Centerra Gold Inc. · TSX:CG
Centerra Gold — Investor Presentation (December 2020)
49 slides from Centerra Gold's investor presentation, December 2020
Slide 1: Built For Success
Kumtor BUILT FOR SUCCESS Mount Milligan Investor Presentation December 2020 TSX: CG Öksüt www.centerragold.com
Slide 2: Caution Regarding Forward-Looking Information
Caution Regarding Forward-Looking Information Information contained in this document which are not statements of historical facts, and the documents incorporated by reference herein, may be “forward-looking information” for the purposes of Canadian securities laws. Such forward- looking information
Slide 3: Centerra: Built For Success
Centerra: Built For Success Corporate Highlights Retained Earnings Profile (US$) 20201 estimated gold production up to 820koz, copper production up to 90Mlbs, AISC2 of $740 to $790 per ounce 1,800 2,000 1,600 Q3 2020 gold production 241,448 oz, copper production 1,600 1,400 23.3Mlbs, at AISC2 of $52
Slide 4: Q3-2020 ESG Operations Update
Centerra: Q3-2020 ESG Operations Update Continued focus on safety leadership training/awareness Maintained and strengthened our “Social Licence to Operate” at all operations with no interruptions for ~87 months A Level III reportable environmental incident at the Kemess Underground Project (migrator
Slide 5: Committed to Responsible Gold Mining
Centerra: Committed to Responsible Gold Mining • Centerra is implementing the World Gold Council’s Responsible Gold Mining Principles (RGMP) across our operations • RGMP was designed to provide confidence to our investors and supply chain participants that our gold has been produced responsibly • Ce
Slide 6: Operational Results vs Guidance 2013-2019
Centerra: Operational Results vs Guidance 2013-2019 Centerra has a strong track record of beating both production and AISC2 on a by-product basis guidance Operating Statistics vs. Guidance (mid-point) (k oz Au) 850 900 878 863 851 800 850 795 852 785 783 750 805 818 748 800 814 730 700 691 744 685
Slide 7: Q3 – 2020 Corporate Highlights
Centerra: Q3 – 2020 Corporate Highlights Operational Highlights COVID-19 – Maintaining Proactive Measures, Hygiene Protocols, Social Distancing, Travel Restrictions and Separating Work Crews when on Site Safety – Öksüt achieved three million work hours without a lost time injury Mount Milligan Produ
Slide 8: Q3 – 2020 Corporate Highlights
Centerra: Q3 – 2020 Corporate Highlights Financial Highlights Q3 2020 Net Earnings of $205.7MM or $0.70 per Common Share (basic) Cash Provided by Operations of $359MM ($1.21 per share), (Kumtor $208MM, Mount Milligan $70MM, Öksüt $85MM) Consolidated Free Cash Flow1 $281MM ($157MM from Kumtor, $63MM
Slide 9: Superior Cash Flow
Centerra: Superior Cash Flow AISC Margin Expansion4 (US$/oz) Cash Flow From Operations 3,5 (US$MM’s) 450 1,806 2,000 1,400 1,278 400 1,620 1,800 1,487 359 1,200 1,374 1,403 1,600 350 1,237 1,400 1,000 300 268 1,200 775 816 250 800 708 1,000 604 200 582 560 800 600 521 150 121 427 95 600 91 92 345 10
Slide 10: Industry Leading FCF Generation
Centerra: Industry Leading FCF Generation YTD-2020 FCF as of September 30, 2020 (US$MM’s) $527 $490 $258 $219 $191 $191 $167 $140 $64 $38 $33 $21 $12 1 2 Centerra B2Gold Yamana Endeavour Eldorado Pretium Pan SSR Alamos Teranga IAMGOLD New Gold Equinox American Net Debt / (Cash) Balance as of Septemb
Slide 11: Industry Leading Free Cash Flow Yield
Centerra: Industry Leading Free Cash Flow Yield Q2 2020 FCF Yield1 (%) 2020E FCF Yield2 (%) 2021E FCF Yield2 (%) Centerra 24% Centerra 15% Centerra 20% Centamin 24% Centamin 13% Endeavour 18% Eldorado 11% Endeavour 11% SSR Mining 16% B2Gold 9% B2Gold 9% Centamin 13% Kinross 8% Eldorado 8% Kinross 11
Slide 12: Compelling Valuation
