Q4 2020 Centerra Gold Inc Earnings Call

February 24, 2021

Okay.

Greetings and welcome to the center of gold 2024th quarter and year end results conference call and webcast. During the presentation, all participants will be in a listen only mode.

Afterwards, we will conduct the question and answer session.

If you have a question. Please press the one followed by the for on your telephone.

If at any time during the conference you need to Richard Operator, Please press Star zero.

As a reminder of this call is being recorded Wednesday February 24 of 2021.

I would now like turn the conference over to John Pearson, Vice President Investor Relations. Please go ahead Sir.

Thank you Carlos welcome everyone to <unk> Gold 2012 fourth quarter and year end results conference call.

And today, we will also present an update on the extended mine life at couture as detailed in the new Couture 43, 101 Technical report filed on SEDAR today.

Summary slides are.

Are available on <unk> website to accompany each speaker's remarks.

Today's call is open to all members of the investment community of media in listen only mode. Following of the formal remarks, the operator will give the instructions for asking a question and then we will open the phone line to questions. Please.

Please note that all figures are in U S dollars unless otherwise noted.

As we continue to work remotely joining me on the call today is Scott Perry, President and Chief Executive Officer, Darren Millman, Chief Financial Officer.

David or Dan Chief operating officer, Malcolm stall Stallman, our vice President exploration and use of for Raman Our general counsel.

I would also like to caution everyone that certain statements made today may be forward looking statements and as such are subject to known and unknown risks, which may cause our actual results to differ from those expressed or implied.

Also of certain of the measures we will discuss today are non-GAAP measures.

Please refer to the description of non-GAAP measures in our news release and the MD&A issued this morning.

For a more detailed discussion of the material assumptions risks and uncertainties. Please refer to our news release and MD&A, along with the audited financial statements and notes and our other filings all of which can be found on SEDAR and the company's website at Sentara gold Dot com.

And now I'll turn the call over to Scott.

Thanks, John and good day, everyone. Thank you for joining us for our call.

Many of you're referencing.

The presentation slide deck and I'm, just starting off on slide number four.

So just from the top left here on slide number for number of sort of key highlights I'd just like to expand on just starting with the first bullet point you can see 2020. It was a very strong year for the company.

In terms of the gold output profile, we finished with 824000 ounces of gold, which was above the upper end of the guidance Mount Milligan mine for Joost 82 point.

8 million pounds of copper I know of.

The corresponding all in sustaining cost was a very low competitive $729 per ounce, which is below favorably below.

Guidance of an excellent operating results of the company.

Subsequent to year end, we announced that we had divested out 60% share in the greenstone gold mines partnership for some 200 million Boes and the cash consideration plus of additional contingent payments of up to $75 million.

Just looking at the third and fourth bullet points, you can see the strong level of production and the corresponding low unit costs really resulted in some significant profitability in terms of operating cash flow during the calendar year, we generated $930 million and then if you look at the fourth bullet point in terms of in terms of the free cash flow metric.

Any wide portfolio generated $604 million of positive free cash flow as you can see in for emphasis each of the individual operations. The contributed very meaningfully control of generating $438 million Mount Milligan generating $150 million, and then offset which is our newest operation now portfolio in its inaugural year of operations at <unk>.

Contributed to $105 million of positive free cash flow.

The next bullet point below obviously, the strong level of free cash flow you can see that we are quickly establishing a peer leading balance sheet.

The debt free balance sheet, and we finished the year with some $545 million use of cash reserves.

One of the other key highlights of today's the.

The announcements is the.

We've also released the new.

Technical report a new 43 101 life of mine plan for <unk>, it's each of the five year extension to the mine life. The new delineated mineral reserves of some 6 million ounces of gold, which is an increase of some $3 1 million ounces and also in terms of the grade and the <unk> zone increased by approximately 15% and this is a fantastic development.

And then Chief operating officer will expand on this shortly you can see the chart on the bottom here on slide for you can see all of our operations were generating.

Meaningful levels of free cash flow throughout the year I think the what really strikes me is the fed chart. Just on offsets this is pretty exciting who's out most of it.

The newest operating mine we brought this mine into operations in January of this year I'm, sorry January of last year, when we poured first gold.

At the end of May we declared commercial production and then you can see in Q3 Q for just the very meaningful levels of free cash flow and profitability for the mine is already demonstrating so it's exciting as we make our way into this year and beyond just in terms of having a third source of high quality low cost production and just what that means for our fundamentals.

Moving forward.

Just moving on to slide five just in terms of some terrorists. The ESG profile of just a few bullet points referenced.

First bullet point.

The App focuses on the zero harm operations, we have a number of leading sort of safety leading initiatives underway as we speak.

We are seeing some benefits about website for them save program I think two notable milestones during the year offset a mine in Turkey celebrated for millions of lost time incident free operations and at <unk> as we speak we're getting relatively close to being one year of lost time incident free operations, where as of today. We are now at 330.

One consecutive days second bullet point, just in terms of the social license to operate.

Now extended.

This record 290 consecutive months without any having any interruptions at any of the operations globally.

The in good stead in the third bullet point just in terms of the.

The environmental incidence the haddon.

No reportable environmental incidents in the quarter as it should be so that was great to see and then just touching the last bullet point.

