Centerra Gold Inc. Common Shares

Thank you for standing by. This is the conference operator. Welcome to the Sentara Gold fourth quarter 2025 conference call. As a reminder, all participants are in 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 one on your telephone keypad. Should you need assistance during the conference, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Lisa Wilkinson, Vice President, Investor Relations and Corporate Communications with Sentara Gold. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Sentara Gold's fourth 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 last night outlines our fourth 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 presentations 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 on MD&A issued yesterday. I will now turn the call over to Paul Tamori.

Thanks, Lisa. Good morning, everyone. In the fourth quarter, we achieved strong operational performance at both Mount Milligan and Netsuit. Consolidated full-year production was over 275,000 ounces of gold and 50 million pounds of copper, surpassing the midpoint of our gold production guidance range. Consolidated all-in sustained costs on a by-product basis were 1,614 crowns, outperforming the low end of our guidance range. We ended the year with a cash balance of $529 million, demonstrating our ability to continue investing in the Thompson Creek Restart Project and our broader organic growth pipeline, while returning record capital to shareholders, including $94 million of buybacks and $41 million in dividends for the full year. Looking ahead to 2026, our production and cost guidance reflects stable operating performance across the portfolio. We expect our operations to continue to generate strong cash flow in 2026, providing the financial flexibility to advance our growth project pipeline while continuing to return capital to shareholders. Our self-funded growth strategy is being executed across multiple fronts. Last year, we published the Mount Milligan PFS, which extends the mine life by 10 years to 2045. We also commenced development of the Goldfield Project in Nevada, which will provide Sentera with additional exposure to future gold production in a top mining jurisdiction. And in the early part of this year, we announced the results of preliminary economic assessment for KEMES, along with an updated mineral resource. This was an important step forward in advancing Sentera's organic growth pipeline in British Columbia. Each of these growth opportunities, in addition to the Thompson Creek Resort Project in Idaho, can be funded from our existing liquidity and cash flow generated from operations. positioning Centera to deliver sustainable, low-risk growth while maintaining our strategic approach to capital allocation. An updated mineral resource, along with the results of the ChemSPEA, were released in January. The study outlines a de-risked restart plan that leverages substantial existing infrastructure and is focused on an integrated development strategy based on a conventional open pit and long-haul open-stoping underground mining operations. This approach sports an initial 15-year mine life with an average annual production of 171,000 ounces of gold and 61 million pounds of copper at an all-in sustaining cost on a byproduct basis of $971 per ounce. The project has robust economics with an after-tax NPV of $1.1 billion and an IRR of 16% using a long-term pricing of $3,000 per ounce gold and $4.50 per pound copper. The value of Comess increases to $2.8 billion in metal prices of $4,500 per ounce of gold and $6 per pound of copper. Comess is a high-quality growth project with the potential to contribute meaningful gold and copper production to Sentara's portfolio. We believe that Comess has the potential to become Sentara's second long-life gold-copper asset in British Columbia, located within the highly prospective Tutagon districts. The updated mineral resource at Comest contains 3.3 million ounces of gold and 1.1 billion pounds of copper in the indicated category, and 3.6 million ounces of gold and 1.2 billion pounds of copper in the inferred category. The expanded resource estimate reflects a thorough and disciplined evaluation of all available geological data across the site, including additional drilling and technical work in the Nugget Zone and the historical Comest South deposit. The PEA only evaluates the Comest main and Comest underground areas, which represent approximately 47% of the total indicated in inferred resource tons, highlighting the potential for additional resources to be incorporated to future technical studies. The updated mineral resource at Comest enhances the project's overall scale and supports its long-term production profile. Moving to the Comest capital profile, it is structured to reflect the project's phase development sequence With open pit mining starting first, the underground production added shortly thereafter. Approximately $770 million in initial non-sustaining capital is required to achieve first production from the open pit. This includes capital stripping, construction of the underground conveyor system from Comest Main to the Comest South process plant, and the refurbishment of the process plant and camp. An additional $277 million in expansionary non-sustained capital will be invested over the two years following open pit startup to support the commencement of underground operation. This includes underground development and the construction of a leach plant, which is expected to both improve overall gold recovery by approximately 14% and provide valuable optionality by enabling the processing of ore from potential satellite deposits in the future. CHEM-S represents a compelling growth opportunity for Sunterra, supported by strong economics and a significant off-site exploration potential in the deep CHEM-S offset zone along the CHEM-S East trend. We are now focused on ongoing exploration and are advancing technical work on a pre-feasibility study expected in 2027. Now I'd like to provide an update on our sustainability initiatives. In January, we successfully received all required permits to allow for the continuation of Mount Milligan's operations through 2035. These approvals also include a 10% increase in plant throughput beginning in 2028, as well as expanded stockpile capacity to enhance operational flexibility. Importantly, this expedited permitting process was a result of Mount Milligan being selected by the Province of British Columbia as one of four eligible mining projects back in 2025. The receipt of these amendments in less than one year reflects both the strength of our engagement with regulators and the province's commitment to supporting responsible economic development. At Uxsut, our commitment to strong social performance continues to receive external recognition. In 2025, Uxsut received nine awards from four leading international organizations recognizing our efforts and social responsibility. These awards reflect initiatives focused on empowering local female entrepreneurs, supporting youth education, strengthening environmental stewardship, and contributing to broader community development. Through initiatives like these, we continue to strive to create lasting positive impact. And with that, I'll pass the call over to David to walk through our operational performance for the quarter of the year.

