Centerra Gold (CGAU) - 2025 Q2 - Quarterly Report

Introduction and Forward-Looking Statements Management's Discussion and Analysis Reviews Centerra Gold's Q2/H1 2025 financial position and results, adhering to IFRS and using non-GAAP measures requiring reconciliation - The MD&A reviews financial position and results for Q2 and H1 2025 vs 2024, prepared as of August 6, 2025[2] - Discussion should be read with unaudited condensed consolidated interim financial statements and notes for Q2/H1 2025 and FY2024 consolidated financial statements, prepared under IFRS[2] - All dollar amounts are in USD, and specified financial measures (non-GAAP) are used, discussed and reconciled in the 'Non-GAAP and Other Financial Measures' section[2] Cautionary Statement on Forward-Looking Information Outlines forward-looking statements and associated material risks, including political, financial, and operational factors, advising against undue reliance - Forward-looking statements are based on expectations, estimates, and projections, involving risks and uncertainties that could cause actual results to differ materially[3][6] - Key forward-looking statements include 2025 guidance (production, costs, capital expenditures), exploration potential, commodity prices, dividend sustainability, NCIB, and project developments for Goldfield, Kemess, and Thompson Creek Mine restart[4][5] - Risk factors include political risks (Türkiye, USA, Canada), commodity price volatility (gold, copper, molybdenum), inflationary pressures, regulatory changes, operational issues, and climate change impacts[7][8] Overview Centerra's Business Centerra Gold is a Canada-based mining company with primary gold and copper operations in Canada and Türkiye, alongside other development projects and a Molybdenum Business Unit - Centerra is a Canada-based mining company with principal operations at Mount Milligan (Canada) and Öksüt (Türkiye) mines[13] - The company also owns the Kemess project (Canada), Goldfield Project (USA), and a Molybdenum Business Unit (Langeloth facility, Thompson Creek Mine, Endako Mine)[13] Centerra's Significant Subsidiaries (as at June 30, 2025) | Entity | Property - Location | Current Status | Ownership | | :--- | :--- | :--- | :--- | | Thompson Creek Metals Company Inc. | Mount Milligan Mine - Canada | Operation | 100% | | | Endako Mine - Canada | Care and maintenance | 75% | | Öksüt Madencilik A.S. | Öksüt Mine - Türkiye | Operation | 100% | | Thompson Creek Mining Co. | Thompson Creek Mine - USA | Development | 100% | | Langeloth Metallurgical Company LLC | Langeloth Facility - USA | Operation | 100% | | Gemfield Resources LLC | Goldfield Project - USA | Development | 100% | | AuRico Metals Inc. | Kemess Project - Canada | Exploration and evaluation | 100% | Overview of Consolidated Financial and Operating Highlights Q2 2025 net earnings rose 82% to $68.6 million, operating cash flow increased 873% to $25.3 million, despite gold production decreases and higher unit costs Consolidated Financial Highlights (Q2 & H1 2025 vs 2024) | ($millions, except as noted) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change (QoQ) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Highlights | | | | | | | | Revenue | 288.3 | 282.3 | 2 % | 587.8 | 588.2 | — % | | Net earnings | 68.6 | 37.7 | 82 % | 99.0 | 104.1 | 5 % | | Adjusted net earnings | 52.7 | 46.4 | 14 % | 79.0 | 77.7 | 2 % | | Cash provided by operating activities | 25.3 | 2.6 | 873 % | 83.9 | 102.0 | (18)% | | Free cash flow (deficit) | (25.6) | (27.0) | 5 % | (15.5) | 54.1 | (129)% | | Capital expenditures - total | 53.9 | 36.3 | 48 % | 100.8 | 53.1 | 90 % | | Net earnings per common share - $/share basic | 0.33 | 0.18 | 83 % | 0.48 | 0.49 | 1 % | | Operating highlights | | | | | | | | Gold produced (oz) | 63,311 | 89,828 | (30)% | 122,690 | 201,169 | (39)% | | Copper produced (000s lbs) | 12,437 | 13,549 | (8)% | 24,084 | 27,880 | (14)% | | Molybdenum roasted (000 lbs) | 3,165 | 1,948 | 62 % | 6,199 | 4,839 | 28 % | | Gold production costs ($/oz) | 1,308 | 870 | 50 % | 1,290 | 802 | 61 % | | All-in sustaining costs on a by-product basis ($/oz) | 1,652 | 1,179 | 40 % | 1,572 | 1,001 | 57 % | Overview of Consolidated Results Q2 2025 net earnings rose 82% to $68.6 million due to a Greenstone gain and lower expenses, while H1 2025 net earnings slightly decreased, and free cash flow remained a deficit - Q2 2025 net earnings increased by $30.9 million to $68.6 million, driven by an unrealized gain on Greenstone Partnership, lower expensed exploration, and reduced income tax expense[17][19] - Q2 2025 cash provided by operating activities increased by $22.7 million to $25.3 million, mainly due to $30.1 million lower tax payments at Öksüt Mine and $7.0 million decrease in cash used at Thompson Creek Mine[21] - H1 2025 net earnings decreased by $5.1 million to $99.0 million, primarily due to lower earnings from mine operations and reclamation recovery, partially offset by lower income tax and exploration costs[22][24][25] - H1 2025 free cash flow deficit was $15.5 million, a decrease of $69.6 million from H1 2024, mainly due to lower operating cash and $51.2 million higher capital spending at Thompson Creek Mine[27] Recent Events and Developments Board approved Goldfield Project construction, Turkish gold royalty rates increased, Mount Milligan PFS advancing, Kemess PEA progressing, Thompson Creek Mine restart on track, and $42.0 million in share repurchases completed - Goldfield Project construction approved (August 2025) with an estimated initial capital investment of $252 million, targeting first production by end of 2028[10][27][32] - Turkish Government State Royalty rates for gold were updated on July 24, 2025, increasing the maximum gold price threshold to $5,100 per ounce, impacting Öksüt Mine's costs[34][35] - Mount Milligan Mine is advancing to a Pre-Feasibility Study (PFS), expected in Q3 2025, aiming to extend mine life beyond 2036 with increased mill throughput and improved metal recovery[36][37] - Kemess Project published an updated resource estimate (2.7 million oz M&I gold, 971 million lbs M&I copper) and is advancing a PEA, targeting 250,000 gold equivalent ounces annually by end of 2025[39] - Thompson Creek Mine restart is progressing, with approximately 20% cost completion by Q2 2025; initial capital investment is $397 million, targeting first production in H2 2027[42][44][45][47] - Centerra repurchased 6,355,433 common shares for $42.0 million in H1 2025 under its Normal Course Issuer Bid (NCIB) program[48] Outlook 2025 outlook revised with lower gold production guidance (250,000-290,000 oz) and higher costs ($1,300-$1,400/oz), while capital expenditures remain stable and Molybdenum Business Unit targets positive adjusted EBITDA - 2025 consolidated gold production guidance revised downwards to 250,000-290,000 ounces (previously 270,000-310,000 ounces), primarily due to lower estimates for Mount Milligan Mine[55][59][60] - Consolidated gold production costs guidance increased to $1,300-$1,400 per ounce and all-in sustaining costs to $1,650-$1,750 per ounce, driven by lower production and increased royalty costs at Öksüt[55][62][63] - Total capital expenditures for gold and copper assets remain unchanged at $105-$130 million, with sustaining capital guidance decreasing to $90-$110 million and non-sustaining increasing to $15-$20 million[55][70] - Molybdenum Business Unit expects 13-15 million pounds roasted/sold in 2025, targeting adjusted EBITDA of $2-$8 million[74][77][78] 2025 Outlook Material Assumptions | Assumption | 2025 Guidance | Previous Guidance | | :--- | :--- | :--- | | Market gold price | $3,300/oz | $2,700/oz | | Mount Milligan average realized gold price | $2,297/oz | $1,902/oz | | Market copper price | $4.00/lb | $4.00/lb | | Mount Milligan average realized copper price | $3.36/lb | $3.36/lb | | Molybdenum price | $21.00/lb | $20.00/lb | | USD:CAD exchange rate | $1USD:$1.36 CAD | $1USD:$1.38 CAD | | USD:Turkish lira exchange rate | $1USD:38 Turkish lira | $1USD:36 Turkish lira | | Diesel fuel price (Mount Milligan) | $1.02/litre (CAD$1.39/litre) | $1.05/litre (CAD$1.45/litre) | | Diesel fuel price (Thompson Creek) | $2.85/gallon | $2.90/gallon | 2025 Sensitivities (Impact on H2 2025) | Change | Impact on Production Costs & Taxes ($M) | Impact on Capital Costs ($M) | Impact on Revenues ($M) | Impact on Cash flows ($M) | Impact on AISC by-product basis ($/oz) | | :--- | :--- | :--- | :--- | :--- | :--- | | Gold price ($100/oz) | 2.5 - 3.0 | — | 10.0 - 13.5 | 9.0 - 12.0 | 8 - 10 | | Copper price (10%) | 0.5 - 1.0 | — | 8.5 - 12.5 | 8.5 - 11.5 | 55 - 70 | | Diesel fuel (10%) | 0.4 - 1.2 | 0.1 - 0.5 | — | 0.5 - 1.8 | 2 - 9 | | Canadian dollar (10 cents) | 10.0 - 11.0 | 0.1 - 0.5 | — | 10.1 - 11.5 | 65 - 70 | | Turkish lira (5 liras) | 1.0 - 1.5 | 1.0 - 1.5 | — | 2.0 - 3.0 | 16 - 18 | Liquidity and Capital Resources Liquidity and Capital Resources Overview Centerra maintained $0.9 billion total liquidity as of June 30, 2025, with increased cash usage in investing and financing activities due to capital spending and share repurchases - Total liquidity as of June 30, 2025, was $0.9 billion, comprising $522.3 million in cash and an undrawn $400.0 million corporate credit facility[93] - Cash used in investing activities increased to $72.6 million in Q2 2025 and $121.2 million in H1 2025, mainly due to higher capital spending at Thompson Creek Mine and $22.0 million in marketable security investments[95][99] - Cash used in financing activities increased to $38.5 million in Q2 2025 and $65.1 million in H1 2025, primarily due to higher share repurchases under the NCIB program ($27.0 million in Q2 2025 and $42.0 million in H1 2025)[96][97][100] Financial Performance Financial Performance Overview Q2 2025 revenue increased 2% to $288.3 million despite lower gold production, while H1 2025 revenue remained flat, with significant increases in gold production costs for both periods - Q2 2025 revenue increased by 2% to $288.3 million, primarily due to higher average realized gold prices and molybdenum sales, partially offset by lower gold production at Öksüt Mine[101] - Q2 2025 gold production decreased by 30% to 63,311 ounces, mainly due to higher Q2 2024 production from built-up inventory at Öksüt and lower head grades/recoveries at Mount Milligan[102] - Q2 2025 cost of sales increased by 6% to $200.9 million, driven by higher production costs at Langeloth Facility and Mount Milligan Mine, with gold production costs per ounce increasing 50% to $1,308[105][106] - H1 2025 revenue was $587.8 million, flat compared to H1 2024, with gold production decreasing 39% to 122,690 ounces[111][112][113] - H1 2025 gold production costs increased by 61% to $1,290 per ounce, primarily due to lower ounces sold, higher royalty costs at Öksüt, and higher processing costs at Mount Milligan[117] - Expensed exploration and evaluation expenditures decreased to $9.7 million in Q2 2025 and $16.8 million in H1 2025, mainly due to reduced project evaluation costs at Thompson Creek Mine and drilling costs at Goldfield Project[109][119][120] Financial Instruments Financial Instruments Overview Centerra uses derivative financial instruments to manage exposure to diesel fuel, commodity, and FX fluctuations, with new gold zero-cost collars for Goldfield and a diesel hedging program for Thompson Creek Mine Hedge Positions as at June 30, 2025 | Instrument | Unit | Type | H2 2025 | 2026 | 2027 | Settlements (H2 2025) | Settlements (2026) | Settlements (2027) | Total Position | Fair value ($'000s) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | FX Hedges | | | | | | | | | | | | USD/CAD zero-cost collars | CAD | Fixed | $1.34/$1.39 | $1.34/$1.39 | — | $96.0M (28%) | $72.0M | — | $168.0M | 971 | | USD/CAD forward contracts | CAD | Fixed | 1.35 | 1.37 | 1.35 | $92.0M (26%) | $121.3M | $78.0M | $291.3M | 2,259 | | Total FX Hedges | | | | | | $188.0M (54%) | $193.3M | $78.0M | $459.3M | 3,230 | | Diesel Fuel Hedges | | | | | | | | | | | | ULSD zero-cost collars | Litres | Fixed | $0.60/$0.67 | $0.60/$0.67 $0.50/$0.57 | | 2,555 (12%) | 3,339 | 469 | 6,363 | (285) | | ULSD swap contracts | Litres | Fixed | $0.65 | $0.60 | $0.58 | 6,222 (30%) | 21,290 | 13,579 | 41,091 | (1,125) | | Total Diesel Fuel Hedges | | | | | | 8,777 (42%) | 24,629 | 14,048 | 47,454 | (1,410) | | Gold Hedges | | | | | | | | | | | | Gold zero-cost collars | Ounces | Fixed | $2,400/$3,400 $2,400/$3,696 | | — | 20,750 (14%) | 20,000 | — | 40,750 | (3,925) | | Gold/Copper Hedges (Royal Gold deliverables) | | | | | | | | | | | | Gold forward contracts | Ounces | Float | N/A | — | — | 17,773 | — | — | 17,773 | 131 | | Copper forward contracts | Pounds | Float | N/A | — | — | 4.0M | — | — | 4.0M | 551 | - Subsequent to quarter-end, new gold zero-cost collar contracts were entered for the Goldfield Project's 2029 and 2030 production (57,000 ounces and 60,000 ounces respectively), with a floor of $3,200/oz and average caps of $4,435/oz (2029) and $4,705/oz (2030)[122][123] - A diesel hedging program was initiated in Q1 2025 for the Thompson Creek Mine restart, covering a portion of estimated future diesel fuel purchases through June 2027[124] Balance Sheet Review Balance Sheet Review Overview Total assets increased to $2,317.3 million as of June 30, 2025, while cash decreased due to share repurchases and investments, and PP&E rose due to capital projects Balance Sheet Summary ($ millions) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 2,317.3 | 2,265.1 | | Total Liabilities | 613.6 | 609.2 | | Current Liabilities | 279.7 | 283.9 | | Non-current Liabilities | 333.9 | 325.3 | | Total Equity | 1,703.7 | 1,655.9 | - Cash decreased by $102.4 million to $522.3 million, mainly due to $42.0 million in share repurchases, $20.8 million in dividends paid, $22.0 million in marketable security investments, and a $15.5 million free cash flow deficit[126] - Amounts receivable increased by $48.5 million to $123.5 million, driven by increased sales, and other current assets increased by $17.4 million due to Greenstone Partnership re-measurement[126][127] - Property, plant and equipment (PP&E) increased by $70 million to $1.17 billion, primarily due to $123.7 million in capital project additions, partially offset by $57.7 million in depreciation and depletion[128] - Share capital decreased by $44.3 million to $782.4 million due to the repurchase and cancellation of shares under the NCIB program[133] - Accumulated other comprehensive income increased by $13.9 million to $2.7 million, primarily due to a change in fair value of derivative instruments on hedging programs at Mount Milligan Mine[134] Operating Mines and Facilities Mount Milligan Mine Mount Milligan Mine saw 83% increase in Q2 2025 earnings to $40.8 million despite lower gold and copper production, with gold production costs rising significantly Mount Milligan Mine Financial and Operating Results (Q2 & H1 2025 vs 2024) | ($millions, except as noted) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change (QoQ) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Highlights | | | | | | | | Total revenue | 126.8 | 99.8 | 27 % | 262.0 | 220.3 | 19 % | | Earnings from mine operations | 40.8 | 22.3 | 83 % | 82.8 | 51.5 | 61 % | | Free cash flow from mine operations | 42.8 | 13.5 | 217 % | 70.2 | 37.6 | 87 % | | Gold produced (oz) | 35,058 | 38,609 | (9)% | 70,938 | 86,926 | (18)% | | Copper produced (000s lbs) | 12,437 | 13,549 | (8)% | 24,084 | 27,880 | (14)% | | Gold production costs ($/oz) | 1,356 | 1,102 | 23 % | 1,371 | 1,017 | 35 % | | All-in sustaining costs on a by-product basis ($/oz) | 1,286 | 1,234 | 4 % | 1,224 | 912 | 34 % | - Q2 2025 gold production decreased by 9% to 35,058 ounces due to lower head grade and recovery; copper production decreased by 8% to 12.4 million pounds due to lower head grade[142][143] - H1 2025 gold production decreased by 18% to 70,938 ounces due to lower grades and recoveries; copper production decreased by 14% to 24.1 million pounds due to lower copper grades[152][153] - H1 2025 gold production costs increased by 35% to $1,371 per ounce, driven by lower ounces sold, higher cost allocation to gold, and increased processing costs from a planned mill maintenance shutdown[154][155] Öksüt Mine Öksüt Mine saw Q2 2025 earnings decrease 34% to $46.9 million due to lower gold production and sales, with gold production costs rising significantly to $1,250 per ounce Öksüt Mine Financial and Operating