We can tear of member of the World Gold Council and the World Gold Council recently rolled out the responsible gold mining principles. We are a signatory to these principles of the 51 key sort of the ESG principles and looking to roll all of these out.

The obtained the compliance.

Over the three year period, we're in good stead at all of our operations and in fact that ox that we're actually well ahead of schedule, whereby we have already established assurance.

In 2020, albeit thats not required until 2022 so.

<unk> very well.

Just moving on to slide six.

A number of the.

Key corporate highlights I'll, just reference the three or four.

The fourth bullet point, I think one of the things that really differentiates and terrors. The low unit operating cost profile you can see here on a companywide basis out of all in sustaining cost of $729 per ounce was the very competitive as I mentioned that was favorably lower the guidance you can see in per emphasis just each of the individual mine.

And they really are operating at that sort of the first quartile relative to the the world industry cost the.

Come towards the $741 of Mount Milligan at 541 in OXXO debt 490 for that obviously always positions us really well just in terms of that margins regardless of what per.

Propelling gold price environment, we're in.

The sixth bullet point I mentioned at the outset of key update today as the new life of mine plan for come until at the five year extension in the reserve mine life, and that's kind of extend the operations to 2031, which are quite say, yes, and the 11 year delineated mine life moving forward.

With today's release the the next bullet point, we've providing providing our guidance for 2021.

Which is the which is a component of value multi year three year guidance, but in terms of the 2021 guidance you can see.

<unk> for the midpoint of the 780000 ounces of gold and some 75 million pounds of copper last bullet point at this level of sort of metal output is.

Well as the associated all in sustaining cost guidance, we think of the business that we think the business will be generating.

Cash cash flow from operations of the $750 8 million $800 million.

And corresponding free cash flow of $350 of $400 million.

This is assuming a gold price of the $1750 per.

Per ounce just for the next slide on slide seven just from some of the key financial highlights the first bullet point.

Good year financially for the company and we finished the year calendar earnings from sorry, We finished the calendar year of net earnings of $408 5 million, which equates to the adult 39 per share.

The third bullet point as I mentioned earlier very strong here in terms of free cash flow $604 million was generated during the calendar year. So for the point that a lot of allowed us to finish the year of of very strong treasury position net of debt free balance sheet and finishing the use of cash reserves of some 545 million of dose then.

Just the fifth bullet point of that.

The board again a day.

<unk> and approved a quarterly dividend of Canadian <unk> per share.

Just moving on to slide eight slide eight this gives you a little bit more detail just on now our guidance for 2021 day.

Just in terms of the the first broke into the <unk>.

Gold production guidance of the common totally guiding up to 510000 ounces of gold Mount Milligan of up to 200000 ounces of gold and offset up to 110000 ounces of.

The gold production.

Just wanted to provide a bit of additional sort of commentary just on the quarterly profile within the calendar year. So just in terms of cum total.

Gold production is expected to rise steadily.

Throughout the year with the first quarter contributing approximately 15% of the annual gold production targets and that will then be rising to approximately 35% of the <unk>.

The target in the fourth quarter of 2021.

In terms of Mount Milligan, both gold and copper production are expected to be slightly back end weighted in 2021.

First half of the year, representing 45% of more of the annual target whilst the second half of the year will represent up to 55% of the annual target and then just lastly, it offsets gold production is expected to be backend weighted.

In the calendar year with the first half of this year, representing 35% or more of the annual target while the second half of this year will represent up to 65% of the annual target, but again as I said earlier when I look at this sort of metal output profile, the the guiding too as well as the sort of corresponding operating cost structure.

Again, assuming of gold price of $17 50, we're expecting this year to be another another meaningful year in guiding for free cash flow of $350 million to $400 million U S. Just moving on to slide nine as our new multi year guidance and we are now providing a three year outlook for the business.

And I think it really does illustrate the medium term.

<unk> of that business.

See the fourth row here, we're expecting a growing level of gold production here over the three year period and that being underpinned really by by each of the operations.

If you look at the sort of second and third rows each of the mind of.

Generally increasing their levels of the gold output moving forward, which is a nice profile. Because then when you look down of the seven for just in terms of the all in sustaining costs.

That is kind of having a favorable economies of scale of deflationary impacts in terms of out cost profile of decreasing.

Over that period of time, so again relative to the sort of current gold price environment. I think this is kind of position us well just in terms of the margins within that business.

As we demonstrated in 2020.

I think over the three year period, with very well positioned for growing growing levels of the profitability and positive free cash flow.

So that really concludes the the first part of the call and as John mentioned in his introduction.

I'd like to move into the second part of that coal and I'm going to look the past proceedings of its the den days that Dennis Melton Stallman of obviously one of the key highlights today was the release of out of new life of mine plans of control.

I mentioned that it's a five year extension of the addition of some $3 1 million ounces.

The new gold reserves and more importantly, the institute of Reserve grade has increased by some 15%. So it's a fantastic development and what I'll do now is I'll pass it over the den our chief operating officer and he can provide a lot more color on that so Dan over to you. Please.

Thanks, Scott good.

Good morning, everyone.

Before I get started I'd like to recognize the efforts of the many employees contractors consultants, who worked tirelessly over the past year to bring forward. This new technical report and extend the life of mine for Kuehne tour.

