Q1 2025 Centerra Gold Inc Earnings Call
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Lisa Welcome: I would now like to turn the conference call over to MS. Lisa Welcome to Vice President Investor Relations and corporate communications listen Pterygote.
Speaker Change: The floor is yours ma'am.
Speaker Change: Thank you operator, and good morning, everyone welcome to some terrible first quarter 'twenty twenty-five result conference call.
Speaker Change: With me on the call today are <unk>, President and Chief Executive Officer, Brian Snyder, Chief Financial Officer, and David Hendrix, Our new Chief operating officer.
Speaker Change: Our news published this morning outline our first quarter 2025 results and should be read alongside our MD&A and financial statements, which are available on SEDAR Edgar and our website.
Speaker Change: All figures are in U S dollars unless otherwise noted.
Speaker Change: Presentation slides accompanying this webcast are available on <unk> web site. Following the prepared remarks, we will open the call for questions.
Speaker Change: Before we begin I would like to remind everyone that today's discussion may include forward looking statements, which are subject to risks that could cause our actual results to differ from those expressed or implied.
Speaker Change: For more information please refer to the cautionary statements in our presentation and the risk factors outlined in our annual information form.
Speaker Change: We will also be referring to certain non-GAAP measures during today's discussion for a detailed description of these measures.
Speaker Change: See our news release and MD&A issued this morning.
Speaker Change: I will now turn the call over to Paul Tomorrow.
Paul Tomorrow: Thank you Lisa and good morning, everyone.
Paul Tomorrow: In the first quarter, we generated positive free cash flow at both operations.
Paul Tomorrow: Golden copper production in the quarter was approximately 60000 ounces and 12 million pounds respectively.
Paul Tomorrow: Our 2025 production guidance is unchanged and we expect a strong second half of the year driven by increasing grades.
Paul Tomorrow: We maintained a strong cash position of $608 million, ensuring financial flexibility to advance ongoing and prospective project activities.
Paul Tomorrow: We remain focused on returning capital to shareholders or the board approved the repurchase of up to $75 million of <unk> shares in 2025.
Paul Tomorrow: We believe buybacks are an effective tool to deploy our cash in line with our capital allocation strategy, while preserving the financial flexibility to support investment in future growth.
Paul Tomorrow: The recent implementation of U S tariffs had no impact on our operations in the first quarter.
Paul Tomorrow: While we continue to monitor the situation no significant impact as expected on our mining operations at Mount Milligan and off suite and restart activities at Thompson Creek.
Paul Tomorrow: We are assessing the potential impact of tariffs on language. However, we do not currently anticipate any material impact at the <unk> level.
Paul Tomorrow: This morning, we published an updated resource at <unk>, which demonstrates the robust mineralization in the highly prospective <unk> on district of Northern BC.
Paul Tomorrow: In 2024, we completed over 11400 meters of core drilling and those results have been included in the updated resource.
Paul Tomorrow: Gold mineral resources, our estimates contained $2 7 million ounces of indicated and $2 2 million ounces inferred.
Paul Tomorrow: Copper mineral resources or estimates containing 971 million pounds vindicated and 821 million pounds of inferred.
Paul Tomorrow: On the <unk> compare favorably to those in the reserves at Mount Milligan.
Paul Tomorrow: We have doubled our 2025 exploration guidance of <unk> to between 10 and $12 million with a total of 28500 meters of drilling planned.
Paul Tomorrow: Our focus is expected to be on infill drilling for the open pit and underground targets and also to test high grade mineralization in the deep <unk> zone, which is currently not included in the state of narrow resource.
Paul Tomorrow: We are moving forward with the preliminary economic assessment on the <unk> project, using an open pit and underground operation with long haul open stoping and backfill.
Paul Tomorrow: The study is expected to be completed by the end of the year.
Paul Tomorrow: <unk> a significant infrastructure already in place, which is expected to lower the execution risk compared to a typical greenfield project of this scale.
Paul Tomorrow: Complementing the existing infrastructure is anticipated a new crushing conveying and my infrastructure will be required for the open pit and underground operations.
Paul Tomorrow: With <unk>, we are advancing studies for potential gold copper mine with a possible 15 year operation and a top tier mining jurisdiction.
Paul Tomorrow: We are targeting a project, but the potential average annual production of approximately 250000 gold equivalent ounces.
Paul Tomorrow: This along with Mount Milligan would gift center or two long life gold copper assets in British Columbia.
Paul Tomorrow: Additionally, two weeks ago, we support a thesis gold with a strategic equity investment.
Paul Tomorrow: Given the proximity of Cemex for the lawyers Ranch project, we see substantial opportunities for synergies.
Paul Tomorrow: <unk> the ability to leverage existing infrastructure to unlock regional potential.
Paul Tomorrow: I'd like to provide an update on our sustainability initiatives we.
Paul Tomorrow: We remain committed to responsible mining and continued to progress in our permitting efforts in.
Paul Tomorrow: In March we submitted an amended application for operating permits in Mount Milligan.
Paul Tomorrow: Milligan is an important producer of copper and gold in British Columbia and has been selected as one of the provinces critical mineral projects, which is expected to result in a streamlined permitting process.
Paul Tomorrow: We are continuing to advance our commitment to responsible mining practices and transparent reporting.
Paul Tomorrow: Our team is actively working on the 2020 for sustainability report, which will highlight our progress.
Paul Tomorrow: <unk> key environmental social and governance initiatives.
Paul Tomorrow: We look forward to publishing the report in the coming months and sharing the steps we are taking to create long term value for our stakeholders.
Speaker Change: Before I move into our operating highlights I would like to welcome David Hendricks as our new Chief operating Officer, who started in April.
Speaker Change: With a proven track record of leadership and operational excellence. He brings valuable expertise that will help drive our continued success.
Speaker Change: Slide eight shows operating highlights of Mount Milligan for the first quarter.
Speaker Change: It produced over 35800 ounces of payable gold and $11 6 million pounds of payable copper in the quarter.
Speaker Change: This was lower than planned primarily due to lower grades encountered in areas of phase six to nine that are at the periphery of the ore body.
Speaker Change: We maintain our guidance of Mount Milligan with both production and sales weighted towards the second half of the year.
Speaker Change: In the first quarter all in sustaining cost on a byproduct basis were $1160 per ounce.
Speaker Change: 5% higher than last quarter due to slightly increase sustained capex and lower ounces sold in the quarter.
Speaker Change: Cost guidance on Mount Milligan is unchanged for the year.
Speaker Change: The site wide optimization program Milligan continues to progress and we've seen improvements in the mine with higher truck availability and increased operating hours.
Speaker Change: Work on the Mount Milligan mine life extension PFS is on track to be completed in the third quarter of this year.
Speaker Change: We are optimistic the mine life can be extended beyond 2036, which is currently limited by the available space in the existing tailing storage facility.
Speaker Change: We are evaluating options for additional tailings capacity as well as an increase of annual mill throughput in the range of 10%.
Speaker Change: Now moving on to exit.
Speaker Change: First quarter production was 23500 ounces lower than planned due to lower grades, resulting from mine sequencing and impacts from unfavorable weather conditions.
Speaker Change: We are maintaining our 2025 production guidance at <unk> suite with production expected to be higher in the second half of the year as we access higher grade areas of the mine.
Speaker Change: In the first quarter all in sustaining cost on a byproduct basis were $1563 per ounce.
Speaker Change: Which is higher compared to last quarter, driven by lower sales and higher royalty expense per ounce due to elevated gold prices.
Speaker Change: Full year cost guidance is unchanged.
Speaker Change: In the first quarter, we continued to progress the restart activities at Thompson Creek with non sustaining capital expenditures of $26 million.
Speaker Change: Since the restart decision in September we have spent $55 million.
Speaker Change: And by the end of the first quarter approximately 14% of the total capital investment has been completed.
Speaker Change: Yes.
Speaker Change: 2025 guidance for non sustaining Capex at Thompson Creek is unchanged and the project remains in line with the total initial capital estimate of $397 million as outlined in the feasibility study.
Speaker Change: With that I'll pass the call over to Ryan to walk through our financial highlights.
Ryan: Thanks, Paul Slide 11 details our first quarter financial results.
Speaker Change: Adjusted net earnings in the first quarter were $26 million or <unk> <unk> per share.
Speaker Change: In the first quarter sales were over 61000 ounces of gold and $12 1 million pounds of copper the average realized price was $2554 per ounce gold and $3 80 per pound of copper both of these figures incorporate the existing streaming arrangement at Mount Milligan.
Speaker Change: At the molybdenum business unit, approximately $4 2 million pounds of molybdenum was sold in the first quarter at the <unk> facility at an average realized price of $21 59 per pound.
Speaker Change: Consolidated all in sustaining cost on a byproduct basis in the first quarter were $1491 per ounce. We have maintained our full year consolidated cost guidance.
