s Board of Directors and Alamos Gold, collectively representing 11.4% of common shares outstanding, have entered into voting support agreements
• Customary non-solicitation covenants and a C$12 million termination fee is payable in customary circumstances Anticipated Timeline
1.
• AuRico shareholder meeting in December 2017 • Expected to close in January 2018
Refer to Company’s news release November 7, 2017.
November 2017
19
Centerra: Attractive Debt Repayment Capacity Net Debt / 2017E EBITDA(1) 2.6x
2.7x
Yamana
B2Gold
2.4x
0.4x
(1.0x)
(0.9x)
(0.9x)
(0.9x)
Randgold
SSR Mining
Alamos
0.5x
0.7x
(1.6x) SEMAFO
IAMGOLD
Pro-Forma Centerra
Kinross
Detour
New Gold
Source: Company filings, S&P Capital IQ. (1) Consensus Net Debt / 2017E EBITDA is calculated based on each company’s latest filings divided by the median research analyst estimate for that same company as at November 6, 2017. Centerra based on pro-forma company cash and debt balances, and includes 2017E EBITDA estimates from both Centerra and AuRico Metals.
November 2017
20
Kemess: De-Risked Brownfield Project(1) • • • •
(1)
Established mining jurisdiction
Kwadacha (Fort Ware)
Kemess Project
Advanced-stage − EA Approved, IBA in hand, FS complete
Kemess Project Omineca Resource Access Road
Tsay Keh
Forest Service Road 0
Low-risk brownfield development
100
200
Kilometers
Dawson Creek
Takla Landing
C$1 billion of existing infrastructure − 25,000 tpd mill, road, power, tailings, rail loadout, camp
Terrace
Smithers
Endako
Prince Rupert
Mackenzie
Mount Milligan Fort St. James
•
Sizeable resource − KUG: P&P of 1.9Moz gold and 0.6Blbs copper and M&I (exclusive of P&P) of 3.3Moz gold and 1.2Blbs copper − KE: M&I of 1.7Moz gold and 1.0Blbs copper
•
Long life − 12 years at Kemess Underground plus further 12 years at Kemess East
Kemess Underground EA Approval
Received – Q1 2017
First Nations IBA
Received – Q2 2017
•
Highly marketable concentrate
Kemess Underground Permit Application
•
Robust Kemess Underground economics with significant upside
•
Continued exploration success − Kemess East and Kemess Offset Zone
Prince George
Expected Catalyst Schedule
Anticipated – Q2 2018
Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings.
November 2017
21
Kemess: Value Creation Opportunities •
Optimization opportunities through the integration of KUG and KE − − −
−
•
Exploration Upside −
−
•
Economies of scale in ore processing, G&A, and site services Optimize tailings management Optimize mining and development of KUG and KE to access highest grade areas of both deposits during the early years Enhance recoveries by blending KUG and KE ore 2017 drill program consisting of ~12,000 metres at Kemess East commenced in July 2017 with infill drilling and growth on outer edges of deposit Drill program to also target the high-grade Kemess Offset Zone, located between Kemess Underground and Kemess East
Potential operational synergies with Centerra’s existing operations in British Columbia
Source: Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings.
November 2017
22
Kemess: Reserves & Resources Kemess Underground Grade
Contained Metal
Quantity (t)
Gold (g/t)
Copper (%)
Silver (g/t)
Gold (koz)
Copper (klbs)
Silver (koz)
-
-
-
-
-
-
-
Probable
107,381
0.54
0.27
1.99
1,868
629,595
6,878
Total P&P
107,381
0.54
0.27
1.99
1,868
629,595
6,878
Measured
-
-
-
-
-
-
-
Indicated
246,400
0.42
0.22
1.75
3,328
1,195,300
13,866
246,400
0.42
0.22
1.75
3,328
1,195,300
13,866
21,600
0.40
0.22
1.70
277
104,700
1,179
Classification Proven and Probable Proven
Total
M&I(1)
Inferred
Kemess East Grade
Contained Metal
Quantity (t)
Gold (g/t)
Copper (%)
Silver (g/t)
Gold (koz)
Copper (klbs)
Silver (koz)
Potassic Strong
67,200
0.60
0.43
2.06
1,292
640,000
4,457
Potassic Moderate
40,000
0.27
0.32
1.81
352
286,000
2,336
Potassic Weak
5,100
0.19
0.22
1.45
31
24,000
238
800
0.20
0.21
1.40
5
4,000
36
Total Indicated
113,100
0.46
0.38
1.94
1,680
954,000
7,066
Potassic Strong
15,200
0.51
0.41
2.05
249
137,000
1,003
Potassic Moderate
41,900
0.26
0.34
1.91
353
311,000
2,579
Potassic Weak
6,000
0.17
0.20
1.42
32
27,000
274
700
0.24
0.21
1.42
6
3,000
33
63,800
0.31
0.34
1.90
640
478,000
3,889
Classification Indicated
Phyllic + Propylitic
Phyllic + Propylitic Total Inferred
Source: Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings. (1) M&I resources are inclusive of reserves.
