Centerra Gold Q1 2025 Earnings Report

Centerra Gold EPS Results

• Actual EPS: $0.12
• Consensus EPS: $0.12
• Beat/Miss: Met Expectations
• One Year Ago EPS: N/A

Centerra Gold Revenue Results

• Actual Revenue: $299.50 million
• Expected Revenue: $288.25 million
• Beat/Miss: Beat by +$11.25 million
• YoY Revenue Growth: N/A

Centerra Gold Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 9:00AM ET

Centerra Gold (NYSE:CGAU), a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects are the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt gold mine located in Turkey. The company was incorporated in 2002 and is based in Toronto, Canada.

Centerra Gold Q1 2025 Earnings Call Transcript

Key Takeaways

• Generated positive free cash flow at both operations, ending Q1 with a strong cash balance of $608 M, and the Board approved a $75 M share repurchase program alongside a quarterly dividend of CAD 0.07/share.
• First-quarter production of ~60,000 oz gold and 12 M lbs copper met expectations, with full-year 2025 guidance unchanged and a stronger second half projected as grades improve.
• Chemes project resource updated to 2.7 M oz indicated and 2.2 M oz inferred gold plus 971 M lbs indicated and 821 M lbs inferred copper, with exploration spending doubled and a PEA due by year-end.
• Mount Milligan and Öksüt Q1 production dipped below plan due to lower grades and adverse weather, pushing all-in sustaining costs higher to $11.68/oz at Milligan (+5%) and $15.63/oz at Öksüt.
• Thompson Creek restart work is ~14% complete with $55 M spent to date, on track with the $397 M initial capex estimate and unchanged 2025 non-sustaining capex guidance.

Presentation

[Operator]

Thank you for standing by. This is the conference operator. Welcome to the Centerra Gold First Quarter twenty twenty five Conference Call. As a reminder, all participants are in a listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

[Operator]

Lisa Wilkinson, Vice President, Investor Relations and Corporate Communications with Centerra Gold. The floor is yours, ma'am.

[Lisa Wilkinson, Vice President of Investor Relations & Corporate Communications at Centerra Gold]

Thank you, operator, and good morning, everyone. Welcome to CenteraGold's first quarter twenty twenty five results conference call. Joining me on the call today are Paul Tamori, President and Chief Executive Officer Ryan Snyder, Chief Financial Officer and David Hendrix, our new Chief Operating Officer. Our news published this morning outlines our first quarter twenty twenty five results and should be read alongside our MD and A and financial statements, which are available on SEDAR, EDGAR and our website. All figures are in U.

[Lisa Wilkinson, Vice President of Investor Relations & Corporate Communications at Centerra Gold]

S. Dollars unless otherwise noted. Presentation slides accompanying this webcast are available on Centerra's website. Following the prepared remarks, we will open the call for questions. Before we begin, I would like to remind everyone that today's discussion may include forward looking statements, which are subject to risks that could cause our actual results to differ from those expressed or implied.

[Lisa Wilkinson, Vice President of Investor Relations & Corporate Communications at Centerra Gold]

For more information, please refer to the cautionary statements in our presentation and the risk factors outlined in our annual information form. We will also be referring to certain non GAAP measures during today's discussion. For a detailed description of these measures, please see our news release and MD and A issued this morning. I will now turn the call over to Paul Tamore.

[Paul Tomory, President & CEO at Centerra Gold]

Thank you, Lisa, and good morning, everyone. In the first quarter, we generated positive free cash flow at both operations. Gold and copper production in the quarter was approximately 60,000 ounces and 12,000,000 pounds respectively. Our 2025 production guidance is unchanged and we expect a strong second half of the year driven by increasing grades. We maintained a strong cash position of $6.00 $8,000,000 ensuring financial flexibility to advance ongoing and prospective project activities.

[Paul Tomory, President & CEO at Centerra Gold]

We remain focused on returning capital to shareholders with the Board approving the repurchase of up to $75,000,000 of Centerra shares in 2025, we believe buybacks are an effective tool to deploy our cash in line with our capital allocation strategy, while preserving the financial flexibility to support investment in future growth. The recent implementation of U. S. Tariffs had no impact on our operations in the first quarter. While we continue to monitor this situation, no significant impact is expected on our mining operations at Mount Milligan and Aksu and restart activities at Thompson Creek.