Thanks, Paul. Slide 9 shows operating highlights at Mount Milligan for the fourth quarter. Mount Milligan produced over 44,000 ounces of gold and 13 million pounds of copper in the fourth quarter. Full year 2025 gold and copper production was over 147,000 ounces and 50 million pounds respectively, which was in line with the recently published PFS mine plan. In 2026, Mount Milligan gold production is expected to be 140,000 to 155,000 ounces, and copper production is expected to be 50 to 60 million pounds. Operating metrics, including gold and copper grades and recoveries, are expected to be in line with the recently announced PFS mine plan. Gold production and sales are expected to be lower in the first quarter and higher in the second and third quarters of 2026, reflecting the planned mine sequencing. Copper production and sales are expected to be evenly weighted throughout 2026. In the fourth quarter, all in sustaining costs on a byproduct basis were $913 per ounce, 38% lower quarter over quarter due to higher ounces produced and sold. Full year ASIC on a byproduct basis was $1,194 per ounce, below the guidance range. We expect ASIC on a byproduct basis in 2026 to be between $1,200 and $1,300 per ounce. Slide 10 shows the quarterly operating highlights at Oksuth. Fourth quarter production was over 26,500 ounces of gold. As part of planned mine sequencing, Heap leach tons stacked in the quarter were lower as mining activity focused on waste stripping in the Caltepe pit to open new ore zones in line with the 2026 mine plan. Oxsuit delivered full-year 2025 production above the top end of the guidance range, producing over 127,700 ounces of gold during the year. In 2026, gold production at AuxSuite is expected to be 110,000 to 125,000 ounces. Gold production and sales are expected to be evenly weighted throughout 2026. In the fourth quarter, ASIC on a byproduct basis was $1,748 per ounce. higher compared to last quarter due to lower gold ounces sold, higher sustaining capex, and higher royalty expense as a result of elevated gold prices. Full year 2025 ASIC on a byproduct basis was $1,613 per ounce outperforming the guidance range. 2026 all-in sustaining costs on a byproduct basis are expected to be $1,850 to $1,950 per ounce. Higher year-over-year primarily due to increased royalty rates from elevated gold prices and the impact of inflation in Turkey, which is not fully offset by the devaluation of the lira. The royalty is expected to account for approximately $650 to $750 per ounce of gold production costs in 2026. The impact of these factors is partially offset by lower sustaining capex. We continue to progress work on a life of mine optimization study at AUXUT to evaluate the assets' full potential, including the incremental production potential of residual leaching of the heap and the inclusion of low-grade oxide mineralization outside of the current reserve pit into the mine plan. The study will explore options to extend gold recovery from existing heap leach pads through improved solution management, which will enhance residual metal extraction efficiency. The study remains on track to be completed by the end of 2026. The restart of Thompson Creek is advancing with approximately 27% of the infrastructure refurbishment complete. Non-sustaining capex in the fourth quarter in full year 2025 was $51 million and $134 million respectively, which was in line with our guidance range. Since the September 2024 restart decision, Capital expenditures have totaled $164 million. Reflecting modest inflationary impacts since the 2024 feasibility study cost baseline, along with additional maintenance requirements for certain mining equipment and refinements to the mine plan, we have increased the project's total capital estimate by about 5% to 10%. from $397 million to between $425 and $450 million. The updated estimate also includes the pull forward of select activities, including the tailings dam Toe Pretras, to further de-risk execution and support the overall project schedule. The project remains on track for production in mid-2027. On January 29th, We suspended operations at our Langloff Metallurgical Facility near Pittsburgh following an explosion. No fatalities, serious injuries, or significant environmental releases were reported. The safety and well-being of our employees, contractors, and the surrounding community remain our top priority. We are conducting a thorough investigation to determine the root cause of the incident, and that process remains ongoing. Operations at Langloff remain temporarily suspended. The site team is cooperating with regulatory authorities, advancing repair activities, and planning for a safe restart, with full operations expected to resume by May 2026. The impact was contained to an area of the site near the acid plant. Repairs are expected to cost approximately $5 to $10 million. As a result of the temporary suspension, Working capital is expected to increase in the first quarter of 2026 as inventories build during the shutdown period. We continue to assess the full operational and financial impacts of this incident and will provide 2026 operating guidance for Langloff at a later date. I'll now pass it to Ryan to walk through our financial highlights for the quarter.

