Centerra Gold Inc. Common Shares

Thank you for standing by. This is the conference operator. Welcome to the Sentara Gold third quarter 2025 conference call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0. I would now like to turn the conference over to Lisa Wilkinson, Vice President, Investor Relations and Corporate Communications with Sentara Gold. Please go ahead, ma'am.

Thank you, Operator, and good morning, everyone. Welcome to Sentara Gold's third quarter 2025 results conference call. Joining me on the call today are Paul Tamori, President and Chief Executive Officer, David Hendricks, Chief Operating Officer, and Ryan Snyder, Chief Financial Officer. Our news published yesterday outlines our third quarter 2025 results and is complemented by our MD&A and financial statements, which are available on CDAR, EDGAR, and our website. All figures are in U.S. dollars unless otherwise noted. Presentation slides accompanying this webcast are available on Sentara's website. Following the prepared remarks, we will open the call for questions. 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. For more information, please refer to the cautionary statements in our presentation and the risk factors outlined in our annual information form. 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 last night. I will now turn the call over to Paul Timore.

Thank you, Lisa, and good morning, everyone. In the third quarter, we sustained robust margins and generated nearly $100 million of free cash flow, driven by strong operational performance at Uxford and elevated metal prices. Golden copper production in the quarter was almost 82,000 ounces, and 13.4 million pounds respectively. Our cash balance increased over $560 million in the quarter, demonstrating our ability to fund the Thompson Creek Restart Project while returning $32 million of capital to shareholders through disciplined share buybacks and our quarterly dividend. We also continue to deploy capital strategically through our equity investment in Liberty Gold, reflecting our balanced approach to growth and value creation. Our self-funded growth strategy continues to advance across multiple fronts. We published the Mount Milligan pre-feasibility study, which I'll come back to, and we also expect to publish a preliminary economic assessment for ChemMass in the first quarter of 2026. Together, these assets form a robust pipeline of long-life gold and copper projects in British Columbia. In Nevada, development has advanced at the Goldfield project, which provides Sentara with additional exposure to future gold production. In the quarter, engineering progressed as planned, early mobilization efforts progressed on site, and we are building out a dedicated project execution team. These early actions mark important steps towards project readiness and position Goldfield for disciplined and efficient execution. Each of these growth opportunities, as well as the Thompson Creek Restore Project in Idaho, can be funded using our existing liquidity and cash flow from operations, positioning Centera to deliver sustainable low-risk growth while maintaining our strategic approach to capital allocation. In September, we announced the results of the PFS from Mount Milligan, extending the life of mine by approximately 10 years to 2045. This is supported by an optimized mine plan delivering average annual production of 150,000 ounces of gold and 69 million pounds of copper from 2026 to 2042, followed by the processing of low-grade stockpiles from 2043 to 2045. The study outlines disciplined non-sustaining capital expenditures of approximately $186 million, most of which are not required until the early to mid-2030s, all fully funded from available liquidity and future cash flow. Key investments include $114 million for a second tailing storage facility to be spent across 2032 and 2033 and providing the potential for future raises which could add multiple decades of storage capacity beyond the 2045 life of mine. $36 million for ball mill motor upgrades and flotation cells in 2028 to increase process plant throughput by about 10% to 66,000 tons per day and increase recovery by approximately 1%. And lastly, $28 million for five new haul trucks to support longer haul distances, higher material movement rates, and stockpile development. Proven and probable reserves increased significantly to 4.4 million ounces of gold and 1.7 billion pounds of copper, representing a 56% and 52% increase respectively from year-end 2024. Recent drilling confirms mineralization remains open to the west of the current resource pit, and Sentara continues to advance exploration aimed at expanding the mineral resource and assessing opportunities to extend the mine life beyond the updated plan. The PFS reaffirms Mt. Milligan's strong economics with an after-tax NPV of approximately $1.5 billion at $2,600 per ounce gold, which increases to over $2 billion at $3,500 per ounce of gold. Mt. Milligan remains a strategic cornerstone asset in Sentara's portfolio with 20 years of mine life, meaningful gold and copper production, strong cash flow, and a significant opportunity for future exploration potential in a top-tier mining jurisdiction. Now I'd like to share an update on our sustainability initiatives. As part of our climate change strategy and commitment to sustainability and operational innovation, we're advancing a renewable diesel pilot project at Mount Milligan. This initiative will establish clear reliability metrics, account for seasonal variations, and evaluate performance analytics across our fleet. By exploring renewable diesel, we aim to meaningfully reduce greenhouse gas emissions at Mount Milligan and move towards lowering Sentara's overall carbon footprint. At the same time, Mount Milligan's Life of Mine Extension marks a major milestone in advancing Sentara's Gold Growth Strategy and reaffirms our commitment to social responsibility. This includes the launch of the 8th Pre-Employment Training and Education Readiness Program, which supports unemployed and underemployed First Nations members in local communities through skills training, followed by direct employment opportunities. Between 2023 and 2025, we've also achieved double-digit growth in our local spend with First Nations-owned and affiliated businesses. That same commitment drives our work at UTSUT, where our community initiatives endeavourly focus on education, sports, environment, and social development. Through these programs, we are proud to have supported more than 13,000 students helping to build stronger, more resilient communities where we operate. And with that, I'll pass the call over to Dave to walk through our operational performance highlights.

