Centerra Gold Inc. · TSX:CG
Centerra Gold — FY2005 Earnings Presentation
27 slides from Centerra Gold's earnings presentation, Jan 31, 2006
Slide 1: 2005 Year-End Conference Call
January 31, 2006 2005 Year-End Conference Call 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements contained in this presentation which are not historical facts are forward looking statements that involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from t
Slide 3: Speakers
Speakers ¾ Len Homeniuk President and Chief Executive Officer ¾ Ian Atkinson Vice President, Exploration ¾ David Petroff Executive Vice President and Chief Financial Officer ¾ George Burns Vice President and Chief Operating Officer ¾ Marina Stephens International Legal Consultant 3
Slide 4: Speaker: Len Homeniuk
Speaker ¾ Len Homeniuk President and Chief Executive Officer 4
Slide 5: 2005 in Review: An Outstanding Year of Operation
2005 in Review: An Outstanding Year of Operation Highlights ¾ Produced $42 million in earnings and $83 million in cash from operations ¾ $202 million in cash-on-hand at end of year ¾ Hedge and debt-free ¾ Production up 23% to a record 787,275 ounces ¾ Average realized price in 2005 increased to $433
Slide 6: Speaker: Ian Atkinson
Speaker ¾ Ian Atkinson Vice President, Exploration 6
Slide 7: Centerra – Reserves & Resources
Centerra – Reserves & Resources Reconciliation of Gold Reserves and Resources on a 100% Project Basis (in thousands of troy ounces) Centerra Share December 31 2005 2005 Addition December 31 December 31 2004 (1) Throughput (2) (Deletion) (3) 2005 2005 (4) Reserves - Proven & Probable (5) Kumtor 3,249
Slide 8: Exploration Activities for 2006
Exploration Activities for 2006 ¾ Add to reserve and resource base ¾ $21 million in exploration expenditures ¾ $11.4 M Kumtor ¾ $1.0M Boroo ¾ $1.0 M Gatsuurt ¾ $1.5 M REN ¾ $5.6 M other opportunities ¾ Focus on new opportunities in Kyrgyzstan, Mongolia, China and other Central Asian and FSU countrie
Slide 9: Exploration Activities for 2006: Gatsuurt
Exploration Activities for 2006 Gatsuurt ¾ Focus on optimizing the project ¾ Drilling to evaluate high grade mineralization beneath Central Zone ¾ Planned exploration expenditures of $1.0 million 9
Slide 10: Speaker: George Burns
Speaker ¾ George Burns Vice President and Chief Operating Officer 10
Slide 11: 2005 Operations Review: Kumtor
2005 Operations Review Kumtor ¾ 501,487 ounces poured in 2005 ¾ 24% below 2004 ¾ Cash cost of $274 per ounce ¾ 37% higher than 2004 ¾ Good safety and environmental performance 11
Slide 12: 2005 Operations Review: Boroo
2005 Operations Review Boroo ¾ 285,788 ounces poured in 2005 ¾ 31% higher than 2004 ¾ Cash cost of $183 per ounce ¾ 23% higher than 2004 ¾ Good safety and environmental performance 12
Slide 13: Reserves
Reserves Contained ounces at December 31, 2005 ¾ Kumtor – 5.0 million ounces ¾ Boroo – 1.2 million ounces Reserves added since IPO ¾ Kumtor – 3.1 million ounces ¾ Boroo – 0.6 million ounces 13
Slide 14: Gatsuurt
Gatsuurt ¾ Significantly expanded resource to 1.9 million ounces ¾ Feasibility study completed in 2005 ¾ Potential for use of Boroo facility with inclusion of BIOX® ¾ Further work to optimize preferred option in first quarter 2006 ¾ Roscoe Postle retained for NI43-101 Report 14
Slide 15: Life-of-Mine Schedule
