Q3 2023 Centerra Gold Inc Earnings Call
Speaker 1: After the presentation, there will be an opportunity to ask questions.
After the presentation there'll be an opportunity to ask questions to join the question queue. You May press star one on your telephone keypad should you need assistance during the conference call you may signaling the operator by pressing Star then zero I would like to turn the conference over to Lisa Wilkinson Vice President in.
Speaker 1: To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Lisa Wilkinson, Vice President Investor Relations and Corporate Communications with Centera Gold. Please go ahead.
Investor Relations and corporate communications with syntactic old. Please go ahead.
Speaker 1: Thank you, operator, and good morning, everyone. Welcome to Sentara Gold's third quarter 2023 results conference call. Joining me on the call today are Paul Timore, President and Chief Executive Officer, Paul Charren, Chief Operating Officer, and Darren Millman, Chief Financial Officer.
Operator, and good morning, everyone welcome to Houston Terrible third quarter 20, twenty-three results conference call.
Joining me on the call today are Paul Tamari, President and Chief Executive Officer, <unk>, Chief operating Officer, and Darren Millman, Chief Financial Officer.
Speaker 2: Our release yesterday details our third quarter 2023 results. This should be read in conjunction with our MD&A and financial statements, both of which can be found on CDAR, EDGAR, and our website.
At least yesterday details are third quarter 2023 result.
Should be read in conjunction with our M. D N a and financial statements both of which can be found on cedar Edgar in our website.
Speaker 2: All figures are in US dollars unless otherwise noted. Presentation slides are available on Centeira Gold's website to accompany this webcast. Following the prepared remarks, we will open the call for questions.
All figures are in U S dollars unless otherwise noted presentation slides are available on the <unk> website to accompany this webcast following.
Following the prepared remarks, we will open the call for questions.
Speaker 2: Before we begin, I would like to caution everyone that certain statements made today may be forward looking and are subject to risk. Which may cause our actual results to differ from those expressed or implied.
Before we begin I would like to caution everyone that certain statements me today may be forward looking and are subject to risks, which may cause our actual results to differ from those expressed or implied.
Speaker 2: Please refer to the cautionary statements included in the presentation, as well as the risk factors set out in our annual information form.
Please refer to the cautionary statements included in the presentation as well as the risk factors set out in our annual information form.
Speaker 2: Also, certain of the measures we will discuss are non-GAAP measures. Please refer to the description of the non-GAAP measures in our news release and MDNA issued yesterday. I will now turn the call over to Paul Temori. Thank you, Lisa.
Also certain of the measures we will discuss our non-GAAP measures. Please refer to the description of the non-GAAP measures in our news release, an M D N a issued yesterday.
Now turn the call over to call Tomorrow.
Thank you Lisa and good morning, everyone.
Speaker 3: Sentara had a very strong third quarter with significant free cash flow generation driving a substantial increase to our cash balance.
Since I wrote a very strong third quarter significant free cash flow generation driving substantially increased work best phones.
Speaker 3: Upshoot outperformed our expectations, producing almost 87,000 ounces in a quarter.
Expectations.
Almost 8000 of them an order.
Speaker 3: Our 2023 consolidated gold production guidance remains on track between 340 and 360,000 ounces and we expect it to continue to generate significant free cash flow in the fourth quarter, further increasing our cash balance by the end of the year.
2023 consolidated coal production guidance remains on track between 340 and 360000 miles.
And we expect to continue to generate significant free cash on the fourth quarter.
Increasing our cats.
A year.
Speaker 3: Paul Chiron will speak to our operations in more detail a little later. And he will speak to the adjustments to the site level production guide at the Boehrdk suit and Memmel again.
Ultra or speak to our operations in more detail a little later.
He will speak to the adjustments decided long production guy.
You didn't know the milligram.
Speaker 3: In September , we rolled out our value maximizing strategic plan for our portfolio of assets.
In September we rolled out our value maximizing strategic plan for portfolio of assets.
Speaker 3: As part of this plan, we announced positive economics for the Thomson Creek Line Research. We'll simultaneously initiate a process to evaluate all strategic options for the molybdened business unit.
As part of this plan, we announced positive economics of the Thompson Creek winery Sir.
Simultaneously initiating process to validate all strategic options for the molybdenum business unit.
Speaker 3: At Mt. Milligan, we continue to drive operational and technical improvements to unlock the full potential of this cornerstone asset.
As a memo milligan decent drive operational and technical improvements to unlock the full potential of discourse on that.
Speaker 3: In 2024, we expect higher levels of goal production and similar levels of cow-cook production when compared to 2023 guidance.
In 2024, we expect higher levels of global production.
Similar levels of copper production when compared to 2023 guidance.
Speaker 3: We continue to believe that we will be able to fund capital returns to our shareholders, invest in internal growth projects and exploration, and evaluate external opportunities for growth, all while maintaining a significant cash balance through the end of 2024 and beyond. Finally, I'd like to touch on some ESG achievements in the quarter. In line with our commitment.
Continue to believe that we will be able to fund capital returns for shareholders invest in internal group projects, some exploration and evaluate external opportunities for growth.
All while maintaining a significant cash browse through the end of 2024 and beyond.
Finally, I'd like to touch on some ESG achievements in the quarter.
In line with our commitment to sustainable and responsible mining practices.
Speaker 3: Centera published a 2022 annual ESG report in the third quarter, which includes the responsible goallining principles conformance reports along with an independent insurance letter.
Since you're a publicist 2022 annual Ese reported in the third quarter, which includes the responsible mining principles conformance report along with it and independents assurance letter.
Speaker 3: As we continue to progress our climate and nature strategy, our next objective is to identify feasible emission reduction pathway than emissions.
As we continue to progress our climate in nature strategy. Our next objective is to identify feasible emission reduction or even initiatives.
Speaker 3: We continue to reinforce our ESG performance to release our sustainable development policy, which focuses on ensuring its safe and respectful workplace for our employees and contracts.
We continue to reinforce our ESG performance has released a our sustainable development policy, which focuses on ensuring a safe and respectful workplace for our employees and contractors protecting the natural environment and creating a positive impact on the communities where we operate.