Results (Q2 & H1 2025 vs 2024) | ($millions, except as noted) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change (QoQ) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Highlights | | | | | | | | Revenue | 91.0 | 121.4 | (25)% | 160.6 | 243.4 | (34)% | | Earnings from mine operations | 46.9 | 71.1 | (34)% | 82.0 | 144.1 | (43)% | | Free cash flow (deficit) from mine operations | (28.2) | (10.9) | (159)% | 13.4 | 79.2 | (83)% | | Gold produced (oz) | 28,253 | 51,219 | (45)% | 51,752 | 114,243 | (55)% | | Gold sold (oz) | 27,608 | 51,856 | (47)% | 52,112 | 111,037 | (53)% | | Gold production costs ($/oz) | 1,250 | 729 | 71 % | 1,181 | 653 | 81 % | | All-in sustaining costs on a by-product basis ($/oz) | 1,755 | 943 | 86 % | 1,665 | 879 | 89 % | - Q2 2025 gold production decreased by 45% to 28,253 ounces, primarily due to lower heap leach grades and higher production levels in Q2 2024 from processing built-up inventory[167][168] - H1 2025 gold production decreased by 55% to 51,752 ounces, mainly due to lower heap leach grades and higher production levels in H1 2024 from processing built-up inventory[177][178] - H1 2025 gold production costs increased by 81% to $1,181 per ounce, driven by higher direct production costs, elevated royalty costs, lower deferred stripping, and net inflation in Türkiye[179][180] Molybdenum Business Unit Thompson Creek Mine Thompson Creek Mine saw significant capital expenditure increases in Q2 and H1 2025 due to restart activities, with 16.4 million tons of waste moved and first production targeted for H2 2027 Thompson Creek Mine Financial and Operating Highlights (Q2 & H1 2025 vs 2024) | ($millions, except as noted) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change (QoQ) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Free cash flow deficit from operations | (25.4) | (8.7) | (192)% | (53.3) | (16.3) | (227)% | | Additions to property, plant and equipment | 26.3 | 5.2 | 406 % | 58.6 | 5.6 | 946 % | | Total capital expenditures | 26.5 | 5.2 | 410 % | 52.3 | 5.6 | 834 % | | Tons mined (000s) | 6,778 | 1,870 | 262 % | 11,645 | 3,904 | 198 % | - Non-sustaining capital expenditures increased to $26.5 million in Q2 2025 and $52.3 million in H1 2025, driven by higher capital spending on mill detailed engineering, housing construction, and pre-stripping[186][192] - Since the restart decision in September 2024, 16.4 million tons of waste have been moved, representing 14% of planned tons prior to production commencement[187] - The majority of planned mining equipment refurbishments were substantially completed by Q2 2025, with plant refurbishment progressing, targeting first production in H2 2027[188][189][191] Langeloth Facility Langeloth Facility significantly increased molybdenum roasted and sold volumes in Q2 and H1 2025, reducing losses and achieving positive Adjusted EBITDA due to strong demand and operational efficiency Langeloth Facility Financial and Operating Highlights (Q2 & H1 2025 vs 2024) | ($millions, except as noted) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | % Change (QoQ) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenue | 70.5 | 61.2 | 15 % | 165.2 | 124.5 | 33 % | | Loss from operations | (0.8) | (1.2) | 33 % | (2.0) | (5.0) | 60 % | | Adjusted EBITDA | 0.2 | (0.4) | 150 % | 0.3 | (3.3) | 109 % | | Mo roasted (000's lbs) | 3,165 | 1,948 | 62 % | 6,199 | 4,839 | 28 % | | Mo sold (000's lbs) | 3,076 | 2,675 | 15 % | 7,320 | 5,623 | 30 % | - Molybdenum roasted and sold increased significantly in Q2 and H1 2025, driven by strong customer demand and the absence of a planned acid plant shutdown in 2024[194][199] - Loss from operations decreased by 33% in Q2 2025 to $0.8 million and 60% in H1 2025 to $2.0 million, primarily due to increased molybdenum sales and higher by-product revenue[195][200] - Adjusted EBITDA turned positive in Q2 2025 ($0.2 million) and H1 2025 ($0.3 million), reflecting improved profitability[196][200] Endako Mine Endako Mine reported Q2 2025 earnings of $5.0 million due to higher reclamation recovery, but H1 2025 saw a $2.2 million loss, with increased cash usage for