Centerra Gold (US:CGAU)2020-11-04 17:46Financial Data and Key Metrics Changes - Centerra Gold recorded net earnings of $205.7 million, or $0.70 per share, for Q3 2020, reflecting strong profitability [18][47] - The company generated $281 million in positive free cash flow during the quarter, contributing to a year-to-date total of $527 million [19][49] - The cash balance at the end of the quarter was $484 million, with no corporate debt outstanding, resulting in a net cash position [20][50] Business Line Data and Key Metrics Changes - Gold production for the quarter was 241,484 ounces, with Oksut contributing 51,412 ounces, Kumtor producing 140,000 ounces, and Mount Milligan producing 49,854 ounces [29][30][34] - The all-in sustaining cost (AISC) for the company was $528 per ounce, with Kumtor at $639 per ounce, Mount Milligan at $165 per ounce, and Oksut at $416 per ounce [48][49] - Oksut mine generated $74 million in free cash flow during its first full quarter of commercial production [39][49] Market Data and Key Metrics Changes - The average gold price realized during the quarter was $1,807 per ounce, while copper was $2.43 per pound [46] - The company sold 238,000 ounces of gold and 21.7 million pounds of copper during the quarter [46] Company Strategy and Development Direction - Centerra Gold is focused on maintaining production guidance for 2020 at 740,000 to 820,000 ounces of gold, while targeting the upper end of this range [52][55] - The company has reduced its AISC guidance for Mount Milligan and Oksut, reflecting effective cost control and favorable operational conditions [51] - The company is committed to advancing its exploration programs and maintaining strong operational performance despite uncertainties in the global environment [67] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of optimizing operations and maximizing production, particularly in light of the economic challenges posed by the COVID-19 pandemic [65][68] - The company is cautious about future capital allocation and dividend decisions, with ongoing discussions at board meetings to assess the situation [72][73] Other Important Information - Centerra Gold achieved a significant safety milestone at Oksut, reaching 3 million hours of lost time incident-free operations [8] - The company is a signatory to the World Gold Council's responsible gold mining principles and is making progress in implementing these principles across its operations [14] Q&A Session Summary Question: Update on Kumtor's mining rates and production outlook - Management indicated that mining rates have been impacted by longer hauls and workforce availability, but production numbers for next year are expected to be similar to previous forecasts [60][62] Question: Investments in Kyrgyzstan during the political transition - Management is focused on optimizing operations and maximizing production, emphasizing their role as a significant tax contributor to the country [65][66] Question: Cash balance in Kyrgyzstan - The company maintains minimal cash in-country, with local requirements being met from a New York bank account [69] Question: Future capital allocation and dividend updates - The board will continue to discuss dividend distribution and capital allocation in light of ongoing uncertainties [72][73] Question: Update on life of mine plans and ESG initiatives - Management expects to publish the life of mine update by the end of February 2021 and highlighted ongoing community support initiatives during the pandemic [76][79]