Speaker 3: Protecting the natural environment and creating a positive impact in the communities where we are.
Speaker 3: I'll not pass the call over the call to walk your operational performance in the quarter.
Pass the call over all to walk through or operational performance in the quarter.
Speaker 4: Thank you Paul. On slide five, we show operating highlights at mountain milligan for the quarter.
Thank you Paul.
On slide five would show operating highlights a mountain milligan for the quarter.
Speaker 4: The Mount Milligan mine produced over 39,000 ounces of gold in the third quarter, in line with last quarter and produced 15 million pounds of copper, almost 10% higher than the last one.
The amount of Milligan mine produced over 39000 ounces of gold in the third quarter in line with last quarter and produced 15 million pounds of copper almost 10% higher than the last quarter.
Speaker 4: There was some residual or waste transitions on material in the third quarter, and recoveries were impacted by the elevated ratio of pirate to calcopyrus.
There was some residual or waste transition zone material mind in the third quarter and recoveries were impacted by the elevated ratio of pirate to chalcopyrite we.
Speaker 4: We expect medium term recoveries for gold and copper to be similar to those achieved in 2023 and have been undertaking additional metallurgical reviews with a goal of increasing recoveries from current levels to better manage this part of the ore bar.
We expect medium term recoveries for gold and copper to be similar to those achieved in 2023 and have been undertaking additional metallurgical reviews with a goal of increasing recoveries from current levels to better manage this part of your body.
Speaker 4: Our Mount Milligan production guidance for 2023 has been adjusted due to lower than plan gold recovery from the elevated pie rate to calcopy rate ratios and lower production experience in the first half of the year due to mine sequence.
Our Mount Milligan production guidance for 2023 has been adjusted due to lower than plan goals recovery from the elevated pyrite took chalcopyrite ratios.
And lower production experienced in the first half of the year due to mind sequencing.
Speaker 4: We are now expecting goal production of Mount Milligan to be between 150 and 160,000 ounces.
We are now expecting Gould production amount milligan to be between 150 and 160000 ounces downs.
Speaker 4: Down slightly from the low end of the 160 to 170,000 ounces announced previous.
Down slightly from the low end of the 160 to 170000 ounces announced previously.
Speaker 4: Our copper production guidance remains at 60 to 70 million pounds and is expected to be near the low end of this ring.
Our copper production guidance remains at 60 to 70 million pounds and is expected to be near the low end of this range.
Speaker 4: In the third quarter, gold production costs were $1,050 per ounce, and all in sustaining costs on a byproduct basis were 1150 per ounce.
And the third quarter gold production costs or $1050 per ounce and all and sustaining costs on a byproduct basis, where 11 50 per ounce 60.
Speaker 4: 16 and 28% lower than last quarter, respectively.
16, and 28% lower than last quarter, respectively.
Speaker 4: All in sustaining costs were lower, quarter over quarter due to higher gold ounces sold, lower gold production costs per ounce, and higher byproduct credits as a result of high copper sale.
All in sustaining costs were lower quarter over quarter due to higher gold ounces sold lower gold production cost per ounce and higher byproduct credits as a result of high copper sales.
Speaker 4: As a result of the revised gold production outlook from outmilligan, we have increased its full year 2023 gold production costs and all in sustaining cost guidance.
As a result of the revised gold production outlook for Mt. Milligan, we have increased its full year 2023 gold production costs, and all and sustaining cost guidance.
Speaker 4: Gold production costs for the full year are now expected to be between $1,050 and $1,100 per ounce. And all in sustaining cost guidance is now expected to be $1,175 to $1225 per ounce.
Gold production costs for the full year are now expected to be between 1050 and $1100 per ounce and all and sustaining cost guidance is now expected to be 1100, 75 to 1200 $25 per ounce.
Speaker 4: A comprehensive asset optimization review has been launched, which includes safety, productivity, and cost efficiencies in concert with Mindflat Optimization.
A comprehensive asset optimization review has been launched which includes safety productivity and cost efficiencies in concert with mine plan optimization.
Speaker 4: This review is expected to be completed in 2024 and drive incremental improvements in operation.
This review is expected to be completed in 2024 and drive incremental improvements in operations.
Speaker 4: Finally, we congratulate our Mount Milligan team and partners at Chucho Environmental for receiving the BC Mine Reclamation Award for Outstanding Reclamation Achievement in 2023.
Finally, we congratulate our Mount Milligan team and partners at <unk> environmental for receiving the BC Mine Reclamation Award for outstanding Reclamation achievement in 2023.
Speaker 4: This award recognizes the ongoing research into innovative techniques to help achieve eventual reclamation and land use objectives at the Mount Milligan Mine in collaboration with local communities.
This award recognizes the ongoing research into innovative techniques to help achieve eventual reclamation and land use objectives at the mountain Milligan mine in collaboration with local communities.
Speaker 4: On slide sticks are the operating highlights that are to
On slide six or the operating highlight cetera suit.
Speaker 4: Third quarter production was over 86,000 ounces, which exceeded our expectations during the ramp up of operation.
Third quarter production was over 86000 ounces, which exceeded our expectations during the ramp up of operations.
Speaker 4: As of late September , all of the stored gold and carbon inventory had been processed.
As of late September all of the storage Golden carbon inventory had been processed the.
Speaker 4: The mine continues to have elevated levels of recoverable ounces of gold in or stock files and on the heap leach pad, which are expected to be processed in the coming month.
The mind continues to have elevated levels of recoverable ounces of gold in or stockpiles and on the heap Leach pads, which are expected to be processed in the coming months.
Speaker 4: Due to the operating team's successful ramp-up execution in the third quarter, full year 2023 production guidance at Erg suit has been increased to 190 to 200,000 ounces of gold.
Due to the operating team successful ramp up execution in the third quarter full year 2023 production guidance at Eric suit has been increased to 190 to 200000 ounces of gold.
Speaker 4: Gold production costs and all in sustaining costs on a byproduct basis in the third quarter 2023 were $445 per ounce and $582 per ounce respectively due to accruals from inventory buildup.
