Centerra Gold (CGAU) - 2023 Q4 - Annual Report

Management's Discussion and Analysis Centerra Gold Inc. reviews its financial position and operations for Q4 and full-year 2023, highlighting USD figures and forward-looking information cautions Introduction This introduction outlines Centerra Gold's financial review for Q4 and full-year 2023, emphasizing USD reporting and forward-looking statement caveats - The MD&A covers financial performance for Q4 and full year 2023 compared to 2022, prepared as of February 22, 2024[2] - All financial figures are expressed in United States dollars (USD) unless otherwise indicated[2] - The document contains forward-looking statements that involve risks and uncertainties, which could cause actual results to differ materially[2][3][5] Caution Regarding Forward-Looking Information This section details the nature, assumptions, and inherent risks associated with Centerra Gold's forward-looking statements and projections - Forward-looking statements are identified by terms like 'believe', 'expect', 'forecast', 'plan', 'target', and relate to future events, results, or outcomes[3] - Such statements include 2024 guidance for production, cash flow, costs, capital expenditures, and exploration results, as well as project evaluations for Mount Milligan and Thompson Creek[4] - These statements are based on assumptions and are subject to significant business, economic, technical, legal, political, and competitive uncertainties and contingencies[5] - Key risk factors include political risks in operating regions (Türkiye, USA, Canada), commodity price volatility, inflationary pressures, regulatory changes, operational challenges, and the ability to replace mineral reserves[6] Company Overview Centerra Gold Inc. is a Canada-based mining company focused on gold and copper properties globally, with primary operations in Canada and Türkiye, and a Molybdenum Business Unit in the USA and Canada - Centerra Gold Inc. is a Canada-based mining company with a global focus on gold and copper properties[10] - Principal operations include the Mount Milligan gold-copper mine (British Columbia, Canada) and the Öksüt gold mine (Türkiye)[10] - The company also owns the Goldfield District Project (Nevada, USA), Kemess project (British Columbia, Canada), and a Molybdenum Business Unit (Langeloth facility in Pennsylvania, USA; Thompson Creek Mine in Idaho, USA; Endako Mine in British Columbia, Canada)[10] - Centerra's common shares are listed on the Toronto Stock Exchange (CG) and New York Stock Exchange (CGAU)[11] Overview of Consolidated Financial and Operating Highlights Centerra Gold reported significant improvements in financial and operating highlights for Q4 2023 and the full year 2023 compared to 2022, with revenue, earnings from mine operations, and gold production seeing substantial increases, and free cash flow turning positive Consolidated Financial Highlights (Q4 2023 vs. Q4 2022) | Metric ($ millions) | Three months 2023 | Three months 2022 | % Change | | :------------------ | :---------------- | :---------------- | :------- | | Revenue | 340.0 | 208.3 | 63 % | | Production costs | 161.3 | 158.1 | 2 % | | DDA | 40.6 | 17.2 | 136 % | | Earnings from mine operations | 138.1 | 33.0 | 318 % | | Net loss | (28.8) | (130.1) | 78 % | | Adjusted net earnings (loss) | 61.2 | (13.7) | 547 % | | Cash provided by (used in) operating activities | 145.4 | (9.8) | 1584 % | | Free cash flow (deficit) | 111.0 | (25.3) | 539 % | | Additions to PP&E | 67.9 | 27.9 | 143 % | | Capital expenditures - total | 36.4 | 15.4 | 136 % | | Sustaining capital expenditures | 34.5 | 15.3 | 125 % | | Non-sustaining capital expenditures | 1.9 | 0.1 | 1800 % | | Net loss per common share - $/share basic | (0.13) | (0.59) | 78 % | | Adjusted net earnings (loss) per common share - $/share basic | 0.28 | (0.06) | 567 % | Consolidated Financial Highlights (Year Ended 2023 vs. 2022) | Metric ($ millions) | Years 2023 | Years 2022 | % Change | | :------------------ | :--------- | :--------- | :------- | | Revenue | 1,094.9 | 850.2 | 29 % | | Production costs | 706.0 | 574.6 | 23 % | | DDA | 124.9 | 97.1 | 29 % | | Earnings from mine operations | 264.0 | 178.5 | 48 % | | Net loss | (81.3) | (77.2) | (5)% | | Adjusted net earnings (loss) | 10.5 | (9.4) | 212 % | | Cash provided by (used in) operating activities | 245.6 | (2.0) | 12380 % | | Free cash flow (deficit) | 160.2 | (82.9) | 293 % | | Additions to PP&E | 121.7 | 275.1 | (56)% | | Capital expenditures - total | 88.3 | 73.2 | 21 % | | Sustaining capital expenditures | 83.5 | 71.1 | 17 % | | Non-sustaining capital expenditures | 4.8 | 2.1 | 129 % | | Net loss per common share - $/share basic | (0.37) | (0.29) | (27)% | | Adjusted net earnings (loss) per common share - $/share basic | 0.05 | (0.04) | 225 % | Consolidated Operating Highlights (Q4 2023 vs. Q4 2022) | Metric | Three months 2023 | Three months 2022 | % Change | | :------------------ | :---------------- | :---------------- | :------- | | Gold produced (oz) | 129,259 | 53,222 | 143 % | | Gold sold (oz) | 130,281 | 49,443 | 163 % | | Average market gold price ($/oz) | 1,974 | 1,728 | 14 % | | Average realized gold price ($/oz) | 1,846 | 1,352 | 37 % | | Copper produced (000s lbs) | 19,695 | 16,909 | 16 % | | Copper sold (000s lbs) | 16,562 | 15,374 | 8 % | | Average market copper price ($/lb) | 3.70 | 3.63 | 2 % | | Average realized copper price ($/lb) | 3.00 | 3.43 | (13)% | | Molybdenum sold (000s lbs) | 2,158 | 4,040 | (47)% | | Average market molybdenum price ($/lb) | 18.64 | 21.49 | (13)% | | Average realized molybdenum price ($/lb) | 20.35 | 20.86 | (2)% | Consolidated Operating Highlights (Year Ended 2023 vs. 2022) | Metric | Years 2023 | Years 2022 | % Change | | :------------------ | :--------- | :--------- | :------- | | Gold produced (oz) | 350,317 | 243,867 | 44 % | | Gold sold (oz) | 348,399 | 242,193 | 44 % | | Average market gold price ($/oz) | 1,942 | 1,800 | 8 % | | Average realized gold price ($/oz) | 1,718 | 1,446 | 19 % | | Copper produced (000s lbs) | 61,862 | 73,864 | (16)% | | Copper sold (000s lbs) | 60,109 | 73,392 | (18)% | | Average market copper price ($/lb) | 3.85 | 3.99 | (4)% | | Average realized copper price ($/lb) | 3.01 | 2.95 | 2 % | | Molybdenum sold (000s lbs) | 11,235 | 13,448 | (16)% | | Average market molybdenum price ($/lb) | 24.19 | 18.73 | 29 % | | Average realized molybdenum price ($/lb) | 25.39 | 19.69 | 29 % | Overview of Consolidated Results Centerra Gold experienced a significant reduction in net loss for Q4 2023, primarily driven by increased gold sales from the Öksüt Mine and higher copper sales from Mount Milligan, while the full year 2023 net loss slightly increased due to higher reclamation expenses and income tax, despite improved mine operations earnings Fourth Quarter 2023 compared to Fourth Quarter 2022 Q4 2023 saw a significant reduction in net loss and a surge in cash from operations, driven by increased gold and copper sales - Net loss decreased