I'd, especially like to thank the <unk> for employees for the results of they put forward in 2020 under such challenging circumstances during COVID-19 and after our tragic accident that we had in 2019 and early 2020. Since then as Scott has indicated we've had excellent safety record of whom tour where today we are.

We're at 331 consecutive days of little lost time incident.

So I take it to the next slide the agenda.

This is the agenda will be going through I will take you through the technical highlights of which Malcolm Stallman of Master well. He is our VP of exploration, who will discuss the comb to our exploration potential.

As the introduction, we've been operating the comb through our mind now for some 24 years and has been operating since 2009 under the concession agreement, which was the comprehensive rights agreement that runs until 2042 <unk>.

During this time, we have not had a meaningful operational interruption and we anticipate to be able to continue under the terms of this agreement going forward.

If you go to slide 13.

This is the layout of the concession.

The gray area in the center as the footprint of the ultimate pits and you can see that our central pit and Sarah tour of southwest are now coming together along strike length.

Which extends both of the southwest and the northeast.

If you go to slide 14.

<unk> certainly of World class asset.

There've been many years with production in excess of 500000 ounces and we anticipate this level going forward with this new life of mine plan.

At the end of 2020 CWM tour has now produced more than 13 million ounces of gold and out of sustained an average grade of three grams per tonne.

The future sees us extending the pit in both directions.

And the depth with the new cutback hockey stick to the southwest and cut back 'twenty, one and 'twenty two to the northeast.

The next slide in terms of performance as the very large open pit with substantial ore stockpiles that we blend for the mill feed couture operates at a fairly steady gold production rate between 500000, and 600000 ounces per year at an all in sustaining cost.

Of between $600 from $1000 per ounce.

The reserve has now increased to 6 million ounces at an average grade of 266, the previous announced increase in resources had been reduced because of this the conversion.

Just in the past year in 2020 couture had an operating cash flow of $661 million and of free cash flow of $438 billion U S, which shows the quality of the asset.

With the exploration drilling program that commenced two years ago.

That had been previously stopped for five years, we successfully increased the proven and probable reserves by 87%.

We have continued our near mine exploration program in 2021 with the gold to identify further extensions of the current pits as well as neuroma and nearby mineralization.

Currently we are not anticipating of start to the underground as current plans require access from the bottom of the central pit, which is currently in active mining phase.

This opportunity continues to be analyzed and better understood.

If I take you to slide 16.

As a result of additional reserves. The mine life is now extended from 2026 to 2031.

As part of the life of mine extension, we have planned to add a small percentage of new equipment, which I will detail out in the future slide.

The new life of mine reflects a $1 96 billion net cash flow at $13 50.

This increases to just over $3 billion at.

At $6200 gold.

There is limited additional capital requirement, but we have planned for focus capital improvements in the plant to increase recovery and throughput.

Include additional leach tanks, and the new tower mill.

The new life of mine calls for increasing the tailings dam each year from the same way that we have over the past few years by adding additional capacity as required within the current footprint.

Finally, our near mine exploration drilling has outlined significant oxide potential and future near term drilling will be focused on this as well as extending the sulfide reserve and resources.

Taking you to the next slide 17.

Here are highlighted in Red you can see the reserves of increased to just over 6 million ounces.

The year over year change in reserve and resources reflects a strong conversion of resources to reserves the 87% increase in reserves gives room for an additional five full years of production.

The grade in the reserves also increased from $2 31 to two 606, given robust economics of $13 50 in the technical report.

The groomed for underground resource stays fairly much constant at $3 1 million ounces and we continue to do engineering work to tighten up different approaches that it would take once the center will open pit is completed.

On the next slide slide 18.

At $13 50 gold.

For 2021 is reflecting of breakeven in terms of net cash flow. This is the transformation year to allow the large stripping of cutback 20.

And accessing substantial or starting in the second half.

Of 2021.

We are currently feeding from lower grade stockpile for the first half of this year.

From 2022 to 2026, the release of ore is sufficient to feed the mill at a steady grade of in excess of three one grams per ton. Thus we are forecasting to produce up to 600000 ounces per year for these five years.

For the year of 2027 to 2031. The current plan is the feed full tonnage, but a lower grade blend therefore, averaging 330000 ounces per year.

As a result of the current near mine exploration and as we learn more the potential to bring forward higher grade blend to these future years to fulfill the.

The full potential.

As planned the reason for final year of the life of mine being higher than previous years as we planned to mine out the step out we did for cut back 19 that was taken to increase the stability of the pit wall below the plant.

This the step out is of higher grade ore area, but will only be accessed near the end of the open pit life.

Again of $13 50 gold the overall net cash flow from 2020 to the end of the mine life is 196 billion.

Fairly spread over the years.

Taking you to the next slide cover sheet on stewardship for the <unk> mine currently take Sentara currently takes its stewardship of the comb to remind very seriously and is making all efforts to fulfill its ECG obligations for the benefit of all stakeholders.

On slide 20.

As a very large industrial operations in Kurdistan CWM tour is a substantial tax contributor to the states.

Since inception, <unk> has invested more than $2 billion U S paid in excess of one 4 billion in taxes and is near 10% of the GDP of the country.

We also contribute to other social programs, both locally and nationally.