November 2017
23
Royalty Portfolio: Cornerstone Royalty Assets Young-Davidson (1.5% NSR)
Fosterville (2.0% NSR)
Mine Operator
Alamos Gold
Mine Operator
Mine Type
Underground
Mine Type
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-210koz Gold 3,687koz @ 2.7 g/t 1,246koz @ 3.1 g/t 314koz @ 2.8 g/t
Highlights • 6-year operating history with strong track record • One of Canada’s largest underground mines • 15-year mine life based on year-end 2016 reserves • Large resource base and exploration potential to support mine life extension • Achieved record gold production of 55.8koz ounces in Q3/17 as the mine continues to ramp-up to 7,500 tpd throughput, having achieved 6,544 tpd in Q3/17
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
Kirkland Lake Gold Underground 250-260koz Gold 1,190koz @15.3 g/t 1,940koz @ 4.4 g/t 1,040koz @ 5.8 g/t
Highlights • 12-year operating history with strong track record • Kirkland Lake Gold has revised Fosterville production guidance upwards in FY2017 from 140-145koz to 250260koz • Achieved monthly production record in October of over 30koz • Mineral reserves more than doubled at Fosterville with an 83% increase in average reserve grade from 9.8 g/t to 17.9 g/t in June 2017 • In-mine and step-out exploration is focused on accelerating conversion in three production horizons in the Swan Zone (reserves of 532koz at 58.8 g/t Au)
Source: AuRico Metals, Alamos Gold and Kirkland Lake Gold filings.
November 2017
24
Producing Royalties Young-Davidson (1.5% NSR)
Fosterville (2.0% NSR)
Mine Operator
Alamos Gold
Mine Operator
Mine Type
Underground
Mine Type
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-210koz Gold 3,687koz @ 2.7 g/t 1,246koz @ 3.1 g/t 314koz @ 2.8 g/t
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
Kirkland Lake Gold Underground 250-260koz Gold 1,190koz @ 15.3 g/t 1,940koz @ 4.4 g/t 1,040koz @ 5.8 g/t
Highlights • One of Canada’s largest underground mines • 15-year mine life based on year-end 2016 reserves • Open at depth
Highlights • Achieved monthly production record of over 30koz in October • Mineral reserves more than doubled with an 83% increase in average reserve grade
Hemlo – Williams (0.25% NSR)
Eagle River (0.5% NSR)
Mine Operator
Barrick Gold
Mine Operator:
Mine Type
Underground
Mine Type
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
195-210koz Gold 1,588koz @ 1.92 g/t 1,720koz @ 0.91 g/t 484koz @ 1.94 g/t
Highlights • 73% increase in reserves announced in February 2017 • Has been producing for 30+ consecutive years
2017 Production Guidance P&P Reserves Inferred
Wesdome Gold Mines Open Pit 45-49koz Gold 344koz @ 9.2 g/t 85koz @ 8.1 g/t
Highlights • Continuous production since 1995 (>1Moz) • Significant upside from continued exploration of identified ore zones (incl. 300 Zone)
Source: AuRico Metals, Alamos Gold, Kirkland Lake Gold, Barrick Gold and Wesdome Gold Mines filings.
November 2017
25
Non-Producing Royalties Date Acquired(1)
Primary Metal
Location
NSR Rate
Operator
Notes
Boulevard
Mar-17
Gold
Yukon
1.00%
Independence Gold
Adjacent to Goldcorp’s Coffee project
Cumobabi
Mar-17
Copper
Mexico
0.50%
Evrim Resources
Under option to First Majestic Silver
East Timmins
Mar-17
Gold
Ontario
0.50%
Kirkland Lake Gold
19 near-mine targets & 81 regional targets (claim progressing in court)
Eskay Creek Area
Dec-16
Gold/Silver
British Columbia
0.50%
Eskay Mining Corp
Area surrounding past producing Eskay Creek mine and near to Brucejack and KSM
GJ / GJ Northern Block
Dec-16
Gold/Copper
British Columbia
0.98% / 0.49%
Skeena Resources
PEA released April 2017; M&I resources of 2.1Moz Au and 1.2Blbs Cu
Goodpaster
Mar-17
Gold
Alaska
1.00%
Millrock Resources
Eligible for advanced royalty payments
Grizzly
Sept-17
Copper/Gold
British Columbia
1.00%
International Samuel Exploration
Located in BC’s Golden Triangle
Hemlo – David Bell
Sept-15
Gold
Ontario
1.50%
Barrick Gold
Historic operation – adjacent to Williams (on strike)
Leviathan
Jul-15
Gold
Australia
1.00%
Kirkland Lake Gold
Exploration stage
Madsen Area
Dec-16
Gold
Ontario
1.00%
Frontline Gold
Exploration stage
Mt. Dunn
Mar-17
Copper/Gold
British Columbia
2.00%
Metallis Resources
Located in BC’s Golden Triangle
Rainy River Area
Feb-17
Gold
Ontario
0.75%
Private
Exploration stage
RDN
Mar-17
Gold
British Columbia
1.33%
Aben Resources
Located in BC’s Golden Triangle
Red Lake Area
Mar-17
Gold
Ontario
1.00%
Frontline Gold
Exploration stage
Stawell
Jul-15
Gold
Australia
1.00%
Kirkland Lake Gold
Care & Maintenance / “operationally ready”; P&P of 132koz and M&I of 114koz
Asset
Source: AuRico Metals filings. (1) Date AuRico Metals acquired the royalty.
November 2017
26
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$435/oz
18.75% @ 15% of spot Cu price
P&P Reserves(2) Grade Royal Gold Stream
Significant Gold and Copper Production
Significant Open Pit Gold and Copper Production +20 years of production from existing P&P reserves(2)
300 245 250
5.8M gold reserve ounces
Low cost, long life production Stable, mining-friendly jurisdiction Restructured stream provides additional gold upside Tax loss pools, no cash taxes until 2022/2023 (1) (2)
Gold ounces (000’s)
(2)
218
80
71
70 59
205
60
200
60 50
150
40 30
100
Copper M lbs
Gold
20 50
10
0
0 2015
2016 GOLD
2017E
2015
2016 2017E COPPER
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release October 31, 2017. 2016 AISC is for the period Oct.20 to Dec.31. Refer to February 23, 2017 mineral reserves and resources news release.