by 78% to $28.8 million in Q4 2023 from $130.1 million in Q4 2022, mainly due to higher earnings from mine operations[15][21] - Earnings from mine operations increased by 318% to $138.1 million, driven by Öksüt Mine's gold sales (88,756 oz in Q4 2023 vs. none in Q4 2022) and higher copper sales at Mount Milligan[15] - Adjusted net earnings were $61.2 million in Q4 2023, a significant improvement from an adjusted net loss of $13.7 million in Q4 2022[21] - Cash provided by operating activities surged to $145.4 million in Q4 2023 from a deficit of $9.8 million in Q4 2022, primarily due to Öksüt Mine's resumed sales and higher realized gold prices[25] - Free cash flow was $111.0 million in Q4 2023, reversing a $25.3 million deficit in Q4 2022[26] Year ended December 31, 2023 compared to 2022 Full-year 2023 net loss slightly increased due to higher expenses, but operating cash flow and adjusted net earnings improved significantly - Net loss increased slightly to $81.3 million in 2023 from $77.2 million in 2022, mainly due to higher reclamation expense ($34.4M in 2023 vs. $94.0M recovery in 2022) and increased income tax expense ($94.9M in 2023 vs. $32.8M in 2022)[27] - Earnings from mine operations increased by 48% to $264.0 million, driven by higher gold sales at Öksüt Mine and improved realized gold and copper prices[28] - Adjusted net earnings were $10.5 million in 2023, a turnaround from an adjusted net loss of $9.4 million in 2022[28] - Cash provided by operating activities significantly increased to $245.6 million in 2023 from a deficit of $2.0 million in 2022, primarily due to higher gold sales at Öksüt and improved commodity prices[32] - Free cash flow was $160.2 million in 2023, reversing an $82.9 million deficit in 2022[33] Recent Events and Developments Centerra Gold recently entered into an Additional Royal Gold Agreement for the Mount Milligan Mine, extending its mine life and increasing cash payments for streamed gold and copper, while the Öksüt Mine successfully ramped up full operations after regulatory approvals, and the company also extended its corporate credit facility, renewed its normal course issuer bid, and made several executive management changes Transaction with RGLD Gold AG and Royal Gold, Inc. Centerra expanded its Royal Gold agreement for Mount Milligan, extending mine life and planning a PEA for future resource evaluation - Centerra entered into an Additional Royal Gold Agreement for the Mount Milligan Mine, increasing cash payments for gold and copper delivered to Royal Gold upon achieving certain thresholds[35] - The agreement extends the Mount Milligan Mine life by two years to 2035 and establishes a platform for further investment and drilling[43] - A Preliminary Economic Assessment (PEA) is planned for H1 2025 to evaluate substantial mineral resources at Mount Milligan, aiming to unlock value beyond 2035[43] - The company made an upfront cash payment of $24.5 million to Royal Gold in February 2023[17][42] Ramp up of Öksüt Mine Operations Öksüt Mine resumed full operations in June 2023 after regulatory approvals, achieving significant gold production and cash generation - Full operations at the Öksüt Mine resumed on June 5, 2023, following the completion and commissioning of a mercury abatement system and approval of an amended environmental impact assessment[44][45] - The Öksüt Mine produced 195,926 ounces of gold and generated $275.1 million in cash from mine operations in 2023[45] - The mine received approval for a 10-year operating license extension and an enlarged grazing land permit in January 2023, allowing for pit expansion[46] Change in the tax regulations Türkiye's corporate income tax rate increase to 25% effective January 1, 2023, impacted Öksüt Mine's tax expenses - Türkiye increased its corporate income tax rate from 20% to 25% effective January 1, 2023, impacting the Öksüt Mine with a $16.1 million increase in current income tax expense and $1.1 million in deferred income tax expense in 2023[53] Pre-Feasibility Study on the Restart of the Thompson Creek Mine A PFS for Thompson Creek Mine restart projects an 11-year mine life with positive NPV, with a feasibility study expected by mid-2024 - A prefeasibility study (PFS) on restarting the Thompson Creek Mine was announced on September 18, 2023, outlining an 11-year mine life with 134 million pounds of molybdenum production[54] - The restart, integrated with Langeloth operations, projects a $373 million after-tax net present value (5% discount rate) and a 16% after-tax internal rate of return at a $20/lb molybdenum price[54] - A feasibility study (FS) is expected by mid-2024, after which the company plans to authorize $100-$125 million for pre-stripping, long-lead item purchases, and plant refurbishments[55] Extension of the Corporate Credit Facility Centerra extended its US$400 million revolving credit facility for four years, providing financial flexibility for corporate purposes - Centerra extended its US$400 million revolving credit facility for four years, maturing on September 8, 2027, maintaining an interest rate based on SOFR plus 2.25% to 3.25%[49] - The credit facility is currently undrawn, providing flexibility for general corporate purposes, including working capital, investments, acquisitions, and capital expenditures[49] Normal Course Issuer Bid Centerra renewed its NCIB to repurchase up to 18.3 million common shares, having repurchased 3.5 million shares in 2023 - The Toronto Stock Exchange accepted the renewal of Centerra's normal course issuer bid (NCIB) to repurchase up to 18,293,896 common shares between November 7, 2023, and November 6, 2024[50] - In 2023, the company repurchased and cancelled 3,475,800 common shares for $20.4 million under its NCIB program[56] Executive Management Changes Centerra announced key executive appointments, including a new President and CEO, and an incoming CFO - Paul Tomory was appointed President and CEO effective May 1, 2023[57] - Hélène Timpano was appointed Executive Vice-President, Strategy & Corporate Development in May 2023[58] - Ryan Snyder will be promoted to Executive Vice President and Chief Financial Officer, effective April 8, 2024, succeeding Darren Millman[60] Exploration and Project Evaluation Update Exploration in 2023 focused on drilling programs at Goldfield, Mount Milligan, Öksüt, and greenfield projects to expand resources - Exploration activities in 2023 focused on drilling programs at Goldfield Project (Nevada), Mount Milligan Mine (British Columbia), Öksüt Mine (Türkiye), and greenfield projects in USA and Türkiye[61] Mount Milligan Mine Exploration Drilling at Mount Milligan in 2023 targeted resource extensions, showing potential for shallow and deep mineralization additions - 21,144 meters of drilling were completed in 2023 at Mount Milligan, targeting resource extensions to the west and south of the current pit boundary[62] - Assay results indicate potential for shallow and deep resource additions and extension of