Speaker Change: Slide 12 shows our financial highlights for the quarter and the first quarter, we generated positive free cash flow at both mining operations.
Speaker Change: Cash flow from operations on a consolidated basis for the quarter was $59 million and free cash flow was $10 million, which includes spending of $26 million of development costs for the Thompson Creek mine and.
Speaker Change: In the first quarter, Mount Milligan generated $39 million in cash from operations and $27 million in free cash flow.
Speaker Change: <unk> generated $50 million of cash from operations and had free cash flow of $42 million.
Speaker Change: The molybdenum business unit <unk> 6 million of cash in operations and had a free cash flow deficit of $34 million this quarter, mainly related to spending that Thompson Creek restart.
Speaker Change: Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation.
Speaker Change: In the first quarter, we remained active on our share buybacks repurchasing two 5 million shares for total consideration of $15 million. This was up 25% from last quarter.
Speaker Change: As Paul mentioned earlier, the board has approved up to $75 million of buybacks in 2025 and has also declared a quarterly dividend of seven Canadian per share.
Speaker Change: A key focus for us in Tara is returning capital to shareholders and we expect to remain active on the share buybacks dependent on market conditions.
Speaker Change: At the end of the first quarter, our cash balance was $608 million.
Speaker Change: This provides us with total liquidity of $1 billion and positions us well to execute on our strategic plan and deliver shareholder value.
Paul Tomorrow: Pass it back to Paul for some closing remarks.
Paul Tomorrow: Thanks, Brian.
Speaker Change: At Mount Milligan and <unk>, we are moving forward key growth initiatives, while expanding our exploration efforts.
Speaker Change: Milligan PFS continues to advance with results expected in the third quarter of 2025, and we are progressing a P e-commerce with results anticipated by the end of this year.
Speaker Change: Together these milestones represent several key catalysts in 2025 that are expected to unlock significant value and further strengthen our growth pipeline.
Speaker Change: And with that operator, we'll open the call to questions.
Speaker Change: Thank you Sir.
Speaker Change: We will now begin the question and answer session.
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Speaker Change: We will pause for a moment as callers join the queue.
Speaker Change: The first question.
Speaker Change: Come from Don Demarco of National Bank Finance. Please go ahead.
Thank you operator, and good morning, Paul and team.
Speaker Change: Congratulations on the quarter and moving forward is that <unk> P. A.
Speaker Change: I think my question is going to focus on that actually so with the shift in mining method to long haul open stoping from block caving I guess, there's a read through here to lower initial capex.
Speaker Change: I believe that the prior reports are somewhat dated so is it too early to provide any magnitude of development capex at this point or or put another way would you expect potential development commenced to be internally funded.
John: Hey, John Thanks for the question.
John: If I refer back to the <unk> Cross section when I pull that up on a web webcast here.
John: The previous concept, which we have shelved.
John: Last year really involve the block cave over towards the right of the slide.
John: Simply put there is just too much development capex.
John: Two little payable metal and too long a timeline for <unk> to accept that risk.
John: What we've been doing over the last year and a half as we re inventoried all of the drill data.
John: Rebuilt the resource model on a site wide basis, and we've determined that there is a significant potential for an open pit combined with.
John: A more conventional underground operation and those are off to the left of the page. So we've not only have we moved away from the block cave.
John: As a concept we've actually spatially moved away from it so there's a whole bunch of mineralization over there towards the left of the page that is open pit able and then a portion of the block of the former blockade concept could be mined with a more conventional underground method. So thats what were doing.
John: Your second question or at least that's what we're going to be assessing hearing this PPA.
John: And the resource that we've just put out here essentially matches that concept. Okay. Your question on being able to fund. This project. This is <unk>.
John: Fundamentally it is a pretty.
John: Then we.
John: We got some pictures in the press release, but we've got a mill that we've got a camp we got a lot of existing infrastructure in place.
John: Which would significantly derisk the way we would look at Capex investment here. There is still be new investment as we showed in the other cross section there will be some development for material.
John: Material conveyance and crushing getting it over.
John: So the mill as well as upgrades to the mill.
John: But when we look at capital allocation. This is a pretty important point when we look at our buyback of our capacity for buyback, we do consider what our capital needs might be not just including Thompson Creek, which we're executing on the Mount Milligan.
John: But also now we're starting to break into that concept of forward liquidity, how we look at buybacks and capital allocation. It is our intent to fund all of our development projects.
John: With existing and future liquidity, we don't expect to have to access either equity or debt markets to be able to fund our project pipeline and that is a fundamental tenet in how we look at liquidity and planning and the way, we look at dividends and buybacks.
Speaker Change: Okay excellent. Thank you for that.
John: <unk>.
John: And continuing with the math you noted synergies with the thesis as lawyers Ranch project, specifically can leverage the infrastructure there, but what infrastructure you have in mind and do you also see are there synergies with the potential of the ore body or any of the mineral resources there.
John: Well, we think highly of you and the team at thesis and we think they have.
John: Good.
Project that they are advancing there when we talk about potential synergies, we refer actually to the infrastructure at <unk> in a way the key to that too Doggone district, which lies north of <unk>. There's a lot of exploration activity recently, it's a highly prospective region.
John: And we think that <unk> could be the linchpin to broader development in the area and I'll remind you we've got the airstrip Theres a power line in place.
John: Our camp with the mill. So there's a very significant set of infrastructure. That's antero owns that could be I'm.
John: I'm, not saying it will be but it could be a significant point of synergy for other deposits in the district. So as I said, we really like what the team at thesis is done and we're happy to be supporting them here in at least the next phase of their development.
John: Okay, great to hear.
John: Okay, well, that's all for me Paul Thanks, Ken.
Ken: Good luck with that Q2, and the back end loaded year.
Speaker Change: I will talk to you and Don Thanks.
Speaker Change: The next question, we have will come from Lawson Winder of Bank of America Securities.
Lawson Winder: Thank you operator, and Hello, Paul and team. Thank you for taking my question and thanks for today's update.
Speaker Change: When you think about.
Speaker Change: Capital allocation now with can mesh in that pipeline is it deep prioritize the need to potentially acquire new gold project.
Speaker Change: Good morning, Ross and yes, that's a good question we what.
Speaker Change: What we like about <unk> is that some of the attributes I listed here, it's built infrastructure it's.
Speaker Change: It's a it's a brownfield site a lot of the permits are in place we have relations.
Speaker Change: With local first nations there.
Speaker Change: And so when we look at potential M&A, we compare things against that which we have in the portfolio, namely cameras.
Speaker Change: And what we find is that <unk> stacks up quite nicely against the potential acquisitions.
Speaker Change: And certainly when you load in the acquisition cost that in fact MFS.
Speaker Change: Appears to screen very highly against potential acquisitions. So yes, I think where you were leading is does this lessen the need for M&A and the answer is yes definitely that doesn't mean, we will.
Speaker Change: We won't continue to consider M&A, but with <unk> and with the Mount Milligan extension project, we are very significant.
Speaker Change: Future potential that we're assessing right now in Sentara and as I said in my prepared remarks.
Speaker Change: What we're targeting here is to very substantial gold copper is in British Columbia with significant mine life.
Speaker Change: So I think we know where you're leading with your question is the correct way to look at it.
Speaker Change: Okay. That's very helpful and then.
Speaker Change: With respect to commence in the potential open Ted do you guys have a sense at this point of what type of strip ratio you might be looking at with at the current consensual configuration.
Speaker Change: The underground and open pit combined.
Speaker Change: Well if you go back to that cross section on the webcast.
Speaker Change: We're not yet at the stage, where I put out PAA level numbers that of course will be the.
The object of the PPA, but a lot of the mineralization to the left of the page there to the west is relatively shallow so we're not looking at a very significant strip ratios. They are there is there will be some waste.
Speaker Change: <unk> will be more in how how we were mining into the side of a hill there the waste will be associated laying back the one wall, but most of the mineralization there in the open pit area is quite shallow.
Speaker Change: And thats the material that grades around for four or five in that range and then we.
Speaker Change: Sorry down to 0.3 range and then we get the upgraded grades as you go down into the <unk>.
Speaker Change: The former block cave area, which are part of which we're going to look at with a more conventional underground those grades are higher down there.
Speaker Change: Okay.
Speaker Change:
Speaker Change: And just finally on the malignant molindone him busy.
Speaker Change: Business unit is.
Speaker Change: Is there any sort of update on the on the potential sale process, you can share or even if your thinking has evolved on that.
Speaker Change: Do you continue to pursue a potential partnership or sale and.
Speaker Change: And if so what could the timeline on something that looked like and if not then.
Speaker Change: What.
Where do you see in terms of.
Speaker Change: The timeline for a completion on.
Speaker Change:
Speaker Change: Thompson Creek project and ultimately.
Speaker Change: Long term value, there and how it fits in the portfolio.
Speaker Change: We are we remain and we will remain open to any strategic outcomes.