[Paul Tomory, President & CEO at Centerra Gold]

We are assessing the potential impact of tariffs on Langlois. However, we don't currently anticipate any material impact at the Centerra level. This morning, we published an updated resource at Chemes, which demonstrates the robust mineralization in the highly prospective Tutugan District of Northern BC. In 2024, we completed over 11,400 meters of core drilling and those results have been included in the updated resource. Gold mineral resources are estimated to contain 2,700,000 ounces of indicated and 2,200,000 ounces inferred.

[Paul Tomory, President & CEO at Centerra Gold]

Copper mineral resources are estimated to contain nine seventy one million pounds vindicated and eight twenty one million pounds of inferred. And the grades at Chemes compare favorably to those in the reserves at Mount Milligan. We have doubled our 2025 exploration guidance at Chemes to between $10,000,000 and $12,000,000 with a total of 28,500 meters of drilling planned. The focus is expected to be on infill drilling for the open pit and underground targets and also to test high grade mineralization in the deep Chemes Offset Zone, which is currently not included in the state of the mineral resource. We are moving forward with a preliminary economic assessment on the Chemes project using an open pit and underground operation with long hole open stoping and backfill.

[Paul Tomory, President & CEO at Centerra Gold]

The study is expected to be completed by the end of the year. Chemes has significant infrastructure already in place, which is expected to lower the execution of risk compared to a typical greenfield project of this scale. Complementing the existing infrastructure is anticipated that new crushing, conveying and mine infrastructure will be required for the open pit and underground operations. With ChemS, we're advancing the studies for a potential gold copper mine with a possible fifteen year operation in a top tier mining jurisdiction. We are targeting a project with a potential average annual production of approximately 250,000 gold equivalent ounces, which along with Mount Milligan would give Centerra two long life gold copper assets in British Columbia.

[Paul Tomory, President & CEO at Centerra Gold]

Additionally, two weeks ago, we supported Thesis Gold with a strategic equity investment. Given the proximity of Chemez to the Lawyers Ranch project, we see substantial opportunities for synergies, including the ability to leverage existing infrastructure to unlock regional potential. I'd like to provide an update on our sustainability initiatives. We remain committed to responsible mining and continue to progress in our permitting efforts. In March, we submitted an amended application for operating permits at Mount Milligan.

[Paul Tomory, President & CEO at Centerra Gold]

Mount Milligan is an important producer of copper and gold in British Columbia and has been selected as one of the province's critical mineral projects, which is expected to result in a streamlined permitting process. We are continuing to advance our commitment to responsible mining practices and transparent reporting. Our team is actively working on the 2024 sustainability report, which will highlight our progress across key environmental, social and governance initiatives. We look forward to publishing the report in the coming months and sharing the steps we are taking to create long term value for our stakeholders. Before I move into our operating highlights, I'd like to welcome David Hendrix as our new Chief Operating Officer, who started in April.

[Paul Tomory, President & CEO at Centerra Gold]

With a proven track record of leadership and operational excellence, he brings valuable expertise that will help drive our continued success. Slide eight shows operating highlights on Mount Milligan for the first quarter. It produced over 35,800 ounces of payable gold and 11,600,000 pounds of payable copper in the quarter. This was lower than planned, primarily due to lower grades encountered in areas of Phases six and nine that are at the periphery of the ore body. We maintain our guidance at Mount Milligan with both production and sales weighted towards the second half of the year.

[Paul Tomory, President & CEO at Centerra Gold]

In the first quarter, all in sustaining costs on a byproduct basis were $11.68 dollars per ounce, 5% higher than last quarter due to slightly increased sustaining CapEx and lower ounces sold in the quarter. Cost guidance at Mount Milligan is unchanged for the year. The site wide optimization program at Mount Milligan continues to progress and we've seen improvements in the mine with higher truck availability and increased operating hours. Work on the Mount Milligan mine life extension PFS is on track to be completed in the third quarter of this year. We are optimistic the mine life can be extended beyond 02/1936, which is currently limited by the available space in the existing tailings storage facility.