reclamation payments - Q2 2025 earnings from operations were $5.0 million (vs. $0.6 million loss in Q2 2024), primarily due to higher reclamation recovery from increased risk-free interest rates[202] - H1 2025 loss from operations was $2.2 million (vs. $0.8 million earnings in H1 2024), primarily due to lower reclamation recovery from changes in discount rates[204] - Cash used in operations and free cash flow deficit increased in both Q2 and H1 2025, mainly due to reclamation payments for the closure of the Tailings Pond 2 spillway[203][205] Quarterly Results – Previous Eight Quarters Quarterly Results – Previous Eight Quarters Overview Net earnings fluctuated over eight quarters due to impairment losses, reclamation adjustments, and financial instrument gains/losses, with Q2 2025 benefiting from higher prices and a Greenstone gain Quarterly Financial Data (Unaudited, $millions, except per share data) | Item | 2025 Q2 | 2025 Q1 | 2024 Q4 | 2024 Q3 | 2024 Q2 | 2024 Q1 | 2023 Q4 | 2023 Q3 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 288 | 299 | 302 | 324 | 282 | 306 | 340 | 344 | | Net earnings (loss) | 69 | 30 | (52) | 29 | 38 | 66 | (29) | 61 | | Basic earnings (loss) per share | 0.33 | 0.15 | (0.25) | 0.14 | 0.18 | 0.31 | (0.13) | 0.28 | | Adjusted earnings per share - basic | 0.26 | 0.13 | 0.17 | 0.19 | 0.23 | 0.15 | 0.28 | 0.20 | - Net earnings in Q2 2025 were positively impacted by higher gold and copper prices and a non-cash gain on the Greenstone Partnership sale, partially offset by lower sales and an unrealized loss on the Additional Royal Gold Agreement[205] - Net losses in Q4 2024 and Q4 2023 were primarily due to non-cash impairment losses at the Goldfield Project and Kemess Project, respectively[205] Accounting Estimates, Policies and Changes Accounting Estimates Critical accounting estimates and judgments for Q2/H1 2025 are consistent with FY2024, with ongoing management review and revisions recognized in the affected period - Critical accounting estimates and judgments for Q2/H1 2025 are consistent with FY2024, except as disclosed in note 3 of the interim financial statements[206][208] - Management reviews estimates and underlying assumptions on an ongoing basis, with changes recognized in the period of revision and any future affected periods[207] Accounting Policies and Changes Accounting policies applied in Q2/H1 2025 interim financial statements are consistent with those used in the FY2024 consolidated financial statements - Accounting policies applied in Q2/H1 2025 interim financial statements are consistent with those used in the FY2024 consolidated financial statements[209] Disclosure Controls and Procedures and Internal Control Over Financial Reporting Disclosure Controls and Procedures and Internal Control Over Financial Reporting Overview Management evaluated disclosure controls and internal control over financial reporting as of June 30, 2025, concluding effectiveness with no material changes during the period - Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and internal control over financial reporting as of June 30, 2025[210][211] - It was concluded that controls are designed to provide reasonable assurance regarding the reliability of information disclosed in filings, including interim financial statements[211] - There has been no material change in the Company's internal control over financial reporting during the three and six months ended June 30, 2025[212] Non-GAAP and Other Financial Measures Non-GAAP and Other Financial Measures Overview Defines and reconciles specified financial measures, including non-GAAP metrics like AISC and Adjusted EBITDA, used by management to assess performance and assist stakeholders - The MD&A uses 'specified financial measures' (non-GAAP financial measures, non-GAAP ratios, supplementary financial measures) to help stakeholders understand costs, economics, operating performance, and free cash flow[214] - These measures are not standardized under IFRS and may not be comparable to similar measures from other issuers; they should not be considered in isolation[214] - Key non-GAAP measures