Gold production costs, and all and sustaining costs on a byproduct basis in the third quarter of 2023 or $445 per ounce and $582 per ounce, respectively due to accruals from inventory buildup.
Speaker 4: As a result of the increased gold production outlook at RITSU, we are lowering our gold production cost and all in sustaining cost guidance for 2023.
As a result of the increased gold production outlook either suit, we are lowering our goal production costs and all and sustaining cost guidance for 2023.
Speaker 4: We now expect full year gold production costs to be in the range of $425 to $475 per ounce and all in sustaining costs to be in the range of $625 to $675 per ounce.
We now expect full year gold production costs to be in the range of 425, two $475 per ounce and all and sustaining cost to be in the range of 625 to $675 per ounce.
Speaker 4: To wrap up, I'd like to command the ARC-15 for achieving 2 million work hours without a lost time injury in September .
To wrap up I'd like to commend the <unk> team for achieving 2 million work hours without a lost time injury in September.
Speaker 4: The safety of our employees and contractors is our top priority, and this milestone demonstrates our commitment to a zero-arm culture.
The safety of our employees and contractors is our top priority and this milestone demonstrates our commitment to a zero arm culture.
Speaker 4: I'll now pass it to Darren to walk through our financial highlights for the quarter. Thanks, Paul. Slide 70.
I'll now pass it to Darren to walk through our financial highlights for the quarter.
Thanks, Paul.
Slide seven details of third quarter financial results.
Speaker 3: Centera had a strong financial performance in the third quarter with net earnings of 61 million or 28 cents per share.
Since there I had a strong financial performance in the third quarter with net earnings of $61 million or 28 cents per share.
Speaker 3: There were several adjusting items in the quarter, including $23 million of reclamation provision re-evaluation recovery.
There were several adjusting items in the quarter, including twenty-three being a reclamation provision reevaluation recovery.
Speaker 5: To me, an unrealised foreign exchange gained relating to the Reclamation Provision at the end of the Q&A project.
To me, an unrealized foreign exchange gains relating to the reclamation provisions of being dot com on and to convince project.
Speaker 5: And 9-mean of deferred income tax expense resulting from the effect of foreign exchange rate changes on monetary assets and liabilities in the determination of taxable income related to oxytemat mill.
A non mean of deferred income tax expense, resulting from the effect of foreign exchange rate changes on monetary assets and liabilities and his determination of taxable income relate to <unk> met Milligan.
Speaker 5: As a result of these one-time items, adjusted net earnings in the third quarter were 44 million or 20 cents per share.
As a result of these one time items adjusted net earnings and the third quarter were $44 million or 2000 per share.
Speaker 5: In the third quarter, the sales were 130,973 ounces of gold and 15.4 million pounds of copper.
In the third quarter sells for 130973 ounces of gold and $15 for me in terms of <unk>.
Speaker 5: Golden copper cells were higher than production in a quarter, mainly due to timing of ship.
Golden called the sales were higher than production in the quarter, mainly Judy timing of shipments.
Speaker 5: The average realised price was $1,741 per ounce of gold and $2.99 per pound of copper, which incorporates the existing stream arrangements for the Mount Meligan mine.
The average realized cross was $1741 per ounce of gold and $2.99 per pound of copper, which incorporates the existing stream arrangements for the men really good luck.
Speaker 5: At the Malibz and in business unit in the third quarter approximately 2.7 million pounds of mole was sold at an average realised price of $24.8 per pound, generating revenue of 68 million.
At the molybdenum business unit in the third quarter, approximately 2.7 million pounds of Molly was sold at an average realized price $24.08 per.
Her account.
Generating revenues of 68 million.
Speaker 5: In the third quarter of 2023, additions to property, plant and equipment and total capital expenditure were $25 million and $24.6 million respectively. At Mount Milligan, we expect elevated capital expenditure in the fourth quarter. Consolidated all-in sustaining costs on a by-product basis for the quarter were $827 per annum.
And the third quarter of 2023 additions to property platen equipment, and total capital expenditure or $25 million and $24 6 million respectively. At mail again, we expect elevated capital expenditure in the fourth quarter consolidated all in sustaining cost on a by product basis for the quarter 800.
$2007 per ounce.
Speaker 5: I oxidally processed all of the stored gold and carbon entry, which had a minimal cash processing cost to convert to dore bars.
<unk>, we process all of the stores Golden Covenant and tree, which had a minimal cash processing costs to convert to tour bus.
Speaker 5: As mentioned earlier in the call, we have adjusted our 2023 production guidance at mind-set level to reflect year-to-day performance and expectations for the fourth quarter, but with no overall financial impact.
As mentioned early in the call. We have adjusted out 2023 production guidance of mindset level to reflect you to date performance expectations for the fourth quarter.
But with no overall financial impact.
Speaker 5: As a result, our consolidated oil and sustaining costs for the full year is unchanged and expected to be in the range $1,000 to $1,050 per ounce. Moving to the next slide.
As a result of consolidated Owen sustaining costs for the full year is unchanged and expect it to be in the range of one to $1050 per ounce.
Moving to the next slide.
Slide eight shows a financial Hottelet's for the quarter.
Speaker 5: In the third quarter we generated significant free cash flow driven by strong performance at Oxford.
In the third quarter, we generated significant free cash flow driven by strong performance at Oxford.
Speaker 5: Cash provider by operating activities was 167 million in a quarter. And free cash flow was 144 million.
Cash provided by operating activities was.
160 $70 million in the quarter and.
And free cash flow was 144 million.
Speaker 5: As we lived in a business unit, approximately $16 million of the investment in working capital for the first quarter was released during the third quarter.
At the molybdenum business unit approximately $16 million of the investment in working capital for the first quarter was released during the third quarter.
Speaker 5: The Melisanda business unit generated nine million in free cash flow in the third quarter.
The elusive business unit generated knowing the free cash flow and the third quarter.
Speaker 5: At the Mount Milligan Line, cash provided by mine operations and free cash flow were 36 million and 25 million respectively in the third quarter.