Centerra: Compelling Valuation P / NAVPS (x) P / 2020E CFPS (x) P / 2020E EPS (x) Kirkland Lake 1.34x Alamos 9.5x Alamos 21.8x B2Gold 1.30x Kirkland Lake 9.3x Yamana 19.1x Yamana 1.12x SSR Mining 8.9x SSR Mining 15.3x New Gold 1.02x B2Gold 7.7x IAMGOLD 15.1x Centamin 0.96x Yamana 7.7x Kirkland Lake
Slide 13: AISC Comparison
Centerra: AISC1 Comparison 1H 2020 AISC1 (US$/oz) YoY Change in AISC1 (%) B2Gold $717 B2Gold (19%) Kirkland Lake $763 Eldorado (8%) Centerra $790 Centamin (4%) Centamin $899 Kinross 7% Eldorado $902 IAMGOLD 8% Endeavour $918 Yamana 10% Kinross $988 Endeavour 11% Yamana $1,074 Centerra 12% Alamos $1,
Slide 14: Low-Cost Asset Base
Centerra: Low-Cost Asset Base 20201 estimated gold production up to 820koz, copper production up to 90Mlbs, AISC2 of $740 to $790 per ounce Au Positioned to generate meaningful cash flow through the price cycles AISC2 Industry Curve (By-Product Basis) $2,500 25% 50% 75% 100% $2,250 $2,000 Center
Slide 15: Kumtor: World Class Open Pit Gold Mine
Kumtor: World Class Open Pit Gold Mine 2017 2018 2019 2020E Gold Production (koz) 563 535 600 520-560 All-In Sustaining Costs ($/oz) (1) $698 $694 $598 $750-$800 Sustaining Capital ($MM) $61 $44 $39 $68 Growth Capital ($MM) $18 $17 $16 $18 Reserves(2) (Moz) 3.2 Au Grade (g/t) 2.31 Resources M&I(2) (
Slide 16: Kumtor: Exploration
Kumtor: Exploration - 2019 drilling focused on the Hockey Stick Zone and confirmed gold mineralization outside the ultimate open pit - 2020 drilling focused on: Extending Southwest and Sarytor Pits resources Evaluating oxide mineralization potential along Kumtor Lower Thrust (Sarytor, Hope, Tria
Slide 17: Kumtor: Southwest Deposit – Oxide Mineralization
Kumtor: Southwest Deposit – Oxide Mineralization N SW-18-272A discovery hole of significant oxide gold confirmed by hole SW-20-317 w/ 158 m @ 2.95 g/t Au SW-18-272A 1.87 Koshuluu Zone Hope Zone SW-20-317 1.48 A’ 0.05 l arcuks tT h r u s t2.75 1.330.46 0.06 0.01 A 0.02 0.64 Th 0.06 0.01 B l a c k B 0
Slide 18: Kumtor: Mineral Resources
Kumtor: Mineral Resources1 Exclusive of Reserves (Year-over-Year Change) Kumtor Open Pit Tonnes Ounces Kumtor Open Pit Tonnes Ounces Au (g/t) Au (g/t) 2018 Reserves (kt) (koz) 2019 Reserves (kt) (koz) Proven & Probable – Reserves 51,631 2.42 4,018 Proven & Probable – Reserves 43,295 2.31 3,214 Kumto
Slide 19: Mount Milligan: Low-Cost Gold Copper Mine
Mount Milligan: Low-Cost Gold Copper Mine 2017 2018 2019 2020E Gold Production (koz) 223 195 183 140-160 Copper Production (Mlbs) 54 47 71 80-90 All-In Sustaining Costs ($/oz)(1) $505 $764 $828 $750-$800 Sustaining Capital ($MM) $30 $43 $36 $55 Gold Copper 35% @ 18.75% @ 15% of Royal Gold Stream US$
Slide 20: Mount Milligan: Available Water – Sept. 30, 2020
Mount Milligan: Available Water – Sept. 30, 2020 December 2020 20
Slide 21: Mount Milligan: Life-of-Mine Plan
Mount Milligan: Life-of-Mine Plan Cash Flow Summary1 1. Effective date December 31, 2019, see NI 43-101 Technical Report on the Mount Milligan Mine dated March 26, 2020 and filed on SEDAR. December 2020 21
Slide 22: Öksüt: Funded High Margin Gold Production
Öksüt: Funded High Margin Gold Production Project Highlights Mine Type Open Pit, Heap Leach Heap Leach Stacking Rate 11,000 tpd Life of Mine Strip Ratio (w:o) 2:1 Avg. LOM Annual Production 110koz Au 2020e Gold Production (koz) 80-100 Öksüt Gold Revised 2020e All-in Sustaining Costs ($/oz)(1) $500-$
Slide 23: Öksüt: Site Photos
Öksüt: Site Photos Admin Offices and Crushing Area Open Pit Mining Open Pit Mining Heap Leach Pads Stacked Ore on Heap Leach Pad Irrigating Stacked Ore December 2020 23
Slide 24: Kemess: C$1Billion of Infrastructure
Kemess: C$1Billion of Infrastructure Fly-in, Fly-out Work Camp Permitted Open Pit Tailings Storage Facility Metallurgical Facility Kemess Proximity to Mount Milligan Kwadacha Kemess Project (Fort Ware) Kemess Omineca Resource Project Tsay Keh Access Road Forest Service Road 0 100 200 Kilometres Daws
Slide 25: Kemess: Large, Low-Cost Production