Speaker Change: That maximize shareholder value so a <unk>.
Speaker Change: Our sale of the divestiture will always be in the cards in that business. However, we see significant value in this business, we think the dynamics.
Speaker Change: In the North American steel industry as being very favorable.
Speaker Change: For molybdenum, we like the project we're advancing it.
Speaker Change: On schedule on budget here, and we think that there will there will be a point at which.
Speaker Change: There will be a value maximization moment for our shareholders, but we're not in a hurry to do that but we would be opportunistic should something come up.
Speaker Change: But we see significant value in our molybdenum business.
Speaker Change: Got.
Speaker Change: It may require a little bit of patients, but we will deliver what we expect to deliver significant value.
Speaker Change: From that business.
Speaker Change: Is it too early to start thinking about.
Speaker Change: Signing.
Speaker Change: We're talking to customers on potential future sales for that for that asset I mean to what extent have you assessed the current.
Speaker Change: Level of demand in the United States.
Speaker Change: Are you talking about from molybdenum or for molybdenum assets.
Speaker Change: Alright.
Speaker Change: <unk> itself yet.
Speaker Change: Yes for the product.
Ryan: What we've seen the Ryan can jump in here. He also oversees the commercial area, but.
Ryan: We have seen demand for molybdenum good as you know at <unk>, we already.
Ryan: Produce a finished product molybdenum on third party material.
Ryan: As a quick recap on the business case here is we're going to get Thompson Creek up and running the clean feed from Thompson Creek goes to Angola, which allows us to ramp up capacity utilization outlining a lot, but the order book will Brian on why you described what we've been seeing so far this year, yes, sure I mean, there's a lot of noise out there right in terms of moving volume around globally, and tariffs and things like that but we've seen really strong.
Speaker Change: Demand from our U S customers, our steel customers in the U S. I think if you go back to last year. Our win loss of operated at 11 million pounds running through that we were hoping to step that up to 14 to 16 million pounds. This year and start to move along that growth trajectory you need Thompson Creek to go to a much bigger scale, but start to step along that way.
Speaker Change: <unk> trajectory and at Q1, if you look at the financials. There we sold 4 million pounds. So on an annualized basis that 16 million pounds. So the demand is there.
Speaker Change: Again, there's there is issues in the world on tariffs and moving concentrate around but we're seeing really strong demand and we continue to look for long term relationships with big customers that will support the growth of that business, but we're feeling really good about it.
Speaker Change: In terms of the steel industry right net loss.
Speaker Change: Okay, great. Thank you both very much I appreciate it.
Speaker Change: Thanks, a lot.
Speaker Change: And next we have Roz ray of BMO.
Roz ray: Thank you operator, and good morning, Paul and team I've got three questions go one at a time if that's okay.
Speaker Change: First up on your.
Speaker Change: Our operational outlook for the year.
Speaker Change: How comfortable probably David can come in here you would the flexibility you have in the operation.
Speaker Change: There has been few quarters, we have seen some variability.
Speaker Change: Are you at a position where you weren't happy with the amount of grade control drilling you have done lending our visibility or <unk>.
Speaker Change: Are you behind on that to production drilling forget them and give some color on that.
Speaker Change: Yeah. Good question. So we're we're not changing guidance on production as I said in my prepared remarks.
Speaker Change: We expect better rates at both Oxford in Milligan, but David is a good opportunity to talk about what we're doing at Milligan on grade.
Raj: Hi, Raj nice to meet you here today.
Raj: So at Mount Milligan, We've started a program to do some pretty extensive.
Raj: Call It mid term model RC drilling so.
Raj: It will really do a large portion of drilling over the next 18 months to take our short term model more to our midterm model and then be able to compare that to our long term numbers that are there.
Raj: So we're pretty confident that this additional information will give us a much better view on what's going on we're seeing some advances as we go through this new phase of material and we're starting to see some better results, but really the proof will be between the drilling program. It will complete over the next couple of months and our results.
Raj: Probably at the end of Q2 can give you a much better update on where we expect to be in the next 18 months to two years on the project.
Raj: So youre seeing by Q end of Q2 should be pretty much done with that additional lawsuit fueling.
Raj: Yeah, we will have the information.
Raj: That is correct.
Raj: And what about opposite.
Raj: <unk>.
Raj: Everything is projecting towards better grades in the second half of the year. It's part of what's in the current mine plan and everything else and I don't see any reasons at this point in time, we would not achieve the guidance numbers by year end at Oxford.
Raj: Okay. That's good.
Raj: And then moving on to mass.
Raj: The updated resource.
Raj: Published today Paul.
Unknown Executive: is being recorded.
Raj: The total mineral inventory is pretty much the same but I see see that theres more inferred now compared to the previous reserves that are out there.
Unknown Executive: After the presentation, there will be an opportunity to ask questions.
Question, So where we're not changing guidance on production and as I said in my prepared remarks.
Unknown Executive: To join the question queue, you may press star, then 1 on your telephone.
Speaker Change: We expect better rate that botox suite in Milligan with David This is a good opportunity to talk about what we're doing at Milligan on grade.
Raj: Is that a function of the change in the way you are thinking about how the mine planning is going to be what's driving that between us and most of it. It wasn't the indicated already benign category now this almost like 50 50 split between indicated and inferred again touch upon that.
Unknown Executive: should you need assistance during the conference call, you may signal an operator by pressing star, then.
Speaker Change: Hi, Raj nice to meet you here today.
Speaker Change: So at Mount Milligan, We've started a program to do some pretty extensive.
Lisa Wilkinson: I would now like to turn the conference call over to Ms. Lisa Wilkinson, Vice President, Investor Relations and Corporate Communications with Centerra Gold.
Speaker Change: Call It mid term model RC drilling.
Speaker Change: So it will really do a large portion of drilling over the next 18 months to take our short term model more to our midterm model and then be able to compare that to our long term numbers that are there. So we're pretty confident that this additional information will give us a much better view on what's going on we're seeing.
Raj: Yes, just complete that question assuming by the end of the year study is positive and you decided to go ahead.
Unknown Executive: The Forgers.
Lisa Wilkinson: Thank you, Operator, and good morning, everyone. Welcome to Centerra Gold's first quarter 2025 results conference call.
Raj: What sort of timeline, we are looking at in terms of when do you stop.
Paul Tomory: Joining me on the call today are Paul Tomory, President and Chief Executive Officer, Ryan Snyder, Chief Financial Officer, and David Hendricks, our new Chief Operating Officer. Our news published this morning outlines our first quarter 2025 results and should be read alongside our MD&A and financial statements, which are available on CDAR, EDGAR and our website. All figures are in US dollars unless otherwise noted.
Raj: Putting the first capital in the ground and when can commence come online assuming everything is is positive by the end of the year on year Studies says yet we should go ahead.
Speaker Change: Some advances as we go through this new phase of material and we're starting to see some better results, but really the proof will be between the drilling program that will complete over the next couple of months and our results and probably at the end of Q2 can give you a much better update on where we expect to be in the next 18 months to two years on.
Raj: Okay. So the first part is on the mineral inventory if you go back to the cross section.
Raj: The the resource actually moved spatially sort of especially there is a degree of overlap between the old and the new but especially we're more in the open pit and lessen the old block cave and in the in force block Cave area.
Unknown Executive: Presentation slides accompanying this webcast are available on Centerra's website.
Speaker Change: The project.
Speaker Change: So youre seeing by kind of Q2 should be pretty much done with that additional lawsuit fueling.
Unknown Executive: Following the prepared remarks, we will open the call for questions.
Raj: Because of the change in mining method.
Unknown Executive: Before we begin, I would like to remind everyone that today's discussion may include forward looking statements, which are subject to risk that could cause our actual results to differ from those expressed or implied.
Speaker Change: We will have the information.
Raj: We increased the grade, but decrease the tons and the underground and that was offset by additions in the open pit. So quite simply there is a bit of a spatial shifts and going from block cave to long haul open stoping theres, a tonnage loss, but a great improvement.
Speaker Change: That is correct.
Speaker Change: And what about opposite.
Speaker Change: <unk>.
Speaker Change: Everything is projecting towards better grades in the second half of the year. It's part of what's in the current mine plan and everything else and I don't see any reasons at this point in time, we will we would not achieve the guidance numbers by year end at auction.
Unknown Executive: For more information, please refer to the cautionary statements in our presentation and the risk factors outlined in our annual information form.
Raj: That was actually part of the strategy is to get better grades.
Raj: Slightly more selective method.
Unknown Executive: We will also be referring to certain non-GAAP measures during today's discussion. For a detailed description of these measures, please see our news release and MD&A issued this morning.
Raj: In terms of timeline.
Speaker Change: Okay. That's good.
Raj: Still too early to say that but our intent is to put out by the end of the year.
Speaker Change: And then moving on to mass.
Speaker Change: The updated resource.