[Paul Tomory, President & CEO at Centerra Gold]

We are evaluating options for additional tailings capacity as well as an increase of annual mill throughput in the range of 10%. Now moving on to Oksut. First Quarter production was 23,500 ounces, lower than planned due to lower grades resulting from mine sequencing and impacts from unfavorable weather conditions. We are maintaining our 2025 production guidance at Oksut with production expected to be higher in the second half of the year as we access higher grade areas of the mine. In the first quarter, all in sustaining costs on a byproduct basis were fifteen sixty three dollars per ounce, which is higher compared to last quarter, driven by lower sales and higher royalty expense per ounce due to elevated gold prices.

[Paul Tomory, President & CEO at Centerra Gold]

Full year cost guidance at Iqsut is unchanged. In the first quarter, we continue to progress the restart activity at the Thompson Creek with non sustaining capital expenditures of $26,000,000 Since the restart decision in September, we have spent $55,000,000 and by the end of the first quarter, approximately 14% of the total capital investment has been completed. 2025 guidance for non sustaining CapEx at Thompson Creek is unchanged and the project remains in line with the total initial capital estimate of $397,000,000 as outlined in the feasibility study. With that, I'll pass the call over to Ryan to walk through our financial highlights.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Thanks, Paul. Slide 11 details our first quarter financial results. Adjusted net earnings in the first quarter were $26,000,000 or $0.13 per share. In the first quarter, sales were over 61,000 ounces of gold and 12,100,000 pounds of copper. The average realized price was $2,554 per ounce of gold and $3.8 per pound of copper.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Both of these figures incorporate the existing streaming arrangement at Mount Milligan. At the Molybdenum business unit, approximately 4,200,000 pounds of molybdenum was sold in the first quarter at the Langloft facility at an average realized price of $21.59 per pound. Consolidated all in sustaining costs on a byproduct basis in the first quarter were $14.91 dollars per ounce. We have maintained our full year consolidated cost guidance. Slide 12 shows our financial highlights for the quarter.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

In the first quarter, we generated positive free cash flow at both mining operations. Cash flow from operations on a consolidated basis for the quarter was $59,000,000 and free cash flow was $10,000,000 which includes spending of $26,000,000 of development costs for the Thompson Creek mine. In the first quarter, Mount Milligan generated $39,000,000 in cash from operations and $27,000,000 in free cash flow. OXU generated $50,000,000 of cash from operations and had free cash flow of 42,000,000 The Molybdenum business unit used $6,000,000 of cash in operations and had a free cash flow deficit of $34,000,000 this quarter, mainly related to spending the Thompson Creek restart. Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

In the first quarter, we remained active on our share buybacks, repurchasing 2,500,000.0 shares for total consideration of $15,000,000 This was up 25% from last quarter. As Paul mentioned earlier, the Board has approved up to $75,000,000 of buybacks in 2025 and has also declared a quarterly dividend of CAD0.07 per share. A key focus for Centerra is returning capital to shareholders, and we expect to remain active on the share buybacks dependent on market conditions. At the end of the first quarter, our cash balance was $6.00 8,000,000 This provides us with total liquidity of $1,000,000,000 and positions us well to execute on our strategic plan and deliver shareholder value. I'll pass it back to Paul for some closing remarks.

[Paul Tomory, President & CEO at Centerra Gold]

Thanks, Ryan. At Mount Milligan and Chemess, we are moving forward key growth initiatives while expanding our exploration efforts. Mount Milligan PFS continues to advance with results expected in the third quarter of twenty twenty five, and we are progressing at PEA at Chemez with results anticipated by the end of this year. Together, these milestones represent several key catalysts in 2025 that are expected to unlock significant value and further strengthen our growth pipeline. And with that operator, we'll open the call to questions.

[Operator]

Thank you, sir. We will now begin the question and answer session. The first question we have will come from Don DeMarco of National Bank Finance. Please go ahead.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

Thank you, operator, and good morning, Paul and team. Congratulations on the quarter and moving forward with the Chemes PEA. I think my question is going to focus on that actually. So with the shift in mining method to long hole open stoping from block caving, I guess there's a read through here to lower initial CapEx. Though I believe the prior reports are somewhat dated.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

So is it too early to provide any magnitude of development CapEx at this point? Or put another way, would you expect potential development of Chemez to be internally funded?

