Centerra Gold (US:CGAU)2022-08-10 18:59Financial Data and Key Metrics Changes - Centerra recorded $167 million in net revenue during the quarter, with no revenue from the Oksut mine due to operational suspensions [37][39] - The Mount Milligan mine generated $81 million in positive operating cash flow, with a free cash flow of $58 million for the quarter [23][42] - The net loss from continuing operations was $2.6 million, with an adjusted net loss of $36.2 million for the quarter [44] Business Line Data and Key Metrics Changes - Mount Milligan produced 42,728 ounces of gold and 17.4 million pounds of copper during the second quarter, maintaining production guidance of 190,000 to 210,000 ounces of gold and 70 million to 80 million pounds of copper for the year [19][20][30] - Oksut mine operations remain suspended, with a stored gold-in-carbon inventory of 58,469 ounces at a cost of approximately $444 per ounce [26][39] Market Data and Key Metrics Changes - The average realized gold price at Mount Milligan was $1,335 per ounce, and the copper price was $2.19 per pound, reflecting a 25% decrease in realized prices compared to Q2 2021 [41] - The company revised its copper price forecast for the second half of 2022 from $4 per pound to $3.25 per pound, impacting all-in sustaining costs [30][31] Company Strategy and Development Direction - The company is focusing on core operations at Mount Milligan and Oksut, with plans for resource expansion and infill drilling at the goldfield development project [9][14] - A new Chief Operating Officer is being recruited, and the company aims to enhance its environmental, social, and governance (ESG) performance [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the timing of regulatory approvals for the Oksut mine, which affects future production guidance [61][62] - The company is optimistic about the completion of the mercury abatement retrofit at Oksut by the end of 2022, which is expected to allow operations to resume in 2023 [35][57] Other Important Information - The Board approved a quarterly dividend of CAD0.07 per share, reflecting the company's strong balance sheet [16][54] - The company is evaluating value-surfacing opportunities in its Molybdenum business unit, which remains a work in progress [16][88] Q&A Session Summary Question: Clarification on Oksut's gold room retrofit and permitting - Management confirmed that completing the retrofit and obtaining regulatory approvals will allow for carbon recycling in 2023 [56][57] Question: Suspension of 2023 guidance - Management indicated that the lack of visibility on regulatory approvals led to the suspension of guidance for 2023 [60][62] Question: Environmental regulators' broader review of Oksut - Management stated that discussions with regulators are ongoing, and a new Environmental Impact Assessment (EIA) will be submitted [85][86] Question: Economics of Mount Milligan and life of mine extension - Management expressed confidence in the economics of Mount Milligan, noting improvements in productivity and cost profiles [77][78] Question: Potential for buybacks or special dividends - Management indicated that discussions regarding capital return initiatives are ongoing, but no specific guidance was provided [89][90]