At the <unk> cash provided by one operations and free cash flow with $36 million and 25 million respectively in the third quarter.
Speaker 5: At Oxford in the third quarter, the mine generated $144 million in cash from operations and $134 million in free cash flow.
At <unk> in the third quarter demand generated 144 million cash from operations and 134 million in free cash flow.
Speaker 5: In the fourth quarter, in addition to the continued free cash flow generation we expect from our operations, a payment of $25 million is due from Orion Mine Finance Group in relation to the December 2021 sale of our interest in the Greenstone project.
In the fourth quarter. In addition to the continued free cash flow generation, we expect from our operations a payment of 25 million is Zhou from Orion mind Finance group in relation to the December 2021 sale about interest in the greenstone project.
We expect to receive additional future payments once certain production most things have been achieved.
Speaker 5: Sinterra ended the third quarter by growing the cash balance by 90 million to 492 million. In September , we extended our 400 million revolving credit facility with a renewed four-year term maturing on September 8th, 2027, which is currently undrawn.
Tara ended the third quarter, while growing the cash balance by $90 million to $492 million in September we extended therefore 100 million revolving credit facility with a renewed four year term maturing.
Operator: The conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero.
Timber 2000, 2007, which is currently undrawn.
Speaker 5: This provides us with total equity of 890 million, given a strong financial position, the board declared a quarterly dividend of seven cents per share. I'll pass it back to Paul for closing remarks.
This provides us with total liquidity of $890 million, given a strong financial position to board the clinic quarterly dividend of seven per share.
Lisa Wilkinson: I would now like to turn the conference over to Lisa Wilkinson, Vice President Investor Relations and Corporate Communications with Centerra Gold. Please go ahead. Thank you, operator, and good morning, everyone. Welcome to Centerra Gold, third quarter, 2023 results conference call. Joining me on the call today are Paul Tomory, President and Chief Executive Officer, Paul Chawrun, Chief Operating Officer, and Darren Millman, Chief Financial Officer. A release yesterday, details are at third quarter, 2023 results.
Cost effective pull for closing remarks.
Speaker 3: Thanks very much, Darren. The third quarter demonstrated our ability to generate significant free cash flow from our operations. As I said earlier, we expect a contingent of generate robust free cash flow in the fourth quarter and further increase our cash balance.
Thanks, very much during the third quarter demonstrated our ability to generate significant free cash flow from our operations and as I said earlier, we expect to continue to generate a robust free cash flow in the fourth quarter and further increase our cash balances.
Speaker 3: We're optimistic about the future of Sentara and our ability to internally fund our strategic initiatives with our cash flow from operations. And with that, I'll.
We're optimistic about the future of <unk> and our ability to internally Thunder strategic initiatives with our cash flow from operations.
And with that.
And the call for questions.
Speaker 1: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any key.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request.
Lisa Wilkinson: This should be read in conjunction with our MDNA and financial statements, both of which can be found on Cedar, Edgar and our website. All figures are in US dollars unless otherwise noted. Presentation slides are available on Centerra Gold's website to accompany this webcast. Following the prepared remarks, we will open the call for questions. Before we begin, I would like to caution everyone that certain statements made today may be forward looking and are subject to risk, which may cause our actual results to differ from those expressed or implied.
We're using a speaker phone please pick up your handset before pressing any keys to withdraw. Your question. Please press Star then too we will pause for a moment as colors join the queue.
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Speaker 1: Our first question comes from Anita Soni of CIBC World Markets.
Lisa Wilkinson: Please refer to the cautionary statements included in the presentation, as well as the risk factors set out in our annual information form. Also, certain of the measures we will discuss are non-GAAP measures. Please refer to the description of the non-GAAP measures in our news release and MDNA issued yesterday.
Our first question comes from Anita Soni of CIBC World markets. Please go ahead.
Speaker 2: Hi, good morning. Thanks for taking my call. So my first question would be with respect to the Malibu-Nan Business Unit.
Hi, Good morning, Thanks for taking my call. So my first question would be with respect to the molybdenum business unit.
Speaker 2: guidance that you put out. So I can see that you're talking about the Langualos facility, working capital incremental investments, $15 to $45 million in a year-to-date, you spent about $15 million. So am I correct in thinking that that's going to consume about $30 million in the fourth quarter? Or like what does that, the fact that you've maintained that broad band of the top end at $45?
Guidance that you've put out so I can see that you know you're talking about well angle-off facility working capital incremental investment of $15 million to $45 million a year to date, you sent about $15 million huh.
Correct in thinking that that's going to consume about $30 million in the fourth quarter or or like like what does that and the fact that you've maintained that broadband at the top end at 45 Min.
Paul Tomory: I will now turn the call over to Paul Tomory. Thank you, Lisa, and good morning, everyone. Centerra had a very strong third quarter with significant free cash flow generation, driving a substantial increase to our cash balance. Uxude performed our expectations, producing almost 87,000 ounces in the quarter. Our 2023 Contemporary Full Production Guidance remains on track between 340 and 360,000 ounces, and we expected continues to generate significant free cash on the fourth quarter, further increasing our cash balance by the end of the year. Paul Charron will speak to our operations in more detail a little later, and he will speak to the adjustments to the site level production guidance of both Uxude and MMIL again.
Speaker 5: Yeah, it's any hard to down here. It's just purely the malignant process, you know, can move significantly and we score that in particular in Q1. So, you know, we're not expecting any, you know, it's maybe cash outlay in Q4. Actually, I hope we'll live in a return of that work in capital given the malignant process has come off a little bit compared to Q3. So I wouldn't be expecting significant outlay. It's just simply the range we provide within God into this quite large.
Yeah. It it's any of their hard star here Uhm, it's just purely the molybdenum prices you know can move significantly and we saw that in particular in Q1. So.
Not expecting.
Any specific cash outlay in queue for actual hopeful even a retired.
I'll bet working capital given the Blue Cross has has come up a little bit compared to Q3, so I wouldn't be expecting significant outlier should simply that the range. We provide we thank god. It is quite large.
