Centerra Gold Inc. ((TSE:CG)) has held its Q4 earnings call. Read on for the main highlights of the call.
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During Centerra Gold Inc.’s recent earnings call, the company presented a balanced outlook. While there was positive momentum from strong free cash flow and strategic project advancements, challenges in production and rising costs, particularly at the Öksüt site, were notable concerns. The uncertainty surrounding the Goldfield project further adds to the company’s growth challenges.
Strong Free Cash Flow Generation
Centerra Gold reported a robust free cash flow of $47 million in the fourth quarter, primarily driven by contributions from the Mount Milligan mine. This financial strength increased the company’s cash reserves to $625 million, reinforcing its liquidity position.
Mount Milligan Performance
Mount Milligan continued to be a significant asset for Centerra Gold, producing nearly 38,000 ounces of gold and 12.8 million pounds of copper in the fourth quarter. For the full year, it produced over 167,000 ounces of gold and 54 million pounds of copper. The site has extended its mine life to 2036, thanks to increased reserves.
Progress on Strategic Projects
Significant advancements were reported at Thompson Creek, with detailed engineering work and fleet refurbishment nearing completion. The company targets the first production in the latter half of 2027, marking a pivotal step in its strategic project pipeline.
Liquidity and Capital Returns
Centerra Gold maintained a strong liquidity position, boasting over $1 billion available. The company returned $88 million to shareholders through dividends and share buybacks in 2024, reflecting its commitment to shareholder returns.
Production Below Guidance
The company faced challenges with gold and copper production at Mount Milligan not meeting guidance due to lower grades in Phases 6 and 9. Moreover, Öksüt experienced higher all-in sustaining costs, attributed to lower sales and inflationary pressures.
Challenges at Öksüt
Öksüt’s gold production is anticipated to drop to between 105,000 and 125,000 ounces in 2025, with all-in sustaining costs projected to rise due to inflation in Turkey and a lower production profile.
Uncertain Future for Goldfield
Goldfield’s initial resource estimate of 706,000 ounces of gold does not meet the company’s criteria for near-term development. This has led to a strategic reevaluation and potential shelving of the project, creating uncertainty about its future.
Higher Consolidated Costs
The company expects consolidated all-in sustaining costs to increase to $1,400 to $1,500 per ounce in 2025, reflecting rising costs at Öksüt and broader inflationary trends.
Forward-Looking Guidance
For 2025, Centerra Gold projects consolidated gold production between 270,000 and 310,000 ounces, with copper production ranging from 50 to 60 million pounds. Despite challenges, the company remains focused on advancing key projects such as Mount Milligan and Kemess, while upholding commitment to responsible mining and sustainability.
In summary, Centerra Gold’s earnings call highlighted a mix of operational strengths and ongoing challenges. While strategic projects and financial health provide optimism, production hurdles and cost pressures, along with the uncertain outlook for Goldfield, present significant headwinds. Investors and market watchers will closely monitor how Centerra navigates these complexities in the upcoming year.