November 2017
27
Mount Milligan: Exploration Update
Q3 Drill hole Section; looking North within Ultimate Pit Boundary
Mount Milligan Q3 Drill hole Plan Map Q3 2017 Exploration Update This information should be read together with our news release of October 31, 2017. C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. November 2017
28
Mount Milligan: Resource Expansion Potential
C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. November 2017
29
Mount Milligan: Exploration Targets
November 2017
30
Kumtor: World Class Open Pit Gold Mine 2015
2016
2017E Guidance
Gold Production (koz)
521
551
540-560
Adjusted Operating Costs ($/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
4.50
650,000
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.
31
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$150MM low-cost +5-year financing in-place Significant exploration potential November 2017
Ounces (000's)
Forestry Permit & GSM License received July 2016
250
2.50
200
2.00
150
1.50
100
1.00
50
0.50
0 Years:
Process Grade (g/tonne)
Avg. LOM
0.00 0 2016
+1 2017
+2 2018
+3 2019
+4 2020
+5 2021
+6 2022
+7 2023
+8 2024
(1) Non-GAAP measure see “Non-GAAP Measures in the MDA and news release of October 31, 2017. (2) Company filings. Technical Report on the Öksüt Gold Project dated September 3, 2015.
32
Öksüt: Powerline Construction Complete
November 2017
33
Gatsuurt: Gold Development Project 2017 Feasibility Highlights(1) Mine Type Avg. LOM Annual Production
111koz Au
Avg. LOM AISC(1) (US$/oz)
$870
Reserve Mine Life
10 years
LOM Development Capex (US$MM)
$245
LOM Sustaining Capital (US$MM)
$37
P&P
The Gatsuurt Project is ~90 km north of Ulaanbaatar
Open Pit
Reserves(2)(Moz)
1.3
Au grade (g/t)
2.7
Life of Mine Recovery
84%
Life of Mine Strip Ratio (w:o)
4.7:1
IRR (after tax)
9%
NPV(5%) - after tax (US$MM)
$39
Boroo’s Historical Cumulative Net Cash Generation (US$MM)
In-Place 5ktpd Processing Facility (Boroo)
600 500 US$ Millions
400 300 200 100 0 (100) 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
(1) See Gatsuurt Project Update in Company’s news release October 31, 2017.
November 2017
34
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
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 Company’s MDA and news release October 31, 2017.
35
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 November 2017
(1) Technical Report on the Hardrock Project dated December 21, 2016.
36
Centerra: 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
37
Centerra: 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
38
Centerra: 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
39
Centerra: 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
40
Centerra: 2017 Revised Guidance – Q3 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.
41
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
42
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.
43
Centerra: Investor Relations Highlights Research Coverage Brokerage Firms
Top Ten (10) Institutional Shareholders
Rating
Target
1. BMO Capital Markets
Market Perform
C$10.50
2. BofA Merrill Lynch
Neutral
C$9.25
1. Blackrock
13.10%
3. Canaccord Genuity
Hold
C$8.50
2. Van Eck
8.65%
4. CIBC World Markets
Neutral
C$11.00
3. Paulson & Co
7.80%
5. Cormark Securities
Buy
C$12.00 C$9.75
4. Dimensional
2.39%
6. Credit Suisse
Hold
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$9.00
7. Vanguard Group
1.50%
10. RBC Capital Markets
Sector Perform
C$10.00
8. Franklin Advisors
1.42%
11. Scotiabank
Sector Outperform
C$10.00
9. USAA
1.36%
12. TD Securities
Hold
C$9.50
10. Newton
1.33%
Average
November 2017
C$10.18
Institution/Firm
TOTAL
Q3-2017
40.91%
44
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
45
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
46
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 forwardlooking information. These forward-looking statements relate to, among other things: whether the arrangement to acquire AuRico Metals Inc. (“AMI”) and the related debt financing will be consummated, including whether conditions to the consummation of the proposed transactions will be satisfied, expectations regarding the assets of AMI, including pro forma financial and operational forecasts, and potential improvements to the Kemess property. 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) the ability to consummate the proposed arrangement to acquire AMI and the related debt financing; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other conditions to the consummation of the proposed arrangement to acquire AMI and the related debt financing on the proposed terms and schedule, and to the extent, anticipated the potential impact of the announcement or consummation of the proposed transactions on relationships, including with regulatory authorities, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; significant competition that Centerra and AMI face; compliance with extensive government regulation; and the diversion of management time on the proposed arrangement to acquire AMI and the related debt financing (B) 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; (C) 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 (D) 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 Centerra’s 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 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 November 7, 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
Centerra: Built For Success Corporate Highlights
Pro-forma Consensus Asset NAV Breakdown Australia 2% Turkey 9%
Internationally Diversified Gold Producer Two Cornerstone Lower-Cost Quartile Assets
Mongolia U.S. 1% 0%
Gold Production up to 815kozpa gold at AISC1 of $705 to $741 per ounce and ~60M lbs of copper
Significant Operational Cash Flow Profile
2,000
800
1,600
600
1,200
400
800
200
400
US$352MM3
Trading at a Discount to Peers, Potential Re-Rating Liquidity of US$802MM3
US$ Millions
Position of
1,000
0
Positive Retained Earnings of US$936MM3
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017 3
Cumulative Dividends
1. 2. 3.