The extended the life of mine is projected to contribute a further $1 billion in taxes and royalties.

To get into the next slide <unk> has a very skilled national workforce with only 1% of workers coming from outside the country.

Our competitive wages and gives us stability and helps us reduce our turnover, that's giving us the ability to retain our top talent.

The <unk> payroll is near $100 million per year, and a very large percentage of our near 4000 employees and contractors lube in the region of the mine.

A number of our current views employees had been promoted to positions in Canada, where we utilize their technical expertise that is world class.

As leaders in the respective communities our employees participated in many ways to help improve the lives of their fellow citizens.

In terms of supporting strategic community development as part of our commitment to the stakeholders.

<unk> works closely with local communities with a focus on sustainable activities female employment youth employment and training as well as all other local community development.

And the investment.

The micro credit agency. The couture initiated have helped small businesses start and developed and is credited for helping create near 5000, new jobs in the region.

The extended mine life will contribute a further $17 million of direct support to these many activities.

Taking the slide 23 now.

As part of our commitment to our host country CWM tour has embraced the goal of local procurement.

Over 25% of whom towards supplies are procured locally from near 400 different suppliers.

Since the beginning of the mine life, whom tourists purchased in excess of $1 billion U S locally.

A predictor of our node for the past five years, 100% of the food required for our 1800 person camp is locally sourced the.

The additional mine life will be the additional local procurement of near 700 million for the country.

Yes.

Slide 24.

In terms of environmental stewardship is an important part of scenario of social license cum tour applies the highest standards towards the approach of managing the environmental effects.

We hold ourselves for the highest international standards and focus on transparency.

Not only do we do constant monitoring on site. We also contribute to the local area in terms of water management for farming supply of clean water to local communities and participate in waste management strategies in the region.

We are of substantial budget and highly skilled environmental employees and consultants to help us achieve our goals and plan to spend in excess of $50 million over the life of the mine.

Now I'll take you to slide 26, and get back to the reserves and resources as indicated the reserves over the year of increased 87% from $3 2 million to 6 million ounces, reflecting the extension of the central pit on both sides.

On slide.

27. This is a reflection of the changes of the dates of the technical report from July one of 2022, our announced reserve at year end. This reflects the depletion of your from stockpiles. During the latter half of 2020 as we were stripping waste from cutback 20. During this time.

Slide 28.

In terms of the plan view there is only a small expansion of the footprint of the resource pit shell the resource could shell in the Blue from 'twenty 2019 is expanded only marginally to the left in the hockey stick zone and on the right as part of the cutback 'twenty, one and 'twenty two.

The total ounces in the resource shell, the only change slightly but the major changes moving ounces from resource.

To reserve.

On Slide 29, you can see the this is the sectional view over and cut back 21.

You can see that we have lowered the pit angle on the right side to account for better understanding of the geotextile ability.

As a result, both actual mining and additional drilling.

The sections of the left shows the we're not changing the slope of substantially due to good stability in this area.

To note the upper Green line is the bottom of the pit at July one 2020.

Moving forward now to slide 31.

These are pictures of the open pit design.

The ultimate pit mine pit plan are depicted here the pictures on the top right labels. The mining zones. It is important to note that we are not developing any new pit on.

On the right you can see the areas that we call of cut back 20 to both cut back 21, and cutback 20 are below the cutback.

On the left you see the hockey stick and southwest Servitor, there to the west of the hockey stick zone.

We are mining cut back 20 currently up until mid 2022 the.

When we shipped to approximately 25% of our efforts over to southwest and 25% of hockey stick beginning in 2021.

Southwest is completed by 2023, but hockey stick continues all of it until 2025.

Cut back 22 starts after a hockey stick in 2026 and it is our final mining cutback ending in 2028.

Servitor starts during that period of time in 2026 and is completed in 2027 as we need to release your while we're doing the large stripping of 2022.

And the next slide slide 32.

We've had questions before about the the fleet.

<unk> has a very large fleet of cat haul trucks are combined with Lieberman high Daiichi shovels the.

Truck fleet is in excellent condition, but due to the longer hauling distances that life of mine calls for an additional 29 trucks.

In anticipation of this requirement, whom toward did procure of 11 used 789 from Chile in 2020 last year as well as the ordering 10, new 789, the trucks from cat.

The first 11 trucks are on site operating and two of our new trucks have already arrived the remaining eight.

Of these trucks are in transit three of our in country and five more will be arriving in operating by April.

Due to productivity improvements, including more fully utilizing the main technology, improving loading and the efficiency truck speeds, we have postponed the final eight trucks and will only procure them if required.

This is why our 2021 capital expenditures are forecasted to be less than what we reported in this technical report due to the eight trucks being purchased differed and potentially cancelled.

As for shovels, the lever shovels are smallest in the oldest shovels.

<unk>. So we are looking to trade in the four for for larger shovels.

And that's what's depicted in the plan the.

Atlanta has not been finalized and will be continued to be studied the.

The smaller graders of the fleet are being replaced by larger graders as they are retired given the capability to maintain the longer haul distances. The remaining replacement equipment is simply the shutdown the older equipment as conditions warrant and replace them with new equipment.

The dig into the next slide the mining schedule.

In the mining schedule, you can see the phasing of ore release in central pit and separately servitor in southwest.

