Centerra snaps up Nevada heap leach gold project

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Centerra Gold Inc. [CG-TSX, CGAU-NYSE] on Tuesday it has agreed to acquire the Goldfield district development project in Nevada from Waterton Nevada Splitter LLC for US$206.5 million in cash at closing.

Under the deal, Centerra will also make a US$31.5 million future milestone payment either in cash or Centerra shares.

Goldfield is a conventional open pit, heap leach project in late-stage development located in a Tier 1 mining jurisdiction, Centerra said in a press release. It contains three known deposits: Gemfield, Goldfield Main and McMahon Ridge.

Centerra is picking up the asset by acquiring 100% of Gemfield Resources LLC, the owner of the Goldfield project.

Centerra is currently 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.

The Kumtor mine was previously one of two flagship assets in the Centerra Gold portfolio. The other is the Mt. Milligan Mine, which is located in British Columbia. The company’s portfolio also includes the Oksut Gold project in Turkey and the late stage Kemess development project in B.C.

Centerra said Goldfield is anticipated to add meaningful future low-cost production to Centerra with a conventional open-pit heap leach mine with expected low capital intensity, similar to that of the company’s Oksut mine in Turkey.

The company said the transaction improves its geographic profile by increasing Centerra’s exposure to North America. It said the deal provides an anchor asset that can act as a foothold for further opportunities in the United States.

Other transaction highlights include a short construction period. “Goldfield is substantially de-risked,’’ Centerra said. The company plans to further refine existing technical studies undertaken to date by Waterton, with a resource estimate expected to be released in the first half of 2023 and an updated feasibility study thereafter.

It also said the property offers a large land position in a prolific mining district that has produced over 4.0 million ounces of gold.

On February 18, Centerra shares closed a $11.45. The shares are currently trading in a 52-week range of $14.73 and $8.21.

“Our experienced exploration and operational teams have intimate knowledge of an asset of this kind, and I feel confident that they will be able to successfully develop and execute on this project in the coming years, delivering another source of meaningful cash flow to Centerra,’’ said Centerra President and CEO Scott Perry.

“Lastly, given the strength of our balance sheet, together with our significant projected free cash flow in 2022, acquiring Goldfield leaves Centerra in a position of flexibility to deliver on other shareholder-friendly capital return initiatives that will be under consideration over time,’’ he said.

 


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