Centerra Gold Q1 Earnings Call Highlights

Key Points

• Centerra reported a “very strong” Q1 with consolidated production of 68,000 ounces of gold and 14.2 million pounds of copper, adjusted net earnings of $88 million, $120 million cash from operations, $49 million free cash flow, ending cash of $543 million and total liquidity of $943 million, while returning $33 million to shareholders via dividends and buybacks.
• Organic growth projects are advancing: Thompson Creek restart is ~38% complete and remains on track for first production in mid‑2027 within a $425–450 million capex envelope, Goldfield is on schedule for late‑2028 first production, and the Kemess PEA shows robust economics with an after‑tax NPV of $2.8 billion and a 29% IRR over a 15‑year mine life.
• Near‑term operational and cash considerations include Öksüt’s stronger‑than‑planned Q1 (management still maintaining full‑year guidance), a $73 million working‑capital build at Langeloth after its provisional April restart (with $5–10 million repair costs expected for 2026), and anticipated Turkish tax/royalty payments of roughly $90–100 million in Q2 that will affect Öksüt free cash flow.

Centerra Gold NYSE: CGAU reported what management described as a “very strong start to the year” in the first quarter of 2026, with production tracking in line with plan across its operating portfolio and an increased cash balance as the company continued to fund growth projects and return capital to shareholders.

On the company’s first-quarter earnings call, President and CEO Paul Tomory said Centerra produced 68,000 ounces of gold and 14.2 million pounds of copper on a consolidated basis. He said Mount Milligan performed in line with its recently published pre-feasibility study and full-year guidance, while the Öksüt mine delivered a stronger-than-planned quarter driven by higher grades.

Chief Financial Officer Ryan Snyder said the company ended the quarter with $543 million in cash and $943 million in total liquidity. Centerra also returned $33 million to shareholders through dividends and share repurchases during the quarter, while investing in internal growth initiatives and building working capital at its Langeloth facility.

Operational performance: Mount Milligan and Öksüt

Snyder said Mount Milligan produced more than 29,500 ounces of gold and 14.2 million pounds of copper in the quarter, representing about 20% of annual gold guidance and matching the production profile the company had previously outlined. He noted that gold and copper sales exceeded production because weather-related logistics disruptions at the end of December deferred some sales into 2026.

Mount Milligan’s all-in sustaining costs (AISC) on a byproduct basis were $1,060 per ounce, which Snyder said benefited from higher byproduct credits due to elevated copper and silver prices. He added that recent increases in diesel prices did not materially impact costs in the first quarter.

At Öksüt, Snyder reported first-quarter production of more than 38,400 ounces of gold, which was higher than planned due to higher grades. Full-year 2026 production guidance for Öksüt remains 110,000 to 125,000 ounces, with production expected to be more evenly weighted and lower than the first quarter for the balance of the year.

Öksüt’s AISC on a byproduct basis was $1,653 per ounce, lower than the prior quarter, driven by higher gold ounces produced and sold and lower sustaining capital expenditures, partially offset by higher royalty expense tied to higher gold prices, Snyder said.

Asked about Öksüt’s outperformance, Tomory said the mine has “reconciled positively almost since first production,” with better-than-modeled grades reporting to the heaps. While he said there “will be times” when grades could exceed plan, he emphasized the company is maintaining its existing 2026 guidance, noting remaining quarters are expected to be lower than the first quarter.

Growth pipeline updates: Thompson Creek, Goldfield, and Kemess

Tomory and Snyder highlighted continued progress across Centerra’s organic growth pipeline, which management has framed as a disciplined, self-funded strategy supported by operating cash flow and balance sheet strength.

• Thompson Creek: Snyder said restart activities are advancing, with about 38% of infrastructure refurbishment complete. First-quarter non-sustaining capital expenditures were $41 million. Since the September 2024 restart decision, capital spending has totaled $205 million. Snyder said the project remains within its $425 million to $450 million total capital estimate and is still on track for first production in mid-2027.
• Goldfield: Tomory said detailed engineering, procurement of long-lead items, and mobilization for 2026 early works are progressing as planned. He reiterated that first production remains on track for late 2028. He also said Goldfield received water rights transfers during the quarter, which he characterized as an important permitting milestone.
• Kemess: Tomory referenced an updated mineral resource and preliminary economic assessment (PEA) released in January. He said the PEA outlines a de-risked restart plan leveraging existing infrastructure and an integrated open pit and underground operation, with an initial 15-year mine life. The PEA includes production of 171,000 ounces of gold and 61 million pounds of copper at an AISC on a byproduct basis of $971 per ounce, Tomory said.