[Paul Tomory, President & CEO at Centerra Gold]

Hey, Don, thanks for the question. If I refer back to the Chemez cross section, we're going pull that up on the webcast here. The previous concept, we have shelved last year really involved the block cave over towards the right of the slide. And simply put, there's just too much development CapEx, too little payable metal and too longer timeline Centerra to accept that risk. What we've been doing over the last year and a half is we reinventoried all the drill data, rebuilt the resource model on a site wide basis.

[Paul Tomory, President & CEO at Centerra Gold]

And we've determined that there's a significant potential for an open pit combined with a more conventional underground operation and those are off to the left of the page. So we've not only have we moved away from the block cave as a concept, we've actually spatially moved away from it. So there's a whole bunch of mineralization over there towards the left of the page that is open pittable. And then a portion of the block of the former blockade concept could be mined with a more conventional underground method. So that's what we're doing.

[Paul Tomory, President & CEO at Centerra Gold]

Your second question, or at least that's what we're going to be assessing here in this PEA, and the resource that we've just put out here essentially matches that concept. Your question on being able to fund this project, this is fundamentally, it's a pretty, we got some pictures in the press release, but we've got a mill, we've got a camp, we've got a lot of existing infrastructure in place, which would significantly de risk the way we would look at CapEx investment here. There will still be new investment. As we showed in the other cross section, there would be some development for material conveyance and crushing, getting it over to the mill as well as upgrades to the mill. But when we look at capital allocation, this is a pretty important point.

[Paul Tomory, President & CEO at Centerra Gold]

When we look at our buyback, our capacity for buyback, we do consider what our capital needs might be, not just including Thompson Creek, which we're executing on the Mount Milligan PFS, but also now we're starting to bring Chemes into that concept of forward liquidity, how we look at buybacks and capital allocation. It is our intent to fund all of our development projects with existing and future liquidity. We don't expect to have to access either equity or debt markets to be able to fund our project pipeline. And that is a fundamental tenant in how we look at liquidity and planning and the way we look at dividends and buybacks.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

Okay, excellent. Thank you for that. Continue with Khameth, you noted synergies with the thesis is Lawyers Ranch project, specifically to leverage infrastructure there. But what infrastructure did you have in mind? And do you also see other synergies with the potential of the ore body or any of the mineral resources there?

[Paul Tomory, President & CEO at Centerra Gold]

Well, we think highly of Ewan and the team at Thesis, we think they have a good project that they're advancing there. When we talk about potential synergies, we refer actually to the infrastructure of Chemez. Chemez is in a way the key to that Tutagun District, which lies north of Chemez. There's a lot of exploration activity recently. It's a highly prospective region.

[Paul Tomory, President & CEO at Centerra Gold]

And we think that Chemez could be the linchpin to broader development in the area. And I'll remind you, we've got the airstrip, there's a power line in place, a camp at the mill. So there's a very significant set of infrastructure that Centerra owns that could be, I'm not saying it will be, but it could be a significant point of synergy for other deposits in the district. So as I said, we really like what the team at TSYS has done and we're happy to be supporting them here in at least the next phase of their development.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

Okay. Great to hear. Okay. Well, listen, that's all for me, Paul. Thanks again and good luck with Q2 and the back end loaded year.

[Paul Tomory, President & CEO at Centerra Gold]

We'll talk soon, Don. Thanks.

[Operator]

The next question we have will come from Lawson Winder of Bank of America Securities.

[Lawson Winder, Analyst at Bank of America]

Thank you, operator. Hello, Paul and team. Thank you for taking my question and thanks for today's update. When you think about capital allocation now with Kness in that pipeline, does that deprioritize the need to potentially acquire a new gold project?

[Paul Tomory, President & CEO at Centerra Gold]

Good morning, Lawson. Yes, that's a good question. We what we like about Chemez is that some of the attributes I listed here, it's built infrastructure, It's a brownfield site. A lot of the permits are in place. We have relations, with local First Nations there.

