Centerra Gold (CGAU) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q3 2024, the company produced over 93,000 ounces of gold and 13.7 million pounds of copper, with cash and cash equivalents growing to $604 million despite spending approximately$32 million on the restart of operations at Thompson Creek [6][35] - Adjusted net earnings for Q3 were $39 million or$0.19 per share, with sales of 96,736 ounces of gold and 14.2 million pounds of copper, representing increases of 16% and 21% respectively compared to the previous quarter [29][30] - Consolidated all-in sustaining costs on a by-product basis were $1,302 per ounce in Q3, with full-year consolidated cost guidance remaining unchanged [30][31] Business Line Data and Key Metrics Changes - Mount Milligan produced almost 43,000 ounces of payable gold and 13.7 million pounds of payable copper in Q3, with gold and copper sales up 46$23.27 per pound [30] Market Data and Key Metrics Changes - The average realized price for gold was $2,206 per ounce and for copper was$3.37 per pound in Q3, reflecting the existing streaming arrangements at Mount Milligan [29] - The company expects to maintain a strong cash balance of $604 million, providing total liquidity of$1 billion to execute its strategic plan [35] Company Strategy and Development Direction - The company is focused on maximizing the value of its assets, with significant progress on the strategic plan, including the restart of operations at Thompson Creek and the evaluation of Mount Milligan's long-term potential [7][14] - The restart of Thompson Creek is expected to produce an after-tax NPV of $472 million and a 22$397 million planned over the next three years [10][13] - The company is also pursuing organic growth projects, including Goldfield and Kemess, while continuing to optimize operations at Mount Milligan [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the company is on track to meet its consolidated production and cost guidance for the year, benefiting from margin expansion in an elevated metal price environment [6][35] - The management team expressed optimism about the future, highlighting ongoing efforts in ESG initiatives and community engagement [16][19] Other Important Information - The company is conducting a preliminary economic assessment for Mount Milligan, expected to be completed by the end of the first half of 2025 [8] - ESG achievements include collaboration with First Nation partners to enhance employment opportunities and support for women entrepreneurs [17][19] Q&A Session Summary Question: Recovery at Mount Milligan - Management acknowledged that oxidized material impacted gold recovery in Q3, but expects improvements in Q4 as they move deeper into the deposit [40] Question: Cost Increases - The increase in mining costs was attributed to timing on equipment refurbishment and some increases in consumables, but overall productivity indicators remain on track [46] Question: Inventory Levels - The increase in gold inventory at Mount Milligan is related to shipment timing, and management expects levels to normalize in Q4 [39] Question: Optimization at Mount Milligan - The company is implementing a real-time optimization system called Float IQ to improve gold recoveries, aiming for mid-60% recovery rates [50][52] Question: Inflation in Turkey - Management noted that inflation in Turkey is elevated, and while costs may increase, they expect to manage within current guidance for 2024 [65] Question: Öksüt Grades - The grades expected in Q4 will likely continue into 2025, reflecting the overall production profile outlined in previous communications [67] Question: Royalty Pressure - There has been no indication of pressure from the government to revisit royalty structures despite higher metal prices [71]