Raj: And as I said.
Paul Tomory: I will now turn the call over to Paul Tomory. Thank you, Lisa, and good morning, everyone. In the first quarter, we generated positive free cash flow at both operations. Gold and copper production in the quarter was approximately 60,000 ounces and 12 million pounds respectively. Our 2025 production guidance is unchanged, and we expect a strong second half of the year, driven by increasing grade. We maintained a strong cash position of 608 million dollars, ensuring financial flexibility to advance ongoing and prospective project activity. We remain focused on returning capital to shareholders with a board approving the repurchase of up to $75 million of Centerra's shares in 2025.
Raj: You've seen the pictures the site as a past producer a significant infrastructure in place.
Speaker Change: Today Paul.
Speaker Change: The total mineral inventory is pretty much the same but I've seen see that theres more inferred now compared to the previous reserves that are out there.
Raj: That is something we would intend to leverage in any potential development plan, but I don't want to speculate at this point on timelines, but if we like what we see in the Pea we'd be moving almost immediately too.
Speaker Change: Is that a function of the change in the way you are thinking about how the mine planning is going to be.
Raj: Advanced studies, meaning a PFS and then in FFS.
Speaker Change: What what's driving that between us and most of it it wasn't the indicated or in the nine category now this almost like 50 50 split between indicated and inferred if you can touch upon that.
Raj: So thats the guidance I can give on timing, but it.
Raj: It starts with that.
Raj: We're advancing right now.
Raj: Okay, and then lastly on <unk>.
Speaker Change: Yes, just.
Speaker Change: Fleet that question, assuming by the end of.
Raj: On the <unk> business and what are you seeing in the U S. Right. Now now you did mention in your prepared remarks that you don't see a material impact on tariffs.
Speaker Change: The study is positive and you decided to go ahead.
Paul Tomory: We believe buybacks are an effective tool to deploy our cash in line with our capital allocation strategy, while preserving the financial flexibility to support investment in future growth.
Speaker Change: Like what sort of timeline, we are looking at in terms of when do you stop.
Raj: Now from what I understand this year you started trying to expenses.
Speaker Change: But in the first capital in the ground and when <unk> came out has come online assuming everything is is positive by the end of the year on year Studies says, yes, we should go ahead.
Raj: We'll be building up inventory.
Paul Tomory: The recent implementation of U.S. tariffs had no impact on our operations in the first quarter. While we continue to monitor this situation, no significant impact is expected on our mining operations at Mount Milligan and Auk Soot and restart activities at Thompson Creek. We are assessing the potential impact of tariffs on Langelaer, however, we don't currently anticipate any material impact at the Centerra level.
Raj: As we look at expanding the production.
Raj: What's the worst case scenario.
Speaker Change: Okay. So the first part is on the mineral inventory if you go back to the cross section.
Raj: Maybe put it this way waiting to get most of your constant that third party concentrate from now and in what situations Kennedy would start to impact too.
Speaker Change: The the resource actually moved spatially sort of especially there is a degree of overlap between the old and the new but especially we're more in the open pit and lessen the old block cave.
Speaker Change: I'll take that Raj good morning, yes.
Speaker Change: Yes look that that is the one area, where tariffs may be impacting sentara, a big mining operations are fairly insulated.
Speaker Change: And in the form of block cave area.
Paul Tomory: This morning, we published an updated resource at CHEMES, which demonstrates the robust mineralization in the highly prospective Tutugon District of northern BC. In 2024, we completed over 11,400 meters of core drilling, and those results have been included in the updated resource. Gold mineral resources are estimated to contain 2.7 million ounces of indicated and 2.2 million ounces inferred. Copper mineral resources are estimated to contain 971 million pounds vindicated and 821 million pounds of inferred. And the grades of CAMFs compare favorably to those in the reserves at Mount Milligan.
Speaker Change: Because of the change in mining method.
Speaker Change: <unk> loss about 60% of the feed right now comes from South America and would be subject to a tariff.
Speaker Change: We increased the grade, but decrease the tons and the underground and that was offset by additions in the open pit. So quite simply there is a bit of a spatial shift and going from block cave to long haul open stoping theres, a tonnage loss, but a great improvement.
Speaker Change: We are looking at ways to mitigate that we feel pretty positive that we can find some strategies to move around that for 2025 and then the long term plan is going to be dependent on how the world works and how long. These tariffs stay in place, whether we're able to get molybdenum concentrated exempted.
Speaker Change: And that was actually part of the strategy is to get better grades.
Speaker Change: Out of a slightly more selective method.
Speaker Change: In terms of timeline.
Speaker Change: I think there's various strategies that we're looking at as we look at future growth.
Speaker Change: Still too early to say that but our intent is to put out a <unk> by the end of the year.
Speaker Change: We're going to have to SaaS, how much we want to ramp up in future years, given the state of tariffs, but we also are lucky that we have big U S production coming online and Thompson Creek comes online that's a big source of U S feed for the way in Los Roaster.
Speaker Change: And as I said.
Speaker Change: You've seen the pictures the site is a past producer a significant infrastructure in place.
Paul Tomory: We have doubled our 2025 exploration guidance at CHEMES to between $10 and $12 million, with a total of 28,500 meters of drilling planned. The focus is expected to be on infill drilling for the open pit and underground targets, and also to test high-grade mineralization in the deep CHEMES offset zone, which is currently not included in the stated mineral resource.
Speaker Change: That is something we would intend to leverage in any potential development plan, but I don't want to speculate at this point on timelines, but if we like what we see in the Pea we'd be moving almost immediately.
Speaker Change: Without giving away kind of details we do buy from other U S mines and so there is a world if we needed to move to a more U S centric business that we could look at but I think it's too early to do that and we're still viewing this as a as a global business for now, but it doesn't really change the commitment to the <unk> business and where we think we want to take this.
Speaker Change: <unk> advanced studies, meaning a PFS and then in FFS.
Speaker Change: So that's the guidance I can give on timing but.
Paul Tomory: We are moving forward with a preliminary economic assessment on the CHEMES project using an open pit and underground operation with long hole open stoping and backfill. study is expected to be completed by the end of the year. Temas, a significant infrastructure already in place, which is expected to lower the execution risk compared to a typical greenfield project of this scale. Complementing the existing infrastructure is anticipated that new crushing, conveying, and mine infrastructure will be required for the open pit and underground operation.
Speaker Change: It starts with that.
Speaker Change: Okay. That's good Brian So youre, saying, 60% for this year.
Speaker Change: We're advancing right now.
Speaker Change: Okay, and then lastly on the.
Speaker Change: It's from South America, and the remaining 40% from U S.
Speaker Change: On the <unk> business and what are you seeing in the U S. Right. Now now you did mention in your prepared remarks that you don't see a material impact on tariffs.
Speaker Change: Yes.
Speaker Change: Or or other north American areas that are pass them.
Speaker Change: Okay. Okay. That's great. Thank you very much that's it for me.
Speaker Change: Now from what I understand this year you start trying to expensing.
Raj: Okay. Thanks Raj.
Speaker Change: We'll be building up inventory.
Jeremy: Next we have Jeremy <unk> of Canaccord Genuity.
Speaker Change: As we look at expanding the production.
Speaker Change: What's the worst case scenario like Oh.
Thanks, operator, thanks, Paul and team for taking my questions. Most of them have been answered. So I have one remaining and that's on <unk>.
Paul Tomory: With ChemS we're advancing the studies for a potential gold copper mine with a possible 15 year operation in a top tier mining jurisdiction. We are targeting a project for the potential average annual production of approximately 250,000 gold equivalent ounces. Which, along with Mount Milligan, would give Centerra two long-life gold-copper assets in British Columbia.
Speaker Change: Maybe I'll put it this way where do you get most of your constant that third party concentrate from now and in what situations candidates start to impact too.
Speaker Change: Did you did you provide an update on what's been going on in the community relations front SMS.
Raj: I'll take that Raj good morning.
Raj: Yes look that that is the one area, where tariffs may be impacting some terra right. The big mining operations are fairly insulated.
Speaker Change: My understanding is thats part of the historic decision.
Speaker Change: A decision to move to a block cave was due to an aversion to open pits in the region and I was hoping you could speak specifically to that.
Paul Tomory: Additionally, two weeks ago, we supported Thesis Gold with a strategic equity investment. Given the proximity of CHEMES to the Lawyers Ranch project, we see substantial opportunities for synergies, including the ability to leverage existing infrastructure to unlock regional potential.
Lane loss about 60% of the feed right now comes from South America and would be subject to a tariff.
Speaker Change: And what gives you confidence that.
Raj: We are looking at ways to mitigate that and we feel pretty positive that we can find some strategies to move around that for 2025 and then the long term plan is going to be dependent on how the world looks at how long. These tariffs stay in place, whether we're able to get with them concentrate exempted.
Speaker Change: The open pit is.
Speaker Change: Something that nearby community would be would be OTT.
