Centerra Gold Inc. · TSX:CG
Centerra Gold — Investor Presentation (August 2020)
47 slides from Centerra Gold's investor presentation, August 2020
Slide 1: Built For Success – Investor Presentation August 2020
Kumtor BUILT FOR SUCCESS Mount Milligan Investor Presentation August 2020 TSX: CG Öksüt www.centerragold.com
Slide 2: Caution Regarding Forward-Looking Information
Caution Regarding Forward-Looking Information Information contained in this document which are not statements of historical facts, and the documents incorporated by reference herein, may be “forward-looking information” for the purposes of Canadian securities laws. Such forward-looking information i
Slide 3: Centerra: Built For Success
Centerra: Built For Success Corporate Highlights Retained Earnings Profile (US$) 20201 estimated gold production up to 820koz, copper production up to 90Mlbs, AISC2 of $820 to $870 per ounce 1,600 2,000 1,400 Q2 2020 gold production 219,6923 oz, copper production 1,600 19.1Mlbs, at AISC2 of $804 per
Slide 4: Q2-2020 ESG Operations Update
Centerra: Q2-2020 ESG Operations Update Continued focus on safety leadership training/awareness. Maintained and strengthened our “Social Licence to Operate” at all operations with no interruptions for ~84 months. No reportable environmental incidents. Formed a global Diversity and Inclusion Steering
Slide 5: Committed to Responsible Gold Mining
Centerra: Committed to Responsible Gold Mining • Centerra is implementing the World Gold Council’s Responsible Gold Mining Principles (RGMP) across our operations • RGMP was designed to provide confidence to our investors and supply chain participants that our gold has been produced responsibly • Ce
Slide 6: Operational Results vs Guidance 2013-2019
Centerra: Operational Results vs Guidance 2013-2019 Centerra has a strong track record of beating both production and AISC2 on a by-product basis guidance Operating Statistics vs. Guidance (mid-point) (koz Au) 850 900 878 863 851 800 850 795 852 785 783 750 805 818 748 800 814 730 700 691 744 685
Slide 7: Q2 – 2020 Corporate Highlights
Centerra: Q2 – 2020 Corporate Highlights Operational Highlights COVID-19 – Implemented and Maintained Proactive Measures, Increased Hygiene Protocols, Social Distancing, Extended Mine Site Rotations, Separated Work Crews when on Site Safety – Öksüt recently achieved three million work hours without
Slide 8: Q2 – 2020 Corporate Highlights
Centerra: Q2 – 2020 Corporate Highlights Financial Highlights Q2 2020 Net Earnings of $80.7MM or $0.27 per Common Share (basic) Adjusted Net Earnings1 of $97.8MM or $0.33 per Common Share (basic) Cash Provided by Operations of $268MM ($0.91 per share) Consolidated Free Cash Flow1 of $169MM ($157MM f
Slide 9: Superior Cash Flow
Centerra: Superior Cash Flow Consolidated Free Cash Flow 4,5 (US$MM’s) Debt Free Balance Sheet 1,2,3 (US$MM’s) 1,620 1,800 -200 1,487 600 1,403 1,600 1,374 169 505 1,237 1,400 500 409 417 -150 1,200 400 1,000 298 -100 300 77 800 212 193 600 200 152 -50 31 400 78 43 100 10 200 0 0 0 - 0 Dec31 2016 De
Slide 10: Industry Leading Free Cash Flow Yield
Centerra: Industry Leading Free Cash Flow Yield Q1 2020 FCF Yield1 (%) 2020E FCF Yield2 (%) 2021E FCF Yield2 (%) Centamin 11% Endeavour 10% Endeavour 16% Endeavour 3 10% Centamin 9% Centerra 12% Centerra 9% Centerra 7% Centamin 10% B2Gold 6% B2Gold 7% SSR Mining 4 10% SSR Mining 4 4% Eldorado 7% Yam
Slide 11: Compelling Valuation
Centerra: Compelling Valuation P / NAVPS (x) P / 2020E CFPS (x) P / 2020E EPS (x) B2Gold 1.66x Alamos 12.7x Yamana 27.8x Kirkland Lake 1.57x SSR Mining 11.4x Alamos 27.7x Yamana 1.55x Kirkland Lake 9.9x IAMGOLD 21.4x Centamin 1.48x Yamana 9.3x Centamin 15.5x Alacer 1.35x B2Gold 8.5x SSR Mining 15.1x
Slide 12: AISC Comparison