mineralization west of the ultimate pit boundary[62] Goldfield Project Exploration and Evaluation Goldfield Project exploration focused on oxide and transition material, with an initial resource estimate targeted by year-end 2024 - Exploration drilling at Goldfield Project focused on Gemfield and satellite targets (Jupiter, Callisto), completing 4,024 meters of diamond drilling and 23,160 meters of reverse circulation drilling in Q4 2023[63][64] - The company is focusing exploration on oxide and transition material to simplify processing, lower capital costs, and increase project returns[66] - An initial resource estimate for the Goldfield Project is targeted by the end of 2024[66] Oakley Project Exploration Centerra acquired 100% interest in the Oakley Project in 2023, continuing exploration for near-surface epithermal gold occurrences - Centerra acquired 100% interest in the Oakley Project in Idaho in 2023[68] - Exploration continues to define near-surface, structurally controlled, low sulfidation epithermal gold occurrences, with additional drilling planned for 2024[69] 2024 Outlook Centerra Gold projects increased consolidated gold production for 2024, driven by higher grades at Mount Milligan and continued strong performance from Öksüt, while overall gold production costs are expected to rise due to Öksüt, Mount Milligan anticipates lower costs per ounce, and total capital expenditures are forecast to increase, with significant spending planned for TSF construction and early works at Thompson Creek Production Profile Centerra Gold projects increased consolidated gold production for 2024, driven by higher grades at Mount Milligan and consistent Öksüt performance 2024 Production Guidance vs. 2023 Actuals | Metric | Units | 2024 Guidance | 2023 Actuals | | :------------------ | :---- | :------------ | :----------- | | Total gold production | (Koz) | 370 - 410 | 350 | | Mount Milligan Mine | (Koz) | 180 - 200 | 154 | | Öksüt Mine | (Koz) | 190 - 210 | 196 | | Total copper production | (Mlb) | 55 - 65 | 62 | - Mount Milligan's 2024 gold production is projected to increase by 22% year-over-year (midpoint), driven by mine sequencing and higher gold grades from phases 6, 7, and 9[97] - Öksüt Mine's 2024 gold production is expected to be consistent with its previously disclosed life of mine plan, with approximately two-thirds of ore from the lower-grade but higher-recovery Güneytepe pit[98] Cost Profile Consolidated gold production costs are expected to rise in 2024 due to Öksüt, while Mount Milligan anticipates lower costs per ounce 2024 Unit Costs Guidance vs. 2023 Actuals | Metric | Units | 2024 Guidance | 2023 Actuals | | :---------------------------------------- | :----- | :---------------- | :----------- | | Gold production costs | ($/oz) | 800 - 900 | 733 | | Mount Milligan Mine | ($/oz) | 950 - 1,050 | 1,088 | | Öksüt Mine | ($/oz) | 650 - 750 | 457 | | All-in sustaining costs on a by-product basis | ($/oz) | 1,075 - 1,175 | 1,013 | | Mount Milligan Mine | ($/oz) | 1,075 - 1,175 | 1,156 | | Öksüt Mine | ($/oz) | 900 - 1,000 | 675 | | All-in costs on a by-product basis | ($/oz) | 1,225 - 1,325 | 1,285 | | Mount Milligan Mine | ($/oz) | 1,100 - 1,200 | 1,199 | | Öksüt Mine | ($/oz) | 900 - 1,000 | 758 | | All-in sustaining costs on a co-product basis | ($/oz) | 1,125 - 1,225 | 1,069 | | Mount Milligan Mine | ($/oz) | 1,175 - 1,275 | 1,283 | | Öksüt Mine | ($/oz) | 900 - 1,000 | 758 | | Copper production costs | ($/lb) | 1.75 - 2.25 | 2.29 | | All-in sustaining costs on a co-product basis | ($/lb) | 2.50 - 3.00 | 2.69 | - Consolidated gold production costs are expected to increase in 2024 due to higher costs at the Öksüt Mine, which benefited from low-cost inventory processing in 2023[99] - Mount Milligan Mine anticipates a reduction in gold production costs per ounce in 2024 due to increased gold ounces sold and lower operating costs from TSF capitalization and fewer mill shutdowns[100] - Öksüt Mine's gold production costs are projected to increase due to higher mining and hauling costs and a higher weighted average cost per ounce in the remaining inventory[103] - Consolidated all-in sustaining costs on a by-product basis are expected to increase in 2024 due to higher Öksüt production costs, increased sustaining capital, and lower copper credits, partially offset by reduced corporate administration costs[105] Capital Expenditures Total capital expenditures are forecast to increase in 2024, with significant spending on TSF construction and early works at Thompson Creek 2024 Capital Expenditures Guidance vs. 2023 Actuals | Metric | 2024 Guidance ($ millions) | 2023 Actuals ($ millions) | | :-------------------------- | :------------------------- | :------------------------ | | Additions to PP&E | 108 - 140 | 121.7 | | Mount Milligan Mine | 55 - 65 | 62.0 | | Öksüt Mine | 40 - 50 | 50.5 | | Molybdenum BU | 12 - 22 | 2.0 | | Other | 1 - 3 | 7.2 | | Sustaining Capital Expenditures | 100 - 125 | 83.5 | | Mount Milligan Mine | 55 - 65 | 44.0 | | Öksüt Mine | 40 - 50 | 36.9 | | Langeloth Facility | 5 - 10 | 0.9 | | Non-sustaining Capital Expenditures | 8 - 15 | 4.8 | | Thompson Creek Mine | 7 - 12 | 0.9 | | Total Capital Expenditures | 108 - 140 | 88.3 | - Total capital expenditures are expected to be higher in 2024 due to deferred projects from 2023 at Öksüt Mine and Mount Milligan Mine[109] - Mount Milligan's 2024 capital expenditures ($55-$65M) primarily relate to TSF construction ($23-$25M), water pumping system completion, and mobile equipment overhauls/purchases[75] - Öksüt Mine plans $40-$50 million in sustaining capital for capitalized stripping, waste rock dump expansion, heap leach pad expansion, and water treatment plant construction[77] Molybdenum Business Unit Outlook The Molybdenum Business Unit anticipates a loss from operations in 2024, with significant expenditures planned for Thompson Creek restart activities Molybdenum Business Unit 2024 Guidance vs. 2023 Actuals | Metric ($ millions) | 2024 Guidance | 2023 Actuals | | :------------------------------------------------ | :------------ | :----------- | | Langeloth Facility | | | | Loss from operations | (5) - (15) | (14) | | Cash (used in) provided by operations before changes in working capital | (5) - 0 | (8) | | Changes in Working Capital | (20) - 20 | (10) | | Cash (Used in) Provided by Operations | (25) - 20 | (18) | | Sustaining Capital Expenditures | (5) - (10) | (1) | | Free Cash Flow (Deficit) from Operations | (30) - 10 | (19) | | Thompson Creek Mine | | | | Non-sustaining Capital Expenditures | (7) - (12) | (1) | | Project Evaluation Expenses | (17) - (20) | (13) | | Care and Maintenance Expenses | (1) - (3) | (10) | | Cash Used in Operations | (25) - (35) | (24) | | Endako Mine | | | | Care and Maintenance Expenses | (5) - (7) | (5) | | Reclamation Costs | (15) - (18) | (21) | | Cash Used in Operations | (20) - (25) | (9) | - Langeloth Facility expects a loss from operations of $5-$15 million in 2024, with cash