The central pit cutbacks of cut back 20, cutback 21, and cut back 22, our large each take two or even three years and the majority of the ore in these respective cutbacks are in their last year the <unk>.

Balance of the or release the plan is to have or released from hockey stick serotonin southwest during these large stripping segments.

The plan is to keep the feed grade at over three grams per tonne to have enough ore in stockpile to always have targeted feed tonnage for the plant.

Slide 34 in 2020.

We had focused on cut back 20, and the northeast with the majority of the waste going to Central Valley dump as we regained permission to utilize the <unk>.

On the next slide 35 currently all of our equipment isn't cut back 20, and 50% of the waste is going to Lucy and 50% is going to Central Valley, we will shift of small amount of equipment to the southwest later in the year.

The slide 36 in 2020, we are much more spread out in our mining zones in the central pit as well as of large cutback in the southwest.

Slide 37 in 2023 of the majority of the focus is the hockey stick and we begin to kind of do cut back 21 again back on the top.

Yes.

Sure.

This is a projection of our stockpile of balances both in past years in the future years <unk> has a number of large areas for stockpiling of ore with different grades of 100% of the blend of our mill is managed by our metallurgy team to ensure maximum.

Recovery of large amount of ore is released by cut back 20, starting in the latter half of 2021.

But very high amount in 2022, the thus reflecting the large stockpile at the end of 2022, which is subsequently depleted during 2023.

You can see the same movements that we had in previous cutbacks during 2018 19 and 2020.

This is the addition, and subsequent depletion from cutback 18 on the plant side and from cut back 19.

Which was the cut back below cut back 20.

Yes.

The next slide Slide 39, <unk> has three main dumps from left to right. They are servitor central and on the right. Lee see these dumps have all been permitted for their footprints and no new dumps are planned at this time over the remaining life of mine central will receive.

40% of the waste while territory <unk> received 30% each of the loading of each waste dump is tightly managed to limit any risk of movement.

Now, let me shift to the mill.

The process flow of the plant slide 41.

It has only one change so that being the addition of the tower mill, which is planned to be commissioned in October of this year the.

The additional leach tanks have been delayed from the targeted operations of late of 2020 due to construction issues, mostly caused by limited manpower due to COVID-19.

They are anticipated now to be operational in the second quarter of this year.

In terms of mill statistics Slide 42, the kuehne per mill has an excellent mechanical availability of 97%, which has been demonstrated over the past few years.

We have the strategy that two times per year of full maintenance shutdown and it has proven very successful.

To keep the mechanical availed of the high the plan is to run the plant at $6 5 million tons per year and with the additional leach time due to the new tanks and finer grinding with the tower mill. The recoveries are expected to be in the mid eighty's.

With most of the different feeds.

Recovery due to.

It will vary due to the grade in order type, but that is taken into account in our planning and focused on when we decide of ore blends by our metallurgy.

Slide 43 shows the tower mill and Leach tanks. The capital addition of the tower mill and Leach tanks are well in progress and both will be contributing to improving our recoveries and the increasing our ounces starting this year and will continue for the life of mine.

On the next slide 40 for the current tailings storage facility is very robust with the additional five years of life. The current footprint has only slightly increased.

And the lifts each year will give us sufficient capacity for non stop operations.

The following slide shows some details on the raising of the dam. The dam is engineered to World class standards by third party experts and external experts.

To do do an annual audit and inspection of the condition and manage helps us manage the dam to.

To improve stability the strategy of excavating of sheer key at the foot of the down to the depths of 20 meters into the base has proven to be very effective.

As can be seen on the table the capital cost of the tailings raising is spread over the remaining life of mine.

Construction is contracted out to local Earth, where contractors.

And as completed Jeremy during the warmer.

Summer months of April through October of each year.

Finally, we will bring you to the financials on slide 47.

As indicated in the summary highlights of the new life of mine reflects 196 billion of free cash flow of $13 50 gold.

Starting in 2022, we have five solid years of production each producing near 200 million free cash flow at $13 50 the.

The all in sustaining cost during the same time is in the $650 to $900 range and the life of mine comes in at a very competitive of $828 an ounce.

Mining costs.

Per ton were higher in 2020 due to the reduced tonnage, but I have full mining rates. The mine can run at an average of $1 39 life of mine milling costs are steady near average at $11 34 per ton mill and the administration costs coming in at $9.

<unk>.

And the $7 87.

Life of mine.

The next slide.

For net cash flow at $13 50. It is only during the large stripping years of 2021. This year and 2027, where we are feeding lower grade stockpile of are resulting in a breakeven cash flow.

The NPV comes in at a robust $1 $5 5 billion out of 5% discount rate and one of three 7 billion at an 8% discount rate.

Next slide in terms of operating costs quickly.

<unk> has a long history and experience operating the boom to our mind, therefore, the cost of operating a well understood and very world competitive.

Even with including sustaining capital of the mining cost comes into the $1 66 U S per ton mined the <unk>.

Milling cost is just over $12 per ton milled in the administration just over $8 per ton milled.

Okay.

For the next slide slide 50.

Thank you.

<unk> is well established and the additional life.

Life is extension of the current pits there is little growth capital required to extend the life of mine our all in sustaining cost per year in the full mining years ranges between $400 and $510 million per year.

