Centerra tables molybdenum mine feasibility study
Centerra Gold Inc. [CG-TSX, CGAU-OTC] has released results of a feasibility study for its Thompson Creek molybdenum mine in Idaho, including a strategic integrated business plan for its Molybdenum business unit. The plan consists of a restart of the Thompson Creek mine and a commercially optimized plan for the Langeloth metallurgical facility near Pittsburgh, Pennsylvania. Collectively these assets are Centerra’s United States molybdenum operations.
According to the feasibility study, Langeloth at full capacity and integrated with Thompson can generate approximately US$45 million in earnings from operations and US$50 million EBITDA (earnings before interest, taxes, depreciation and amortization) per year.
Centerra shares advanced on the news, rising 0.58% or $0.055 to $9.45. The shares trade in a 52-week range of $10.25 and $6.07.
Centerra is a Canadian gold mining company with a focus on operating, developing, exploring and acquiring gold properties in North America, Turkey and other markets worldwide. Its portfolio includes the Mt. Milligan mine in British Columbia.
Thompson Creek is part of a molybdenum business unit that also includes the Endako Mine in northern British Columbia and the Langeloth Metallurgical Facility. Endako is also on care and maintenance.
Thompson Creek is a primary surface molybdenum mine and mill located approximately 48 kilometres southwest of Challis in Idaho’s Cluster County. The mine and concentrator were placed on care and maintenance when the mining and processing of Phase 7 ore was completed.
“Today, we announce the decision to unlock significant value through the restart of the operations at Thompson Creek and a progressive ramp-up of production at Langeloth,’’ said Centerra President and CEO Paul Tomory.
“When Thompson Creek begins production, currently targeted for the second half of 2027, it will provide additional high-grade, high-quality feed to Langeloth, enabling a ramp-up of production to Langeloth’s full annual capacity of 40 million pounds while improving operational flexibility to meet market demand.’’
A previously announced pre-feasibility study includes an optimized mine plan with an 11-year lifespan, producing 134 million pounds of molybdenum, (95 million tonnes).
The PFS outlined a requirement for $350-$400 million of pre-production capital spending, including optimized mine design.
Tomory said the feasibility study has confirmed the capital estimate from the prefeasibility study, while adding another year of production. “Following significant progress on permitting efforts in the second quarter of 2024, we have pivoted from a two-phase approval to a single-phase capital investment of US$397 million over three years from now through mid-2027.
The feasibility study envisages an initial mine life of 12 years. Average annual production is estimated at approximately 13 million pounds of molybdenum after the initial ramp-up. The study pegs the all-in-sustaining cost at US$12.46 per pound.
The study is based on a proven and probable molybdenum reserve of 161 million pounds of molybdenum.
“Our total project cost guidance at Thompson Creek for the second half of 2024 is expected to be US$55 million to US$65 million,’’ Tomory said. “We will provide 2025 guidance for Thompson Creek with our annual guidance that is expected to be published early next year.’’