Centerra Gold Inc. has announced the company’s full-year guidance for 2021, including estimated gold production of 740 000 – 820 000 oz and copper production of 70 – 80 million lbs.
The company also announced a 3-year outlook reflecting growing gold production approaching the 1 million oz level in 2022 – 2023 and declining costs underpinned by the higher gold production.
2021 to 2023 outlook highlights
- Strong organic gold growth production profile:
- 2021: 740 000 – 820 000 oz.
- 2022: 920 000 – 1 020 000 oz.
- 2023: 930 000 – 1 030 000 oz.
- Maintain robUS$t copper production profile:
- 2021: 70 – 80 million lbs.
- 2022: 90 – 100 million lbs.
- 2023: 70 – 80 million lbs.
2021 guidance highlights
- Gold production guidance of 740 000 – 820 000 oz.
- Copper production guidance of 70 – 80 million lbs.
- Gold production costs guidance of US$475 – US$525/oz.
- All-in sustaining costs (AISC) on a by-product basisNG guidance of US$850 – US$900/oz is higher than 2020 primarily due to Kumtor processing lower grade material from its stockpiles on surface.
- All-in costs (AIC) on a by-product basisNG guidance of US$1175 – US$1230/oz.
- Total capital spending guidance of US$430 – US$480 million including capitalised stripping is higher than 2020 due to increased spending at Kumtor and Mount Milligan.
- Total capitalised stripping guidance of US$230 – US$245 million including US$220 – US$230 million at Kumtor primarily for mining cut-back 20 and US$10 – US$15 million at Öksüt.
- Cash provided by operations guidance of US$750 – US$800 million (assuming US$1750 gold price).
- Free cash flowNG guidance of US$350 – US$400 million (assuming US$1750 gold price).
- Exploration budget of US$50 million with approximately 70% focused on brownfield exploration at our three existing operations.
Scott Perry, President and CEO of Centerra, stated: “For 2021, we are estimating consolidated gold production to be in the range of 740 000 – 820 000 oz and 70 million – 80 million lbs of copper production from the Mount Milligan Mine. Centerra’s consolidated AISC on a by-product basisNG for 2021 is expected to be in the range of US$850 – US$900/oz, which includes higher AISC at the Öksüt Mine compared to 2020. Öksüt gold production in 2021 is estimated to be in the range of 90 000 – 110 000 oz, and AISC on a by-product basisNG is estimated to be in the range of US$730 – US$780/oz. We expect that in 2021 the AISC on a by-product basisNG at Öksüt to be higher than the normal profile due to a combination of processing lower grade ore and additional sustaining capital expenditures related to construction of the Phase 2 of the heap leach pad. AISC on a by-product basisNG at Öksüt is expected to normalise after 2021 as the mine’s gold production increases from mining higher-grade ore in the Güneytepe pit and operating and capital costs decline.”
“We are also pleased to announce our inaugural 3-year outlook which reflects a growing gold production profile in 2022 and 2023. This brings Centerra close to expected annual gold production of approximately 1 million oz with a declining cost profile which is expected to generate significant diversified free cash flow from our operations.”
2021 – 2023 outlook
Centerra expects an increasing gold production profile at Kumtor over the 2021 – 2023 period. While the midpoint of gold production in 2021 is expected to be approximately 12% lower than 2020 gold production at the mine, Centerra expects 2022 – 2023 gold production levels to return to or exceed 2020 levels. Expansion of the mine fleet capacity is expected to allow Kumtor to exceed 2019 mining levels. 2021 capital expenditures are forecast to be less than what is reported in the 2021 Kumtor Technical Report due to eight haul truck purchases being deferred to 2022. Mill improvement projects, including a tower mill project for regrinding of flotation tails is expected to allow Kumtor to achieve higher targeted gold production levels. Gold production and AISC on a by-product basisNG over the 3-year period are expected to reflect a growing gold production profile with unit costs per ounce fluctuating primarily due to changes in gold production.
The company expects strong gold and copper production at Mount Milligan over the 2021 – 2023 period. The Mount Milligan mill is expected to maintain a stable average daily throughput of approximately 60 000 tpd, the maximum permitted rate. Installation of staged flotation reactors are expected to contribute to achieving targeted gold and copper production levels in 2022 and beyond. AISC on a by-product basisNG is expected to be at or below 2020 levels over the 3-year period. Centerra expects to have adequate water inventory levels for targeted throughput and is working with government regulators, its First Nations partners, and other stakeholders to maintain access to its existing water resources and secure a stable long-term water solution. The long-term water solution is expected to require additional infrastructure, the capital for which is not included in the capital expenditure guidance. Mount Milligan’s current water level is in excess of 6 million m3.
Gold production at Öksüt in 2021 is expected to be approximately the same as 2020 levels, whereas in 2022 and 2023 gold production is expected to benefit from mining and processing higher grade ore from the Güneytepe pit subject to receipt of all required permits. Construction of Phase 2 of the heap leach pad is expected to be completed by the end of 2021, and with the expanded heap leach capacity, it is expected to be sufficient to achieve targeted gold production in 2022 and 2023. As the Güneytepe pit ore becomes available, the average grade of ore stacked to the heap leach pad is estimated to increase to approximately 2.22 g/t gold (Au) during 2022 and 2023 compared to the estimated 1.27 g/t Au in 2021 and the actual stacked grade of 1.40 g/t Au in 2020. Gold production and AISC profiles over the 3-year period are expected to reflect a growing gold production profile with unit costs per ounce reducing with the increases in gold production.