Once mining is completed in 2028 and the remaining three years, the all in sustaining costs dropped to $250 million to $300 million per year.

The whole life of mine average all in sustaining cost per ounce comes in at the $853 per ounce and inclusive of gross revenue tax and capital growth. We are still very competitive just over $1000 at $1044 per ounce.

Yeah.

In terms of capital expenditures on slide 51 of.

The majority of new equipment needed to execute the plan is scheduled to be purchased in the first three years after that the majority of capital.

As mobile component replacement.

The annual raising of our tailings dam, followed by our annual mill.

Maintenance type of repairs.

If you look at sensitivities.

And of 5% discount rate of the NPV does come in at $1 6 billion.

The value fluctuates, most with the price of gold when gold has increased 20% to <unk> hundred 20 announced the NPV increases to $2 5 billion at a 20% decrease in gold price down to 1080, the NPV is still $600 million.

The NPV is second most sensitive to our operating cost and with an additional 20% of operating cost the NPV drops to 950.

<unk>.

Both FX and capital fluctuations have little effect on the overall life of mine NPV of Comptroller.

And finally.

<unk> opportunities of the future we call it or the Golden Sunrise for a number of large opportunities that we are investigating with firm for the current extension of the <unk> life of mine has all been well of SaaS. There are also a number of additional opportunities that we can add substantial value to the company.

First the gold in the current ore is very fine with the recovery over life of mine of 83%, giving an opportunity to continue to find ways to improve that.

As the <unk> pit deepens. It is now constrained to the northwest bye.

Our plant.

Additional drilling has shown the ore body does extend in this direction. Therefore at some point it may be economic develop a new plant.

This is also tied to the opportunity number three as exploration is uncovering of potential oxide resource. This would also require a new processing plant, which could be tied to movement of the old plan.

Currently the operation utilizes a truck shovel configuration as mining methods change there may be an opportunity to move to the conveyor or the light type of system, which would also change the location of the waste dumps and potentially use green hydropower.

The company has been doing work on testing different methods of recovering gold through the tailings processing. Currently there are in excess of 3 million ounces in our tailings.

Finally, the underground resource as well delineated and open and a number of directions and we continue to study of that.

Now <unk> will take us through the <unk> exploration opportunities.

Alright, Thank you Dan good morning to everyone.

I will now briefly discuss the exploration of them completed of contour in the recent past.

I'll then outline the planned exploration for 2021 and beyond.

The first slide will be slide 55.

As mentioned the exploration drilling resumed that control the mid 2019 after a five year hiatus in.

In 2018 in 2019 drilling was mainly focused on the development of resources and the hockey stick on the stock where ex items and this work defined mineralization outside of the ultimate open pits in these areas.

The photo on the slide is looking towards the southwest shows the hockey stick zone and you can see the substantial.

Substantial size of the central pit.

In 2020 drilling focused on extending sulphide mineralization that southwest I'm, sorry, so the deposit of resources.

Evaluating oxide gold mineralization potential along the control lower thrust that sorry, tore hope triangle most of the suite of northeast.

And also we began testing the potential of peripheral targets in the boardroom.

So at least the GAAP and petrol of areas.

The slide 56.

Sorry.

Sorry back on slide 55 of the map on the left you can see the control of concession area in Red and the location of the main prospects the <unk>.

<unk> gold trend runs through the concession in the northeast the direction for a distance of other 15 kilometers.

It should be noted that down the around six kilometers of the trend has been subjected to substantial exploration.

Slide 56.

This slide shows the extended mine life out to 2031 based on the update of reserves through.

There is significant potential for aggressive exploration in the coming years to extend the mine life, even further and in particular to fill in the drop in ounces that occurs after 2027.

Slide 57.

Comptroller of the World class Orogenic gold deposits located on the Tien Shen <unk> zone in southern Kyrgyzstan within the control of concession brownfields ex targets include sulphide Goldman realization in the vicinity of the existing pits and oxide gold mineralization outside the existing pits.

Greenfields targets include new styles of mineralization and previously Underexploited targets, along the strike of the cum total gold trend.

Infill drilling will also be undertaken to update resource categories around the existing pits.

Since the exploration drilling resumed in mid 2018, 550 drill holes have been completed for over 143000 meters of mainly diamond drilling.

For 2021, we have of $21 million exploration budget, which will include 75000 meters of drilling.

We believe that there is significant potential to increase the existing sulfur gold resources and to delineate new oxide gold resources within the control of concession.

Slide 58.

The slug is more specific information on the main areas to be drilled in 2021.

I won't go into the details for each area, which you can read them from the slide for the rest of the main takeaways from the slide.

Firstly preliminary metallurgical test work from the form of total relative from oxide gold material from the sorry, it's sort of hope areas has returned gold recoveries in excess of 80%.

These are the metallurgical test work will commence in 2021.

Secondly, some very significant drill and the steps we returned from the southwest the oxide zone of late last year and I'll refer to these the gyn later on.

Certainly theres, a GAAP known as the lease the GAAP.

Although the one kilometer between the central and northeast deposits that has previously been drilled tested and signing a handful of holes.

GAAP was covered by the leaks of glacier, but as the glaciers for treating due to the effects of climate change the potential of this zone the host sulfide gold mineralization could now be tested.

