Centerra Gold (US:CGAU)2023-08-01 17:30Financial Data and Key Metrics Changes - The company reported a net loss from continuing operations of $40 million, equating to a loss of $0.18 per share, with an adjusted net loss of $42 million or a loss of $0.20 per share [36][38] - Net revenue for the quarter was $185 million, with gold sales of 48,155 ounces and copper sales of 12.8 million pounds, reflecting a 22% decrease in gold sales compared to production due to delays from Turkish national holidays [38][39] - Consolidated all-in sustaining costs on a byproduct basis for the quarter were $1,711 per ounce, with full-year guidance expected to be in the range of $1,000 to $1,050 per ounce [40] Business Line Data and Key Metrics Changes - Mount Milligan produced over 40,000 ounces of gold in Q2 2023, a 24% increase from the previous quarter, and produced 13.8 million pounds of copper [23] - Öksüt produced just over 20,000 ounces of gold in Q2 2023, with full-year production guidance set between 180,000 and 190,000 ounces [31][34] - The Molybdenum Business Unit sold approximately three million pounds of molybdenum, generating revenue of $76 million [40] Market Data and Key Metrics Changes - The average realized price for gold was $1,532 per ounce, while copper was $2.56 per pound [39] - The Turkish government increased the corporate income tax rate from 20% to 25%, retroactive to January 1, 2023, which is expected to result in an incremental $0.9 million in cash taxes for the first half of 2023 [43] Company Strategy and Development Direction - The company is focused on developing a comprehensive value-maximizing strategic plan, including evaluating the Molybdenum Business Unit and assessing opportunities for growth in gold production [15][16] - A strategic pivot at the Goldfield project will focus on oxide and transition material to achieve a lower capital expenditure flow sheet and maximize returns [17][19] - The company aims to optimize shareholder value through a capital allocation framework that includes returning capital to shareholders, investing in internal projects, and exploring external M&A opportunities [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities ahead, particularly following the approval of an Environmental Impact Assessment for the Öksüt mine, which is expected to contribute significantly to production in the second half of the year [13][14] - The company anticipates elevated production levels well into the first half of 2024, transitioning to a normal state by 2025 [5][100] - Management acknowledged inflationary pressures but noted that inflation has abated to more normal levels compared to the significant inflation experienced in 2021 and early 2022 [60] Other Important Information - The company achieved full conformance with the World Gold Council's responsible gold mining principles during its year three assessment, reflecting its commitment to sustainable mining practices [21] - Capital expenditures in Q2 were $23 million, with full-year guidance expected to be between $90 million and $115 million [42] Q&A Session Summary Question: Discussion on organic vs inorganic growth opportunities - Management indicated a focus on evaluating current assets for value and is open to M&A opportunities that align with their skill set [54][55] Question: Cost increases and inflationary pressures - Management confirmed that the increase in all-in sustaining costs is primarily due to lower gold production and mine sequencing issues [57][59] Question: Strategic direction regarding non-producing assets - Management reaffirmed the company's commitment to remain primarily a gold producer while exploring value in base metals and molybdenum [65][66] Question: Update on Goldfield project and exploration potential - Management highlighted the focus on oxide material and the potential for additional mineralization, leading to an increased exploration budget [75][77] Question: Molybdenum business strategy and potential sale - Management noted strong fundamentals for molybdenum and plans to demonstrate value before considering any sale or M&A opportunities [79][81]