Gold Price (US$/oz)
Cash Reserves2 Profile (US$)
Solid Late-Stage Development Pipeline Cash2
Canada 55%
Kyrgyz Republic 33%
Entered into a friendly acquisition of AuRico Metals; de-risked brownfield project and a high quality free-cash flow generating royalty portfolio2
Cash Balance
Gold Price
2017e AISC: Kumtor $737 to $764/oz, Mount Milligan $483 to $523/oz. All-in sustaining costs per ounce sold is a non-GAAP measures and is discussed under “Non-GAAP Measures” in the Company’s MDA & news release October 31, 2017. Refer to Company’s news release November 7, 2017. As at September 30, 2017. Liquidity based on September 30, 2017 balance sheet and new credit facility; excluding AuRico Metals cash balance
November 2017
3
Centerra: Q3 - 2017 Corporate Update 2017 YTD: Internally Funded Business (US$MM’s) 700
88
600
Liquidity Profile (US$MM’s)(2)
172
$50
$125
105
500
78
409
400
352
US$802MM $150
300
$352
200 100
$125
0
1
2016 Cash Mt Milligan Kumtor FCF Debt Other FCF Repayments (Projects, G&A, etc)
Q3 2017 Cash
Cash Reserves CBCH Revolver Credit Facility New Credit Facility
Positive Net Cash Position2 (US$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
$542MM
(75) (100)
(96)
(125)
2016
US$ Millions
800
1,200
600 800
400
400
200 0
Q3-2017
Gold Price (US$/oz)
50
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 2017
Retained Earnings
Cumulative Dividends
0
Gold Price
1
November 2017
Includes cash and cash equivalents, restricted cash and short-term investments at December 31, 2016. 2 Based on September 30, 2017 balance sheet and new credit facility; excluding AuRico Metals cash balance.
4
Centerra: Q3 Full Year Guidance Revision 2017 Mid-Point Gold Production (oz’s)
Guidance Mid-Point Highlights
850,000
815,000 795,000
800,000
Gold Production – 3% Downward Revision
755,000 750,000
700,000
All-In Sustaining Costs – Negligible Revision
650,000 Original Guidance
2017 Mid-Point All-In Sustaining Costs (US$/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: AuRico Metals Transaction1 Rationale Acquiring a de-risked brownfield project in British Columbia and cash flowing royalty portfolio
•
•
Enhances Centerra’s high-quality asset base in a world-class jurisdiction −
Kemess can be a future cornerstone asset that will further bolster Centerra’s strong development pipeline
−
Cash flowing royalty portfolio underpinned by the high-quality Fosterville and Young-Davidson mines
Near-term de-risked growth −
•
Numerous value creation upside opportunities at Kemess −
•
Integration of Kemess Underground (“KUG”) and Kemess East (“KE”) has the potential to become a 20+ year mining operation through optimization studies and potential synergy opportunities
High-quality, free cash flowing royalty portfolio −
1.
Over C$1 billion of surface infrastructure, EIA and first nation agreements in place
Acquisition of a high-quality, free-cash flow generating royalties provides immediate incremental cash flow and potential for long-term upside from high-quality underlying assets
•
Accretive to NAV, reserves and resources
•
Strong balance sheet maintained −
Centerra holds in excess of US$350 million in cash to fund the acquisition and has secured a new US$125 million acquisition facility
−
Positioned to build out Centerra’s pipeline of development projects
−
Centerra plans to restructure its current debt facilities upon close of this transaction
Refer to Company’s news release November 7, 2017.
November 2017
6
Pro-Forma High-Quality Producing and Growth Assets
Mt. Milligan Mine Au, Cu Canada
Greenstone Project (50%) Au Canada
Kumtor Mine Au Kyrgyz Republic
Hemlo-Williams (0.25% NSR) Au Canada
Kemess Underground and East Projects Au, Cu Canada
Operations Development Producing Royalty Assets Molybdenum Asset
Eagle River (0.5% NSR) Au Canada
Gatsuurt Project Au Mongolia
Young-Davidson (1.5% NSR) Au Canada
Öksüt Project Au Turkey
Fosterville (2.0% NSR) Au Australia
Source: Company Filings. Gold: Au; Copper: Cu.
November 2017
7
High-Quality Free Cash Flowing Royalty Portfolio 4
19
4
Producing Royalties
Total Royalties
Countries
Top-Tier Assets
Valued Operating Partners
World-Class Mining Jurisdictions
Hemlo-Williams
Canada
0.25% NSR (Barrick Gold)
GJ & GJ Northern Block
Eagle River
1.0% & 0.5% NSRs (Skeena Resources)
0.5% NSR (Wesdome Gold Mines)
USA
Young-Davidson
Royalty Revenue (US$MM’s)
1.5% NSR (Alamos Gold)
$10.5 - $11.0 $8.1
Mexico Australia
Stawell Producing Royalty Non-Producing Royalty Source: AuRico Metals filings.
November 2017
1.0% NSR (Kirkland Lake Gold)
2016A
2017 Guidance
Fosterville 2.0% NSR (Kirkland Lake Gold)
8
Diversified Portfolio with Balanced Geographical Profile Pro-forma Consensus Asset NAV by Geography(1) Australia 2% Turkey 9%
Pro-forma P+P Reserves by Geography(2)
Mongolia U.S. 1% 0%
Turkey 7%
Canada 55%
Kyrgyz Republic 33%
Pro-forma Consensus Asset NAV by Stage Exploration 4%
Mongolia 7%
Kyrgyz Republic 29%
Canada 57%
Pro-forma M+I Resource (Inclusive) by Geography(3) Turkey 5%
Mongolia 8%
Development 26%
Kyrgyz Republic 28%
Canada 59%
Producing 70% Source: Company filings, AuRico Metals filings, and analyst estimates. (1) Does not include assets classified as ‘Other’. (2) See Reserves and Resources details on slides 23 and 43 in the appendix, excludes royalties. (3) Resources are shown inclusive of reserves. Minerals resources that are not mineral reserves do not have demonstrated economic viability. Excludes royalties.