Slide 15 non.

The slide shows the cross section, which is looking towards the northeast and it explains a simple schematic model for the three main types of Goldman utilization of control.

From the right hand of South Eastern side, the majority of the sulfur gold resource of the control of hosted within unit, two which comprises fill out some black shales.

Moving to the Lyft will further northwest of.

So of Goldman amortization of hosted within the unit zero, which comprises the sandstone siltstone and lump sum.

Moving further to the northwest of game.

First gold mineralization is mineralization that has been eroded from both unit two and unit zero and is hosted in much younger conglomerate of rocks.

The disburse mineralization has also authorized.

There have been no results as calculated at the stage for the oxide disbursed styles of mineralization.

Slide 16, this slide shows the ultimate pit outlines can pile of grain.

The zones of sulfur Goldman amortization of shown in Red and these isobar unit, two which was in pink.

The OXXO Goldman of realization in the sector. It's a day shown in Orange and the hosted near zero, which is shown in green.

And it can be seen from this map that there are substantial intervals within the unit zero of not being tested for drilling.

I will now show a series of cross sections through some of the deposits all of the sections of looking looking towards the northeast.

The slide 61 shows the section through the central deposit.

On the right hand side, you can see that the resigns of sulfide Goldman organization within unit to below the ultimate pit.

The pit outline of the Grey line apologies, it's of little little hard to see.

Moving to the left of northwest the potential for oxide gold mineralization within unit zero remains largely untested in this area.

Further to the northwest drilling has intersected wide zones of low grade disbursed, all oxide gold mineralization, which require a follow up.

The slide 62.

This shows the sections for the southwest supposedly on the right hand side, you can see the Vera zones of sulfide gold mineralization within unit tube of blood. The ultimate pit again shown is the gray line.

Moving to a lift of northwest oxide gold mineralization has been in the sector the depth within unit zero in the deep oxides zone.

SWT of $23 17 returned 150 of it made us the 295 grams per tonne gold.

Further to the northwest of <unk>.

<unk> zone of oxide Goldman realization called the hope stone as it turns from significant drill intercepts.

And then further to the northwest of game drilling because in the sector disbursed, all oxide gold mineralization, which requires for the follow up.

Slide 63.

It shows the section 40 minutes further to the southwest of the previous slide.

The recent drilling with the oxide gold mineralization at depth in the oxide zone.

The $23 86 returned 222 made us at $4, one one grams per ton bill.

Slide 60 for shows another section 40 meters for the sort of southwest again.

The Guy in recent drilling, let's say the oxide gold mineralization at depth from the deep oxides zone.

SW 23 of it.

We returned 225 meters of $3, one one grams per ton gold.

Slide 65 shows the sections of the stars for the puzzle for.

On the right hand side, you can see that theyre zones of sulfur gold mineralization within unit to flow. The ultimate pit again shown is the gray line.

Going to the northwest shallow oxide gold mineralization intersected with the unit zero.

Slide 66 shows the section through the northeast deposit at the other end of the income until gold trend.

On the right hand side, you can see that there was one of the sulfide gold mineralization within unit, one and power Inc.

Generally we don't see significant gold mineralization in unit one. So this may open up new zones with potential for sulfur Goldman of amortization.

Moving to the left the northwest shallow mixed oxide and sulfide gold mineralization, because we intersected the same unit zero.

Slide 67.

Slide shows the image from an airborne electromagnetic survey that was completed in 2019 the.

Pink colors on the lyft represent zones of low resistivity that relates to ulta and potentially Goldman realized rocks, along the comfortable gold trend.

The full line deposits of Sean and it can be seen that there is still the considerable strike length of the control of gold trend for us under explored.

Slide 68.

<unk> summarized what has been achieved over the last few years and one of our objectives will be over the coming years.

After the restarting exploration in 2018, we successfully increased the measured and indicated resources for 112%, which is now reflected in the expanded reserve among the mind months.

In 2020 drilling focused on further expanding sulfide and oxide gold mineralization and the number of areas.

For 2021 of our exploration budget was $21 million, representing some 75000 meters of drilling and going forward, we would expect to maintain the similar level of spending.

The four key objectives. This year are to expand the southwest sorry tool of northeast sulfide gold resources.

Evaluate goldman of oxide gold mineralization potential among the Comptroller of the thrust sorry total hope triangle most of the assumed in the northeast.

And so the potential of peripheral targets in the border Rockville lease the GAAP and petrol the areas.

We aim to the calculated maintenance doses for the hopes northeast from costly zones at the end of 'twenty 'twenty, one or early 2022.

Thank you that now completes the Comptroller exploration update I will now pass back to Scott.

Thanks, Malcolm in the <unk>.

Congratulations to yourself and then and your respective teams. This is a very meaningful developments in still of lot of excitement of still some significant exploration potential here for further success moving forward. So again congratulations just.

On slide 17, just the wrap things up.

In terms of out of three of three year outlook again really on the back of the Controle is optimized and expanded life of mine plan you can see it's really kind of underpin a significant increase in the company wide gold gold output levels, you can see that in the fourth row here in this table line.

Likewise, the symptoms of the corresponding unit cost if I look at the all in sustaining cost metric for example in the seventh for.