Paul Tomory: I'd like to provide an update on our sustainability initiative.
Jeremy: Okay, Great question Jeremy.
Paul Tomory: We remain committed to responsible mining and continue to progress in our permitting efforts. In March, we submitted an amended application for operating permits at Mount Milligan. Now Milligan is an important producer of copper and gold in British Columbia, and has been selected as one of the province's critical mineral projects, which is expected to result in a streamlined permitting process.
Speaker Change: The old open pit concept to what you were referring to was a giant open pit that took out the entire block cave and then some so what we're contemplating here is a.
Raj: I think there's various strategies that we're looking at as we look at future growth.
Raj: We're gonna have to assess how much we want to ramp up in future years, given the state of tariffs, but we also are lucky that we have big U S production coming online and Thompson Creek comes online that's a big source of feed for the landlord roaster.
Jeremy: A significantly smaller.
Jeremy: Open pit.
Jeremy: And the challenge of that time would have been that the size of that open pit.
Jeremy: And the tailings requirement associated with the amount of material that would've been processed would've caused a significant disturbance to nearby.
Paul Tomory: We are continuing to advance our commitment to responsible mining practices and transparent reporting.
Raj: Without giving away kind of kind of details we do buy some other U S mines and so there is a world if we needed to move to a more U S centric business that we could look at but I think it's too early to do that and we're still viewing this as a global business for now, but it doesn't really change the commitment to the mall business and where we think.
Jeremy: Water bodies and that is what in effect led to opposition and a no go on a big open pit what we're looking at here is a subset we have a component that's underground.
Paul Tomory: Our team is actively working on the 2024 sustainability report, which will highlight our progress across key environmental, social and governance initiatives. We look forward to publishing the report in the coming months and sharing the steps we are taking to create long-term value for our stakeholders.
Jeremy: The tailings.
Raj: We want to take this.
Jeremy: That we're looking at here would go into a combination of the pit.
Brian: Okay. That's good Brian So youre, saying, 60% for this year.
Paul Tomory: Before I move into our operating highlights, I'd like to welcome David Hendricks as our new Chief Operating Officer, who started in April. With a proven track record of leadership and operational excellence, he brings valuable expertise that will help drive our continued success.
Jeremy: <unk> North gate pit.
Brian: From South America, and the remaining 40% from U S.
Jeremy: Which is permanent to receive tailings as well as remaining capacity in the existing tailings dam. So our project concept here.
Brian: Yeah, you use <unk> or other North America and areas that are okay.
Jeremy: Its tailings fit within that envelope I just described would not require.
Speaker Change: Okay. Okay. That's great. Thank you very much that's it for me.
Paul Tomory: Slide 8 shows operating highlights on Mount Milligan for the first quarter. It produced over 35,800 ounces of payable gold and 11.6 million pounds of payable copper in the quarter. This was lower than planned, primarily due to lower grades encountered in areas of phases six and nine that are at the periphery of the ore body.
Jeremy: More disturbance in the combination of the very large open pit and impacts on global water bodies are what caused the problem. The first time in that giant open pit that you referred to.
Raj: Okay. Thanks Raj.
Jeremy: Next we have Jeremy <unk> of Canaccord Genuity.
Jeremy: Thanks, operator, thanks, Paul and team for taking my questions. Most of them have been answered. So I have one remaining and that's on <unk>.
Jeremy: It's a much more modest scope.
Jeremy: And you were asking about the relationship with communities.
Paul Tomory: We maintain our guidance of Mount Milligan with both production and sales weighted towards the second half of the year. In the first quarter, all unsustained costs on a byproduct basis were $1,168 per ounce, 5% higher than the last quarter due to slightly increased sustained capex and lower ounces sold in the quarter. Cost guidance at Mount Milligan is unchanged for the year. The sitewide optimization program on Milligan continues to progress, and we've seen improvements in the mine with higher truck availability and increased operating hours.
Jeremy: Could you provide an update on what's been going on in the community relations for Intouch MFS and my understanding is that part of the historic decision to move to a block cave was due to an aversion to open pits in the region and I was hoping you could speak specifically to that.
Jeremy: We do have an IV in place.
Jeremy: At Kemess.
Jeremy: We maintained very good relations with.
Jeremy: With.
Jeremy: The local community there and we will continue to engage in dialogue with them.
Jeremy: Great that's very clear fall. Thanks for your thanks for your response.
Jeremy: Thanks.
Jeremy: And what gives you confidence that.
Speaker Change: As a reminder, if you'd like to participate in today's Q&A. This star then one to ask your question again that is star then one.
Jeremy: The open pit is.
Jeremy: Something bad nearby community would be we'd be open to.
Jeremy: Okay, Great question Jeremy.
Speaker Change: The next question, we have will come from Anita Soni of CIBC World markets.
Paul Tomory: Work on the Mount Milligan Mine Life Extension PFS is on track to be completed in the third quarter of this year. We are optimistic the mine life can be extended beyond 2036, which is currently limited by the available space in the existing tailing storage facility. We are evaluating options for additional tailings capacity, as well as an increase of annual mill throughput in the range of 10%.
Jeremy: The old open pit concept to what you were referring to was a giant open pit that took out the entire block cave and then some sort of what we're contemplating here is a a significantly smaller open.
Anita Soni: Good morning, Paul So good to see commerce.
Speaker Change: Back in peoples.
Mm ranges thoughts Eric.
Jeremy: Open pit.
Jeremy: And the challenge of that time would have been the size of that open pit.
Speaker Change: One of the first stocks have recovered as an analyst.
Jeremy: And the tailings requirement associated with the amount of material that would've been processed would have caused a significant disturbance to nearby.
Speaker Change: I wanted to ask a little bit more about some.
Speaker Change: Some of the parameters around Smith can you remind me is there a royalty on that I think at one point there was that.
Paul Tomory: Now, moving on to Uxut. First quarter production was 23,500 ounces, lower than planned due to lower grades resulting from mine sequencing and impacts from unfavorable weather conditions.
Water bodies and that is what in effect led to opposition.
Speaker Change: Our royalty that was out but I'm not sure if were recalled bought it back and then it ended up within some Kara.
Jeremy: No go on a big open pit.
Paul Tomory: We are maintaining our 2025 production guidance at Oak Suite, with production expected to be higher in the second half of the year as we access higher grade areas of the mine. In the first quarter, all in sustaining costs on a byproduct basis were $1,563 browns, which is higher compared to last quarter, driven by lower sales and higher royalty expense grounds due to elevated gold prices. Full year cost guidance is unchanged.
Jeremy: We're looking at here is a subset we have a component thats underground.
Speaker Change: Yes, so right now and what there is a whole different mine plan and will need to figure. This out there is a silver stream agreement with.
Jeremy: And the tailings.
Jeremy: That we're looking at here would go into a combination of the pit.
Speaker Change: Triple flag for just the silver.
Jeremy: Old Northgate pit.
Speaker Change: But none of the equal their copper is streamed are tied up in anything like that.
Jeremy: Which is permitted to receive tailings as well as remaining capacity in the existing tailings dam. So our project concept here.
Speaker Change: And then in terms of the amount of infrastructure. That's fair I think when I was at Mount Milligan, maybe about a year and a half ago. When you were talking about.
Jeremy: Its tailings fit within that envelope I, just described and it would not require more disturbance in the combination of the very large open pit and impacts on global water bodies are what caused the problem.
Speaker Change: Potentially selling some of that infrastructure I just wanted to know if that actually got done or is most of the infrastructure is still there in place.
Paul Tomory: In the first quarter, we continue to progress the restart activities at Thompson Creek with non-sustaining capital expenditures of $26 million. Since the restart decision in September, we have spent $55 million. And by the end of the first quarter, approximately 14% of the total capital investment has been completed. 2025 Guidance for Non-Sustaining Capitalists at Thompson Creek is unchanged, and the project remains in line with the total initial capital estimate of $397 million, as outlined in the feasibility statement.
Jeremy: The first time in that giant open pit that you referred to so it's a it's.
Speaker Change: Okay. So when we remember one of the things we talked about is we also have a very large very modern mill at at Endako and that was always an option as what to do with the material. There. So nothing was sold from either <unk> or <unk> over the past couple of years.
Jeremy: It's a much more modest scope.
Jeremy: And you were asking about the relationship with communities, we do have an IV in place.
Jeremy: Chems.
Jeremy: We maintained very good relations.
Speaker Change: The mill at Cemex ran a $50 to 55000 tonnes, a day and Northgate way back moved one of our lines to young Davidson.
Jeremy: With.
Jeremy: The local community there and we will continue to engage in dialogue with them.
Jeremy: Great that's very clear fall. Thanks for your thanks for your response.