November 2017
9
Centerra: Lower-Cost-Quartile Asset Base •
Kemess underground represents a potential fourth Centerra mine in the bottom quartile of global gold producers
•
Royalty cash flow provides additional margin enhancement AISC Industry Curve (By-Product Basis) $2,500
0%
25%
75%
100%
Centerra Gold (US$705-741/oz Au)
$2,250 $2,000
AISC, net (US$/oz Au)
50%
Kemess Underground (US$244/oz)(1)
$1,750 $1,500
Kumtor (US$737-764/oz)
Mount Milligan (US$483-523/oz)
$1,250 $1,000
Öksüt (US$490/oz)(2)
$750 $500 $250 $0 730
9,100
16,008
23,666
30,082
36,417
39,898
42,962
Source: SNL Metals. Cumulative Gold Production (koz Au) Notes: Centerra AISC figures based on 2017 revised cost guidance, unless noted. (1) Kemess Underground based on LOM plan as per National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings. (2) Öksüt AISC based on LOM plan as per the NI 43-101 technical report dated September 3, 2015.
November 2017
10
Centerra: Pro-Forma Asset Breakdown Pro-Forma Free Cash Flow (US$MM’s)(1)
Pro-Forma Free Cash Flow by Asset (1) Royalties 4%
Consensus Asset NAV (US$MM’s)
Mount Milligan
Mount Milligan
$138M
$945M Kumtor 43%
Kumtor $855M
Mt. Milligan 53%
Kemess $270M
Kumtor $113M
Pro-Forma Consensus Asset NAV Other Gatsuurt Royalties 4% 1% 4% Greenstone 6% Öksüt 8%
Öksüt $230M Greenstone
Mt. Milligan 35%
$160M Gatsuurt
Kemess 10%
$40M
Royalty Portfolio $10.5 to $11.0M
Royalty Portfolio Kumtor 32%
$110M
Source: Centerra Gold and AuRico Metals filings, analyst estimates. (1) Mount Milligan and Kumtor Mine free cash flow figures based on Q3 2017 year-to-date operating cash flow less capital expenditures annualized for full-year 2017; AuRico Metals royalties cash flow is based on published 2017E guidance.
November 2017
11
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 • Additional ~12,000m of drilling planned for 2017
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 for Kemess Underground and Kemess East available in the AuRico Metals filings. AISC is a Non-GAAP measure
November 2017
12
Kemess: Site Layout – C$1Billion of Infrastructure Fly-in, Fly-out Work Camp
Metallurgical Facility
South Open Pit (Tailings Storage Facility)
Kemess Underground & East Deposits
13
Kemess: Large, Low-Cost Production Kemess Underground – 2016 Feasibility Highlights(1) Underground Block Cave
Mine Type
Avg. LOM Gold Production (koz)
106
Avg. LOM Gold Production (koz)
Avg. LOM By-Product AISC (US$/oz)(2)
$244
Avg. LOM By-Product AISC (US$/oz)(2)
Reserve Mine Life (years) Development Capex (C$MM)(3)
12
Reserve Mine Life (years) Development Capex (C$MM)
$604
80 ($69) 12 $327
P&P Au Reserves (Moz)
1.9
M&I Au Resource (Moz)
1.7
P&P Au Reserve Grade (g/t)
0.54
M&I Au Grade (g/t)
0.46
P&P Cu Reserves (Mlbs)
629.6
M&I Cu Resource (Mlbs)
954.0
P&P Cu Reserve Grade (%)
0.27%
M&I Cu Grade (%)
0.38%
After-tax IRR
12.6%
After-tax IRR
16.7%
After-tax NPV5% (C$MM)
After-tax NPV5% (C$MM)
$289
80
120
60
80
40
40
20 -Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Project Schedule Year Au Cu
Gold (koz)
160
--
$375
KE Gold and Copper Production(1)
Copper (Mlbs)
Gold (koz)
KUG Gold and Copper Production(1)
(1) (2) (3)
Underground Panel Cave
160
80
120
60
80
40
40
20
--
0 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Project Schedule Year Au Cu
Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings. AISC is a Non-GAAP measure Includes pre-commercial net revenue and capitalized pre-production operating expenditures.
November 2017
Copper (Mlbs)
Mine Type
Kemess East– 2017 PEA Highlights(1)
14
Centerra: Significant Leverage to Gold Company Gold M&I Resources per US$1,000 Invested (Gold Ounces)(1)
16
16
13 11
11
11 9 7 6
6
6
2
Yamana
Pro-Forma Centerra
Centerra
New Gold
Detour
Kinross
IAMGOLD
Alamos
SEMAFO
SSR Mining
B2Gold
Randgold
Source: Company filings, AuRico Metals filings. (1) Calculated as total M&I gold resource (inclusive of P&P gold reserves) / market capitalization as at November 16, 2017. Based on Centerra current equity value.
November 2017
15
Kemess: Timeline – And Copper Outlook Kemess Timeline
Copper Outlook Deficit
25
Large ~6Mt deficit expected by 2030
Mt
20
15
10 2015 Source: Wood Mackenzie.
