TORONTO (miningweekly.com) – Canadian miner Centerra Gold has beaten its 2015 production guidance, producing a consolidated total of 536 921 oz of gold, the company reported on Tuesday.

This included 520 695 oz of gold from the TSX-listed company’s flagship Kumtor mine, in the Kyrgyz Republic, and 16 226 oz of gold from the now-discontinued Boroo mine, in Mongolia.

During the fourth quarter ended December 31, consolidated gold output was 133 665 oz, including 130 611 oz of gold produced by Kumtor mine and 3 054 oz of gold produced by Boroo mine.

The company ended the year with more than $535-million in cash and short-term investments.

For 2016, Centerra estimated gold production to be in the range of 480 000 oz to 530 000 oz.

Gold production was expected to be weighted towards the second half of the year at Kumtor, as Centerra planned to access the higher-grade portion of the SB zone at the end of the second quarter.

Kyrgyzstan's government last month stopped talks with Centerra on restructuring the jointly owned Kumtor mine, saying that the current agreement was not in the national interest.

News agency Reuters reported that the government said it would propose a new restructuring project to develop Kumtor, seeking "an increase in financial flows" for Kyrgyzstan.

Centerra, which is the Kumtor operator, has been in talks with Kyrgyzstan for almost two years on a deal that would involve the former-Soviet republic swapping its 32.7% stake in Centerra for half of a joint venture (JV) that would control the gold deposit.

Centerra’s projected consolidated all-in sustaining costs per ounce sold for 2016 was expected to be in the range of $877/oz to $968/oz.

PROJECT DEVELOPMENT
Meanwhile, work to advance the Öksüt project, in Turkey was ramping up, with work on detailed engineering and the procurement of contractors and equipment ongoing.

CEO Scott Perry advised that the site project management team was now in place and would be moving to the company’s offices in Develi, located about 20 minutes from the site, on February 1.

Excluding capitalised stripping, Centerra budgeted to spend $269-million on capital expenditure in 2016, including $85-million of sustaining capital and $184-million of growth capital. While the Kumtor mine would require $84-million in sustaining capital and $26-million in growth capital this year, the Öksüt project was expected to absorb about $157-million in development expenditures.

The Turkish Ministry of Environment and Urbanisation approved the Öksüt project’s environmental-impact assessment early in November, paving the way for Centerra to focus on obtaining the necessary land use and other operational permits. At the time, Perry advised that the company planned to start construction and development of the project late in the first quarter, or early in the second quarter of 2016.

First gold output was expected in the second quarter of 2017.

The Öksüt project’s estimated mineral reserves as at June 30, 2015 were 26.1-million tonnes at an average grade of 1.4 g/t, containing 1.2-million ounces of gold at a cutoff grade of 0.3 g/t, and a gold price of $1 250/oz.

The project was expected to cost $221-million, which included a $25-million contingency.

Öksüt was expected to produce 895 000 oz of gold over the eight-year mine life, generating an after-tax internal rate of return of 43%.

Centerra was also moving ahead with a feasibility study on the Hardrock project, due for completion by the middle of the year, on which it expected to spend about $10.8-million. In the first quarter of 2015 the company announced a partnership with 50/50 JV partner Premier Gold to develop the project, including the Hardrock project located in the Geraldton-Beardmore Greenstone belt, in north-western Ontario.