flow primarily driven by working capital changes[78][79][80] - Thompson Creek Mine plans $25-$35 million in expenditures for H1 2024, including $7-$12 million in non-sustaining capital for early work activities and $17-$20 million for project evaluation[78] - Endako Mine's 2024 care and maintenance costs are projected at $5-$7 million, with reclamation costs estimated at $15-$18 million, focusing on Tailings Pond 2 closure[78][81] Project Evaluation, Exploration, and Other Costs Total exploration and project evaluation costs are projected for 2024, with a focus on Goldfield and greenfield projects, alongside reduced corporate administration 2024 Project Evaluation, Exploration, and Other Costs Guidance vs. 2023 Actuals | Metric ($ millions) | 2024 Guidance | 2023 Actuals | | :---------------------------------------- | :------------ | :----------- | | Project Exploration and Evaluation Costs | | | | Goldfield Project | 9 - 13 | 15.4 | | Thompson Creek Mine | 17 - 20 | 13.0 | | Total Project Evaluation Costs | 26 - 33 | 28.4 | | Brownfield Exploration | 17 - 22 | 40.7 | | Greenfield and Generative Exploration | 18 - 23 | 10.0 | | Total Exploration Costs | 35 - 45 | 50.7 | | Total Exploration and Project Evaluation Costs | 61 - 78 | 79.1 | | Other Costs | | | | Kemess Project | 24 - 30 | 11.1 | | Corporate Administration Costs | 37 - 42 | 44.9 | | Stock-based Compensation | 8 - 10 | 9.2 | | Other Corporate Administration Costs | 29 - 32 | 35.7 | - Total exploration expenditures in 2024 are expected to be $35-$45 million, with an even split between brownfield and greenfield projects[83] - Goldfield Project's 2024 project evaluation costs are $9-$13 million, aiming to complete an initial resource estimate by year-end[85] - Kemess Project's care and maintenance costs are projected at $12-$14 million, with reclamation costs of $12-$16 million, focusing on TSF sedimentation pond decommissioning[86] - Corporate administration expenses are expected to decrease to $37-$42 million in 2024, primarily due to lower consulting fees and severance costs[88] Depreciation, Depletion and Amortization Consolidated DDA is expected to increase in 2024, driven by higher capital expenditures at Mount Milligan and increased Öksüt sales 2024 DDA Guidance vs. 2023 Actuals | Metric ($ millions) | 2024 Guidance | 2023 Actuals | | :---------------------------------- | :------------ | :----------- | | Depreciation, depletion and amortization | 140 - 165 | 124.9 | | Mount Milligan Mine | 90 - 100 | 76.5 | | Öksüt Mine | 45 - 55 | 44.1 | | Other | 5 - 10 | 4.3 | - Consolidated DDA is expected to increase to $140-$165 million in 2024 from $124.9 million in 2023, driven by higher capital expenditures at Mount Milligan and a longer operating period/higher sales at Öksüt[89] Current Taxes and Tax Payments Öksüt Mine's income tax expense is projected at $46-$52 million in 2024, with total cash taxes paid expected to be $85-$95 million 2024 Current Taxes Guidance vs. 2023 Actuals | Metric ($ millions) | 2024 Guidance | 2023 Actuals | | :---------------------------------- | :------------ | :----------- | | Income tax and BC mineral tax expense | 47 - 57 | 85.7 | | Mount Milligan Mine | 1 - 5 | 2.0 | | Öksüt Mine | 46 - 52 | 83.7 | - Öksüt Mine's income tax expense is projected at $46-$52 million in 2024 (25% rate plus $17M withholding tax), with cash taxes paid expected to be $85-$95 million[92] Other Material Assumptions Key 2024 assumptions include specific market prices for gold, copper, and molybdenum, along with exchange rates and diesel fuel costs - Key assumptions for 2024 include a market gold price of $1,850/oz (Mount Milligan realized $1,355/oz), a blended copper price of $3.50/lb (Mount Milligan realized $2.94/lb), and a molybdenum price of $20.00/lb[113] - Exchange rate assumptions are $1USD:$1.33 CAD and $1USD:30 Turkish lira[113] - Diesel fuel price is assumed at $1.06/litre or CAD$1.41/litre at Mount Milligan[113] - The Additional Royal Gold Agreement is not expected to significantly impact 2024 assumptions, as increased payments are anticipated to commence around 2030[110] 2024 Sensitivities This section outlines the financial impact of changes in commodity prices, diesel fuel, and currency exchange rates on 2024 performance 2024 Sensitivity Analysis | Factor | Change | Production Costs & Taxes ($M) | Capital Costs ($M) | Revenues ($M) | Cash flows ($M) | All-in sustaining costs on a by-product basis per ounce ($/oz) | | :----------------- | :------- | :---------------------------- | :----------------- | :------------ | :-------------- | :------------------------------------------------------------- | | Gold price | -$50/oz | 8.5 - 10.5 | — | 15.5 - 17.0 | 7.0 - 8.5 | 10 - 12 | | Gold price | +$50/oz | 8.5 - 10.5 | — | 15.5 - 17.0 | 7.0 - 8.5 | 10 - 12 | | Copper price | -10% | 0.3 - 0.5 | — | 8.5 - 11.0 | 8.0 - 11.0 | 20 - 30 | | Copper price | +10% | 0.3 - 1.0 | — | 18.0 - 21.0 | 17.5 - 20.5 | 45 - 55 | | Diesel fuel | 10% | 1.0 - 1.5 | 0.5 - 1.0 | — | 1.5 - 2.5 | 4 - 6 | | Canadian dollar | 10 cents | 18.5 - 20.0 | 0.1 - 0.2 | — | 18.5 - 20.0 | 45 - 55 | | Turkish lira | 1 lira | 0.2 - 0.5 | 0.1 - 0.2 | — | 0.3 - 0.7 | 1 - 2 | - The company has hedging programs in place for copper (approx. 20% coverage), diesel fuel (51% coverage), and Canadian dollar (78% coverage) as of December 31, 2023[95] Risks That Can Affect Centerra's Business Centerra Gold faces a broad range of risks inherent to the mining industry, including strategic, legal, planning, financial, and operational risks, which the company manages through an enterprise risk management (ERM) program with Board and management oversight Overview of Risk Management Centerra employs an ERM program to identify, assess, and mitigate diverse risks across its global operations and corporate functions - Centerra has an enterprise risk management (ERM) program based on international standards to identify, assess, mitigate, and monitor risks across all operations and corporate offices[96][116] - The ERM program covers technical, financial, commercial, social, reputational, environmental, governance, health and safety, political, and human resources related risks[117] Board and Committee Oversight The Board of Directors and its committees oversee policies and systems for managing Centerra's principal strategic, financial, and operational risks - The Board of Directors oversees policies, processes, and systems for managing principal strategic, financial, and operational risks[118] - Each Board committee is responsible for risks within its specific area of responsibility[118] Management Oversight Management is responsible for developing and implementing company-wide risk identification, assessment, and mitigation policies and systems - Management is responsible for developing and implementing risk identification, assessment, and management policies and systems company-wide[119] - The executive team regularly reviews organizational risks and the effectiveness of