Speaker 2: So that's just conservatism in terms of where the prices could go if they go. Correct. That's right.
Okay. So that's just conservatism in terms of where the prices could tell us a correct that truck.
Speaker 2: All right, and then the second question, if you could provide some color on Mount Milligan for 2024, I noticed in the release, or I think was in the release for the MDNA, but you basically said that recoveries are going to be the same as 2023, which is lower on copper, as I can see, than your prior forecast.
Alright, and then the second question if you could provide some color on mountain Milligan for 2024, I noticed in the release or I think it was in the release of the MBNA, but he basically said that recoveries are gonna be the same as 2023, which is lower on copper as I can see it in your in your prior forecast you know what.
Paul Tomory: In September, we ruled out our value maximizing strategic plan for portfolio of assets. As part of this plan, we announced positive economics for the Thompson Creek line research, while simultaneously initiating a process to evaluate all strategic options for the molybdened business unit. At Mount Milligan, we continue to drive operational technical improvements to unlock the full potential of this cornerstone asset. In 2024, we expect higher levels of goal production and similar levels of capital production when compared to 2023 guidance.
Speaker 2: you know, what you would originally have put out at the beginning of the year, but probably in line with what we saw on the tour. And then gold production is higher next year and copper is lower next year. So does that mean that the grades are higher in gold and copper grades are lower? And then also what does that mean to the strip ratio with the sequencing of the phases that
Originally it put out at the beginning of the year, but probably in line with what we saw on the tour.
And then gold production is higher and next year and go copper is lower next year. So that does that mean that the grades are hiring gold and copper grades are lower and then also what does that mean to the the strip ratio with the the sequencing of the phases that you have there.
Paul Tomory: We continue to believe that we will be able to fund capital returns or shareholders, invest in internal growth projects and exploration, and evaluate external opportunities for growth, all while maintaining a significant cash balance through the end of 2024 and beyond.
Speaker 4: Okay, well thanks Anita, so it's Paul here. I'll start with the recoveries. Yes, we can expect them to be about what we've seen in 2023, perhaps a little bit better, but we're being conservative by saying that. And the real challenge there is the amount of gold that we can feed in, which a lot of it, not all of it, but a lot of it is associated with pyrate, and the circuit is built to recover calcopyrite.
Uh-huh.
Okay, well, thanks for that either so it's Paul here.
I'll start with the recoveries, yes, we can expect them to be about what we've seen in 2023, perhaps a little bit better, but we're being conservative by saying that in.
Paul Tomory: Finally, I'd like to touch on some ESG achievements in the quarter. In line with our commitment to sustainable and responsible mining practice. Centerra published a 2022 annual ESG report in the third quarter, which includes the responsible goallining principles conformance reports along with an independent assurance letter. As we continue to progress our climate and nature strategy, our next objective is to identify feasible emission reduction pathway than the initiative. We continue to reinforce our ESG performance due to the release of our sustainable development policy, which focuses on ensuring and respectful workplace for our employees and contractors, protecting the natural environment, and creating a positive impact in the communities where we operate.
The real challenge there is the amount of gold that we can feed in which a lot of it not all of it but a lot of it associated with high rate and the circuit is built to recover chalcopyrite. So.
Speaker 3: One of the reasons why we've had to downgrade the production of gold for 2023 is because we basically have to defer some of this higher grade gold. And in terms of 2024 expected production, about the same on copper as what we're forward projecting and higher on gold as to what we're forward projecting for 2023.
One of the reasons why we've had to downgrade the production of Gould for 2023 is because we basically have to defer some of this higher grade gold.
And in terms of 2024 expected production about the same on copper is what we're forward projecting and higher on gold as to what were foreign projected for 2023.
And and so that relates to the grades than what you wear.
Paul Chawrun: I'll not pass the call over Paul to walk through our operational performance in the quarter. Thank you Paul. On slide five, we show operating highlights at Mount Milligan for the quarter. The Mount Milligan mine produced over 39,000 ounces of gold in the third quarter in line with last quarter and produced 15 million pounds of copper almost 10% higher than the last quarter. There was some residual or waste transitions on material line in the third quarter and recoveries were impacted by the elevated ratio of pirate to calcopyrate.
Speaker 6: The grade and the recovery, when you have higher copper grade, you actually get better gold recovery, we can expect the copper grades to be around the same, but we are looking at feeding higher grade gold and then the recovery would be about what we say. And we are looking at incremental improvements as well in 2021.
But I guess my question greed greed and the recovery when you have higher copper greed, you actually get better Gould recovery.
We can expect a copper grades to be around in the same but we are looking at feeding higher grade Gould and then recovered would be about what we say and we are looking at an incremental improvements as well in 2023.
Speaker 2: Okay, and then the final on that was what kind of strip ratios relative to what you delivered this.
Okay, and then the the the <unk>.
Final on that was what kind of strip ratios relative to what you've delivered this year.
Speaker 6: Approximately the same as what we're seeing this year. Basically we have a fleet and we optimize material movement of the fleet. We'll be somewhere in the range of 50 million tons for this year. We can expect about the same and we take advantage of the sequencing. We take advantage of the waste material movement to be able to build the dike, our annual tailings lift. So approximately the same and we don't minimize the strip ratio. We utilize the fleet.
Approximately the same as what we're what we're seeing this year basically we have a fleet and we optimize movement material movement of the fleet will be somewhere in the range of 50 million tons for this year. We can expect about the same and we take advantage of the sequencing. We take advantage of the waste material movement to be able to build to take our annual.
Paul Chawrun: We expect medium term recoveries for gold and copper to be similar to those achieved in 2023 and have been undertaking additional metallurgical reviews with a goal of increasing recoveries from current levels to better manage this part of the ore body. Our Mount Milligan production guidance for 2023 has been adjusted due to lower than planned gold recovery from the elevated pirate to calcopyrate ratios and lower production experience in the first half of the year due to mine sequencing.