Ryan Snyder: With that, I'll pass the call over to Ryan to walk through our financial highlights. Thanks, Paul. Slide 11 details our first quarter financial Adjusted debt earnings in the first quarter were $26 million or $0.13 per share. In the first quarter, sales were over 61,000 ounces of gold and 12.1 million pounds of copper. The average realized price was $2,554 per ounce of gold and $3.80 per pound of copper. Both of these figures incorporate the existing streaming arrangement at Mount MacArthur. At the molybdenum business unit, approximately 4.2 million pounds of molybdenum was sold in the first quarter at the Langlois facility at an average realized price of $21.59.
And.
Speaker Change: In this project that we're looking at here, we are contemplating of course, we're replacing the equipment that was taken to young Davidson.
Jeremy: Thanks.
Jeremy: As a reminder, if you'd like to participate in today's Q&A. The Star then one to ask your question again that is star then one.
Speaker Change: In the past few years, we have not sold anything from sites. So we just to reiterate we have the process plant. We have a truck shop, we have a camp importantly, a power line to site.
Anita Soni: The next question, we have will come from Anita Soni of CIBC World markets.
Speaker Change: And Eric strip.
Speaker Change: Water water treatment.
Anita Soni: Good morning, Paul So good to see commerce.
Speaker Change: These are all require refurbishment, but it's certainly not a standing start.
Anita Soni: Back on peoples.
Speaker Change: Okay and then just in terms of I know, it's Super early to ask this question, but in terms of.
Speaker Change: Range of thoughts Eric says one of the first stocks have recovered as an analyst.
Speaker Change: I wanted to ask a little bit more about some.
Speaker Change: Ballpark estimates on how much you think the refurbishment and wood.
Speaker Change: Some of the parameters around Smith.
Speaker Change: Wood costs could you give us a sort of a thumbnail thought on what that what that looks like right now.
Speaker Change: Can you remind me is there a royalty on that I think at one point there was a.
Ryan Snyder: Consolidated all in sustaining costs on a byproduct basis in the first quarter $1,491 per maintained or fully air consolidated column.
Speaker Change: Oh royalty that was out but I'm not sure if were recalled bought it back and then it ended up within some Kara.
Speaker Change: I don't want to get into the Capex numbers at this point anyway, because we do have to do a bit more engineering work and we're not at the PAA level, but what I can say is that compare to the construction of our Greenfield site on the order of 50 to 60000 tonnes a day with all the associated infrastructure. The Capex here will be.
Speaker Change: Yes, so right now theres, a whole different mine plan and will need to figure. This out there is a silver stream agreement.
Ryan Snyder: Slide 12 shows our financial highlights for the course. In the first quarter, we generated positive free cash flow at both mining Cash flow from operations on a consolidated basis for the quarter was $59 million and free cash flow was $10 million, which includes spending of $26 million of development costs for the Thompson Crete project. In the first quarter, Mount Milligan generated $39 million in cash from operations. $27 million in free cash. OPSU generated $50 million of cash from operations and had free cash flow of $42 million.
Speaker Change: Triple flag for just the silver.
Speaker Change: But none of the equal their copper stream youre tied up in anything like that.
Speaker Change: A fraction of that it would be the fraction of a greenfield.
Speaker Change: And then in terms of the amount of infrastructure. That's fair I think when I was at Mount Milligan, maybe about a year and a half ago. When you were talking about.
Speaker Change: Of this scale.
Speaker Change: Yep, that's the principal elements of Capex of this I can talk about there would be development capex in opening up the open pit as well as.
Speaker Change: Potentially selling some of that infrastructure I just wanted to know if that actually got done or is most of the infrastructure is still there in place.
Speaker Change: Those conveyor tunnel that showed up on the one cross section there'll be crushing and conveyance infrastructure, so that would be new new physical works.
Speaker Change: Okay. So when we remember one of the things we talked about is we also have a very large very modern mill at at Endako and that was always an option as what to do with the material. There. So nothing was sold from either <unk> or <unk> over the past couple of years. The mill at Cemex ran a $50 to 55.
Speaker Change: The second main area would be the refurbishment of the mill and the replacement of those components that.
Ryan Snyder: The Molybdenum Business Unit used $6 million of cash in operations and had a free cash flow deficit of $34 million this quarter, mainly related to spending the Thompson Creek Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation. In the first quarter, we remained active on our share buybacks, repurchasing 2.5 million shares for total consideration of 50 million. This was up 25% from last.
Ben: Hi, Ben.
Speaker Change: Salvaged out of there and then of course, there would be refurbishment capex and the campaign and some of the other ancillary facilities.
Speaker Change: Tons, a day and Northgate way back moved one of our lines to young Davidson.
Speaker Change: Okay, Alright, that's it from my questions congratulations on.
Speaker Change: Getting this thing restarted or almost yet.
Speaker Change: And.
Speaker Change: Yes.
Speaker Change: In this project that we're looking at here, we are contemplating of course, we're replacing the equipment that was taken to young Davidson.
Speaker Change: We're taking the first steps.
Speaker Change: Thank you.
Speaker Change: In the past few years, we have not sold anything from sites. So we just to reiterate we have a process plant we have a truck shop, we have a camp importantly, a power line to site.
Speaker Change: As a final reminder, if you'd like to participate in today's Q&A. It is star then one to ask a question again. It is star then one we will just pause momentarily to assemble our roster.
Ryan Snyder: As Paul mentioned earlier, the board has approved up to 75 million of buybacks in 2025 and has also declared a quarterly dividend of 7 cents Canadian per share. A key focus for Centerra is returning capital to shareholders, and we expect to remain active on the share buybacks dependent on market conditions.
Speaker Change: And Eric strip.
Speaker Change: Water water treatment.
Speaker Change: These are all require refurbishment, but it's certainly not a standing start.
Speaker Change: Yeah, well this will conclude the question and answer session and today's conference call. You may disconnect your lines.
Speaker Change: Okay and then just in terms of I know this is in for <unk>.
Ryan Snyder: At the end of the first quarter, our cash balance was $680,000. This provides us with total liquidity of $1 billion and positions us well to execute on our strategic plan and deliver shareholder value.
Speaker Change: You for your participation and have a pleasant day take care everyone.
Early to ask this question, but in terms of.
Speaker Change: Ballpark estimates on how much you think the refurbishment and <unk>.
Speaker Change: Wood costs could you give us a sort of a thumbnail thought on what that what that Lou.
Paul Tomory: I'll pass it back to Paul for some closing. Thanks, Ryan.
Speaker Change: Looks like right now.
Paul Tomory: At Mt. Milligan and CHEMS, we are moving forward key growth initiatives while expanding our exploration efforts. Mt.
Speaker Change: I don't want to get into the Capex numbers at this point anyway, because we do have to do a bit more engineering work and we're not at a pea level, but what I can say is that compare to the construction of our Greenfield site on the order of 50 to 60000 tonnes a day with all the associated infrastructure. The Capex here will be.
Paul Tomory: Milligan PFS continues to advance with results expected in the third quarter of 2025, and we are progressing a PEA at CHEMS with results anticipated by the end of this year. Together, these milestones represent several key catalysts in 2025 that are expected to unlock significant value and further strengthen our growth pipeline.
Speaker Change: A fraction of that it would be the fraction of a greenfield.
Speaker Change: Of this scale.
Unknown Executive: And with that, Operator, we'll open the call to questions. Thank you, sir.
Yeah, that's the principal elements of Capex of this I can talk about there would be development capex in opening up the open pit as well as.
Unknown Executive: We will now begin the question and answer session. To join the question queue, you may press star, then 1 on your telephone. You will hear a tone to confirm to acknowledge your request.
Speaker Change: Those conveyor tunnel that showed up on the one cross section there'd be crushing and convinced infrastructure, so that would be new new physical works.
Speaker Change: The second main area would be the refurbishment of the mill and the replacement of those components that.
Unknown Executive: If you are using a speakerphone, please pick up your headset before pressing any key. To address your question, please press star, then. Again, that is star then one to ask a question.
Speaker Change: Had been.
Speaker Change: Our salvage out of there and then of course, there would be refurbishment capex and the campaign and some of the other ancillary facilities.
Speaker Change: Okay, Alright, that's it from my questions congratulations on getting.
Unknown Executive: We will pause for a moment as callers join in.
Speaker Change: Getting this thing really started almost at breakeven.
Speaker Change: Yes.
Speaker Change: We're taking the first steps.
Speaker Change: Okay. Thank you.
Don Demarco: The first question we have will come from Don DeMarco of National Bank Finance. Please go ahead. Thank you, Operator. Good morning, Paul and team. Congratulations on the quarter and moving forward with the Commerce PEA.
Speaker Change: As a final reminder, if you'd like to participate in today's Q&A. It is star then one to ask a question again. It is star then one we will just pause momentarily to assemble our roster.
Don Demarco: I think my question is going to focus on that.
Don Demarco: With the shift in mining method to long hole open stoping from block caving, I guess there's a read through here to lower initial capex. Though I believe that the prior reports are somewhat dated, so is it too early to provide any magnitude of development topics at this point? Or put another way, would you expect potential development of CMS to be internally funded?