Thanks, David. Slide 12 details our fourth quarter financial results. Adjusted net earnings in the fourth quarter were $83 million, or 41 cents per share, which benefited from strong production at Milligan and elevated metal prices. Key adjustments to net earnings include $145 million related to the non-cash impairment reversal at Comess, $17 million of unrealized loss on the financial asset related to the additional agreement with Royal Gold, and $35 million of deferred income tax adjustments, among other things. For the full year of 2025, adjusted net earnings were $229 million, or $1.12 per share. In the fourth quarter, sales were over 68,000 ounces of gold and 12.5 million pounds of copper. The average realized price was $3,415 per ounce of gold and $4.69 per pound of copper, which incorporates the existing streaming arrangements at melt millage. Approximately 3.6 million pounds of molybdenum were sold in the fourth quarter at the Lane Law Facility at an average realized price of $23.78 per pound. Consolidated all-in sustaining costs on a byproduct basis in the fourth quarter were $1,646 per ounce. Full year 2025 all-in sustaining costs on a byproduct basis were $1,614 per ounce, outperforming the guidance range. Slide 13 shows our financial highlights for the board. In the fourth quarter, we generated strong cash flow from operations of $103 million and free cash flow of $12 million, proven by strong operational performance at Mount Milligan and Oxsuit, as well as elevated metal prices. In the fourth quarter, Mount Milligan generated $85 million in cash flow operations and $54 million in free cash flow. Oxsuit generated $57 million in cash flow operations and $44 million in free cash flow. The Molybdenum business unit used $15 million of cash in operations and had a free cash flow deficit of $61 million this quarter, mainly related to spending on the Thompson Creek restart and a working capital increase at Langlois. In the full year 2025, we generated $349 million in cash flow operations and $95 million in free cash flow. Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation. In the fourth quarter, we repurchased 2.3 million shares for total consideration of $30 million, a record level of quarterly buybacks, and we continue to believe that repurchasing our shares is an accretive high-return use of cash. We also declared a quarterly dividend of $0.07 per share. In the full year 2025, we have returned $135 million to shareholders, including $94 million in buybacks, which equates to about 5% of our outstanding shares, and $41 million in dividends. A key focus for Sentara is returning capital to shareholders, and we expect to remain active on the share buybacks dependent on market conditions. At the end of the year, our cash balance is $529 million, bringing total liquidity to $929 million. We also hold over $115 million in equity investments. This strong financial position gives us the flexibility to fully fund our organic growth projects at Milligan, Goldfield, Comess, and Thompson Creek, while continuing to return capital to shareholders. Slide 14 shows our 2026 outlook. This year, we expect to produce between 250,000 and 280,000 ounces of gold on a consolidated basis. Copper production is expected to be between 50 and 60 million pounds. The guidance ranges are focused on executing on the PFS mine plan at Mount Milligan and consistent operational performance at Oxford. Gold production and sales at Mount Milligan are expected to be higher in the second and third quarters of 2026, reflecting planned line sequencing, with approximately 20% of full-year gold production expected in the first quarter of the year. 2026 consolidated all-in sustaining costs are expected to be between $1,650 and $1,750 per ounce. We are committed to protecting and expanding margins through disciplined cost management and continuous operational initiatives sustainability. Sustaining capital expenditures in 2026 are expected to be 85 to 105 million, and non-sustaining capital expenditures are expected to be 260 to 315 million across our growth project pipeline. This includes approximately 190 to 220 million for the restart of operations at Thompson Creek, between 30 and 40 million at Goldfield, focused on launching long-lead procurement and initiating site establishment works, and $35 to $45 million at Meadow Milligan for haul truck additions and buttress foundation construction for the tailing storage facility. We continue to invest in exploration. This year, we expect to spend between $40 and $50 million on exploration, including $20 to $25 million on brownfield exploration and $20 to $25 million on greenfield and generative exploration programs. Over 90% of exploration expenditures are expected to be expensed. We expect our operations to continue generating strong cash flow in 2026, providing the financial flexibility to advance our growth project pipeline while returning capital to shareholders. I'll pass it back to Paul for some concluding remarks.