Paul Chawrun: We are now expecting gold production on Mount Milligan to be between 150 and 160,000 ounces down slightly from the low end of the 160 to 170,000 ounces announced previously. Our copper production guidance remains at 60 to 70 million pounds and is expected to be near the low end of this range. In the third quarter, gold production costs were $1,050 per ounce and all in sustaining costs on a byproduct basis were 1150 per ounce, 16 and 28% lower than last quarter respectively.
Tailings lift so approximately the same and we don't minimize the stoop ratio we utilize the fleet.
Alright, Okay. That's it for my question. Thank you.
Okay.
Speaker 1: Once again, if you have a question, please press star, then 1. Our next question comes from Mike Parkin of National Bank. Please go ahead.
Once again, if you have a question. Please press Star then one.
Our next question comes from Mike Parkin of National Bank. Please go ahead.
Speaker 5: Hi guys, congrats on the good quarter. This question is more geared towards probably Darren or maybe Paul, but just looking at slide 6 on OXA, the ASIC guidance of 625 to 675, that would include, well I guess the same for the gold production costs, that would include a fairly significant non-cash inventory expense, would it not?
Hi, guys. Congrats on the good quarter questions more geared towards probably Darren or maybe Paul but just looking at slides six on Oct. The.
Guidance of 625 675.
That would include well I guess the same physical production costs that would include a fairly significant significant non-cash inventory expense would it not.
Speaker 5: Yes, so for Q3, Mike, all the inventory that was previous cost built up and cash incurred in previous quarters, that was largely released in Q3.
Yeah. So it's a Q3 mark we all.
Holding inventory that was previous call spilled top of cash incurred in previous quarters that was largely released in Q3.
Paul Chawrun: All in sustaining costs were lower quarter over quarter due to higher gold ounces sold, lower gold production costs per ounce and higher byproduct credits as a result of high copper sales. As a result of the revised gold production outlook for Mount Milligan, we have increased its full year 2023 gold production costs and all in sustaining costs guidance. Gold production costs for the full year are now expected to be between $1,050 and $1,100 per ounce and all in sustaining cost guidance is now expected to be $1,175 to $1225 per ounce.
Speaker 5: As we get into Q4, we will see some higher cost processing costs, like true cash costs. But it's still minimal in the context of the significant inventory buildup. So yeah, high cost cash costs to convert the inventory compared to the golden carbon.
Yeah, as we get into the queue for that we will see some higher cost processing costs like true cash cost.
But you know it's still minimal in the context of.
If you're able to rebuild up so so yeah less high cost cash cost to convert.
The inventory compared to the Golden carbon bathtub.
Speaker 5: still relatively low and we do expect a reduced or overall oil and sustaining cost at oxoo for the final quarter given the we're at year to day.
Still relatively low and we do expect a reduced overall owens sustaining cost at Oxford.
The final quarter, if given the.
Either died.
Paul Chawrun: A comprehensive asset optimization review has been launched, which includes safety, productivity, and cost efficiencies in concert with mine plan optimization. This review is expected to be completed in 2024 and drive incremental improvements in operations.
Speaker 5: Yeah, but an idea of the $18 million dollars, what the working catapult adjustment for ox that would be roughly for fourth quarter. Yeah, if you refer the financials, it's pretty much all that logic increased from inventory level is coming from that movement in ox, suited, and retriever.
Yeah.
And millions of dollars, what the working capital adjustment for ox that would be roughly for fourth quarter.
If you refer the financials.
Pretty much all that large increase from inventory level.
Is coming from that movement and.
Paul Chawrun: Finally, we congratulate our Mt. Milligan team and partners at Chucho Environmental for receiving the BC Mine Reclamation Award for Outstanding Reclamation Achievement in 2023. This award recognizes the ongoing research into innovative techniques to help achieve eventual reclamation and land use objectives at the Mt. Milligan Mine in collaboration with local communities.
And <unk> it retriever.
Okay.
Very much guy.
Speaker 1: Once again, if you have a question, please press star, then 1.
Once again, if you have a question. Please press Star then one R.
Speaker 1: Our next question comes from Brian MacArthur of Raymond James. Please go ahead.
Our next question comes from Brian Macarthur of Raymond James. Please go ahead.
Speaker 7: Good morning. So I'd just like to follow up in the last question. Is there anything in oxute? Obviously, it had a good quarter, but it looks to me just, you know, got your 80,000 ounces out with the, you know, less than $50 cash remaining cost. Start at the work through the 200,000 that's low cost. But is there anything you've seen as you operationally start up and work things through that would cause you to?
Hi, good morning, So I'd just like to follow up on the last question is there anything in <unk>, obviously, you had a good quarter, but it looks to me just.
Paul Chawrun: On slide six are the operating highlights at Erktsu. Third quarter production was over 86,000 ounces, which exceeded our expectations during the ramp up of operations. As of late September, all of the stored gold and carbon inventory had been processed. The mine continues to have elevated levels of recoverable ounces of gold in ore stock files and on the heap leach pad, which are expected to be processed in the coming months. Due to the operating team's successful ramp up execution in the third quarter, full year 2023 production guidance at Erktsu has been increased to 190 to 200,000 ounces of gold.
Got your 80000 ounces out with the.
Less than $50 cash remaining costs started to work through the 200000 that low cost, but is there anything you would see operationally start up and work things toward that would cause you to.
Speaker 7: Be more positive or negative about what you've got it for 2024 as far as, you know, cash liberation from oxoo.
Be more positive or negative about what you've got it for 2024 as far as cash liberation from Oxford.
Speaker 3: Well, I'll make a general comment and I'll ask Paul to jump in on some of the more technical details. We remain very bullish on the cash generation potential in Q4 and Q1, Q2 as we draw down those inventories. Thus far, as we noted in our release, it is outperforming our expectations.
Well I'll make a general comment on the last call to jump in on some of the more technical details. We remained very bullish on the cash generation potential in Q4, and Q1 Q2, as we draw down those inventories thus far.
We noted in our release it is outperforming our expectations.
Speaker 6: And we don't have any major reasons to believe that there will be any hiccups with Paul. You can perhaps elaborate on that. Yeah, I just think for your model, Brian .
We don't have any major reasons to believe that there will be any hiccups hopefully you can perhaps elaborate on the yeah I just think for your model Brian.