[Paul Tomory, President & CEO at Centerra Gold]

And so when we look at potential M and A, we compare things against that which we have in the portfolio, namely Chem S. And what we find is that ChemS stacks up quite nicely against potential acquisitions. And certainly, when you load in the acquisition costs that, in fact, ChemS appears to screen very highly against potential acquisitions. So yes, I think where you're leading is, does this lessen the need for M and A? And the answer is yes, definitely.

[Paul Tomory, President & CEO at Centerra Gold]

That doesn't mean we won't continue to consider M and A. But with Chem S and with the Mount Milligan extension project, we have very significant future potential that we're assessing right now in Centerra. And as I said in my prepared remarks, what we're targeting here is two very substantial gold coppers in British Columbia with significant mine life. So I think where you're leading with your question is the correct way to look at it.

[Lawson Winder, Analyst at Bank of America]

Okay. That's very helpful. And then with respect to Komatsa and the potential open pit, do you guys have a sense at this point of what type of strip ratio you might be looking at with the current conceptual configuration of both underground and open pit combined?

[Paul Tomory, President & CEO at Centerra Gold]

Well, if you go back to that cross section on the webcast, we're not yet at the stage where we're going to put out PEA level numbers. Of course, will be the objective of the PEA. But a lot of the mineralization to the left of the page there, to the west is relatively shallow. So we're not looking at very significant strip ratios. There will be some waste.

[Paul Tomory, President & CEO at Centerra Gold]

The waste will be more in how we're mining into the side of a hill there. The waste will be associated laying back the one wall, but most of the mineralization there in the open pit area is quite shallow. And that's the material that grades around 0.4, zero point four five in that range. And then we sorry, down to 0.3 range and then we get the upgraded grades as you go down into the former block cave area, which a part of which we're going to look at with a more conventional underground. Those grades are higher down there.

[Lawson Winder, Analyst at Bank of America]

Okay. And just finally on the molybdenum business unit. Is there any sort of update on the potential sale process that you can share? Or even if your thinking has evolved on that, do you continue to pursue a potential partnership or sale? And if so, what could the time line on something like that look like?

[Lawson Winder, Analyst at Bank of America]

And if not, then what do you see in terms of the time line for a completion on Thompson Creek project and ultimately, the long term value there and how it fits in the portfolio?

[Paul Tomory, President & CEO at Centerra Gold]

We are we remain and we will remain open to any strategic outcomes about that maximize shareholder value. So a sale or divestiture will always be in the cards in that business. However, we see significant value in this business. We think the dynamics in the North American steel industry has been very favorable for molybdenum. We like the project.

[Paul Tomory, President & CEO at Centerra Gold]

We're advancing it on schedule, on budget here. And we think that there will be a point at which there will be a value maximization moment for our shareholders. But we're not in a hurry to do that, but we would be opportunistic should something come up. But we see significant value in that molybdenum business and it may require a little bit of patience, but we will deliver or we expect to deliver significant value from that business.

[Lawson Winder, Analyst at Bank of America]

Is it too early to start thinking about, signing or talking to customers on potential future sales for that asset? I mean, to what extent have you assessed the current level of demand in The United States?

[Paul Tomory, President & CEO at Centerra Gold]

Are you talking about for molybdenum or for molybdenum assets?

[Lawson Winder, Analyst at Bank of America]

Sorry, no, for Molybdenum itself. Yes. Thanks.

[Paul Tomory, President & CEO at Centerra Gold]

Yes. For the product. No, what we've seen Ryan can jump in here. He also oversees the commercial area. But we have seen demand for Molybdenum.

[Paul Tomory, President & CEO at Centerra Gold]

As you know, at Langloft, we already produce a finished product Molybdenum on third party material. Just a quick recap on the business case here is we're going to get Thompson Creek up and running. The clean feed from Thompson Creek goes to Langeloth, which allows us to ramp up capacity utilization out of Langeloth. But the order book, Ryan, why don't you describe what we've been seeing so far this year?