Kemess: Large, Low-Cost Production Kemess Underground – 2016 Feasibility Highlights(1) Kemess East– 2017 PEA Highlights(1) Mine Type Underground Block Cave Mine Type Underground Panel Cave Avg. LOM Gold Production (koz) 106 Avg. LOM Gold Production (koz) 80 Avg. LOM By-Product AISC (US$/oz)(2) $244
Slide 26: Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines
Greenstone: One of Canada’s Largest Undeveloped Open Pit Gold Mines Cornerstone Canadian Development Project Ontario: Top Tier Mining Jurisdiction 50:50 development partnership with Premier Gold Greenstone Development Project Open pit reserves(1) 4.7Moz Au @ 1.02 g/t (100%) Location: Ontario, Canada
Slide 27: Centerra: Built For Success
Centerra: Built For Success Corporate Highlights Retained Earnings Profile (US$) 20201 estimated gold production up to 820koz, copper production up to 90Mlbs, AISC2 of $740 to $790 per ounce 1,800 2,000 1,600 Q3 2020 gold production 241,448 oz, copper production 1,600 1,400 23.3Mlbs, at AISC2 of $52
Slide 28: Appendix
Kumtor BUILT FOR SUCCESS Mount Milligan Appendix TSX: CG Öksüt www.centerragold.com
Slide 29: COVID-19 Update
Centerra: COVID-19 Update • Priority is the health, safety and well-being of employees, contractors, communities and other stakeholders, and to minimize spread of virus at operations and local communities • Working remotely successfully and where possible • Restrict access to mine sites continues •
Slide 30: Diesel and FX Hedging Programs
Centerra: Diesel and FX Hedging Programs Diesel Hedging Program(1) Canadian Dollar Hedging Program(1) Q4 2020 2021 Q1 – Q3 2022 Q4 2020 2021 Q1 - Q3 2022 (2) (2) Derivative Hedge Rate Notional Notional Notional(2) USD/CAD FX Collars $1.33/$1.39 $48,000 $190,800 $137,000 FX Forwards $1.38 $45,000 $10
Slide 31: 2020 Exploration - Map of Projects
Centerra: 2020 Exploration - Map of Projects 2016A 2017A 2018A 2019A 2020E Exploration spending ($MM) $11 $13 $21 $28 $50 31 December 2020
Slide 32: Mount Milligan: Exploration
Mount Milligan: Exploration North NPI (Resource) • 69 drill holes completed (25,961 m) • 6 zones (South Boundary, Southern Star, Saddle, GEF, MBX/WBX, Oliver) Brownfield • 26 drill holes completed (12,137 m) • 5 zones (North Slope, Goldmark, Goldmark- Oliver, Saddle West, South Boundary) Greenfield
Slide 33: Öksüt: Exploration Targets
Öksüt: Exploration Targets Western Asia, Europe and West Africa Keltepe NW-Keltepe N Oxide Au & Supergene Cu Target Boztepe & Boztepe West Porphyry Cu/Au Target Keltepe Pit Büyüktepe Oxide Au Target Keltepe & Güneytepe Oxide Au Resource & Supergene Cu Target Güneytepe Pit Yelibelen Oxide Au Target M
Slide 34: Potential Upside Optionality - Molybdenum
Centerra: Potential Upside Optionality - Molybdenum Molybdenum Price Movement Thompson Creek Mine ● Located in Idaho, is the world’s fourth largest open-pit primary molybdenum mine ● Operations began in 1983, using conventional open-pit mining and a on- site 25,500 tpd mill ● In December 2014 placed
Slide 35: Leading Capital Efficiency and Profitability
Centerra: Leading Capital Efficiency and Profitability L3Y Return on Invested Capital (%) L3Y Return on Capital (%) L3Y Return on Equity (%) Kirkland Lake 20% Kirkland Lake 23% Kirkland Lake 21% Centamin 13% Centamin 11% B2Gold 9% B2Gold 9% B2Gold 10% Centerra 8% Centerra 8% Centerra 8% OceanaGold 7
Slide 36: Q3 - 2020 Corporate Update
Centerra: Q3 - 2020 Corporate Update AISC Margin Expansion4 (US$/oz) Cash Flow From Operations 3,5 (US$MM’s) 450 1,806 2,000 1,400 1,278 400 1,620 1,800 1,487 359 1,200 1,374 1,403 1,600 350 1,237 1,400 1,000 300 268 1,200 775 816 250 800 708 1,000 604 200 582 560 800 600 521 150 121 427 95 600 91 9
Slide 37: Q3-2020 AISC Margin Expansion