defined include All-in sustaining costs, Sustaining and Non-sustaining capital expenditures, Adjusted net earnings, Adjusted EBITDA, Free cash flow, and various unit costs[215][216] Consolidated All-in Sustaining Costs on a By-Product Basis Reconciliation (Q2 & H1 2025 vs 2024) | (Unaudited - $millions, unless otherwise specified) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Production costs attributable to gold | 80.3 | 72.4 | 157.9 | 150.4 | | Production costs attributable to copper | 24.9 | 28.8 | 52.0 | 58.6 | | Total production costs excluding Molybdenum BU segment, as reported | 105.2 | 101.2 | 209.9 | 209.0 | | Adjust for: | | | | | | Third party smelting, refining and transport costs | 2.5 | 2.4 | 5.1 | 5.1 | | By-product and co-product credits | (46.5) | (46.5) | (95.1) | (97.0) | | Adjusted production costs | 61.2 | 57.1 | 119.9 | 117.1 | | Corporate general administrative and other costs | 9.5 | 10.8 | 20.0 | 20.4 | | Reclamation and remediation - accretion (operating sites) | 3.4 | 2.3 | 5.9 | 4.9 | | Sustaining capital expenditures | 25.3 | 26.3 | 43.2 | 42.0 | | Sustaining lease payments | 2.0 | 1.6 | 3.5 | 3.2 | | All-in sustaining costs on a by-product basis | 101.4 | 98.1 | 192.5 | 187.6 | | Ounces sold (000s) | 61.3 | 83.3 | 122.5 | 187.6 | | All-in sustaining costs on a by-product basis ($/oz) | 1,652 | 1,179 | 1,572 | 1,001 | Consolidated Adjusted Net Earnings Reconciliation (Q2 & H1 2025 vs 2024) | ($millions, except as noted) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings | 68.6 | 37.7 | 99.0 | 104.1 | | Adjust for items not associated with ongoing operations: | | | | | | Unrealized gain on sale of Greenstone Partnership | (15.0) | — | (21.6) | — | | Unrealized loss on financial assets relating to the Additional Royal Gold Agreement | 12.1 | 7.4 | 13.5 | 8.9 | | Deferred income tax adjustments | (11.0) | 1.9 | (12.2) | (4.9) | | Reclamation recovery at the Molybdenum BU sites and the Kemess Project | (7.7) | (5.1) | (2.9) | (30.1) | | Unrealized foreign exchange loss (gain) | 6.2 | 5.5 | 2.9 | (3.4) | | Unrealized (gain) loss on marketable securities and other losses | (0.5) | (1.0) | 0.3 | 0.6 | | Transaction costs related to the Additional Royal Gold Agreement | — | — | — | 2.5 | | Adjusted net earnings | 52.7 | 46.4 | 79.0 | 77.7 | | Adjusted net earnings per share - basic | 0.26 | 0.23 | 0.38 | 0.36 | Consolidated Adjusted EBITDA Reconciliation (Q2 & H1 2025 vs 2024) | ($millions, except as noted) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings | 68.6 | 37.7 | 99.0 | 104.1 | | Adjustments: | | | | | | Income tax (recovery) expense | (2.2) | 17.8 | 22.7 | 47.6 | | Depreciation, depletion and amortization ("DDA") | 26.9 | 29.0 | 51.7 | 63.7 | | Interest income | (5.7) | (7.9) | (11.1) | (16.0) | | Finance costs | 4.1 | 3.8 | 8.0 | 7.2 | | Unrealized gain on sale of Greenstone Partnership | (15.0) | — | (21.6) | — | | Unrealized loss on financial assets relating to the Additional Royal Gold Agreement | 12.1 | 7.4 | 13.5 | 8.9 | | Reclamation recovery at the Molybdenum BU sites and the Kemess Project | (7.7) | (5.1) | (2.9) | (30.1) | | Unrealized foreign exchange loss (gain) | 6.2 | 5.5 | 2.9 | (3.4) | | Unrealized (gain) loss on marketable securities and other losses | (0.5) | (1.0) | 0.3 | 0.6 | | Transaction costs related to the Additional Royal Gold Agreement | — | — | — | 2.5 | | Adjusted EBITDA | 86.8 | 87.2 | 162.5 | 185.1 | Qualified Person & QA/QC Qualified Person & QA/QC Overview Christopher Richings and Richard Adofo are 'qualified persons' for scientific and technical information, adhering to NI 43-101 and industry QA/QC standards - Christopher Richings (VP, Technical Services) is the 'qualified person' for non-exploration scientific and technical information[225] - Richard Adofo (VP, Exploration & Resource) is the 'qualified person' for exploration and related scientific and technical information[226] - All qualified persons comply with NI 43-101 Standards of Disclosure for Mineral Projects, with QA/QC protocols consistent with industry standards, using independent certified assay labs[225][226][227][228]