Centerra: AISC1 Comparison 2019 AISC1 (US$/oz) YoY Change in AISC1 (%) Kirkland Lake $564 Kirkland Lake (18%) Alacer $713 Alamos (4%) Centerra $737 Centerra (2%) Endeavour $818 SSR Mining (0%) B2Gold $862 Yamana 0% Centamin $943 Alacer 1% Alamos $951 Kinross 2% Kinross $983 Eldorado 4% Yamana $999 I
Slide 13: Low-Cost Asset Base
Centerra: Low-Cost Asset Base 20201 estimated gold production up to 820koz, copper production up to 90Mlbs, AISC2 of $820 to $870 per ounce Au Positioned to generate meaningful cash flow through the price cycles AISC2 Industry Curve (By-P roduct Basis) $2,500 25% 50% 75% 100% $2,250 $2,000 Cente
Slide 14: Kumtor: World Class Open Pit Gold Mine
Kumtor: World Class Open Pit Gold Mine 2017 2018 2019 2020E Gold Production (koz) 563 535 600 520-560 All-In Sustaining Costs ($/oz) (1) $698 $694 $598 $750-$800 Sustaining Capital ($MM) $61 $44 $39 $68 Growth Capital ($MM) $18 $17 $16 $18 Reserves(2) (Moz) 3.2 Au Grade (g/t) 2.31 Resources M&I(2) (
Slide 15: Kumtor: Exploration
Kumtor: Exploration 2019 drilling focused on the Hockey Stick Zone and continued to confirm gold mineralization outside the ultimate open pit Hockey Stick Zone Boris Kotlyar, a Member with the American Institute of Professional Geologists, is Centerra’s qualified person for the purpose of National I
Slide 16: Kumtor: Mineral Resources
Kumtor: Mineral Resources1 Exclusive of Reserves (Year-over-Year Change) Kumtor Open Pit Tonnes Ounces Kumtor Open Pit Tonnes Ounces Au (g/t) Au (g/t) 2018 Reserves (kt) (koz) 2019 Reserves (kt) (koz) Proven & Probable – Reserves 51,631 2.42 4,018 Proven & Probable – Reserves 43,295 2.31 3,214 Kumto
Slide 17: Mount Milligan: Low Cost Gold Copper Mine
Mount Milligan: Low Cost Gold Copper Mine 2017 2018 2019 2020E Gold Production (koz) 223 195 183 140-160 Copper Production (Mlbs) 54 47 71 80-90 All-In Sustaining Costs $505 $764 $828 $885-$935 (US$/oz)(1) Sustaining Capital ($MM) $30 $43 $36 $55 Gold Copper 35% @ 18.75% @ 15% of Royal Gold Stream U
Slide 18: Mount Milligan: Life-of-Mine Plan
Mount Milligan: Life-of-Mine Plan Cash Flow Summary1 1. Effective date December 31, 2019, see NI 43-101 Technical Report on the Mount Milligan Mine dated March 26, 2020 and filed on SEDAR. August 2020 18
Slide 19: Öksüt: Funded High Margin Gold Production
Öksüt: Funded High Margin Gold Production Project Highlights Mine Type Open Pit, Heap Leach Heap Leach Stacking Rate 11,000 tpd Life of Mine Strip Ratio (w:o) 2:1 Avg. LOM Annual Production 110koz Au 2020e Gold Production (koz) 80-100 Öksüt Gold 2020e All-in Sustaining Costs ($/oz)(1) $650-$700 Proj
Slide 20: Öksüt: Site Photos
Öksüt: Site Photos Admin Offices and Crushing Area Open Pit Mining Open Pit Mining Heap Leach Pads Stacked Ore on Heap Leach Pad Irrigating Stacked Ore August 2020 20
Slide 21: Kemess: C$1Billion of Infrastructure
Kemess: C$1Billion of Infrastructure Fly-in, Fly-out Work Camp Permitted Open Pit Tailings Storage Facility Metallurgical Facility Kemess Proximity to Mount Milligan Kwadacha Kemess Project (Fort Ware) Kemess Omineca Resource Project Tsay Keh Access Road Forest Service Road 0 100 200 Kilometres Daws
Slide 22: Kemess: Large, Low-Cost Production
Kemess: Large, Low-Cost Production Kemess Underground – 2016 Feasibility Highlights(1) Kemess East– 2017 PEA Highlights(1) Mine Type Underground Block Cave Mine Type Underground Panel Cave Avg. LOM Gold Production (koz) 106 Avg. LOM Gold Production (koz) 80 Avg. LOM By-Product AISC (US$/oz)(2) $244
Slide 23: Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines
Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines Cornerstone Canadian Development Project Ontario: Top Tier Mining Jurisdiction 50:50 development partnership with Premier Gold Greenstone Development Project Open pit reserves(1) 4.7Moz Au @ 1.02 g/t (100%) Location: Ontario, Canada
Slide 24: Centerra: Built For Success