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Yes, sure. I mean there's a lot of noise out there, right, in terms of moving Vale around globally and tariffs and things like that. But we've seen really strong demand from our U. S. Customers, our steel customers in The U.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

S. Think if you go back to last year, Langlois operated at £11,000,000 running through that. We were hoping to step that up to 14,000,000 to £16,000,000 this year, and start to move along that growth trajectory. You need Thompson Creek to go to a much bigger scale, but start to step along that growth trajectory. And at Q1, if you look at the financials there, we sold £4,000,000 So on an annualized basis, that's £16,000,000 So the demand is there.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Again, there's issues in the world on tariffs and moving concentrate around, but we're seeing really strong demand. And we continue to look for long term relationships with big customers that will support the growth of that business. But we're feeling really good about it in terms of the steel industry right now, Lawson.

[Lawson Winder, Analyst at Bank of America]

Okay, great. Thank you both very much. Appreciate it.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Thanks, Lawson.

[Operator]

And next we have Raj Ray of BMO.

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

Thank you, operator. Good morning, Paul and team. I've got three questions, go one at a time, if that's okay. First up on your operational outlook for the year. How comfortable and probably David can come in here, are you with the flexibility you have in the operation?

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

So there has been a few quarters we have seen some variability. Are you at a position where you are happy with the amount of grade control drilling you have done and you have visibility? Or are you behind on that production drilling? If you can give some color on that.

[Paul Tomory, President & CEO at Centerra Gold]

Yes, good question. So we're not changing guidance on production. As I said in my prepared remarks, we expect better grades at both Oksut and Milligan. Dave, this is a good opportunity to talk about what we're doing at Milligan on grade.

[David Hendriks, EVP & COO at Centerra Gold]

Hi, Raj.

[David Hendriks, EVP & COO at Centerra Gold]

Nice to meet you here today. So at Mount Milligan, we've started a program to do some pretty extensive, call it mid term model RC drilling. So it will really do a large portion of drilling out the next eighteen months to take our short term model more to a midterm model and then be able to compare that to our long term numbers that are there. So we're pretty confident that this additional information will give us a much better view on what's going on. We're seeing some advances as we go through this new phase of material and we're starting to see some better results, But really the proof will be between the drilling program that we'll complete over the next couple of months and our results.

[David Hendriks, EVP & COO at Centerra Gold]

And probably at the end of Q2, can give you a much better update on where we expect to be in the next eighteen months to two years on the project.

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

So you're saying by end of Q2, you should be pretty much done with that additional RC drilling and you will have the information?

[David Hendriks, EVP & COO at Centerra Gold]

That is correct.

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

And what about Oksut?

[David Hendriks, EVP & COO at Centerra Gold]

Oksut, everything is projecting towards better grades in the second half of the year. It's part of what's in the current mine plan and everything else. And I don't see any reasons at this point in time we would not achieve the guidance numbers by year end at Oksut.

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

Okay. That's good. Then moving on to Chemes. So the updated resource that you published today, Paul, the total mineral inventory is pretty much the same, but I see that there's more inferred now compared to the previous reserves that was there. Is that a function of the change in the way you are thinking about how the mine plan is going to be?

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

What's driving that? Because previously, most of it was in the indicated or M and I category. Now there's almost like fifty-fifty split between indicated and inferred. If you can touch upon that. And also yes, just to complete that question, assuming that the end of the year study is positive and you decide to go ahead, like what sort of a time line we are looking at in terms of when do you start putting the first capital in the ground?

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

And when can chemists come online, assuming everything is positive by the end of the year and your study says, yes, we should go ahead?

[Paul Tomory, President & CEO at Centerra Gold]

Okay. So the first part is on the mineral inventory. If you go back to the cross section, the resource actually moved spatially. So spatially, there is a degree of overlap between the old and the new. But spatially, we're more in the open pit and less in the old block cave.

[Paul Tomory, President & CEO at Centerra Gold]

And in the former block cave area, because of change in mining method, we increased the grade, but decreased the tons in the underground. And that was offset by additions in the open pit. So quite simply, there's a bit of a spatial shift and we're going from blockade to long haul open stoping. There's a tonnage loss, but a grade improvement. And that was actually part of the strategy is to get better grades out of a slightly more selective method. In terms of timeline, still too early to say that, but our intent is to put out a PEA by the end of the year. And as I said, you've seen the pictures. I mean, the site is a past producer, significant infrastructure in place. That is something we would intend to leverage in any potential development plan. But I don't want to speculate at this point on timelines.

