Centerra Gold (US:CGAU)2023-02-22 16:00Financial Performance - Centerra reported a net loss from continuing operations of $77.2 million in 2022, a significant decrease from net earnings of $446.9 million in 2021, primarily due to lower gold sales at the Öksüt Mine and higher production costs at the Mount Milligan Mine [124]. - The company experienced a free cash flow deficit of $25.3 million in Q4 2022, compared to a free cash flow of $38.7 million in Q4 2021, driven by lower cash provided by operating activities [124]. - Earnings from mine operations decreased to $178.5 million in 2022 from $292.0 million in 2021, attributed to lower gold ounces sold and increased production costs due to inflation [124]. - The net loss for 2022 was $77.2 million, a decrease from a net loss of $381.8 million in 2021, mainly due to a loss of $926.4 million recognized on the change of control of the Kumtor Mine in 2021 [138]. - Revenue decreased to $850.2 million in 2022 from $900.1 million in 2021, attributed to lower gold and copper sales at the Öksüt and Mount Milligan Mines [265]. - Total revenue for Q4 2022 was $121.2 million, reflecting a 15% decline from $142.6 million in Q4 2021 [226]. - Gold revenue for Q4 2022 was $66.8 million, down 15% from $78.9 million in Q4 2021 [226]. - Copper revenue for Q4 2022 was $52.7 million, a decrease of 15% compared to $61.7 million in Q4 2021 [226]. Production and Costs - Gold production in 2022 was 243,867 ounces, down from 308,141 ounces in 2021, with the Mount Milligan Mine contributing 189,177 ounces [245]. - Gold production costs increased to $681 per ounce in 2022 from $604 per ounce in 2021, primarily due to lower gold sold and increased production costs at the Mount Milligan Mine [268]. - Gold production costs are expected to rise to between $900 and $950 per ounce in 2023, compared to $767 per ounce in 2022 [142]. - All-in sustaining costs rose to $860 per ounce in 2022, compared to $649 per ounce in 2021, due to lower gold sales and higher corporate administration costs [248]. - All-in sustaining costs on a by-product basis increased to $1,572 per ounce in Q4 2022 from $732 per ounce in Q4 2021, driven by higher exploration and project development costs [201]. - The average gold production cost was $790 per ounce in Q4 2022, up from $670 per ounce in Q4 2021, mainly due to lower gold ounces sold [217]. - Operating costs for gold production were $386 per ounce in Q4 2022, compared to $328 per ounce in Q4 2021 [307]. Cash Flow and Liquidity - Cash used in operating activities was $9.8 million in Q4 2022, a significant decrease from cash provided by operating activities of $61.8 million in Q4 2021, primarily due to no gold sold at the Öksüt Mine and lower average realized copper prices [137]. - Cash provided by mine operations was $26.5 million in Q4 2022, a 58% decrease from $63.5 million in Q4 2021 [228]. - Free cash flow from mine operations decreased to $100.4 million in 2022 from $201.5 million in 2021, attributed to lower cash provided by mine operations [276]. - The company's total liquidity position as of December 31, 2022, was $923.4 million, consisting of a cash balance of $531.9 million and $391.5 million available under a corporate credit facility [165]. Impairments and Expenses - Centerra recognized a non-cash impairment loss of $138.2 million related to the Kemess Project in Q4 2022, contrasting with an impairment reversal of $117.3 million for the Mount Milligan Mine in Q4 2021 [124]. - Corporate administration expenses rose to $47.2 million in 2022 from $27.1 million in 2021, mainly due to management changes and increased consulting costs [256]. - A non-cash impairment loss of $145.9 million was recognized in Q4 2022 related to the Kemess Project, reflecting a lack of capital allocation for its advancement [202]. Future Outlook and Projects - The company anticipates ongoing activities at the Goldfield project, including drilling and resource estimation, as part of its future growth strategy [121]. - Centerra's liquidity and capital resources analysis for 2023 indicates expectations for continued cash outflows at the Öksüt Mine and the completion of regulatory approvals for gold room operations [121]. - The company plans to optimize the Mount Milligan Mine's staged flotation reactors and is exploring strategic options for the Molybdenum Business Unit, including a potential restart of the Thompson Creek Mine [121]. - The Goldfield Project's total exploration and project development costs are guided to be between $50 million and $65 million in 2023, down from $70 million in 2022 [129]. Production Metrics - Gold production in Q4 2022 was 53,222 ounces, a decrease from 91,197 ounces in Q4 2021, attributed to lower gold head grades and recoveries [199]. - Copper production at the Mount Milligan Mine was 16.9 million pounds in Q4 2022, slightly down from 17.0 million pounds in Q4 2021, primarily due to lower copper grades [170]. - Total tonnes mined in 2022 were 9.2 million tonnes, down from 15.3 million tonnes in 2021, primarily due to not receiving a pasture land permit [292]. - The Öksüt Mine stacked 0.8 million tonnes at an average grade of 1.90 g/t in Q4 2022, containing 45,820 ounces of gold, compared to 1.1 million tonnes at 2.42 g/t containing 82,943 ounces in Q4 2021 [310].