mitigation actions[119] Principal Risks Centerra faces principal risks including political instability, commodity price volatility, inflationary pressures, and operational challenges inherent to mining - The company faces strategic, legal, and planning risks, including political risks in Türkiye, USA, and Canada, regulatory changes, community activism, litigation, and the inability to replace mineral reserves[121][123] - Financial risks include sensitivity to gold, copper, and molybdenum price volatility, reliance on key customers, inflationary pressures, currency fluctuations, and access to future financing[124] - Operational risks encompass unanticipated ground/water conditions, geological risks, equipment failures, labor unrest, climate change impacts, supply chain disruptions, and cyber incidents[125][127] Market Conditions Centerra Gold's profitability is significantly influenced by the volatile market prices of gold, copper, and molybdenum, as well as foreign exchange rates for the Canadian dollar and Turkish lira against the US dollar, with the company using hedging programs for foreign exchange and diesel fuel to manage exposure Commodities Centerra's profitability is significantly affected by volatile gold, copper, and molybdenum prices, which saw mixed trends in 2023 - The company's profitability is materially affected by the market prices of gold, copper, and molybdenum, which fluctuate widely[128] Average Market Commodity Prices (Q4 2023 vs. Q4 2022 & Year Ended 2023 vs. 2022) | Commodity | Q4 2023 ($) | Q4 2022 ($) | Q4 % Change | Year 2023 ($) | Year 2022 ($) | Year % Change | | :-------------- | :---------- | :---------- | :---------- | :------------ | :------------ | :------------ | | Gold (per oz) | 1,978 | 1,728 | 14 % | 1,943 | 1,800 | 8 % | | Copper (per lb) | 3.73 | 3.63 | 3 % | 3.86 | 3.99 | (3)% | | Molybdenum (per lb) | 18.64 | 21.39 | (13)% | 24.19 | 18.73 | 29 % | - Gold prices increased in Q4 and full year 2023, influenced by Federal Reserve monetary policy, central bank demand, and geopolitical tensions[129] - Copper prices increased in Q4 2023 but decreased for the full year, driven by anticipated supply disruptions and increased demand from green energy transition[130] - Molybdenum prices decreased in Q4 2023 but increased for the full year, with a bullish sentiment for future prices due to energy sector demand and declining supply[131] Foreign Exchange Centerra's costs are impacted by USD/CAD and USD/Turkish Lira exchange rates, with hedging in place for the Canadian dollar - All revenues are earned in US dollars, while significant operating and capital costs are incurred in Canadian dollars (Mount Milligan, ~90%) and Turkish lira (Öksüt Mine, ~70%)[134] Average Market Exchange Rates (Q4 2023 vs. Q4 2022 & Year Ended 2023 vs. 2022) | Currency | Q4 2023 | Q4 2022 | Q4 % Change | Year 2023 | Year 2022 | Year % Change | | :----------------- | :------ | :------ | :---------- | :-------- | :-------- | :------------ | | USD-CAD | 1.36 | 1.36 | — % | 1.35 | 1.30 | 4 % | | USD-Turkish Lira | 28.54 | 18.61 | 53 % | 23.80 | 16.57 | 44 % | - The Canadian dollar was consistent against the US dollar in Q4 2023 but weakened by 4% for the full year 2023[137] - The Turkish lira significantly weakened against the US dollar in both Q4 and the full year 2023, ending the year at 29.5[138] - The company utilizes a foreign exchange hedging program for the Canadian dollar but does not currently hedge the Turkish lira[138] Diesel Fuel Fuel costs represent approximately 5% of production costs, with Centerra utilizing a hedging program to manage price fluctuations - Fuel costs represent approximately 5% of production costs at Centerra's continuing operations[139] - Mount Milligan's diesel prices are based on the Prince George Rack Rate, while Öksüt Mine's fuel costs are included in outsourcing contracts based on local retail prices[139] - The company uses a diesel hedging program to manage exposure to price fluctuations[140] Liquidity and Capital Resources Centerra Gold's total liquidity position improved significantly to $1,011.0 million as of December 31, 2023, driven by a substantial increase in cash provided by operating activities, a decrease in cash used in investing activities due to receivable collection and lower PP&E additions, and a reduction in cash used in financing activities due to fewer share repurchases - Total liquidity as of December 31, 2023, was $1,011.0 million, comprising $612.9 million in cash and $398.1 million available under its corporate credit facility[141] Fourth Quarter 2023 compared to Fourth Quarter 2022 Q4 2023 saw a significant increase in operating cash flow and reduced cash usage in investing and financing activities - Cash provided by operating activities increased to $145.4 million in Q4 2023 from a deficit of $9.8 million in Q4 2022[142] - Cash used in investing activities decreased to $9.2 million in Q4 2023 from $15.5 million in Q4 2022, primarily due to collecting a $25.0 million receivable from Orion[143] - Cash used in financing activities decreased to $15.4 million in Q4 2023 from $23.5 million in Q4 2022, mainly due to fewer common shares repurchased and cancelled[144] Year ended December 31, 2023 compared to 2022 Full-year 2023 cash from operations significantly increased, while cash used in investing and financing activities decreased - Cash provided by operating activities increased to $245.6 million in 2023 from a deficit of $2.0 million in 2022[145] - Cash used in investing activities decreased to $90.3 million in 2023 from $255.6 million in 2022, driven by the collection of a $25.0 million receivable and lower PP&E additions at Mount Milligan, partially offset by the Goldfield Project milestone payment[151][152] - Cash used in financing activities decreased to $74.3 million in 2023 from $157.7 million in 2022, primarily due to fewer share repurchases, including the absence of the Kyrgyzaltyn share repurchase from 2022[147] Financial Performance Centerra Gold's financial performance in Q4 2023 showed a significant revenue increase, driven by the Öksüt Mine's resumed gold sales and higher copper sales from Mount Milligan, leading to improved earnings from mine operations, while for the full year 2023, revenue also increased substantially, primarily due to Öksüt's higher gold sales and improved commodity prices, and despite higher production costs and DDA, the company saw a decrease in all-in sustaining costs per ounce for the full year, reflecting operational efficiencies and increased sales volumes Fourth Quarter 2023 compared to Fourth Quarter 2022 Q4 2023 revenue increased significantly due to Öksüt's resumed gold sales and higher copper production, improving mine operations earnings - Revenue increased by 63% to $340.0 million in Q4 2023, primarily due to increased gold sales at Öksüt Mine and higher average realized gold prices, partially offset by lower gold ounces and realized copper prices at Mount Milligan[153] - Gold production