Centerra: Built For Success Corporate Highlights Retained Earnings Profile (US$) 20201 estimated gold production up to 820koz, copper production up to 90Mlbs, AISC2 of $820 to $870 per ounce 1,600 2,000 1,400 Q2 2020 gold production 219,6923 oz, copper production 1,600 19.1Mlbs, at AISC2 of $804 per
Slide 25: Appendix
Kumtor BUILT FOR SUCCESS Mount Milligan Appendix TSX: CG Öksüt www.centerragold.com
Slide 26: Leading Capital Efficiency and Profitability
Centerra: Leading Capital Efficiency and Profitability L3Y Return on Invested Capital (%) L3Y Return on Capital (%) L3Y Return on Equity (%) Kirkland Lake 18% Kirkland Lake 22% Kirkland Lake 16% Centamin 13% Alacer 10% Alacer 8% Alacer 9% B2Gold 9% Centerra 8% B2Gold 8% Centamin 8% OceanaGold 8% Cen
Slide 27: COVID-19 Update
Centerra: COVID-19 Update • Priority is the health and safety and well-being of employees, contractors, communities and other stakeholders, and to minimize spread of virus • Working remotely where possible • Restrict access to mine sites • Increased cleaning and hygiene protocols at all sites, inclu
Slide 28: Q2 - 2020 Corporate Update
Centerra: Q2 - 2020 Corporate Update YTD - 2020 Cash Flow (US$MM’s) Cash Flow From Operations 5 (US$MM’s) 1,620 1,800 400 1,487 300 1,600 294 57 1,374 1,403 268 350 250 1,237 1,400 300 17 51 1,200 200 250 212 1,000 200 150 121 800 91 95 92 600 150 100 100 400 50 43 200 50 0 5 0 0 Q2-2019 Q3-2019 Q4-
Slide 29: Q2-2020 Financial Highlights
Centerra: Q2-2020 Financial Highlights Gold Sales1 of 217,539 ounces / Copper Sales of 19.4 million pounds in Q2 2020 Q2 2020 Net Earnings of $80.7MM, $0.27 Cents Per Share (basic), Adjusted Net Earnings2 for Q2 2020 of $97.8MM, $0.33 per common share (basic) Q2 2020 Production Costs of $410 per oun
Slide 30: Q2-2020 Operating Highlights
Centerra: Q2-2020 Operating Highlights Kumtor’s contractor group achieved two full years without a lost time injury and July 19th Öksüt achieved three million work hours without a lost time injury Q2 2020 gold production - Kumtor 173,245 oz, Mount Milligan 35,656 oz, Öksüt 10,791 oz Q2 2020 copper p
Slide 31: 2020 Operations Key Focus
Centerra: 2020 Operations Key Focus Improve Safety Performance Company-wide Ramp up Öksüt Gold Production Adequate Volumes of Stored Water at Mount Milligan to Run at Full Capacity for the Year Focus on Consistent and Improved Production at the Mount Milligan Mine Cost Control with a Promi
Slide 32: Mount Milligan: Available Water - June 30, 2020
Mount Milligan: Available Water - June 30, 2020 August 2020 32
Slide 33: Mount Milligan: Short & Medium-term Water Sources
Mount Milligan: Short & Medium-term Water Sources August 2020 33
Slide 34: Kemess: Overview
Kemess: Overview Kemess Underground (Feasibility – 2016)(1) • Reserves of 1.9Moz Au and 0.6Blbs Cu(2) • LOM of 12 years at 106koz Au/p.a. and 47Mlbs/p.a. at AISC(3) of $244/oz on a by-product basis • Environmental approvals and IBA received • Received Mines Act Permit (construction permit) • Receive
Slide 35: Kemess: De-Risked Brownfield Project
Kemess: De-Risked Brownfield Project(1) • Established mining jurisdiction Kwadacha Kemess Project • (Fort Ware) Advanced-stage Kemess Omineca Resource Project Tsay Keh Access Road − EA Approved, IBA in hand, Amended Mines Act Forest Service Road Permit (construction permit) received, Effluent 0 100
Slide 36: 2020 Guidance
Centerra: 2020 Guidance6 Mount 2020 Production Guidance Units Kumtor Öksüt Centerra Milligan(1) Gold Total Gold Payable Production(2) (Koz) 520-560 140-160 80-100 740-820 Copper Total Copper Payable Production(2) (Mlb) - 80-90 - 80-90 2020 All-in Sustaining Unit Costs Units Kumtor Mount Milligan(1)
Slide 37: 2020 Guidance Sensitivities and Assumptions
Centerra: 2020 Guidance5 Sensitivities and Assumptions Impact on Impact on ($ per ounce ($ millions) sold) Production Costs Net Earnings AISC(2)(3) on Capital Costs Financing Costs Revenues Cash flows & Taxes (after tax) by-product basis Gold price $50/oz 2.2 – 2.7 - 0.7 – 0.8 15.4 – 19.1 12.5 – 15.