Speaker Change: Yeah, well this will conclude the question and answer session and today's conference call. You may disconnect your lines.
Speaker Change: You for your participation and have a pleasant day take care everyone.
Speaker Change: [music].
Paul Tomory: Hey, Don, thanks for the question. If I refer back to the CMS cross section, we're going to pull that up on the webcast here. The previous concept, which we had shelved last year, really involved the block cave over towards the right of the slide. And simply put, there's just too much development capex. too little payable metal and too long a timeline for Centerra to accept that risk. What we've been doing over the last year and a half is we re-inventoried all the drill data, rebuilt the resource model on a site-wide basis, and we've determined that there's a significant potential for an open pit combined with a more conventional underground operation, and those are off to the left of the page.
Paul Tomory: So not only have we moved away from the block cave as a concept, we've actually spatially moved away from it. So there's a whole bunch of and then a portion of the former block cave concept could be mined with a more conventional underground method. So that's what we're doing. Your second question, or at least that's what we're going to be assessing here in this PEA, and the resource that we've just put out here essentially matches that concept. Your question on being able to fund this project, this is fundamentally, it's a pretty We got some pictures in the press release, but we've got a mill, we've got a camp, we've got a lot of existing infrastructure in place.
Speaker Change: Yeah.
Speaker Change: [music].
Paul Tomory: which would significantly de-risk the way we would look at CapEx investment here. There would still be new investment. As we showed in the other cross-section, there would be some development for material conveyance and crushing, getting it over to the mill, as well as upgrades to the mill.
Paul Tomory: But when we look at capital allocation, this is a pretty important point. When we look at our buyback, our capacity for buyback, we do consider what our capital needs might be, not just including Thompson Creek, which we're executing on, the Mount Milligan PFS, but also now we're starting to bring ChemS into that concept of forward liquidity, how we look at buybacks and capital allocation. It is our intent to fund all of our development projects. with existing and future liquidity. We don't expect to have to access either equity or debt markets to be able to fund our project pipeline.
Paul Tomory: And that is a fundamental tenant in how we look at liquidity and planning, and the way we look at dividends and buybacks.
Don Demarco: Okay, excellent. Thank you for that.
Don Demarco: And continue with CMS, you noted synergies with thesis is Lawyer's Ranch Project, specifically to leverage infrastructure there, but what infrastructure did you have in mind, and do you also see other synergies with the potential of the ore body or any of the mineral resources there? Well, we think highly of Ewan and the team at Thesis. We think they have a good project that they're advancing there. When we talk about potential synergies, we refer actually to the infrastructure at ChemS. ChemS is, in a way, the key to that Tudogon district, which lies north of ChemS. There's a lot of exploration activity recently.
Paul Tomory: It's a highly prospective region. And we think that ChemS could be the linchpin to broader development in the area. And I'll remind you, we've got the airstrip. There's a power line in place. A camp, the mill, so there's a very significant set of infrastructure that Centerra owns that could be, I'm not saying it will be, but it could be a significant point of synergy for other deposits in the district. So, as I said, we really like what the team at Thesis has done and we're happy to be supporting them here in at least the next phase of their development.
Don Demarco: Okay, great to hear.
Don Demarco: Okay, well, listen, that's all for me, Paul. Thanks again, and good luck with Q2 and the back-end loaded year. We'll talk soon, Don. Thanks.
Lawson Winder: The next question we have will come from Lawson Winder of Bank of America Securities.
Lawson Winder: Thank you, Operator and hello, Paul and team. Thank you for taking my question and thanks for today's update. When you think about capital allocation now with CNES in that pipeline, does that deprioritize the need to potentially acquire a new gold project?
Paul Tomory: Morning, Lawson. Yeah, that's a good question. We, what we like about ChemS is that some of the attributes I listed here, it's built infrastructure, it's It's a Brownfield site. A lot of the permits are in place. We have relations. with local First Nations there. And so when we look at potential M&A, we compare things against that which we have in the portfolio, namely Chem S. And what we find is that Chem S stacks up quite nicely against potential acquisitions. And certainly when you load in the acquisition costs that, in fact, Chem S appears to screen very highly against potential acquisition.
Paul Tomory: So, yes, I think where you're leading is, does this lessen the need for M&A? And the answer is yes, definitely.
Paul Tomory: That doesn't mean we won't we won't continue to consider M&A. But with CAMAS and with the Mount Milligan Extension Project, we have very significant future potential that we're assessing right now in Centerra.
Paul Tomory: And as I said in my prepared remarks. What we're targeting here is two very substantial gold coppers in British Columbia with significant mine life. So I think where you're leading with your question is the correct way to look at it. Okay, that's very helpful.
Paul Tomory: And then with respect to CMS and the potential open pit, do you guys have a sense at this point of what type of strip ratio you might be looking at with the current conceptual configuration of underground and open pit combined? Well, if you go back to that cross section on the webcast. We're not yet at the stage where we're going to put out PEA level numbers. That, of course, will be the objective of the PEA. But a lot of the mineralization to the left of the page there, to the west, is relatively shallow. So we're not looking at very significant strip ratios.
Paul Tomory: There will be some waste. The waste will be more in how we're mining into the side of a hill there. The waste will be associated with laying back the one wall. But most of the mineralization in the open pit area is quite shallow. And that's the material that grades around 0.4, 0.45 in that range. And then we, sorry, down to 0.3 range. And then we get the upgraded grades as you go down into the former block cave area, which a part of which we're going to look at with a more conventional underground. Those grades are higher down there.
Lawson Winder: And just finally on the Molybdenum Business Unit is Is there any sort of update on the potential sale process that you can share, or even if your thinking has evolved on that? Um, do you continue to pursue a potential partnership or sale and And if so, what could the timeline on something like that look like?
Lawson Winder: And if not, then what?
Lawson Winder: What do you see in terms of The timeline for a completion on on the Thompson Creek project and ultimately the long term value there and how it fits in the portfolio.
Paul Tomory: We are, we remain, and we will remain open to any strategic outcomes that maximize shareholder value. So a sale or divestiture will always be in the cards in that business. However, we see significant value in this business. We think the dynamics. In the North American steel industry as being very favorable for molybdenum. We like the project. We're advancing it on schedule on budget here. And we think that there will there will be a point at which.
Paul Tomory: There will be a value maximization moment for our shareholders, but we're not in a hurry to do that, but we would be opportunistic should something come up, but we see significant value in that millibit in business and. It may require a little bit of patience, but we will deliver or we expect to deliver significant value from that business.
Paul Tomory: Is it too early to start thinking about? are talking to customers on potential future sales for that for that asset. I mean, to what extent have you assessed the current level of demand in the United States. Are you talking about for molybdenum or for molybdenum assets? Oh, sorry, no, for MOLLE itself. Yeah, for the product. What we've seen, Ryan can jump in here, he also oversees the commercial area, but We have seen demand for molybdenum. As you know, at Langeloft, we already produce a finished product of molybdenum on third-party material.
Ryan Snyder: Just a quick recap on the business case here is we're going to get Thompson Creek up and running. The clean feed from Thompson Creek goes to Langeloft, which allows us to ramp up capacity utilization at Langeloft. But the order book, well, Brian, why don't you describe what we've been seeing so far this year? Yeah, sure. I mean, there's a lot of noise out there, right, in terms of moving moly around globally and tariffs and things like that. We've seen really strong demand from our U.S. customers, our steel customers in the U.S. I think if you go back to last year, Langeloft operated at £11M running through that.
Ryan Snyder: We were hoping to step that up to £14M to £16M this year and start to move along that growth trajectory. You need Thompson Creek to go to a much bigger scale, but start to step along that growth trajectory. And at Q1, if you look at the financials there, we sold £4M. So on an A, again, there's issues in the world on tariffs and moving concentrate around, but we're seeing really strong demand. And we continue to look for long-term relationships with big customers that will support the growth of that business. But we're feeling really good about it in terms of the steel industry right now.
Ryan Snyder: Okay.
Ryan Snyder: Great.
Ryan Snyder: Thank you both very much. Appreciate it.
Raj Ray: And next we have Raj Ray of BMO. Thank you, operator. Good morning, Paul and team. I've got three questions. We'll go one at a time, if that's okay.
Raj Ray: First up on your operational outlook for the year, how comfortable, and probably David can come in here, are you with the flexibility you have in the operation? There has been a few quarters where we've seen some variability. Are you at a position where you are happy with the amount of grid control drilling you have done and you have visibility, or are you behind on that production drilling, if you can give some color on that? Yeah, good question. So we're not changing guidance on production. And as I said in my prepared remarks, we expect better grades at Bodox, Soot, and Milligan.
David Hendricks: But Dave, this is a good opportunity to talk about what we're doing at Milligan on grades.