[Paul Tomory, President & CEO at Centerra Gold]

But if we like what we see in the PEA, we'd be moving almost immediately to advanced studies, meaning a PFS and then an FS. So that's the guidance I can give on timing, but it starts with that PEA that

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

And lastly, on the moly business and what we are seeing in The U. S. Right now. Now you did mention in your prepared remarks that you don't see a material impact on tariffs. Now from what I understand, this year, you start trying to expand.

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

So you will be building up inventory as you look at expanding the production. What's the worst case scenario? Like maybe put it this way, where do you get most of your concentrate, third party concentrate from now? And in what situation can it start to impact you?

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

I'll take that Raj. Good morning. Yes, look, is the one area where tariffs may be impacting some tariff, right? The big mining operations are fairly insulated. At Langlois, about 60% of the feed right now comes from South America and would be subject to a tariff.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

We are looking at ways to mitigate that. We feel pretty positive that we can find some strategies to move around that for 2025. And then the long term plan is going to be dependent on how the world works and how long these tariffs stay in place, whether we're able to get within them concentrate exempted. I think there's various strategies that we're looking at. As we look at future growth, we're going to have to assess how much we want to ramp up in future years given the state of tariffs.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

But we also are lucky that we have big U. S. Production coming online, right? When Thompson Creek comes online, that's a big source of U. S.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Feed for the Landloth roaster without giving We do buy from other U. S. Mines. And so there is a world if we needed to move to a more U.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

S.-centric business that we could look at. But I think it's too early to do that and we're still viewing this as a global business for now. But it doesn't really change the commitment to the moly business and where we think we want to take this.

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

Okay. That's great, Ryan. So you're saying 60% for this year is from South America and the remaining 40% from U. S?

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Yes. U. S. Or other North American areas that are tariff exempt.

[Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets]

Okay. That's great. Thank you very much. That's it for me.

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Yes. Thanks, Raj.

[Operator]

Next, we have Jeremy Roy of Canaccord Genuity.

[Jeremy Hoy, Equity Research Analyst at Canaccord Genuity Inc]

Thanks, operator. Thanks, Paul and team, for taking my questions. Most of them have been answered. So I have one remaining, that's on ChemS. Could you provide an update on what's been going on, on the community relations front at ChemS?

[Jeremy Hoy, Equity Research Analyst at Canaccord Genuity Inc]

And my understanding is that part of the historic decision to move to Block A was due to an aversion to open pits in the region. And I was hoping you could speak specifically to that. And what gives you confidence that the open pit is something that nearby community would be open to?

[Paul Tomory, President & CEO at Centerra Gold]

Okay. Great question, Jeremy. The old open pit concept to which you're referring to was a giant open pit that took out the entire block cave and then some. So what we're contemplating here is a significantly smaller open pit. And the challenge at that time would have been that the size of that open pit and the tailings requirement associated with the amount of material that would have been processed would have caused a significant disturbance to nearby water bodies.

[Paul Tomory, President & CEO at Centerra Gold]

And that is what in effect led to opposition and a no go in the big open pit. What we're looking at here is a subset. We have a component that's underground and the tailings that we're looking at here would go into a combination of the pit, the old Northgate Pit, which is permitted to receive tailings as well as remaining capacity in the existing tailings dam. So our project concept here, its tailings fit within that envelope I just described and would not require more disturbance. And the combination of the very large open pit and impacts on local water bodies are what caused the problem the first time in that giant open pit that you referred to.

[Paul Tomory, President & CEO at Centerra Gold]

So it's a much more modest scope. And you were asking about the relationship with communities. We do have an IBA in place at Chemez and we maintain very good relations with the local community there and we will continue to engage in dialogue with them.

[Jeremy Hoy, Equity Research Analyst at Canaccord Genuity Inc]

Great. That's very clear, Paul. Thanks for response.

[Paul Tomory, President & CEO at Centerra Gold]

Thanks.