Life-of-Mine Schedule Life-of-Mine ¾ Extended Kumtor life by almost three years ¾ Extended Boroo life by one year ¾ Centerra’s 2009 production forecast exceeds one million ounces ¾ Growth capital committed for Kumtor of $87 million to expand mining fleet Centerra Production - Gold Poured 1200 Ounces
Slide 16: 2006 Outlook – Production & Cash Cost
2006 Outlook – Production & Cash Cost 2006 Forecast Q1 Year Ounces Poured - Kumtor 101 461 - Boroo - 100% 64 268 - Boroo - 95% Centerra's share 61 255 - Centerra Consolidated 162 716 Total Cash Cost - US$ per ounce - Kumtor $384 $347 - Boroo $221 $203 - Centerra Consolidated $321 $294 16
Slide 17: Speaker: David Petroff
Speaker ¾ David Petroff Executive Vice-President and Chief Financial Officer 17
Slide 18: Financial Summary - 2005: Financial Strength
Financial Summary - 2005 Financial Strength ¾ $115 Cash flow from Operations before working capital ¾ $200 million in cash; no long-term debt ¾ Significant increase in NAV from reserve and resource increases ¾ Longer asset lives with exploration successes in the Kyrgyz Republic and Mongolia 18
Slide 19: Financial Summary - 2005: Reality and Circumstances
Financial Summary - 2005 Financial Reality ¾ Cost pressure ¾ Revenue related taxes and royalties ¾ Higher cost for labour and consumables ¾ Migration of mining to the SB Zone Financial Circumstances ¾ Increased ownership ¾ Full year of production at Boroo ¾ No hedge position allows full participatio
Slide 20: Income Statement – Q4 2005 vs. Q4 2004
Income Statement – Q4 2005 vs. Q4 2004 Fourth Quarter US$ millions 2005 2004 Revenue 75 88 Cost of sales 43 42 Depreciation, depletion and reclamation 12 21 Exploration & Business Development 9 7 Interest and other (1) (3) Administration 6 6 6 15 Income tax expense (recovery) (1) (1) Minority intere
Slide 21: Income Statement – 2005 vs. 2004
Income Statement – 2005 vs. 2004 Year US$ millions 2005 2004 Revenue 338 247 Cost of sales 186 110 Depreciation, depletion and reclamation 60 54 Exploration & Business Development 30 15 Interest and other (5) (8) Administration 18 12 49 64 Other expenses - 8 Income tax expense (recovery) 5 - Minorit
Slide 22: Balance Sheet – 2005 vs. 2004
Balance Sheet – 2005 vs. 2004 December 31, 2005 US$ millions 2005 2004 Assets Cash 202 153 Accounts receivable 9 2 Inventories 77 57 Prepaid expenses 17 13 Current portion of long-term receivables, investments and other - - 305 225 Property, plant and equipment 239 268 Long-term receivables, investm
Slide 23: Cash Flows
Cash Flows Fourth Quarter Year US$ millions 2005 2004 2005 2004 Cash provided (used) by operations 5 25 83 89 Investing activities (15) (4) (34) 13 Financing activities - 1 - 41 Increase (decrease) in cash (10) 22 49 143 Cash at the beginning of the period 212 131 153 10 Cash at the end of the perio
Slide 24: Sensitivity to the Gold Price
Sensitivity to the Gold Price US$ millions Year Effect of $25 change in the gold price: Revenues $18 Earnings $15 Cash flow $17 24
Slide 25: Speaker: Len Homeniuk
Speaker ¾ Len Homeniuk President & CEO 25
Slide 26: Strategic Priorities for 2006
Strategic Priorities for 2006 ¾ Operate safe and efficient gold mining operations ¾ Expand our assets ¾ Develop new reserves at Kumtor, Boroo, Gatsuurt and REN ¾ Explore growth opportunities in Central Asia, FSU and in other emerging markets 26
Slide 27: Question Period
Question Period centerraGoL_op