Paul Chawrun: Gold production costs and all in sustaining costs on a byproduct basis in the third quarter 2023 were $445 per ounce and $582 per ounce respectively due to accruals from inventory buildup. As a result of the increased gold production outlook at Erktsu, we are lowering our gold production cost and all in sustaining cost guidance for 2023. We now expect full year gold production cost to be in the range of $425 to $400 and $75 per ounce and all in sustaining cost to be in the range of $625 to $675 per ounce.
Speaker 6: We've increased the guidance so you can take that for what it is. And then we put out the life of MindFland for 2024. And for now, I think you can just use those numbers to run out your model. But we are, it was an excellent startup and we're very pleased with the operations to date.
We've increased the guidance. So you can you can take that for what it is and then we put out the lights on line plan.
For 2024 and for now I think you can just use those numbers to run out in your model.
But we are we are.
It was an excellent startup and we're very pleased with the operations to date.
Speaker 7: Great things. I mean, I was just going, I mean, if I remember like the ADR has a capital capacity, what 30,000 ounces a month or something. So, I mean, obviously you just liberated all that. Um, but I just want to make sure everything behind that's ramping up. Okay.
Great. Thanks, I mean, I was just going I mean, if I remember like the ADR has a cap or.
Capacity, what 30000 ounce with a month or something so I mean, obviously you just liberated all of that but I just want to make sure everything behind us ramping up okay too.
Speaker 6: October was a very good month. We're on track.
October.
October was a very good months, we are on track.
Paul Chawrun: To wrap up, I'd like to command the Arctsu team for achieving 2 million work hours without a lost time injury in September. The safety of our employees and contractors is our top priority and this milestone demonstrates our commitment to a zero harm culture.
Speaker 3: Perfect. Thank you very much. The leash solution grades remain high and they're going to be coming down as for the plan. Right, right.
Thank you very much relief solution grades remain high and they are going to be coming down as for the plan.
Right right, Okay, great. Thank you very much.
Speaker 1: Once again, if you have a question, please press star, then 1.
Once again, if you have a question. Please press Star then one.
Darren Millman: I'll now pass it to Darren to walk through our financial highlights for the quarter. Thanks, Paul. Slide 7 details our third quarter financial results.
Speaker 1: This concludes the question and answer session as well as today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
This concludes the question and answer session as well as today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
Darren Millman: Centera had a strong financial performance in the third quarter with net earnings of $61 million or $20.8 per share. There were several adjusting items in the quarter, including 23 million of reclamation provision, re-evaluation recovery. Two million unrealised foreign exchange gains relating to the reclamation provisions at the Indyachomline and the KMS project. And nine million of the third income tax expense resulting from the effect of foreign exchange rate changes on monetary assets and liabilities in the determination of taxable income related to oxooth and matmilligan.
Speaker 8: The.
Okay.
Okay.
Okay.
Ooh.
Darren Millman: As a result of these one-time items adjusted net earnings in the third quarter were $44 million or $20.8 per share. In the third quarter, sales were $130,973 ounces of gold and 15.4 million pounds of copper. Gold and copper sellers were higher than production in the quarter, mainly due to timing of shipments. The average realised price was $1,741 per ounce of gold, and $2.99 cents per pound of copper, which incorporates the existing stream of ranges for the Mount Milligan line.
Mhm.
Darren Millman: At the Millipid and Business Unit in the third quarter, approximately 2.7 million pounds of molly was sold, at an average realised price $24.08 per pound, generating revenue of 68 million. In the third quarter of 2023, additions to property, plant and equipment and total capital expenditure were 25 million and 24.6 million respectively. At Mount Milligan, we expect elevated capital expenditure in the fourth quarter. Consolidated all in-sustaining costs on a by-product basis for the quarter were $827 per ounce.
Mhm.
Darren Millman: Oxidly processed all of the stored gold and carbon entry, which had a minimal cash processing cost to convert to doore bars. As mentioned earlier in the call, we have adjusted our 2023 production guidance at mind-set level to reflect year-to-day performance and expectations for the fourth quarter, but with no overall financial impact. As a result, our consolidated all in-sustaining costs for the full year is unchanged and expected to be in the range for $1,000 to $1,000 per ounce.
Darren Millman: Living to the next slide. Slide 8 shows our financial highlights for the quarter. In the third quarter, we generated significant free cash flow driven by strong performance at Oxid. Cash provider by operating activities was 167 million in the quarter, and free cash flow was 144 million. At the militant business unit, approximately 16 million of the investment in working capital for the first quarter was released during the third quarter. The militant business unit generated 9 million free cash flow in the third quarter.
Darren Millman: At the Mount Milligan mine, cash provided by mine operations and free cash flow were 36 million and 25 million respectively in the third quarter. At Oxid, in the third quarter, the mine generated 144 million cash from operations and 134 million in free cash flow. In the fourth quarter, in addition to the continued free cash flow generation, we expect from our operations. A payment of 25 million is due from a Ryan Mine Finance Group.
Darren Millman: In relation to the December of 2021, sale of our interest in the Greenstone Project, we expect to receive additional future payments once certain production milestones have been achieved. Centera ended the third quarter by growing the cash balance by 19 million to 492 million. In September, we extended our 400 million revolving credit facility with a renewed four-year term returing on September 8, 2027, which is currently on draw.
Darren Millman: This provides us with total equity of 890 million, given a strong financial position, the board declared a quarterly dividend of 7 cents per share.
Paul Tomory: I'll pass it back to Paul for closing remarks. Thanks very much, Darren. The third quarter demonstrated our ability to generate significant free cash flow from our operations. As I said earlier, we expect to continue to generate our bus free cash flow in the fourth quarter and further increase our cash balance. We're optimistic about the future of Centerra and our ability to internally fund our strategic initiatives with our cash flow from operations.
Paul Tomory: And with that, I'll open the calls to questions. Thank you.
Operator: We will now begin the question and answer session. To join the question, you may press star, then one on your telephone keypad. You will hear tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your questions, please press star, then two. We will pause for a moment as colors join the queue.