You can see what kind of the peer leading cost structure here in the medium term is obviously going to obviously going to make for a very robust margins and that's kind of really benefit the organization when it comes through out sort of.

Go forward profitability and free cash flow and I think thats kind of see us continuing to strengthen our leading financial profile, so pretty exciting developments, particularly so as we look to <unk>.

Delivering sustainable value and growth for the organization and our shareholders.

Look with that call.

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One moment please for the first question.

The first question comes from the line of Tariq Credit Suisse. Please go ahead.

Hi, Good morning, Thanks for taking my two questions maybe first on Oxford.

The difference between 2020 production in 2021 production can you just provide more commentary on I know, you've given more guidance on grade and things like that but just.

What was expected previously.

Our grades expected to be lower than before.

Any color around kind of the cadence of the production and the great specifically would be helpful.

Yes, it's Scott here I'll go first of the debt you can chime in the video any additional commentary, but it's really just a function of the grade. If you look at last last year 2020 calendar year of stacked grade was one four grams per tonne.

This year 2021, we're budgeting for a stacked grade of approximately one point to seven.

Grants per ton. So that's really what's driving the year over year profile, but in terms of the sort of mine sequencing mind phasing as you would depict from out of three year outlook.

To be moving into a very high grade sequence.

In calendar year, 2022, 2023, and you're going to see very significant increases in.

Offset for Apple protocols. So short answer it's really just a function of the mine grade and how thats disseminated for the ore body and where we are currently sequencing in terms of the mine plan. Dan is there anything I missed there or anything that you want to add to that.

No you hit it spot on it is the sequencing and there is just differences a little bit between the original technical reports from what we're executing now, but but certainly.

We're seeing a book good positive reconciliation against our resource models. So that's that's all bodes well, but its simply the release of the different grades or is because we blended the put upon the heap.

Okay, Great. That's helpful. And then my only other question on capital allocation.

Maybe provide your most recent thoughts on how youre thinking about it I know previously you had indicated that.

You've done an exercise of comparing our distribution as a percentage of free cash flow and there was an opportunity to maybe raise the dividend maybe talk about how you are thinking about capital allocation now knowing.

The revised concurrently.

Life of mine plan.

Yes look it is an ongoing discussion with our board of directors of its pretty much of a standing agenda items. Each board meeting as you would expect with obviously a board decision.

We have been consulting or lagging with all of our key shareholders, taking the abuse as well in terms of what they think would be the.

The best measure of the best step in terms of go forward capital return initiatives.

Likewise now that we've published this new lots of mine study for <unk>. We're also looking to reach out to.

The political leadership in Kyrgyzstan, obviously cookies, the odor and is that a lot of shareholders.

Looking to get their views as well.

That really everything's on the table, we've been having discussions around potential share buyback initiative, all the way periods, who ask sort of a regular quarterly dividend program.

Unfortunately that kind of provide any additional sort of color other than at the longer evaluation.

And the continuing we continue to revisit that with the board at each of our board meeting.

Okay, great. That's it from me thanks.

Our next question comes from the line of Brian Macarthur Raymond James. Please go ahead.

Good morning.

Lots of follow up on the oxy permit because obviously, there's a fair bit of growth going in there.

What actually has to be done there to get that permit to get the the higher grade in 2022.

Dan do you want to take the questions. Please.

Certainly.

The.

The effect on the grade in both 2021 and 'twenty two there is no effect by the permitting.

Right now what we have is we have an update on our environmental permit, but we're looking for a final forest free footprint permit.

In our Goonan Tepe pit.

So as if we were to get that earlier, we could access more ore from good Entebbe earlier.

But right now there is there is no no effect.

And against our three year guidance that we've just put out in terms of the timing of receiving that permit.

Okay. So just sort of unclear that permit for that and other.

Your pet is post that other thought of when you're ready for another.

The sales have been accelerating even faster than the other if you get that forestry permit for that you'd be even better.

Finding two and 'twenty three that's just what I'm trying to figure out.

We have not schedule of the ore from <unk> and 'twenty and 'twenty one 'twenty two that's correct.

Because of needing that forestry permits.

Great. Thank you cited for thank you chairman of the right and the second question sorry to go back of the Scott and I know, you're somewhat constrained, but on the dividend for our capital return.

Some of your competitors, obviously, you sold the hard rock, which even more money and with the cash flow you have the $1 billion of potential at the end of next year.

Is there any thought given to I mean, some of the other companies of dividend out the.

What I would call excess proceeds.

From sales of is that even being considered and I realize that the board decision.

Yes, I mean look Brian we had a board meeting yesterday, and we actually we spoke about that in terms of of what Barrick. For example in terms of what debt, what they're doing with that I'm going to the designated as the special dividend the way, they're doing it but in terms of what they're doing we discuss that.

Yes, I think it's difficult right now we've got new political leadership and the target than they are a lot larger shareholder and they're awesome.

Preliminary discussions underway with regard to.

What we could be doing with regard to the capital of exciting initiatives, but we have not concluded those discussions so.

That's the key data point that I would like to have in hand, and I think the Boulder bites of having hand until we have that it's just difficult to talk about the things further.

Great. Thank you that's very helpful color Scott Thanks very much.

Ex question comes from the line of.

Trevor Turnbull Scotiabank. Please go ahead.

Yes. Thank you.

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