David Hendricks: Hi, Raj. Nice to meet you here today. So, at Mount Milligan, we've started a program to do some pretty extensive. call it midterm model RC drilling. So it will really do a large portion of drilling out the next 18 months to take our short term model more to a midterm model, and then be able to compare that to our long term numbers that are there. So we're pretty confident that this additional information will give us a much better view on what's going on. We're seeing some advances as we go through this new phase of material.
David Hendricks: And we're starting to see some better results. But really, the proof will be between the drilling program that we'll complete over the next couple of months, and our results and probably at the end of Q2 can give you a much better update on where we expect to be in the next 18 months to two years on the project. So you're saying by the end of Q2, you should be pretty much done with that additional lossy filling. Yeah, we will have the information. That is correct.
David Hendricks: And what about Oxford? Oxsoot, everything is projecting towards better grades in the second half of the year. It's part of what's in the current mind plan and everything else. And I don't see any reasons at this point in time, we would not achieve the guidance numbers by year end at Oxsoot.
Raj Ray: Okay, that's good.
Raj Ray: Then moving on to CMS. So the updated resource that you published today, Paul, the total mineral inventory is pretty much the same, but I see that there's more inferred now compared to the previous resource that was there. Is that a function of the change in the way you are thinking about how the mine plan is going to be? What's driving that? Because previously most of it was in the indicated or M&I category. Now there's almost like 50-50 split between indicated and inferred, if you can touch upon that.
Raj Ray: Yeah, just to complete that question, assuming that the end of the year study is positive and you decide to go ahead. like what sort of a timeline we are looking at in terms of when you start But in the first capital in the ground, and when can chemists come online, assuming everything is, is positive by the end of the year, and your study says, yeah, we should go ahead.
Paul Tomory: Okay, so the first part is on the mineral inventory, if you go back to the cross section. The resource actually moved spatially. Spatially, there is a degree of overlap between the old and the new, but spatially, we're more in the open pit and less in the old block cave. In the former block cave area, because of the change in mining method, we increased the grade but decreased the tons in the underground, and that was offset by additions in the open pit. So quite simply, there's a bit of a spatial shift, and going from block cave to long hole open stoping, there's a tonnage loss but a great improvement.
Paul Tomory: And that was actually part of the strategy, to get better grades out of a slightly more selective method.
Paul Tomory: In terms of timeline. Still too early to say that, but our intent is to put out a PEA by the end of the year. And as I said. You've seen the pictures. I mean, this site is a past producer, significant infrastructure in place. That is something we would intend to leverage in any potential development plan, but I don't want to speculate at this point on timelines. But if we like what we see in the PEA, we'd be moving almost immediately to advanced studies, meaning a PFS and then an FS. So that's the guidance I can give on timing, but it starts with that PEA that we're advancing right now.
Raj Ray: Okay, and lastly on the On the MOLLE business and what we're seeing in the US right now, now you did mention in your prepared remarks that you don't see a material impact on tariffs. Now, from what I understand, this year you start trying to expand, so you will be building up inventory as you look at expanding the production.
Ryan Snyder: What's the worst case scenario? Like, maybe put it this way, where do you get most of your content, the third party concentrate from now? And in what situation can it start to I'll take that, Raj.
Ryan Snyder: Good morning. Yeah, look, that is the one area where tariffs may be impacting Centerra, right? The big mining operations are fairly insulated. At Langlois, about 60% of the feed right now comes from South America and would be subject to a tariff. We are looking at ways to mitigate that. We feel pretty positive that we can find some strategies to move around that for 2025. Then the long-term plan is going to be dependent on how the world works and how long these tariffs stay in place, whether we're able to get aluminum concentrate exempted. I think there's various strategies that we're looking at.
Ryan Snyder: As we look at future growth, we're going to have to assess how much we want to ramp up in future years given the state of tariffs, but we also are lucky that we have big U.S. production coming online. When Thompson Creek comes online, that's a big source of U.S. feed for the Langlois roaster. Without giving away details, we do buy from other U.S. There is a world if we needed to move to a more U.S.-centric business that we could look at, but I think it's too early to do that. We're still viewing this as a global business for now, but it doesn't really change the commitment to the MOLLE business and where we think we want to go.
Raj Ray: Okay, that's good, right. So you're saying 60% for this year, from South America, meaning 40% from US? Yeah, U.S. or other North American areas that are Okay. Okay. That's great.
Raj Ray: Thank you very much.
Raj Ray: That's it from me.
Jeremy Hoy: Thanks, Raj. And next with Jeremy Hoy of Cantercourt, Genoa. Thanks, Paul and team for taking my questions. Most of them have been answered. So I have one remaining and that's on Chem S. Did you provide an update on what's been going on, on the community relations front at CHEMIS, and my understanding is that part of the historic decision to move to Block A was due to an aversion to open pits in the region. And I was hoping you could speak specifically to that and what gives you confidence that the open pit is something that the nearby community would be would be open to.
Paul Tomory: Okay, great question, Jeremy. The old open pit concept to which you're referring to was a giant open pit that took out the entire block cave, and then some. So what we're contemplating here is a significantly smaller open pit. And the challenge at that time would have been that the size of that open pit and the tailings requirements associated with the amount of material that would have been processed would have caused a significant disturbance to nearby water bodies. And that is what, in effect, led to opposition and a no-go on the big open pit. What we're looking at here is a subset.
Paul Tomory: We have a component that's underground and the tailings That we're looking at here would go into a combination of the pit, the old Northgate pit. Which is permitted to receive tailings as well as remaining capacity in the existing tailings dam. So, our project concept here. Its tailings fit within that envelope I just described and would not require more disturbance. And the combination of the very large open pit and impacts on local water bodies are what caused the problem the first time in that giant open pit that you referred to. So it's a, it's a much more modest scope.
Paul Tomory: And you were asking about the relationship with communities. We do have an IBA in place. at ChemS. And we maintain very good relations. with the local community there, and we will continue to engage in dialogue with them. Great. That's very clear, Paul. Thanks for your response. Thanks.
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Anita Soni: The next question we have will come from Anita Soni of CIBC World Market. Good morning, Paul. So, good to see Comess back in people's range of thoughts there. It's one of the first stocks I ever covered as an analyst. I wanted to ask a little bit more about some of the parameters around Comess. Can you remind me, is there a royalty on that? I think at one point there was a royalty that was out, but I'm not sure if Orico bought it back and then it ended up within Centerra. Yeah, so right now and what there's a whole different mind playing and we'll need to figure this out.
Paul Tomory: There is a silver stream agreement with triple flag for just the silver.
Paul Tomory: But none of the gold or copper is streamed or tied up in And then in terms of the amount of infrastructure that's there, I think when I was at Mount Milligan, maybe about a year and a half ago, you were talking about potentially selling some of that infrastructure. I just wanted to know if that actually got done or is most of the infrastructure still there in place? Okay, so when we were at Mount Milligan, one of the things we talked about is we also have a very large, very modern mill at Indaco. And that was always an option is what to do with the material there.
Paul Tomory: So nothing was sold from either Indaco or Chemess over the past couple of years. The mill at Chemess ran a 50 to 55,000 tons a day. And Northgate way back moved one of the lines to Young David's And in this project that we're looking at here, we are contemplating, of course, replacing the equipment that was taken to Young Davidson. But in the past 2 years, we have not sold anything from site. So, just to reiterate, we have the process plant, we have a truck shop, we have a camp, importantly, a power line to site, an airstrip, water, water treatment.
Paul Tomory: And these are all required refurbishment, but it's certainly not a standing start.
Paul Tomory: OK, and then just in terms of I know this is super early to ask this question, but in terms of, you know, ballpark estimates on how much you think this refurbishment and. would cost. Could you give us a sort of a thumbnail thought on what that looks like right now?
Paul Tomory: I don't want to get into the CapEx numbers at this point, Anita, because we do have to do a bit more engineering work and we're not at a PEA level. But what I can say is that compared to the construction of a greenfield site on the order of 50 to 60,000 tons a day with all the associated infrastructure, the CapEx here will be a fraction of that, it'd be the fraction of a greenfield of this scale. Yeah, that's the principal elements of CapEx, this I can talk about. There would be development CapEx in opening up the open pit as well as those conveyor tunnels that showed up on the one cross section, there'd be crushing and conveyance infrastructure.
Paul Tomory: So that would be new, new physical work. The second main area would be the refurbishment of the mill and the replacement of those components that had been salvaged out of there. And then of course, there would be refurbishment capex in the camp and some of the other ancillary facilities. Okay. All right. That's it for my questions. Congratulations on getting this thing restarted, or almost yet. Thank you. Yeah, we're taking the first steps. Yep. Thank you.
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Unknown Executive: We will just pause momentarily to assemble our Well, this will conclude the question and answer session and today's conference call. You may disconnect your lines. Thank you for your participation and have a pleasant day. Take care.