Thanks, Paul. Slide eight shows operating highlights at Mount Milligan for the third quarter. Mount Milligan produced over 32,500 ounces of gold and 13.4 million pounds of copper in the quarter. In 2025, mining operations encountered zones with more complex mineralization, the impact of which were incorporated in the recently published PFS. Year-to-date and full-year gold and copper production remains in line with the PFS. In the third quarter, all-in sustaining costs on a byproduct basis were $1,461 per ounce, 14% higher than last quarter due to an increase in sustaining capex, and lower ounces sold in the quarter. Full-year 2025 costs are expected to be near the low end of the guidance ranges. Slide 9 shows the quarterly operating highlights at OXU, reflecting another period of strong performance. Third quarter production was 49,000 ounces, better than planned due to higher grades resulting from mine sequencing. As a result, we have reaffirmed our 2025 production guidance with production expected near the upper end of the guidance range. In the third quarter, all-in sustaining costs on a byproduct basis were $1,473 per ounce, which is 16% lower compared to last quarter, driven by higher ounces sold and lower sustaining capex, partially offset by higher royalty expenses due to elevated gold prices and new royalty rates in Turkiye. Full year 2025 cost guidance is expected to be near the low end of the range, benefiting from expected higher sales and continued strong operational performance. We have initiated a life of mine optimization study at AUXUT to evaluate the asset's full potential, including the incremental production potential of residual leaching of the heat and expanding the pit to pursue additional mineralization. The study will explore options to extend gold recovery from existing leach pads through improved solution management, which will enhance residual metal extraction efficiency. The study is expected to be completed by the end of 2026 and will support updates to the mine's long-term reclamation and site management plans, ensuring the operation continues to maximize metal recovery and cash flow in a safe and responsible manner. The restart of Thompson Creek is advancing with approximately 29% of the total capital investment from fleets. In the third quarter, we invested $31 million in non-sustaining capital expenditures, bringing total investment spend since the September 2024 restart decision to $113 million. We have reaffirmed our 2025 guidance for non-sustaining CapEx at Thompson Creek. The project remains on track, and first production is expected in the second half of 2027. I'll now pass it to Ryan to walk through our financial highlights for the quarter. Thanks, David.