was 129,259 ounces in Q4 2023, a 143% increase, with Öksüt Mine contributing 88,756 ounces (vs. none in Q4 2022)[148] - Copper production at Mount Milligan increased by 16% to 19.7 million pounds, attributed to higher copper head grade and mill throughput[154] - Cost of sales increased to $201.9 million, mainly due to resumed operations and higher production costs/DDA at Öksüt Mine[155] - Gold production costs decreased by 25% to $595 per ounce, primarily due to higher gold ounces sold at Öksüt[156] - All-in sustaining costs on a by-product basis decreased by 16% to $831 per ounce, driven by lower gold production costs per ounce[159] - A non-cash impairment loss of $34.1 million was recognized in Q4 2023 for the Kemess Project and Berg Property, compared to $138.2 million (net of tax) for Kemess in Q4 2022[160] - Reclamation expense was $50.1 million in Q4 2023, compared to a recovery of $3.5 million in Q4 2022, due to increased estimated future cash outflows and decreased risk-free interest rates[161] - Income tax expense was $38.9 million in Q4 2023, compared to a recovery of $25.1 million in Q4 2022, mainly due to Öksüt Mine's resumed operations and withholding tax on repatriated earnings[163] Year ended December 31, 2023 compared to 2022 Full-year 2023 revenue increased substantially due to higher gold sales and improved commodity prices, despite increased costs - Revenue increased by 29% to $1,094.9 million in 2023, primarily due to higher gold sales at Öksüt Mine and improved average realized gold, copper, and molybdenum prices[164] - Gold production was 350,317 ounces in 2023, a 44% increase, with Öksüt Mine producing 195,926 ounces (vs. 54,691 oz in 2022) due to resumed operations and processing accumulated inventory[166] - Copper production at Mount Milligan decreased by 16% to 61.9 million pounds, attributed to lower head grade and recoveries[167] - Cost of sales increased to $830.9 million, mainly due to higher production costs at Mount Milligan and Öksüt Mines, and increased molybdenum concentrate purchase prices[169] - Gold production costs increased by 8% to $733 per ounce, due to lower gold ounces sold at Mount Milligan and higher costs at Öksüt after its restart[170] - All-in sustaining costs on a by-product basis increased by 18% to $1,013 per ounce, driven by higher gold production costs and lower copper by-product credits[171] - Reclamation expense was $34.4 million in 2023, compared to a recovery of $94.0 million in 2022, due to increased estimated future cash outflows for Kemess Project and Endako Mine[173] - Other operating expenses increased to $29.6 million, primarily due to $15.4 million in standby costs at Öksüt Mine prior to its restart[174] - Income tax expense increased to $94.9 million in 2023 from $32.8 million in 2022, mainly due to Öksüt Mine's resumed operations and withholding tax on repatriated earnings[176] Financial Instruments Centerra Gold actively manages its exposure to commodity price and foreign exchange rate fluctuations through derivative financial instruments, with significant hedging positions for USD/CAD, diesel fuel, and copper as of December 31, 2023, and the initiation of a gold hedging program in Q2 2023, all of which significantly impacted the consolidated statements of loss - Centerra uses derivative financial instruments to manage exposure to diesel fuel prices, commodity prices, and foreign exchange rates[178] Hedge Positions as at December 31, 2023 | Instrument Type | Unit | 2024 Coverage | Total Position | Fair Value ($'000s) | | :------------------------ | :------ | :------------ | :------------- | :------------------ | | USD/CAD zero-cost collars | CAD | $237.0M (37%) | $363.0M | 6,345 | | USD/CAD forward contracts | CAD | $265.0M (41%) | $421.0M | 2,244 | | Total FX Hedges | | $502.0M (78%) | $784.0M | 8,589 | | ULSD zero-cost collars | Barrels | 36,000 (22%) | 45,000 | 204 | | ULSD swap contracts | Barrels | 87,900 (53%) | 137,100 | (568) | | Total Fuel Hedges | | 123,900 (75%) | 182,100 | (364) | | Copper zero-cost collars | Pounds | 9.9M (19%) | 9.9M | 2,379 | | Gold put options | Ounces | 50,000 (15%) | 50,000 | 495 | | Gold forward contracts | Ounces | 24,366 | 24,366 | 986 | | Copper forward contracts | Pounds | 5.0M | 5.0M | 220 | Realized (Loss) Gain from Hedges ($ millions) | Metric | Q4 2023 | Q4 2022 | Year 2023 | Year 2022 | | :---------------------- | :------ | :------ | :-------- | :-------- | | Foreign exchange hedges | (5,657) | (3,336) | (12,189) | 779 | | Fuel hedges | 341 | 2,138 | 1,993 | 8,778 | | Copper hedges | 1,207 | 969 | 2,924 | 3,470 | | Gold hedges | 1,042 | — | 1,988 | — | - The company commenced a gold hedging program in Q2 2023, consisting of gold put options[178] Balance Sheet Review Centerra Gold's balance sheet as of December 31, 2023, shows an increase in cash and total liabilities, while total assets and total equity decreased, driven by positive free cash flow and receivable collection, partially offset by share repurchases and dividends, with inventories decreasing due to processing gold-in-carbon and lower molybdenum prices, and the long-term provision for reclamation increasing due to updated estimates Balance Sheet Highlights ($ millions) | Metric | December 31, 2023 | December 31, 2022 | | :------------------ | :---------------- | :---------------- | | Total Assets | 2,280.8 | 2,335.9 | | Total Liabilities | 606.6 | 525.6 | | Current Liabilities | 297.5 | 274.8 | | Non-current Liabilities | 309.1 | 250.8 | | Total Equity | 1,674.2 | 1,810.3 | - Cash increased to $612.9 million at December 31, 2023, from $531.9 million at December 31, 2022, driven by free cash flow and Orion receivable collection, partially offset by share repurchases and dividends[181] - Total inventories decreased to $257.3 million from $316.8 million, primarily due to the full processing of gold-in-carbon inventory at Öksüt Mine and a decline in molybdenum prices[182] - The carrying value of Property, Plant & Equipment (PP&E) decreased to $1.24 billion from $1.27 billion, due to depreciation and impairment losses, partially offset by additions from ongoing capital projects[189] - The long-term provision for reclamation increased to $272.6 million from $227.9 million, due to increased estimated future cash outflows and updated closure plans[191] Contractual Obligations Centerra Gold's contractual obligations as of December 31, 2023, include significant commitments for 2024, primarily related to contractual commitments, reclamation provisions, and lease obligations, with the company believing it has sufficient capital resources to meet these mandatory and discretionary expenditure commitments Contractual Obligations as of December 31, 2023 ($ millions) | Obligation | 2024 | 2025 | 2026 | 2027 | Thereafter | | :------------------ | :---- | :--- | :--- | :--- | :--------- | | Contractual commitments | 345.6 | 22.8 | 0.3 | — | — | | Reclamation provisions | 28.1 | 0.9 | 0.9 | 0.9 | 426.2 | | Lease obligations | 7.0 | 6.4 | 4.3 | 4.0 | 5.9 | | Total | 380.7 | 30.1 | 5.5 | 4.9 | 432.1 | 2024 Liquidity and Capital Resources Analysis Centerra Gold anticipates total mandatory and discretionary expenditure commitments of $816.9 million for 2024, believing its current capital resources are sufficient to cover these, which include contractual obligations, accounts payable, income taxes payable, expected capital expenditures, and exploration and evaluation costs 2024 Mandatory and Discretionary Expenditure Commitments ($ millions) | Commitment Type | Amount | | :-------------------------------------------- | :----- | | 2024 Mandatory Commitments: | | | Contractual obligations | 380.7 | | Accounts payable and accrued liabilities (Dec 31, 2023) | 201.7 | | Income taxes payable (Dec 31, 2023) | 41.0 | | Total 2023 mandatory expenditure commitments | 623.4 | | 2024 Discretionary Commitments: | | | Expected capital expenditures | 124.0 | | Expected exploration and evaluation costs | 69.5 | | Total 2024 discretionary expenditure commitments | 193.5 | | Total 2024 mandatory and discretionary expenditure commitments | 816.9 | - The company believes it has sufficient capital resources to satisfy its 2024 mandatory and discretionary expenditure commitments[192] Operating Mines and Facilities This section details the financial and operating results for Centerra Gold's key assets: the Mount Milligan Mine, Öksüt Mine, and the Molybdenum Business Unit, with Mount Milligan experiencing decreased earnings and gold production in 2023 due to mine sequencing but increased copper production in Q4, Öksüt Mine's operations significantly improving in 2023 following its restart, leading to substantial increases in gold production and earnings, and the Molybdenum Business Unit reporting losses from operations in 2023, primarily due to higher reclamation expenses and project evaluation costs at Thompson Creek Mount Milligan Mine Mount Milligan is an open-pit gold-copper mine in British Columbia, Canada, operating under a streaming agreement with Royal Gold - Mount Milligan is an open-pit gold-copper mine in British Columbia, Canada, subject to a streaming agreement with Royal Gold[193] Mount Milligan Mine Financial and Operating Results This section presents Mount Milligan's financial and operating performance for Q4 and full-year 2023, detailing revenue, costs, and production metrics Mount Milligan Mine Financial Highlights (Q4 2023 vs. Q4 2022) | Metric ($ millions) | Three months 2023 | Three months 2022 | % Change | | :------------------ | :---------------- | :---------------- | :------- | | Gold revenue | 50.7 | 66.8 | (24)% | | Copper revenue | 49.7 | 52.7 | (6)% | | Total revenue | 102.5 | 121.2 | (15)% | | Production costs | 62.1 | 69.8 | (11)% | | DDA | 17.9 | 15.8 | 13 % | | Earnings from mine operations | 22.5 | 35.6 | (37)% | | Cash provided by mine operations | 29.1 | 26.5 | 10 % | | Free cash flow from mine operations | 14.1 | 15.6 | (10)% | | Capital expenditures - total | 16.4 | 10.0 | 64 % | Mount Milligan Mine Financial Highlights (Year Ended 2023 vs. 2022) | Metric ($ millions) | Years 2023 | Years 2022 | % Change | | :------------------ | :--------- | :--------- | :------- | | Gold revenue | 218.2 | 248.6 | (12)% | | Copper revenue | 181.0 | 216.5 | (16)% | | Total revenue | 407.3 | 472.5 | (14)% | | Production costs | 303.4 | 269.0 | 13 % | | DDA | 76.5 | 79.2 | (3)% | | Earnings from mine operations | 27.4 | 124.3 | (78)% | | Cash provided by mine operations | 113.9 | 161.6 | (30)% | | Free cash flow from mine operations | 72.7 | 100.4 | (28)% | | Capital expenditures - total | 44.0 | 54.7 | (20)% | Mount Milligan Mine Operating Highlights (Q4 2023 vs. Q4 2022) | Metric | Three months 2023 | Three months 2022 | % Change | | :------------------ | :---------------- | :---------------- | :------- | | Tonnes mined (000s) | 12,397 | 10,185 | 22 % | | Tonnes ore mined (000s) | 6,256 | 4,578 | 37 % | | Tonnes processed (000s) | 5,775 | 5,504 | 5 % | | Process plant head grade gold (g/t) | 0.35 | 0.47 | (26)% | | Process plant head grade copper (%) | 0.21 % | 0.19 % | 11 % | | Gold produced (oz) | 40,503 | 53,222 | (24)% | | Copper produced (000s lbs) | 19,695 | 16,909 | 16 % | | Gold production costs ($/oz) | 946 | 790 | 20 % | | Copper production costs ($/lb) | 1.86 | 2.00 | (7)% | Mount Milligan Mine Operating Highlights (Year Ended 2023 vs. 2022) | Metric | Years 2023 | Years 2022 | % Change | | :------------------ | :--------- | :--------- | :------- | | Tonnes mined (000s) | 50,015 | 44,362 | 13 % | | Tonnes ore mined (000s) | 21,278 | 19,420 | 10 % | | Tonnes processed (000s) | 21,680 | 21,348 | 2 % | | Process plant head grade gold (g/t) | 0.36 | 0.42 | (14)% | | Process plant head grade copper (%) | 0.18 % | 0.20 % | (10)% | | Gold produced (oz) | 154,391 | 189,177 | (18)% | | Copper produced (000s lbs) | 61,862 | 73,864 | (16)% | | Gold production costs ($/oz) | 1,088 | 767 | 42 % | | Copper production costs ($/lb) | 2.29 | 1.70 | 35 % | Mount Milligan Mine Fourth Quarter 2023 compared to Fourth Quarter 2022 Q4 2023 earnings from mine operations decreased due to lower gold sales and realized copper prices, despite increased copper production - Earnings from mine operations decreased by 37% to $22.5 million in Q4 2023, primarily due to lower average realized copper prices and lower gold ounces sold, partially offset by higher copper pounds sold and lower operating costs[197] - Gold production decreased by 24% to 40,503 ounces, mainly due to lower gold head grade (0.35 g/t vs. 0.47 g/t) and lower recoveries (64.9% vs. 65.5%)[201] - Copper production increased by 16% to 19.7 million pounds, driven by higher copper head grade (0.21% vs. 0.19%) and higher mill throughput[202][203] - Gold production costs increased by 20% to $946 per ounce, primarily due to decreased gold ounces sold[204] - All-in sustaining costs on a by-product basis increased by 50% to $946 per ounce, due to lower gold ounces sold, higher sustaining capital expenditures, and lower copper credits[207] Mount Milligan Mine Year ended December 31, 2023 compared to 2022 Full-year 2023 earnings from mine operations significantly decreased due to lower gold and copper sales and higher production costs - Earnings from mine operations decreased by 78% to $27.4 million in 2023, primarily due to lower gold ounces and copper pounds sold, and higher production costs[209] - Gold production decreased by 18% to 154,391 ounces, due to lower gold head grade (0.36 g/t vs. 0.42 g/t) and lower recoveries (64.0% vs. 66.9%)[213] - Copper production decreased by 16% to 61.9 million pounds, due to lower copper head grade (0.18% vs. 0.20%) and lower recoveries (77.6% vs. 81.9%)[213] - Gold production costs increased by 42% to $1,088 per ounce, primarily due to decreased gold ounces sold and higher mining/processing costs[215] - All-in sustaining costs on a by-product basis increased by 83% to $1,156 per ounce, driven by lower gold ounces sold, higher production costs, and