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Centerra Gold (CGAU) - 2024 Q4 - Earnings Call Transcript
CGAUCenterra Gold (CGAU)2025-02-21 16:08
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Financial Data and Key Metrics Changes - In Q4 2024, Centerra Gold produced over 73,000 ounces of gold and 12.8 million pounds of copper, generating strong free cash flow and increasing cash balance to 625million[9][10]−AdjustednetearningsforQ4were625 million [9][10] - Adjusted net earnings for Q4 were 37 million or 0.17pershare,withconsolidatedall−insustainingcostsat0.17 per share, with consolidated all-in sustaining costs at 1,296 per ounce [32][33] - Full year 2024 all-in sustaining costs were 1,148perounce,inlinewithguidance[33]BusinessLineDataandKeyMetricsChanges−MountMilliganproducedalmost38,000ouncesofpayablegoldand12.8millionpoundsofpayablecopperinQ4,withfullyearproductionbelowguidanceduetolowergrades[20][21]−O¨ksu¨tproducedover35,000ouncesinQ4andover200,000ouncesforthefullyear,withall−insustainingcostsat1,148 per ounce, in line with guidance [33] Business Line Data and Key Metrics Changes - Mount Milligan produced almost 38,000 ounces of payable gold and 12.8 million pounds of payable copper in Q4, with full year production below guidance due to lower grades [20][21] - Öksüt produced over 35,000 ounces in Q4 and over 200,000 ounces for the full year, with all-in sustaining costs at 1,327 per ounce in Q4 [26][27] - Thompson Creek's restart activities are on track, with detailed engineering work initiated and a target for first production in the second half of 2027 [30] Market Data and Key Metrics Changes - The average realized price for gold was 2,207perounceandforcopperwas2,207 per ounce and for copper was 2.88 per pound in Q4 [32] - Molybdenum sales in Q4 were approximately 2.9 million pounds at an average realized price of 22.67perpound[32]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonmaximizingassetvalue,particularlythroughMountMilliganandKemess,withplansforapre−feasibilitystudyforMountMilligan[12][13]−Centerraiscommittedtoresponsibleminingandsustainabilityinitiatives,includinggreenhousegasreductionstrategies[17][18]−ThecompanyisexploringstrategicoptionsforGoldfield,whichiscurrentlyonholdduetoinsufficientresourcesize[11][82]Management′sCommentsonOperatingEnvironmentandFutureOutlook−ManagementexpressedoptimismaboutthefutureofMountMilliganandKemess,highlightingthepotentialforincreasedreservesandproduction[13][14]−Thecompanyremainsdisciplinedincapitalallocation,prioritizinginvestmentsingoldgrowthwhilemaintainingdividendsandsharebuybacks[52][36]−Managementnotedthatthepermittingprocessforcriticalmineralprojectsisbeingstreamlined,whichisencouragingforfutureoperations[17]OtherImportantInformation−Centerra′scashbalanceattheendoftheyearwas22.67 per pound [32] Company Strategy and Development Direction - The company is focused on maximizing asset value, particularly through Mount Milligan and Kemess, with plans for a pre-feasibility study for Mount Milligan [12][13] - Centerra is committed to responsible mining and sustainability initiatives, including greenhouse gas reduction strategies [17][18] - The company is exploring strategic options for Goldfield, which is currently on hold due to insufficient resource size [11][82] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of Mount Milligan and Kemess, highlighting the potential for increased reserves and production [13][14] - The company remains disciplined in capital allocation, prioritizing investments in gold growth while maintaining dividends and share buybacks [52][36] - Management noted that the permitting process for critical mineral projects is being streamlined, which is encouraging for future operations [17] Other Important Information - Centerra's cash balance at the end of the year was 625 million, providing total liquidity of over 1billion[37]−Thecompanyplanstospend1 billion [37] - The company plans to spend 35 million to $45 million on exploration in 2025, focusing on both Brownfield and Greenfield programs [40] Q&A Session Summary Question: Future growth in gold and potential M&A - Management confirmed that gold remains the primary focus and they are looking to unlock value within existing assets before considering M&A opportunities [45][46] Question: Capital return strategy amid rising gold prices - Management stated they are committed to share buybacks and dividends while prioritizing capital allocation towards gold growth projects [50][52] Question: Gold recoveries at Mount Milligan - Management acknowledged lower recoveries in Q4 but indicated improvements are expected as they optimize mining strategies [54][56] Question: Impact of tariffs on Milligan costs - Management expressed confidence that tariffs would not significantly impact costs, as most suppliers are Canadian [60][62] Question: Reserve and resource update at Mount Milligan - Management explained that the increase in grade was due to tighter domain modeling, which resulted in lower ore amounts but higher grades [66][70] Question: Strategy for Goldfield and potential sale - Management indicated Goldfield is on hold for now, but they are open to strategic options such as a sale or joint venture [82] Question: Update on molybdenum operations - Management expressed confidence in the molybdenum business and indicated openness to strategic partnerships if they meet valuation requirements [86] Question: Potential for extending Öksüt's reserve life - Management noted limited exploration potential at Öksüt but acknowledged the possibility of residual leaching from stockpiled inventory [88] Question: Opportunities for additional ounces at Öksüt - Management clarified that while there are no significant opportunities for reclassifying waste as ore, they continuously evaluate operational efficiencies [96][97]