Anita Soni: Our first question comes from Anita Soni of CIBC World Markets. Please go ahead. Hi, good morning. Thanks for taking my call. So my first question would be with respect to the molybdened business unit guidance that you put out. So I can see that, you know, you're talking about a little angle of facility, working capital, incremental investment. And it's 15 to 45 million and you're today, you spent about $15 million. So am I correct in thinking that that's going to consume about $30 million in the fourth quarter?
Anita Soni: Or like, what does that, the fact that you've maintained that broad band of the top end at 45 mean? Yeah, it's Anita Hart's down here. It's just purely the molybdened process, you know, can move significantly and we score that in particular in queue one. So, you know, we're not expecting any, you know, maybe cash outlay in queue four. Actually, I hope we'll live in a return of that working capital given the molybdened process has come off a little bit compared to queue three.
Anita Soni: So I wouldn't be expecting significant outlay. It's just simply the range we provide within guidance. It's quite large. Okay, so that's just conservators and in terms of where the prices could go if they go. Correct. That's right. All right.
Paul Tomory: And then the second question, if you could provide some color on Mount Milligan for 2024, I noticed in the release, or I think was in the release for the MDNA, but you basically said that recoveries are going to be the same as 2023, which is lower on copper. As I can see, then you're in your prior forecast, you know, what you would originally have put out at the beginning of the year, but probably in line what we saw on the tour.
Paul Tomory: And then gold production is higher next year and copper is lower next year. So that means that the grades are higher in gold and copper grades are lower. And then also, what does that mean to the strip ratio with the sequencing of the phases that you have there? Okay, well, thanks. I need a soul. It's Paul here. I'll start with the recoveries. Yes, we can expect them to be about what we've seen in 2023, perhaps a little bit better, but we're being conservative by saying that.
Paul Tomory: And the real challenge there is the amount of gold that we can feed in, which a lot of it, not all of the, but a lot of it associated with pyrate and the circuit is built to recover calcopyrite. So one of the reasons why we've had to downgrade the production of gold for 2023 is because we basically have to defer some of this higher grade gold. And in terms of 2024 expected production about the same on copper as what we're forward projecting and higher on gold as to what we're for projected for 2023.
Paul Tomory: And so that's related to the grades and what you were, I guess at my question. The grade and the recovery, when you have higher copper grade, you actually get better gold recovery. We can expect a copper grade to be around the same, but we are looking at feeding higher grade gold. And then the recovery would be about what we say. And we are looking at incremental improvements as well in 2023. Okay.
Paul Tomory: And then the final on that was what kind of strip ratio is relative to what you delivered this year. Approximately the same as what we're seeing this year. Basically, we have a fleet and we optimize material movement of the fleet. We'll be somewhere in the range of 50 million tons for this year. We can expect about the same. And we take advantage of the sequencing. We take advantage of the waste material movement to be able to build the dyke, our annual tailings lift. So approximately the same. And we don't minimize the strip ratio. We utilize the fleet. All right. Okay. That's it from the question. Thank you. Once again, if you have a question, please press star then one.
Mike Parkin: Our next question comes from Mike Parkin of National Bank. Please go ahead. Hi guys.
Darren Millman: Congrats on the good quarter. This question is more geared towards probably Darren or maybe Paul, but just looking at slide six on Oxford, the ASIC guidance of 625, 675. That would include, well, I guess the same for the goal production cost. That would include a fairly significant non-cash inventory expense. Would it not? Yeah. So for Q3, Mike, we only inventory that was, you know, previous cost builds up and caching current in previous quarters.
Darren Millman: That was, you know, largely released in Q3. As we get into Q4, if we will see some higher cost processing costs like true cash costs. But, you know, it's still minimal in the context of, you know, the, if this individual inventory will build up. So, so yeah, less, you know, higher cost, cash costs to convert the inventory compared to the golden carbon, but still relatively low. And we do expect a reduced or overall oil and sustaining cost at Oxford for the final quarter given the, you know, we're at either day.
Darren Millman: Yeah, but an idea of the can millions of dollars, what the working catapult adjustment for ox that would be roughly for fourth quarter. Yeah. If you refer to the financials, it's pretty much all that large increase from inventory level, um, uh, he's, he's coming from that movement in, um, in oxygen retriever. Okay. Thanks so much, guys. Once again, if you have a question, please press star, then one.
Brian Macarthur: Our next question comes from Brian MacArthur of Raymond James. Please go ahead. Good morning. So I'd just like to follow up from the last question. Is there anything in ox suit? Obviously, it had a good quarter, but it looks to me just, you know, got your 80,000 ounces out with the, you know, less than $50 cash remating cost, start to work through the 200,000 that's low cost. But is there anything you've seen as you operationally start up and working through that would cause you The more positive or negative about what you've got it for 2024 as far as, you know, cash liberation from oxygen.
Darren Millman: Well, I'll make a general comment and I'll ask Paul to jump in on some of the more technical details. We remain very bullish on the cash generation potential in Q4 and Q1, Q2 as we draw down those inventories thus far as we noted in our release. It is also for me our expectations. And we don't have any major reasons to believe that there will be any hiccups with Paul. You can perhaps rely right on that.
Darren Millman: Yeah, I just think for your model, Brian, we've increased the guidance so you can take that for what it is. And then we put out the life of mine plan for 2024. And for now, I think you can just use those numbers to run out your model. But we are, we are, it was an excellent startup and we're very pleased with the operations to date.
Paul Chawrun: Great. I mean, I was just going, I mean, if I remember like the ADR has a capital capacity, what 30,000 ounces a month or something. So I mean, obviously you just liberated all that. But I just want to make sure everything behind that's ramping up OK to. October was a very good month. We're on track.
Paul Chawrun: Perfect. Thank you very much. The least solution grades remain high and they're going to be coming down as for the plan. Right, right.
Unknown Executive: OK, great. Thank you very much. Once again, if you have a question, please press star, then one.
Operator: This concludes the question and answer session as well as today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
Unknown Executive: Thank you very much.
Unknown Executive: Thank you.