Centerra Gold Inc. [CG-TSX, CAGDF-OTC] on Tuesday beat street estimates by producing 91,197 ounces of gold in the fourth quarter of 2021. However, copper production of 17 million pounds in the quarter fell short of some estimates.
The company said full year 2021 gold production was 308,141 ounces, including 196,438 ounces from the Mount Milligan mine in British Columbia and 111,703 ounces from the Oksut mine in Turkey. Full year copper production came in at 73.3 million pounds.
Looking ahead to 2022, Centerra is forecasting annual gold production of between 400,000 and 450,000 ounces at an all-in-sustaining cost (AISC) of US$600-US$650 an ounce. The company expects to produce 70-80 million pounds of copper this year, a figure that is below street estimates of 90-100 million pounds due to mine sequence changes at the Mount Milligan mine.
A new technical report is planned to arrive in the second quarter of 2022 on Mount Milligan and 2023 copper output is under review pending that update. Also, Centerra said that at its Oksut gold mine, the company has indicated that taxes will start increasing due to the end of previously established incentives.
Centerra shares advanced on the news, rising 0.38% or $0.04 to $10.41 on volume of 303,530. The shares are currently trading in a 52-week range of $14.73 and $8.21.
Centerra recently announced that it is engaged in negotiations with representatives of the Kyrgyz Republic to resolve their dispute related to seizure of Centerra’s Kumtor Mine by the Kyrgyz government in May, 2021.
Centerra said it expects that the framework for any resolution would involve a number of principal terms. They include Centerra receiving the approximately 26.1% in Centerra common shares (77.4 million) held by the state-owned gold refiner, Kyrgyzaltan JSC. Upon receipt, Centerra would cancel the shares surrendered by Kyrgyzaltan JSC.
Centerra said the Kyrgyz Republic will also need to assume all responsibility for the company’s two Kyrgyz subsidiaries and the Kumtor Mine.
If the terms are met, the Kyrgyz government would be able to operate the Kumtor mine without international legal challenges and likely have its status restored with the LBMA (London Bullion Marketing Association) for gold delivery gold sales.
The Kumtor mine was previously one of two flagship assets in the Centerra Gold portfolio. The other is the Mt. Milligan Mine. The company’s portfolio also includes the Oksut Gold project in Turkey and the late stage Kemess development project in B.C.
Kumtor has been the largest gold mine operated in Central Asia by a Western-based company. Mining operations are carried out using conventional open-it mining methods.