Slide 11 details our third quarter financial results. Adjusted net earnings the third quarter were $66 million, or $0.33 per share. which benefited from strong production from offsuit and elevated metal prices. Key adjustments to net earnings include 194 million related to the non-cash impairment reversal in goldfield, 27 million of unrealized gain net of taxes on the financial assets related to the additional agreement with Royal Gold, and 16 million of unrealized gain on the remeasurement of the sale of the Greenstone Partnership in 2021, among other things. In the third quarter, It sales for over 80,000 ounces of gold and 13 million pounds of copper. The average realized price was $3,178 per ounce of gold and $3.73 per pound of copper, which incorporates the existing streaming arrangements at Mount Melody. At the molybdenum business unit, approximately 3.1 million pounds of molybdenum was sold in the third quarter at the Langlois facility at an average realized price of $24.42 per pound. Consolidated all-in sustaining costs on a byproduct basis in the third quarter were $1,652 per M. We expect consolidated all-in sustaining costs on a byproduct basis to be near the low end of the guidance range for both Mt. Milligan and Auxude in 2025. Slide 12 shows our financial highlights for the quarter. In the third quarter, we generated robust cash flow from operations of $162 million and free cash flow of $99 million driven by strong operational performance at Oxsut and elevated metal prices. In the third quarter, Mount Milligan generated $64 million in cash flow operations and $45 million in free cash flow. Oxsut generated $139 million in cash flow operations and $134 million in free cash flow. The Molybdenum Business Unit used $16 million of cash flow operations and had a free cash flow deficit of $54 million this quarter, mainly related to spending on the Thompson Creek restart and a working capital increase at Langloff, partially due to high equilibrium prices. Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation. In the third quarter, we repurchased 2.8 million shares for total consideration of 22 million, and we continue to believe that repurchasing our shares is an accretive high return use of cash. Our board has increased the approved level of share repurchases through the NCID in 2025 to $100 million, and we have repurchased $64 million year-to-date. We also declared a quarterly dividend of $0.07 per share. Year-to-date, we have returned over $95 million to shareholders through dividends and share buybacks. As part of our commitment to returning capital to our shareholders, we expect to remain active on the share buybacks subject to market conditions. At the end of the third quarter, our cash balance was $562 million, bringing total liquidity to over $960 million. We also hold an additional $85 million in equity investments. This strong financial position gives us the flexibility to fully fund our organic growth projects at Milligan, Goldfield, Caness, and Thompson Creek while continuing to return capital to shareholders. I'll pass it back to Paul for some closing remarks.

Thanks, Ryan. We're proud of the continued progress in advancing our internal self-funded growth strategy. The recently published Mount Milligan PFS represents a major step forward in unlocking additional value from this cornerstone asset and provides a clear view of the mine's long-term potential. Alongside this, we continue to advance the ChemS study, which is expected to be completed in the first quarter of 2026. These efforts reflect our disciplined approach to capital allocation and our commitment to enhancing shareholder value through a robust pipeline of self-funded growth opportunities supported by a strong balance sheet. And with that, operator, I'll open the call for questions, please.

Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then 2. We will pause for a moment as callers join the queue. And your first question today will come from Luke Bertozzi with CIBC. Please go ahead.

Hi, Paul and team. Congrats on the solid quarter. It's great to see higher commodity prices flowing right into free cash flow. I noticed gold recovery at Mount Milligan was a bit low compared to prior quarters and the recent technical reports. Can you provide a bit of color on what drove the low recovery in Q3 as well as your expectations for Q4?

All right. Thanks very much for the question. This is Dave. On the recovery piece, we had remodeled the entire deposit. And one of the things that we did when we put the PFS out was looking at the ratio of the pyrite to the alpha pyrites. And that ratio has been more pyrite in the last quarter than we had modeled in there. And that has led to the low recoveries. What we have done through the end of the year is we will be able to get through to our ounces for guidance based on moving a little bit more higher material. And so we're able to satisfy ourselves that we understand the piece of the pyrite to calcopyrite ratio, which is impacting our recovery.

Okay, awesome. Thanks for the details. And congrats again on the solid quarter. I'll pass it on to the next caller. Thanks, Lou.

And your next question of the day will come from Don DeMarco with National Bank. Please go ahead.

Hi, Paul. Good morning and congratulations on the strong quarter. I'll start with oxide. So I see that during the quarter you had 1.5 million tons stacked at a grade of 1.82 grams per ton. So considering heap leach residence times and so on, Does this suggest that we might see another strong grade quarter in Q1-26 after the production normalizes in Q4?

