Photo by: Reuters
TORONTO (miningweekly.com) – Canadian miner Centerra Gold has swung to a fourth-quarter profit, boosted by strong output from its two operating mines.
For the three months ended December 31, the TSX-listed miner late on Wednesday reported net earnings of $106.6-million, or $0.45 a share, compared with a loss of $70.7-million, or $0.30 a share, a year earlier.
Analysts had expected earnings of C$0.67 a share.
For the full year, the company recorded net earnings of $157.7-million, or $0.67 a share, compared with a net loss of $143.7-million, or $0.61 a share, in 2012.
Revenue for the period rose 27% to $468.9-million, boosted by a 71% increase in gold ounces sold. The average realised gold price in the fourth quarter was $1 271/oz, a 26% decrease from $1 711/oz realised in the same quarter of 2012.
Consolidated output from the company’s controversial flagship Kumtor mine, in Kyrgyzstan, and the Boroo mine, in Mongolia, totalled 362 234 oz, up 65% year-on-year when compared with 219 316 oz in the same period in 2012.
Gold output in 2013 nearly doubled to 690 720 oz, compared with 387 076 oz a year earlier.
All-in costs per ounce sold were $474 in the period, compared with $850/oz in the same quarter of 2012. The decrease reflected the increased ounces sold from higher output and lower capital requirements at Kumtor, partially offset by increased costs associated with the larger truck fleet.
“Both operations exceeded their production guidance in 2013, mainly as a result of a strong fourth quarter at Kumtor and better-than-expected annual production from the heap leach operation at Boroo,” Centerra said.
Centerra said that it expected consolidated gold output of 595 000 oz to 645 000 oz in 2014, that its consolidated all-in sustaining costs per ounce sold would be within a range of $875 to $950 and its consolidated all-in costs $989 to $1 074 per ounce sold.
KUMTOR OWNERSHIP
Centerra said that it expected to continue its discussions with the government regarding a potential restructuring transaction to resolve all outstanding concerns relating to Kumtor.
On December 24, Centerra entered into a non-binding heads of agreement (HOA) with the Kyrgyz government and State-owned miner Kyrgyzaltyn JSC regarding a potential restructuring transaction under which Kyrgyzaltyn would exchange its 32.7% equity interest in Centerra for a 50% interest in a joint venture company that would own the Kumtor mine.
Earlier this month, after their review of the HOA, the Kyrgyz Parliament adopted a resolution that appeared to support the concept of the restructuring described in the HOA, but which also contained a number of recommendations that were materially inconsistent with the terms of the HOA.
Among other things, the resolution called for further audits of the Kumtor operation and for the government and the general prosecutor’s office to continue pursuing claims for environmental and economic damages, which the company disputes. Centerra said it had not yet received an official copy of the Parliamentary resolution.
However, Centerra stressed that any agreement to resolve matters must be fair to all its shareholders.
Kyrgyzstan in December sued Centerra for $304-million over what the government says is ecological damage.
TURKISH DELIGHT
Meanwhile, Centerra also on Wednesday said it had completed a preliminary economic assessment (PEA) on its 100%-owned Öksüt project, located in south-central Turkey, about 295 km south-east of the capital city of Ankara.
The project comprises the Keltepe deposit and the smaller Güneytepe deposit.
The resource estimate used as the basis for the PEA was made as of December 31, using a cutoff grade of 0.2 g/t of gold and a gold price of $1 300/oz. The resource estimate consists of National Instrument 43-101-compliant indicated mineral resources from the Keltepe deposit, estimated at 29-million tonnes grading 1.2 g/t of gold for 1.1-million contained ounces; and inferred mineral resources located at the Güneytepe deposit, estimated at 4.7-million tonnes grading 0.9 g/t of gold for 134 000 contained ounces of gold.
The PEA envisions a conventional openpit and heap leach facility with an expected 34-million tonnes of ore to be stacked at a maximum rate of 11 000 t/d.
Highlights of the PEA treatment provided for an 11 year mine life starting from 2016, with life-of-mine gold output of 893 000 oz and average yearly gold output of 125 000 oz from the fourth to the sixth years.
The mine could be built for about $166-million, requiring total sustaining capital of $9-million.
The PEA estimated all-in costs for the project of $849/oz, and all-in costs including taxes for the project of $914/oz.
The after-tax net present value is $117-million at an 8% discount rate with a 19% project internal rate of return.
Payback on construction capital and preproduction costs was expected to be 4.5 years after production started.