2021 gold production guidance
Centerra’s 2021 gold production is expected to be between 740 000 – 820 000 oz.
Kumtor gold production in 2021 is expected to be in the range of 470 000 – 510 000 oz and reflects lower average grades in the ore stockpiles available for processing compared to 2020. Gold production is expected to rise steadily throughout the year with 1Q21 contributing approximately 15% of annual gold production rising to approximately 35% in 4Q21. Total tonnes mined are expected to increase to a rate of approximately 550 000 tpd from the average mining rate of 280 000 tpd in 2020 due to the addition of new mining equipment, a resumption of waste rock dumping at the Lysii waste rock dump and fewer expected restrictions due to COVID-19. Mine operations are expected to be focused mainly on waste stripping from cut-back 20 during 1H21, accessing greater amounts of ore in 2H21 and accessing the high-grade ore in 4Q21. The Kumtor mill is scheduling a 6-day mill maintenance shutdown in 3Q21 to complete a replacement of the regrind mill motor and carry out SAG mill and regrind mill relines and other maintenance work.
At Mount Milligan, the company expects to achieve an average daily throughput of approximately 60 000 tpd. Mill maintenance downtimes are scheduled for 1Q21 (5 days) and 3Q21 (4 days) to complete SAG Mill reline replacements and other maintenance work. Mount Milligan’s total (streamed and unstreamed) gold production is forecast to be in the range of 180 000 – 200 000 oz. Gold and copper production is expected to be slightly back-end weighted in 2021 with 1H21, representing 45% or more of the 2021 annual metal production total while 2H21 will represent up to 55% of the 2021 annual metal production total. The company plans to continue to work on continuous improvement projects in 2021, including secondary crusher improvements and the installation of staged flotation reactors which is expected to improve metal recoveries in future years.
At Öksüt, 2021 will be the first full year of operations and gold production is expected to be in the range of 90 000 – 110 000 oz. Gold production is expected to be back-end weighted in 2021 with 1H21 representing 35% or more of the 2021 annual gold production total while 2H21 will represent up to 65% of the 2021 annual gold production total. Mining will continue at the Keltepe pit in 2021 while the Güneytepe pit is expected to be developed from early 2022 assuming receipt of the forestry permit from the local authorities. The average grade of ore stacked to the heap leach pad in 2021 is expected to be approximately 1.27 g/t Au, which is lower than the average grade of ore stacked in 2020 of approximately 1.40 g/t Au. In 2021, Öksüt is expected to achieve a project-to-date accumulated heap leach recovery of 75%. The company continues with construction of Phase 2 of the heap leach facility, where excavation has been completed and the company is currently carrying out levelling activities with clay placement expected to start in May 2021.
2021 copper production guidance
Centerra expects total (streamed and unstreamed) copper production from the Mount Milligan Mine to be in the range of 70 – 80 million lbs.
2021 Sales, AISC and all-in unit costs guidance
Gold production costs are expected to increase to US$475 – US$525/oz range up from 2020 consolidated gold production costs of US$419/oz due to higher operating costs at Kumtor and Öksüt, lower gold production at Kumtor and lower copper production at Mount Milligan.
Consolidated AISC on a by-product basisNG are expected to be in the range of US$850 – US$900/oz. Kumtor’s AISC on a by-product basisNG are expected to increase to US$950 – US$1000/oz range driven by lower gold production and higher capitalised stripping and mining costs reflecting the expansion of mining activities. Mount Milligan’s AISC on a by-product basisNG are expected to be in line with 2020 levels as higher production costs attributable to increased mill throughput are offset by higher gold production and a higher credit for copper sales. Öksüt’s AISC on a by-product basisNG are expected to increase to a range of US$730 – US$780/oz, reflecting lower ore grades, higher sustaining capital expenditures and capitalised stripping costs compared to 2020.
Consolidated AIC on a by-product basisNG are expected to be in the range of US$1175 – US$1230/oz. Kumtor’s AIC on a by-product basisNG are expected to be in the range of US$1365 – US$1420/oz due to lower gold production, higher AISC, increases in non-sustaining capital and site exploration expenditures planned for 2021. Mount Milligan’s AIC on a by-product basisNG of US$590 – US$640/oz are expected to be in line with 2020. Öksüt’s AIC on a by-product basisNG are expected to be between US$790 – US$840/oz reflecting the higher AISC offset by lower non-sustaining capital expenditures planned for 2021.
Consolidated cash flow provided by operations and consolidated free cash flowNG are expected to be in the range of US$750 – US$800 million and the range of US$350 – US$400 million (assuming US$1750 gold price), respectively.
Read the article online at: https://www.globalminingreview.com/finance-business/24022021/centerra-gold-announces-2021-guidance/
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