November 2017
2018
2021 Base
Probable Projects
2024
2027
2030
Primary Demand 16
Centerra: Enhanced Project Pipeline Öksüt: High Margin Open Pit Heap Leach Gold Project Funded, late-stage gold development project Near-term high margin gold production
Kemess: Low-Cost Brownfield Gold-Copper Project in British Columbia Over C$1 billion of surface infrastructure, EIA and First Nation agreement in place KUG and KE optimization and potential synergy opportunities
Greenstone: Large Scale Open Pit Gold Project One of Canada’s largest undeveloped open pit gold deposits Bankable feasibility study completed, final EIS/EA filed, IBA and mine permitting work underway
Gatsuurt: Open Pit Gold Project with Established Infrastructure Updated feasibility study completed Surface processing infrastructure in-place
November 2017
17
Appendices TSX: CG www.centerragold.com
Centerra: AuRico Metals Transaction1 Summary Transaction Summary
• Total transaction value of C$310 million • Each existing AuRico share outstanding at closing will be exchanged for C$1.80 in cash pursuant to a plan of
Consideration
arrangement
• 38% premium to AuRico’s closing price on November 6, 2017 and a 37% premium based on AuRico’s 20-day volume-weighted average price
Financing of Acquisition
Conditions
• Cash on hand • New US$125 million acquisition credit facility • AuRico shareholder approval (66⅔% of shareholder votes cast) • Customary regulatory and court approvals • Unanimous support from AuRico’s Board of Directors (subject to abstentions)
Other
• AuRico’s Officers, AuRico’s Board of Directors and Alamos Gold, collectively representing 11.4% of common shares outstanding, have entered into voting support agreements
• Customary non-solicitation covenants and a C$12 million termination fee is payable in customary circumstances Anticipated Timeline
1.
• AuRico shareholder meeting in December 2017 • Expected to close in January 2018
Refer to Company’s news release November 7, 2017.
November 2017
19
Centerra: Attractive Debt Repayment Capacity Net Debt / 2017E EBITDA(1) 2.6x
2.7x
Yamana
B2Gold
2.4x
0.4x
(1.0x)
(0.9x)
(0.9x)
(0.9x)
Randgold
SSR Mining
Alamos
0.5x
0.7x
(1.6x) SEMAFO
IAMGOLD
Pro-Forma Centerra
Kinross
Detour
New Gold
Source: Company filings, S&P Capital IQ. (1) Consensus Net Debt / 2017E EBITDA is calculated based on each company’s latest filings divided by the median research analyst estimate for that same company as at November 6, 2017. Centerra based on pro-forma company cash and debt balances, and includes 2017E EBITDA estimates from both Centerra and AuRico Metals.
November 2017
20
Kemess: De-Risked Brownfield Project(1) • • • •
(1)
Established mining jurisdiction
Kwadacha (Fort Ware)
Kemess Project
Advanced-stage − EA Approved, IBA in hand, FS complete
Kemess Project Omineca Resource Access Road
Tsay Keh
Forest Service Road 0
Low-risk brownfield development
100
200
Kilometers
Dawson Creek
Takla Landing
C$1 billion of existing infrastructure − 25,000 tpd mill, road, power, tailings, rail loadout, camp
Terrace
Smithers
Endako
Prince Rupert
Mackenzie
Mount Milligan Fort St. James
•
Sizeable resource − KUG: P&P of 1.9Moz gold and 0.6Blbs copper and M&I (exclusive of P&P) of 3.3Moz gold and 1.2Blbs copper − KE: M&I of 1.7Moz gold and 1.0Blbs copper
•
Long life − 12 years at Kemess Underground plus further 12 years at Kemess East
Kemess Underground EA Approval
Received – Q1 2017
First Nations IBA
Received – Q2 2017
•
Highly marketable concentrate
Kemess Underground Permit Application
•
Robust Kemess Underground economics with significant upside
•
Continued exploration success − Kemess East and Kemess Offset Zone
Prince George
Expected Catalyst Schedule
Anticipated – Q2 2018
Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings.
November 2017
21
Kemess: Value Creation Opportunities •
Optimization opportunities through the integration of KUG and KE − − −
−
•
Exploration Upside −
−
•
Economies of scale in ore processing, G&A, and site services Optimize tailings management Optimize mining and development of KUG and KE to access highest grade areas of both deposits during the early years Enhance recoveries by blending KUG and KE ore 2017 drill program consisting of ~12,000 metres at Kemess East commenced in July 2017 with infill drilling and growth on outer edges of deposit Drill program to also target the high-grade Kemess Offset Zone, located between Kemess Underground and Kemess East
Potential operational synergies with Centerra’s existing operations in British Columbia
Source: Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings.
November 2017
22
Kemess: Reserves & Resources Kemess Underground Grade
Contained Metal
Quantity (t)
Gold (g/t)
Copper (%)
Silver (g/t)
Gold (koz)
Copper (klbs)
Silver (koz)
-
-
-
-
-
-
-
Probable
107,381
0.54
0.27
1.99
1,868
629,595
6,878
Total P&P
107,381
0.54
0.27
1.99
1,868
629,595
6,878
Measured
-
-
-
-
-
-
-
Indicated
246,400
0.42
0.22
1.75
3,328
1,195,300
13,866
246,400
0.42
0.22
1.75
3,328
1,195,300
13,866
21,600
0.40
0.22
1.70
277
104,700
1,179
Classification Proven and Probable Proven
Total
M&I(1)
Inferred
Kemess East Grade
Contained Metal
Quantity (t)
Gold (g/t)
Copper (%)
Silver (g/t)
Gold (koz)
Copper (klbs)
Silver (koz)
Potassic Strong
67,200
0.60
0.43
2.06
1,292
640,000
4,457
Potassic Moderate
40,000
0.27
0.32
1.81
352
286,000
2,336
Potassic Weak
5,100
0.19
0.22
1.45
31
24,000
238
800
0.20
0.21
1.40
5
4,000
36
Total Indicated
113,100
0.46
0.38
1.94
1,680
954,000
7,066
Potassic Strong
15,200
0.51
0.41
2.05
249
137,000
1,003
Potassic Moderate
41,900
0.26
0.34
1.91
353
311,000
2,579
Potassic Weak
6,000
0.17
0.20
1.42
32
27,000
274
700
0.24
0.21
1.42
6
3,000
33
63,800
0.31
0.34
1.90
640
478,000
3,889
Classification Indicated
Phyllic + Propylitic
Phyllic + Propylitic Total Inferred
Source: Refer to National Instrument 43-101 technical report dated July 12, 2017 for Kemess Underground and Kemess East available in the AuRico Metals filings. (1) M&I resources are inclusive of reserves.