Centerra: Q3-2020 AISC1 Margin2 Expansion Consolidated Kumtor Margin AISC Margin AISC 1400 1278 1400 1248 1200 1200 985 1000 1000 911 816 838 811 775 744 800 560 708 800 706 727 $/oz $/oz 582 604 600 521 600 533 427 400 400 200 200 0 0 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'18 Q4'1
Slide 38: Q3-2020 Other Financial Highlights
Centerra: Q3-2020 Other Financial Highlights Gold Sales of 238,069 ounces / Copper Sales of 21.7 million pounds in Q3 2020 Q3 2020 Net Earnings and Adjusted1 Net Earnings of $205.7MM, $0.70 per common share (basic) Q3 2020 Production Costs of $386 per ounce sold (Kumtor $326/oz., Mount Milligan $612
Slide 39: Q3-2020 Operating Highlights
Centerra: Q3-2020 Operating Highlights Öksüt achieved three million work hours without a lost time injury Q3 2020 gold production - Kumtor 140,182 oz, Mount Milligan 49,854 oz, Öksüt 51,412 oz Q3 2020 copper production - Mount Milligan 23.3 million pounds Kumtor received permit to utilize Lysii Vall
Slide 40: 2020 Operations Key Focus
Centerra: 2020 Operations Key Focus Improve Safety Performance Company-wide Continue Ramp up Öksüt Gold Production, Complete Crusher Modifications Adequate Volumes of Stored Water at Mount Milligan to Run at Full Capacity for the Year Focus on Consistent and Improved Production at the Mount
Slide 41: Mount Milligan: Short & Medium-term Water Sources
Mount Milligan: Short & Medium-term Water Sources December 2020 41
Slide 42: Kemess: Overview
Kemess: Overview Kemess Underground (Feasibility – 2016)(1) • Reserves of 1.9Moz Au and 0.6Blbs Cu(2) • LOM of 12 years at 106koz Au/p.a. and 47Mlbs/p.a. at AISC(3) of $244/oz on a by-product basis • Environmental approvals and IBA received • Received Mines Act Permit (construction permit) • Receive
Slide 43: Kemess: De-Risked Brownfield Project
Kemess: De-Risked Brownfield Project(1) • Established mining jurisdiction Kwadacha Kemess Project • (Fort Ware) Advanced-stage Kemess Omineca Resource Project Tsay Keh Access Road − EA Approved, IBA in hand, Amended Mines Act Forest Service Road Permit (construction permit) received, Effluent 0 100
Slide 44: 2020 Guidance
Centerra: 2020 Guidance6 Mount 2020 Production Guidance Units Kumtor Öksüt Centerra Milligan(1) Gold Total Gold Payable Production(2) (Koz) 520-560 140-160 80-100 740-820 Copper Total Copper Payable Production(2) (Mlb) - 80-90 - 80-90 2020 All-in Sustaining Unit Costs Units Kumtor Mount Milligan(1)
Slide 45: 2020 Guidance Sensitivities and Assumptions
Centerra: 2020 Guidance5 Sensitivities and Assumptions Impact on Impact on ($ per ounce ($ millions) sold) Production Costs Net Earnings AISC(2)(3) on Capital Costs Financing Costs Revenues Cash flows & Taxes (after tax) by-product basis Gold price $50/oz 0.6 – 1.1 - - 4.0 – 7.7 3.4 – 6.6 3.4 – 6.6
Slide 46: Mineral Reserves - Proven & Probable
Centerra: Mineral Reserves - Proven & Probable1 Gold Mineral Reserves Proven Probable Total Proven and Probable Property Tonnes Grade Contained Tonnes Grade Contained Tonnes Grade Contained (kt) (g/t) Gold (koz) (kt) (g/t) Gold (koz) (kt) (g/t) Gold (koz) Mount Milligan 114,753 0.41 1,525 76,275 0.3
Slide 47: Investor Relations Highlights
Centerra: Investor Relations Highlights Research Coverage Top Ten (10) Institutional Shareholders Brokerage Firms Rating Target Institution/Firm Sept.30-2020 1. BofA Merrill Lynch Buy C$16.25 1. Blackrock 11.07% 2. Canaccord Genuity Buy C$22.00 3. CIBC World Markets Outperform C$20.00 2. Van Eck Ass
Slide 48: Directors
Centerra: Directors Board of Directors Background MICHAEL S. PARRETT Chairman Appointed Director of Centerra’s Board, May 2014 BRUCE V. WALTER Vice Chair Appointed Director of Centerra’s Board, May 2008 SCOTT G. PERRY Director Appointed Director of Centerra’s Board, January 2016 TENGIZ BOLTURUK Dire
Slide 49: Built For Success
Kumtor BUILT FOR SUCCESS Mount Milligan Investor Presentation December 2020 TSX: CG Öksüt www.centerragold.com
Centerra Gold — Investor Presentation (December 2020) on 6ix