Slide 38: Mineral Reserves - Proven & Probable
Centerra: Mineral Reserves - Proven & Probable1 Gold Mineral Reserves Proven Probable Total Proven and Probable Property Tonnes Grade Contained Tonnes Grade Contained Tonnes Grade Contained (kt) (g/t) Gold (koz) (kt) (g/t) Gold (koz) (kt) (g/t) Gold (koz) Mount Milligan 114,753 0.41 1,525 76,275 0.3
Slide 39: 2020 Exploration - Map of Projects
Centerra: 2020 Exploration - Map of Projects 2016A 2017A 2018A 2019A 2020E Exploration spending ($MM) $11 $13 $21 $28 $50 39 August 2020
Slide 40: Mount Milligan: Exploration
Mount Milligan: Exploration North NPI (Resource) • 69 drill holes completed (25,961 m) • 6 zones (South Boundary, Southern Star, Saddle, GEF, MBX/WBX, Oliver) Brownfield • 26 drill holes completed (12,137 m) • 5 zones (North Slope, Goldmark, Goldmark- Oliver, Saddle West, South Boundary) Greenfield
Slide 41: Öksüt: Exploration Targets
Öksüt: Exploration Targets Western Asia, Europe and West Africa Keltepe NW-Keltepe N Oxide Au & Supergene Cu Target Boztepe & Boztepe West Porphyry Cu/Au Target Keltepe Pit Büyüktepe Oxide Au Target Keltepe & Güneytepe Oxide Au Resource & Supergene Cu Target Güneytepe Pit Yelibelen Oxide Au Target M
Slide 42: Potential Upside Optionality - Molybdenum
Centerra: Potential Upside Optionality - Molybdenum Molybdenum Price Movement Thompson Creek Mine ● Located in Idaho, is the world’s fourth largest open-pit primary molybdenum mine ● Operations began in 1983, using conventional open-pit mining and a on- site 25,500 tpd mill ● In December 2014 placed
Slide 43: 2019 Corporate Highlights
Centerra: 2019 Corporate Highlights Safety – 2019 performance overshadowed by two tragic safety incidents at Kumtor in December 2019 and February 2020 Completed KR Strategic Agreement August 26, 2019 Construction of Öksüt Project Approximately 89% Complete Exceeded 2019 Gold Production Guidanc
Slide 44: 2019 Corporate Update
Centerra: 2019 Corporate Update 2019 Cash Flow (US$MM’s) Liquidity Profile (US$MM’s) 600 500 329 111 500 400 63 87 US$615MM 300 177 200 152 43 72 100 43 0 1 1 2 3 3 2018 YE Cash Kumtor + 5 Debt KR Settlement Oksut Spend Dev Projects, 2019 YE Cash Cash Reserves Corporate Credit Facility Oksut Credit
Slide 45: Investor Relations Highlights
Centerra: Investor Relations Highlights Research Coverage Top Ten (10) Institutional Shareholders Brokerage Firms Rating Target Institution/Firm June 30-2020 1. BofA Merrill Lynch Buy C$19.00 1. Blackrock 11.07% 2. Canaccord Genuity Buy C$20.00 3. CIBC World Markets Outperform C$17.00 2. Van Eck Ass
Slide 46: Directors
Centerra: Directors Board of Directors Background MICHAEL S. PARRETT Chairman Appointed Director of Centerra’s Board, May 2014 BRUCE V. WALTER Vice Chair Appointed Director of Centerra’s Board, May 2008 SCOTT G. PERRY Director Appointed Director of Centerra’s Board, January 2016 RICHARD W. CONNOR Di
Slide 47: Built For Success
Kumtor BUILT FOR SUCCESS Mount Milligan Investor Presentation August 2020 TSX: CG Öksüt www.centerragold.com