Tomory also cited PEA economics for Kemess, including an after-tax net present value of $2.8 billion and 29% internal rate of return at assumed prices of $4,500 per ounce of gold and $6 per pound of copper. He said the capital plan is phased, with about $770 million in initial non-sustaining capital followed by $277 million in expansionary non-sustaining capital over the two years after open pit start-up to support underground development.

In response to an analyst question about the fact that the PEA evaluates only 47% of overall resource tonnes, Tomory said the company’s planned 2027 pre-feasibility study (PFS) is intended to increase confidence across engineering and permitting and is expected to focus on delivering the 15-year mine plan from the PEA. He said additional drilling to potentially expand the mine plan would be targeted later, as the project moves toward feasibility work and potential execution.

Langeloth restart and working capital build

Snyder said operations at Langeloth “provisionally resumed in April” following a temporary suspension that began Jan. 29. During the restart, the company identified items requiring additional testing and validation, which he said is typical when bringing a processing facility back to stable operations.

Centerra incurred $2 million of repairs in the first quarter, with remaining costs expected to be incurred over the balance of the year. Snyder reiterated management’s estimate that total repair costs for 2026 are expected to be $5 million to $10 million.

He also said the company made a $73 million working capital investment at Langeloth in the quarter, primarily from building inventory during the suspension. Snyder said the company does not expect this working capital to unwind in the near term, as Centerra plans to maintain higher inventory levels through 2026 while operations and shipments normalize and as Langeloth ramps up under a “commercial optimization strategy.”

Financial results, cash flow, and capital returns

Snyder reported adjusted net earnings of $88 million, or $0.44 per share, for the first quarter. He said adjustments included a $25 million unrealized loss on a financial asset related to an additional agreement with Royal Gold.

First-quarter sales totaled nearly 73,000 ounces of gold and 14.9 million pounds of copper. Snyder said the average realized price was $4,172 per ounce for gold and $4.48 per pound for copper, incorporating Mount Milligan’s existing streaming arrangements. The company also sold about 3.7 million pounds of molybdenum at Langeloth at an average realized price of $26.11 per pound.

Consolidated AISC on a byproduct basis was $1,705 per ounce in the quarter. While Snyder said diesel price volatility could impact costs in 2026, he added that at current levels any impact is not expected to be material. In a Q&A discussion, Snyder said diesel represents “a little under 10%” of the cost profile across Mount Milligan and Öksüt, and that the company is partially hedged, including about 30% hedged at Mount Milligan and about 75% hedged for Thompson Creek during its initial capital period. He said a $50 per barrel increase in diesel would imply about a $75 per ounce impact on AISC, but that at current prices the company expects to remain within guidance ranges.

Centerra generated $120 million in cash from operations and $49 million in free cash flow during the quarter, Snyder said, citing strong operational performance and elevated metal prices. He said Mount Milligan generated $125 million in operating cash flow and $106 million of free cash flow, while Öksüt generated $134 million in operating cash flow and $132 million of free cash flow.

U.S. Moly used $75 million of cash in operations and reported a $117 million free cash flow deficit, which Snyder attributed mainly to Thompson Creek restart spending and the working capital increase at Langeloth.

On capital returns, Snyder said Centerra repurchased 1.3 million shares for $22.5 million and declared a quarterly dividend of $0.07 per share. Tomory said management discusses capital allocation each quarter and described the buyback as “very robust,” adding that the company views its shares as “very compelling value” at current levels.

Looking ahead, Snyder said the company expects to make routine payments to the Turkish government in the second quarter for taxes and royalties of roughly $90 million to $100 million, which he said will impact Öksüt free cash flow next quarter, assuming current exchange rates.

Tomory closed by saying the company’s strong operating base and progress across Mount Milligan, Kemess, Thompson Creek, Goldfield, and Öksüt position Centerra to continue investing in growth while returning capital to shareholders.

About Centerra Gold NYSE: CGAU

Centerra Gold Inc is a gold mining company incorporated in Canada and headquartered in Toronto. The company specializes in the exploration, development and operation of precious metals properties, with a focus on gold production. Centerra's portfolio includes the Mount Milligan mine in British Columbia, Canada, and the Otjikoto mine in Namibia. Both operations produce gold and copper concentrates and employ modern mining methods and processing facilities to optimize recovery rates and minimize environmental impact.

In addition to its producing assets, Centerra is advancing the development of its Greenstone Gold Project in Ontario, Canada, which, upon completion, is expected to become one of Canada's largest gold mines.

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