Yeah, I think what we'll see going forward there, Don, is that through the end of the year, again, we reaffirmed our guidance number. We're pretty confident that we'll get there. And then we should see some good strong production going into next year as well.

100 that will impact us going into q1 of 2020 cents actually don this is a bit of a segue into the longer term study we're launching at oxu this mine has reconciled positively since day one and we're pretty confident that there's a lot more gold in those heaps than our our previous metallurgical models showed and so what we've kicked off here is looking at how we might be able to exploit those accumulated inventories in that heat so as we as we said in our um in our release and in Dave's prepared remarks, we've initiated a study on how to access what we believe are significant accumulated inventories of gold in those heaps. But this asset continues to perform extremely well in reconciliation, and that's what you're seeing in those stacked ounces and in accumulated inventories.

Okay, thank you. And for my next question, US-based assets have been trending favorably under the current administration. So I've got two parts to this question. is there a read-through to improving optics for the MBU? And given that MOLLE is a critical mineral, you know, with applications in defense and aerospace and so on, is there potential for a strategic deal with the U.S. government?

Okay, so on your first question, there is no doubt that the whole mining and metal space has become a more favorable place over the last year. And particularly for molybdenum, We are a US-based mine feeding a US-based roaster, principally selling refined molybdenum products to domestic US steel mills. And we've seen increased confidence in that sector, in the US steelmaking sector. Molybdenum, as you know, goes into high-performance steels that are used in everything from pipelines to nuclear power to defense, aerospace, shipbuilding, all sectors that are seeing an uptick in in potential steel demand. So yes, the whole US minerals and mining space, particularly what we have, fully permitted in-flight project, certainly has become more attractive. In terms of a US government deal, it's something that we monitor. We don't need funding. We're fully funded right through the build. The project is on track, as we said in our prepared remarks. At this stage, we're going to continue to monitor the situation with the government, but there's nothing to report. And other than to say that, as I said in the previous comment, that it's a very favorable environment right now.

Okay. Okay, great. Well, listen, that's all for me. Good luck with the rest of the quarter. Thank you. Thank you.

And your next question today will come from Frederick Bolton with BMO Capital Markets. Please go ahead.

Good morning, Paul and team. Thank you for taking my questions. Just a couple of questions from me. I just want to follow up on Luke's first question about Mount Mulligan. There's a mention of the winding circuit being impacted during the quarter. Can you just expand on that? That's an issue that's been resolved. And my second question relates to Oxford. If the life mine optimisation study that concludes towards the end of 2026, if that results in an expansion of the pit, would that require additional permitting from the Turkish government or would that require a new EIA? That's it. Thank you.

Okay, so let me take the opposite question first. So the mine life, the current reserve life ends in 2029. So that will be, and we still anticipate at this point, that that will be when the last ton comes out of the pit. What this optimization study looks at is the accumulated inventories on the heaps. Because the mine has reconciled positive, we believe, and we're going to be proving this up with sonic drilling and other means over the next little while, we believe that there's significant accumulated inventories. This can be done in the context of the current footprint. There would have to be permit modifications for residual leaching, but there's broad understanding what that might look like. So the principal focus of the study is how to manage what we believe are accumulated inventories, better solution management with the cyanide solution. And lastly, as part of the study, we will also evaluate whether or not there might be a sulfide inventory beyond the current oxide boundary at depth. It's still very early to say what that might look like. And of course, if there were more material in mind that would require permanent modifications, but it's early days and we're going to be assessing the study as principally residual leaching, but secondarily, whether or not there are potential extensions to the pit into the sulfide. So that's the OXU point. on Mount Milligan. So as Dave said, the purpose of this PFS, of course, was to extend mine life, but it was also to reset our understanding on grade, recovery, and throughput, fundamentally. How do we mine a plan that has an optimal blend of the various characteristics so that we're not impacted on recovery? This year, we're still dealing with, in effect, having mined ourselves into a corner on some of this material as they've described we've been impacted by high pyrite decalcopyr which which depresses recovery in the pfs what we've done is we've created a mine plan that blends down the pyrite so that we can get back up to the recoveries that we intend to be at and same by the way goes for grade so the pfs one of its major objectives was to create a mine plan that provides for a more optimal feed feed source and feed blending into the mill. So we expect to start working our way through that. It's not something you can turn around overnight, but it's something we expect to work our way through, certainly starting in the first quarter of next year. Did I answer your question?