November 2017
23
Royalty Portfolio: Cornerstone Royalty Assets Young-Davidson (1.5% NSR)
Fosterville (2.0% NSR)
Mine Operator
Alamos Gold
Mine Operator
Mine Type
Underground
Mine Type
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-210koz Gold 3,687koz @ 2.7 g/t 1,246koz @ 3.1 g/t 314koz @ 2.8 g/t
Highlights • 6-year operating history with strong track record • One of Canada’s largest underground mines • 15-year mine life based on year-end 2016 reserves • Large resource base and exploration potential to support mine life extension • Achieved record gold production of 55.8koz ounces in Q3/17 as the mine continues to ramp-up to 7,500 tpd throughput, having achieved 6,544 tpd in Q3/17
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
Kirkland Lake Gold Underground 250-260koz Gold 1,190koz @15.3 g/t 1,940koz @ 4.4 g/t 1,040koz @ 5.8 g/t
Highlights • 12-year operating history with strong track record • Kirkland Lake Gold has revised Fosterville production guidance upwards in FY2017 from 140-145koz to 250260koz • Achieved monthly production record in October of over 30koz • Mineral reserves more than doubled at Fosterville with an 83% increase in average reserve grade from 9.8 g/t to 17.9 g/t in June 2017 • In-mine and step-out exploration is focused on accelerating conversion in three production horizons in the Swan Zone (reserves of 532koz at 58.8 g/t Au)
Source: AuRico Metals, Alamos Gold and Kirkland Lake Gold filings.
November 2017
24
Producing Royalties Young-Davidson (1.5% NSR)
Fosterville (2.0% NSR)
Mine Operator
Alamos Gold
Mine Operator
Mine Type
Underground
Mine Type
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
200-210koz Gold 3,687koz @ 2.7 g/t 1,246koz @ 3.1 g/t 314koz @ 2.8 g/t
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
Kirkland Lake Gold Underground 250-260koz Gold 1,190koz @ 15.3 g/t 1,940koz @ 4.4 g/t 1,040koz @ 5.8 g/t
Highlights • One of Canada’s largest underground mines • 15-year mine life based on year-end 2016 reserves • Open at depth
Highlights • Achieved monthly production record of over 30koz in October • Mineral reserves more than doubled with an 83% increase in average reserve grade
Hemlo – Williams (0.25% NSR)
Eagle River (0.5% NSR)
Mine Operator
Barrick Gold
Mine Operator:
Mine Type
Underground
Mine Type
2017 Production Guidance P&P Reserves M&I (exclusive) Inferred
195-210koz Gold 1,588koz @ 1.92 g/t 1,720koz @ 0.91 g/t 484koz @ 1.94 g/t
Highlights • 73% increase in reserves announced in February 2017 • Has been producing for 30+ consecutive years
2017 Production Guidance P&P Reserves Inferred
Wesdome Gold Mines Open Pit 45-49koz Gold 344koz @ 9.2 g/t 85koz @ 8.1 g/t
Highlights • Continuous production since 1995 (>1Moz) • Significant upside from continued exploration of identified ore zones (incl. 300 Zone)
Source: AuRico Metals, Alamos Gold, Kirkland Lake Gold, Barrick Gold and Wesdome Gold Mines filings.
November 2017
25
Non-Producing Royalties Date Acquired(1)
Primary Metal
Location
NSR Rate
Operator
Notes
Boulevard
Mar-17
Gold
Yukon
1.00%
Independence Gold
Adjacent to Goldcorp’s Coffee project
Cumobabi
Mar-17
Copper
Mexico
0.50%
Evrim Resources
Under option to First Majestic Silver
East Timmins
Mar-17
Gold
Ontario
0.50%
Kirkland Lake Gold
19 near-mine targets & 81 regional targets (claim progressing in court)
Eskay Creek Area
Dec-16
Gold/Silver
British Columbia
0.50%
Eskay Mining Corp
Area surrounding past producing Eskay Creek mine and near to Brucejack and KSM
GJ / GJ Northern Block
Dec-16
Gold/Copper
British Columbia
0.98% / 0.49%
Skeena Resources
PEA released April 2017; M&I resources of 2.1Moz Au and 1.2Blbs Cu
Goodpaster
Mar-17
Gold
Alaska
1.00%
Millrock Resources
Eligible for advanced royalty payments
Grizzly
Sept-17
Copper/Gold
British Columbia
1.00%
International Samuel Exploration
Located in BC’s Golden Triangle
Hemlo – David Bell
Sept-15
Gold
Ontario
1.50%
Barrick Gold
Historic operation – adjacent to Williams (on strike)
Leviathan
Jul-15
Gold
Australia
1.00%
Kirkland Lake Gold
Exploration stage
Madsen Area
Dec-16
Gold
Ontario
1.00%
Frontline Gold
Exploration stage
Mt. Dunn
Mar-17
Copper/Gold
British Columbia
2.00%
Metallis Resources
Located in BC’s Golden Triangle
Rainy River Area
Feb-17
Gold
Ontario
0.75%
Private
Exploration stage
RDN
Mar-17
Gold
British Columbia
1.33%
Aben Resources
Located in BC’s Golden Triangle
Red Lake Area
Mar-17
Gold
Ontario
1.00%
Frontline Gold
Exploration stage
Stawell
Jul-15
Gold
Australia
1.00%
Kirkland Lake Gold
Care & Maintenance / “operationally ready”; P&P of 132koz and M&I of 114koz
Asset
Source: AuRico Metals filings. (1) Date AuRico Metals acquired the royalty.