[Operator]

The next question we have will come from Anita Soni of CIBC World Markets.

[Anita Soni, Managing Director at CIBC Capital Markets]

Good morning, Paul. So good to see Chemez back in people's range of thoughts there. It's one of the first stocks I ever covered as an analyst. I wanted to ask a little bit more about some of the parameters around Chemes. Can you remind me, is there a royalty on that?

[Anita Soni, Managing Director at CIBC Capital Markets]

I think at one point, there was a royalty that was out, but I'm not sure if Orico bought it back and then it ended up within Centerra?

[Ryan Snyder, Executive VP & CFO at Centerra Gold]

Yes. So right now and what, there's a whole different mine plan, and we'll need to figure this out. There is a silver stream agreement, with Triple Flag, for just the silver, but none of the gold or copper is streamed or tied up in anything like that.

[Anita Soni, Managing Director at CIBC Capital Markets]

Okay. And then in terms of the amount of infrastructure that's there, I think when I was at Mount Milligan maybe about one point years ago, you were talking about potentially selling some of that infrastructure. I just wanted to know if that actually got done or is most of the infrastructure still there in place?

[Paul Tomory, President & CEO at Centerra Gold]

Okay. So when we were at Mount Milligan, 1 of things we talked about is we also have a very large, very modern mill at Endaco. And that was always an option as what to do with the material there. So nothing was sold from either Endaco or Chemes over the past couple of years. The mill at Chemes ran at 50,000 to 55,000 tons a day.

[Paul Tomory, President & CEO at Centerra Gold]

And Northgate way back moved one of the lines to Young Davidson. And in this project that we're looking at here, we are contemplating, of course, replacing the equipment that was taken to Young Davidson. But in the past two years, we have not sold anything from site. So we just to reiterate, we have a process plant, we have a truck shop, we have a can, importantly, a power line to site, an airstrip, water, water treatments. And these will all require refurbishment, but it's certainly not a standing start.

[Anita Soni, Managing Director at CIBC Capital Markets]

Okay. And then just in terms of I know this is super early to ask this question, but in terms of ballpark estimates on how much you think this refurbishment would cost, could you give us a sort of a thumbnail thought on what that looks like right now?

[Paul Tomory, President & CEO at Centerra Gold]

I don't want to get into the CapEx numbers at this point, Anita, because we do have to do a bit more engineering work and we're not at a PEA level. But what I can say is that compared to the construction of a greenfield site on the order of 50,000 to 60,000 tons a day with all the associated infrastructure, the CapEx here will be a fraction of that. It would be the fraction of a greenfield, of this scale. The principal elements of CapEx, so this I can talk about. There would be development CapEx in opening up the open pit as well as, those conveyor tunnels that showed up on the one cross section.

[Paul Tomory, President & CEO at Centerra Gold]

There'd be crushing and conveyance infrastructure. So that would be new physical works. The second main area would be the refurbishment of the mill and the replacement of those components that had been salvaged out of there. And then of course, there would be refurbishment CapEx in the camp and some of the other ancillary facilities.

[Anita Soni, Managing Director at CIBC Capital Markets]

Okay. All right. That's it for my questions. Congratulations on getting this thing restarted or almost yet.

[Paul Tomory, President & CEO at Centerra Gold]

Thank you, Amin. Yes, we're taking the first steps.

[Anita Soni, Managing Director at CIBC Capital Markets]

Yes. Thank you.

[Paul Tomory, President & CEO at Centerra Gold]

Thank you.

[Operator]

Well, will conclude the question and answer session and today's conference call. You may disconnect your lines. Thank you for your participation and have a pleasant day. Take care everyone.

Participants

Executives

• Lisa Wilkinson, Vice President of Investor Relations & Corporate Communications
• Paul Tomory, President & CEO
• Ryan Snyder, Executive VP & CFO
• David Hendriks, EVP & COO

Analysts

• Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial
• Lawson Winder, Analyst at Bank of America
• Raj Ray, Managing Director - Metals & Mining Research at BMO Capital Markets
• Jeremy Hoy, Equity Research Analyst at Canaccord Genuity Inc
• Anita Soni, Managing Director at CIBC Capital Markets