lower copper credits[219] Öksüt Mine The Öksüt Mine, a gold operation in Türkiye, resumed full operations in June 2023 after a temporary suspension - The Öksüt Mine is a gold mine in Türkiye that resumed full operations in early June 2023 after a suspension from March 2022 due to mercury detection[223][224] Öksüt Mine Financial and Operating Results This section details Öksüt Mine's financial and operating performance for Q4 and full-year 2023, reflecting its operational restart Öksüt Mine Financial Highlights (Q4 2023 vs. Q4 2022) | Metric ($ millions) | Three months 2023 | Three months 2022 | % Change | | :------------------ | :---------------- | :---------------- | :------- | | Revenue | 190.0 | — | — % | | Production costs | 46.1 | — | — % | | DDA | 21.9 | — | — % | | Earnings from mine operations | 122.0 | — | — % | | Cash provided by (used in) mine operations | 144.3 | (11.9) | 1313 % | | Free cash flow (deficit) from mine operations | 127.9 | (16.5) | 875 % | | Capital expenditures - total | 16.4 | 4.6 | 257 % | Öksüt Mine Financial Highlights (Year Ended 2023 vs. 2022) | Metric ($ millions) | Years 2023 | Years 2022 | % Change | | :------------------ | :--------- | :--------- | :------- | | Revenue | 380.9 | 101.6 | 275 % | | Production costs | 89.6 | 21.1 | 325 % | | DDA | 44.1 | 12.6 | 250 % | | Earnings from mine operations | 247.2 | 67.9 | 264 % | | Cash provided by (used in) mine operations | 275.1 | (17.5) | 1672 % | | Free cash flow (deficit) from mine operations | 238.2 | (33.5) | 811 % | | Capital expenditures - total | 36.9 | 16.0 | 131 % | Öksüt Mine Operating Highlights (Q4 2023 vs. Q4 2022) | Metric | Three months 2023 | Three months 2022 | % Change | | :------------------ | :---------------- | :---------------- | :------- | | Tonnes mined (000s) | 3,499 | 995 | 252 % | | Tonnes ore mined (000s) | 190 | 715 | (73)% | | Gold produced (oz) | 88,756 | — | — % | | Gold production costs ($/oz) | 474 | — | n/a | Öksüt Mine Operating Highlights (Year Ended 2023 vs. 2022) | Metric | Years 2023 | Years 2022 | % Change | | :------------------ | :--------- | :--------- | :------- | | Tonnes mined (000s) | 9,873 | 9,159 | 8 % | | Tonnes ore mined (000s) | 486 | 6,455 | (92)% | | Gold produced (oz) | 195,926 | 54,691 | 258 % | | Gold production costs ($/oz) | 457 | 386 | 18 % | Öksüt Mine Fourth Quarter 2023 compared to Fourth Quarter 2022 Q4 2023 saw a significant increase in cash from mine operations and gold production due to the mine's restart - Cash provided by mine operations was $144.3 million in Q4 2023, compared to a deficit of $11.9 million in Q4 2022, due to strong production and favorable working capital changes[227] - Gold production was 88,756 ounces in Q4 2023, with no production reported in Q4 2022 due to suspension of gold room operations[229] - Gold production costs per ounce were $474 in Q4 2023[229] - Free cash flow from mine operations was $127.9 million in Q4 2023, reversing a $16.5 million deficit in Q4 2022[235] - All-in sustaining costs on a by-product basis and all-in costs on a by-product basis were $671 and $679 per ounce, respectively, in Q4 2023[236] Öksüt Mine Year ended December 31, 2023 compared to 2022 Full-year 2023 earnings and cash from mine operations significantly increased due to higher gold production and sales after the restart - Earnings from mine operations increased to $247.2 million in 2023 from $67.9 million in 2022, driven by higher gold production and sales due to a longer operating period and processing accumulated inventory[237] - Cash provided by mine operations was $275.1 million in 2023, compared to a deficit of $17.5 million in 2022, due to higher gold sales and realized prices[238] - Gold production was 195,926 ounces in 2023, a 258% increase from 2022, due to the restart of operations and processing of gold-in-carbon inventory[242] - Gold production costs increased to $457 per ounce from $386 per ounce, due to higher production costs and royalty costs, partially offset by higher strip ratio and weakening Turkish lira[243] - All-in sustaining costs on a by-product basis decreased to $675 per ounce from $791 per ounce, primarily due to higher gold ounces sold[244] Molybdenum Business Unit The Molybdenum Business Unit comprises the Langeloth Facility and two North American molybdenum mines, one under care and maintenance - The Molybdenum Business Unit includes the Langeloth Facility (Pennsylvania) and two North American molybdenum mines: Thompson Creek Mine (Idaho) and 75%-owned Endako Mine (British Columbia, on care and maintenance)[246] Molybdenum BU Financial and Operating Results This section presents the Molybdenum Business Unit's financial and operating performance for Q4 and full-year 2023 Molybdenum BU Financial Highlights (Q4 2023 vs. Q4 2022) | Metric ($ millions) | Three months 2023 | Three months 2022 | % Change | | :------------------ | :---------------- | :---------------- | :------- | | Total revenue | 47.4 | 87.2 | (46)% | | Production costs | 53.1 | 88.3 | (40)% | | Loss from mine operations | (6.5) | (2.5) | (160)% | | Reclamation expense (recovery) | 32.5 | (3.4) | 1056 % | | (Loss) earnings from operations | (47.5) | (5.2) | 813 % | | Cash (used in) provided by operations | (7.7) | 8.6 | (190)% | | Free cash (deficit) flow from operations | (9.1) | 8.6 | (206)% | Molybdenum BU Financial Highlights (Year Ended 2023 vs. 2022) | Metric ($ millions) | Years 2023 | Years 2022 | % Change | | :------------------ | :--------- | :--------- | :------- | | Total revenue | 306.7 | 276.1 | 11 % | | Production costs | 312.9 | 284.5 | 10 % | | Loss from mine operations | (10.5) | (13.6) | 23 % | | Reclamation expense (recovery) | 22.0 | (94.0) | 123 % | | (Loss) earnings from operations | (65.0) | 60.1 | (208)% | | Cash (used in) provided by operations | (44.4) | (9.3) | (377)% | | Free cash (deficit) flow from operations | (46.3) | (10.4) | (345)% | Molybdenum BU Operating Highlights (Q4 2023 vs. Q4 2022) | Metric | Three months 2023 | Three months 2022 | % Change | | :------------------ | :---------------- | :---------------- | :------- | | Mo roasted (lbs) | 2,247 | 4,550 | (51)% | | Mo sold (lbs) | 2,158 | 4,040 | (47)% | | Average market molybdenum price ($/lb) | 18.64 | 21.49 | (13)% | Molybdenum BU Operating Highlights (Year Ended 2023 vs. 2022) | Metric | Years 2023 | Years 2022 | % Change | | :------------------ | :--------- | :--------- | :------- | | Mo roasted (lbs) | 11,377 | 13,497 | (16)% | | Mo sold (lbs) | 11,235 | 13,448 | (16)% | | Average market molybdenum price ($/lb) | 24.19 | 18.73 | 29 % | Molybdenum BU Fourth Quarter 2023 compared to Fourth Quarter 2022 Q4 2023 saw an increased loss from operations and cash used, driven by higher reclamation and project evaluation expenses - Loss from operations increased to $47.5 million in Q4 2023 from $5.2 million in Q4 2022, primarily due to higher reclamation expense and project evaluation expenses at Thompson Creek Mine[248] - Cash used by operations wa