Thank you. That's great. Yeah, that's great. Thank you very much. So that's it for me. Congrats on the second quarter.

Thanks, Fred. And your next question today will come from Brian McArthur with Raymond James. Please go ahead.

Good morning and thank you for taking my question. Paul, just so I'm clear on this aux suit, I think you've answered this, but assuming we don't do the sulfides and we just do the residual leach, are we just talking about, are we removing material again from leach pad to leach pad or are we just going to be able to reuse the current leach pads and get more material out. So effectively, my real question goes to this. The capital for this is very, very little, and there's no mining involved, assuming we don't go to the sulfide. Is that right?

It would be a very low-cap expansion. Both Dave and I have a lot of experience with this type of stuff in Nevada. Dave, why don't you describe what we're going to be looking at here, a scope on the residual work?

Yeah, there's a couple different pieces. One of the studies we'll look at is certainly reshaping the heaps will be a big part of this. So that's just dozer time and everything else. So it takes a little bit of capital to get that done. But that gives us a big opportunity to be able to get in there. And then we'll look at our solution flow and decide, is it best to just go with a straight piece? Do we want to try and up the preg grades by going through the areas a couple of different times and having maybe an additional pond or two to do things? And so it's just a piece of what we'll look at is what's the best way to get the gold out in an appropriate timeline and leaving us in a good position for closure. So whether that ends up being a little bit more capital, it will only be more capital from the standpoint that we'll be able to get a lot more ounces out. And that's just something that we will plug away at and it will continue to evolve over the next few years. We'll have a study published at the end of next year that will give us a good level of confidence And whatever we put in there, I'm sure we'll beat that as well. There's a lot of opportunity taking out of the old heats. We've done it a bunch of times and we look forward to initiating that work in Turkey.

It makes great sense and great return on capital. So just with that, though, as you get this information, is there any opportunity Um, get better recoveries in the later part of the current mine life. Like obviously the studies done in 2026, we start to get benefit even in 28 or 29, or is it, or do you just have to, I mean, I haven't been there for a while, just reconfiguring things, how you actually do this.

A lot of it comes down to how much solution that we have and how we're able to put it through the heaps. So, are we going to just run it through one at a time? Do we try and build the preg right up by going through a couple of different areas? And that's the study we'll look at. So, my expectation is that we would be able to increase the grades going through the plants and get more ounces early, but continue to get ounces late. But that could take you know, 18 months, two years to get that up and running because it would require probably some additional pumping. Therefore, we need to do some, you know, minor modifications to permitting and everything else. So, it's an iterative process and expect that we would be able to do very well with it over the next period of time. And you are 100% correct. Very low capital for the return that we would get out of it.

Great. Thank you very much. That's very helpful.

Again, if you have a question, please press star and then one. And your next question today will come from Steven Green with TD Securities. Please go ahead.

Yeah, morning, guys. I think you answered my questions on Oxsuit. But just to finish that off, do you have any oxide targets in the project area or potentially regional opportunities? just take advantage of your position in Turkey at the end of the month.

Yeah, one of the Sure. One of the pieces of this optimization study is really a 360 around the site, an exploration 360 around the site, bringing in some different people to take a look at what we've been doing there for the last 10 years and give us an opportunity to make sure we're not leaving something behind. And then also working with the deposits in the area. So that is part of the work that we will continue to do, and that will be a part of the life of mine optimization study. Okay, great. Thank you.

Again, if you have a question, please press star and then one. Please stand by as we poll for questions. Seeing no further questions, this will conclude our question and answer session as well as today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.