Centerra Gold (US:CGAU)2024-08-03 17:28Financial Data and Key Metrics Changes - Adjusted net earnings for Q2 2024 were $47 million or $0.23 per share, with sales of 83,258 ounces of gold and 11.7 million pounds of copper [14][16] - Average realized prices were $2,097 per ounce of gold and $3.79 per pound of copper [14] - Consolidated all-in sustaining costs on a by-product basis were $1,179 per ounce, with full-year guidance for unit cost metrics unchanged [15][16] - Cash flow from operations before working capital and income taxes was $94 million, while free cash flow showed a deficit of $27 million [16][18] Business Line Data and Key Metrics Changes - Mount Milligan produced over 38,000 ounces of gold and over 13 million pounds of copper in Q2, with all-in sustaining costs at $1,234 per ounce, higher due to lower sales and increased sustaining CapEx [10][11] - Oksut's production was over 51,000 ounces, lower than the previous quarter due to inventory winding down, with all-in sustaining costs at $943 per ounce [12][13] - Molybdenum Business Unit sold approximately 2.7 million pounds at an average price of $22.10 per pound, operating at 30% capacity [15] Market Data and Key Metrics Changes - Mount Milligan's cash flow from operations was $29 million, while Oksut used $2 million of cash from operations due to tax and royalty payments [16][18] - The company expects gold and copper sales volumes to increase in the second half of the year, contributing approximately 60% of annual sales [10][16] Company Strategy and Development Direction - The company is focused on maximizing the value of its assets, with ongoing work on the preliminary economic assessment for Mount Milligan and a feasibility study for Thompson Creek [4][7] - The integration of Thompson Creek and Langeloth is seen as a key value driver, with plans to optimize capital allocation based on the upcoming feasibility study [25][49] - The company is also exploring growth opportunities at the Goldfield property in Nevada, with an initial resource expected by year-end [7][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and cash flow generation for the second half of 2024, despite challenges in the first half [4][19] - The company remains committed to sustainable practices, having achieved significant milestones in its ESG initiatives [8] - Management highlighted the importance of disciplined capital allocation and the potential for future growth through exploration and optimization efforts [25][26] Other Important Information - The company declared a quarterly dividend of $0.07 per share and repurchased 1.4 million shares for a total of $10 million [18] - The cash balance at the end of Q2 was $592 million, providing total liquidity of $992 million [18] Q&A Session Summary Question: Oksut pit sequencing and stripping - Management confirmed ongoing waste stripping and adjustments in ore sequencing due to blending needs and rainy season impacts [20][21][23] Question: Free cash flow and capital prioritization - Management indicated that the Thompson Creek feasibility study is a priority for capital allocation, with ongoing assessments of molybdenum prices [24][25] Question: Mount Milligan grades and recovery expectations - Management acknowledged lower grades in Q2 due to standard mine sequencing but expects improvements in gold recovery and grades in the second half [28][29] Question: Goldfield resource estimate and drilling - Management confirmed ongoing drilling and positive results from column leach tests, with a potential increase in gold price assumptions for the resource estimate [34][35] Question: Molybdenum study and integration with Langeloth - Management outlined the strategy for integrating Thompson Creek with Langeloth to optimize capacity and profitability [46][48]