November 2017
26
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$435/oz
18.75% @ 15% of spot Cu price
P&P Reserves(2) Grade Royal Gold Stream
Significant Gold and Copper Production
Significant Open Pit Gold and Copper Production +20 years of production from existing P&P reserves(2)
300 245 250
5.8M gold reserve ounces
Low cost, long life production Stable, mining-friendly jurisdiction Restructured stream provides additional gold upside Tax loss pools, no cash taxes until 2022/2023 (1) (2)
Gold ounces (000’s)
(2)
218
80
71
70 59
205
60
200
60 50
150
40 30
100
Copper M lbs
Gold
20 50
10
0
0 2015
2016 GOLD
2017E
2015
2016 2017E COPPER
Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Company’s MDA and news release October 31, 2017. 2016 AISC is for the period Oct.20 to Dec.31. Refer to February 23, 2017 mineral reserves and resources news release.
November 2017
27
Mount Milligan: Exploration Update
Q3 Drill hole Section; looking North within Ultimate Pit Boundary
Mount Milligan Q3 Drill hole Plan Map Q3 2017 Exploration Update This information should be read together with our news release of October 31, 2017. C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. November 2017
28
Mount Milligan: Resource Expansion Potential
C. Paul Jago, a Member of the Engineers and Geoscientists British Columbia, is Centerra’s qualified person for the purpose of National Instrument 43-101. November 2017
29
Mount Milligan: Exploration Targets
November 2017
30
Kumtor: World Class Open Pit Gold Mine 2015
2016
2017E Guidance
Gold Production (koz)
521
551
540-560
Adjusted Operating Costs ($/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
4.50
650,000
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.
31
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$150MM low-cost +5-year financing in-place Significant exploration potential November 2017
Ounces (000's)
Forestry Permit & GSM License received July 2016
250
2.50
200
2.00
150
1.50
100
1.00
50
0.50
0 Years:
Process Grade (g/tonne)
Avg. LOM
0.00 0 2016
+1 2017
+2 2018
+3 2019
+4 2020
+5 2021
+6 2022
+7 2023
+8 2024
(1) Non-GAAP measure see “Non-GAAP Measures in the MDA and news release of October 31, 2017. (2) Company filings. Technical Report on the Öksüt Gold Project dated September 3, 2015.
32
Öksüt: Powerline Construction Complete
November 2017
33
Gatsuurt: Gold Development Project 2017 Feasibility Highlights(1) Mine Type Avg. LOM Annual Production
111koz Au
Avg. LOM AISC(1) (US$/oz)
$870
Reserve Mine Life
10 years
LOM Development Capex (US$MM)
$245
LOM Sustaining Capital (US$MM)
$37
P&P
The Gatsuurt Project is ~90 km north of Ulaanbaatar
Open Pit
Reserves(2)(Moz)
1.3
Au grade (g/t)
2.7
Life of Mine Recovery
84%
Life of Mine Strip Ratio (w:o)
4.7:1
IRR (after tax)
9%
NPV(5%) - after tax (US$MM)
$39
Boroo’s Historical Cumulative Net Cash Generation (US$MM)
In-Place 5ktpd Processing Facility (Boroo)
600 500 US$ Millions
400 300 200 100 0 (100) 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
(1) See Gatsuurt Project Update in Company’s news release October 31, 2017.
November 2017
34
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
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 Company’s MDA and news release October 31, 2017.
35
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 November 2017
(1) Technical Report on the Hardrock Project dated December 21, 2016.
36
Centerra: 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
37
Centerra: 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
38
Centerra: 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
39
Centerra: 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
40
Centerra: 2017 Revised Guidance – Q3 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.
41
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
42
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.
43
Centerra: Investor Relations Highlights Research Coverage Brokerage Firms
Top Ten (10) Institutional Shareholders
Rating
Target
1. BMO Capital Markets
Market Perform
C$10.50
2. BofA Merrill Lynch
Neutral
C$9.25
1. Blackrock
13.10%
3. Canaccord Genuity
Hold
C$8.50
2. Van Eck
8.65%
4. CIBC World Markets
Neutral
C$11.00
3. Paulson & Co
7.80%
5. Cormark Securities
Buy
C$12.00 C$9.75
4. Dimensional
2.39%
6. Credit Suisse
Hold
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$9.00
7. Vanguard Group
1.50%
10. RBC Capital Markets
Sector Perform
C$10.00
8. Franklin Advisors
1.42%
11. Scotiabank
Sector Outperform
C$10.00
9. USAA
1.36%
12. TD Securities
Hold
C$9.50
10. Newton
1.33%
Average
November 2017
C$10.18
Institution/Firm
TOTAL
Q3-2017
40.91%
44
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
45
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
46
TSX: CG www.centerragold.com