Thanks, Ryan. We're very pleased with our performance in 2025, reflecting strong operational execution, disciplined cost control, and assets that continue to generate meaningful free cash flow. Our balance sheet strength and consistent cash generation give us the flexibility to self-fund an attractive pipeline of low-risk, value-agreed growth. We'll continue to return capital to shareholders. With a stable operating base, a clear line of sight to growth at Mount Milligan, Comest, Goldfield, and Thompson Creek, and a disciplined approach to capital allocation, we believe Santerra is well-positioned to deliver sustainable value for shareholders in 2026 and beyond. With that, operator, we can open the call to questions, please.

We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star and then two. Our first question comes from Luke Bertozzi with CIBC. Please go ahead.

Hey, Paul and team. Thanks for taking my questions. I'd like to begin with the Langloff suspension. During the shutdown, I understand inventories and working capital are expected to build. How much more than concentrate has already been contracted for purchase in Q1 and Q2 2026?

Hey, Luke, I'll pass it over to Ryan.

Hey, Luke, good morning. I don't want to get into the necessary details on concentrate purchases. If you think of last year's volumes, which was about 14 to 15 million pounds, we were stepping up slightly from there, so that can give you a bit of a range. But you're right, we're going to continue to purchase concentrate during the shutdown, so there will be an associated inventory build over the next couple months.

I see. Do you think there's any flexibility from some of those suppliers or opportunities to temporarily reroute the concentrate?

Yeah, we're looking at all of that, right? We're working with our customers, obviously our downstream customers to try to find solutions. We're going to be looking at what we do with the concentrate, but our commercial team's working at trying to find the right solution there. There probably is homes for that concentrate, but we have to decide on what we're going to do with it and what our customers need eventually once we restart before we decide to move any concentrate or anything like that. So it It is a dynamic situation. I think we're evaluating it day by day here, and we're going to do what's best for the company and for our customers then.

Okay, thanks. Shifting to Mount Milligan, there's mention of water management projects in 2026. Can you elaborate the scope of some of those projects, and are they largely one time in nature, or should we expect them to continue into 2027?

Dave can take that one.

Yeah, hi, Luke. So the water work is something that's continuously ongoing. We're always replacing pumps, making sure we have the right amount of water coming in. And so it's a constant bit of work there. The capital this year is maybe a little bit higher than past years, but it's not substantially so. It's almost more of a sustaining piece. And I think there's one new set of a well field that we're putting in this year that would be the exception to that rule. but it's pretty much normal business of what we're doing with the water this year.

Okay, great. Well, congrats on the solid quarter and stable outlook. Thanks again for your time. Have a great day. Thanks, Luke.

And the next question comes from Jeremy Hoy with Canaccord Genuity. Please go ahead.

Hi, thanks for taking my questions. Mine is on MS on the PSS. Do you envision this being sort of an updated DEA with, you know, tightened assumptions around OpEx and CapEx and additional technical work, or is there an opportunity to potentially bring in additional resources if there's success on the exploration front and the conversion front?

Well, the purpose of the PFS that we've already launched here is to tighten up our assumptions advance the engineering and importantly get going on some of the environmental work that will be ultimately required for some of the permitting. In terms of the resource, I think what you're referring to is the PEA mines out not even half of the total resource. We will, of course, look to tighten up some of the drilling, move more from inferred to indicated. But in terms of the scope of the mine plan, we're quite happy with the 15-year mine life that we have and As the years go by and we do more drilling, we would look to expand the mine plan, but that is not the main objective of the PFS. The main objective of the PFS is to put forward a robust set of engineering and economics on the mine plan that was communicated in the PEA and leaving upside for the future. I mean, at the end of the day, a 15-year mine life is a really good starter plan, and we would look for additions to that beyond the initial phases of execution.

Perfect. Appreciate the caller. I'll step back and queue. Thanks.

And the next question comes from Don DeMarco with National Bank. Please go ahead.

Oh, thank you, Operator, and good morning, Paul and team. Thanks for taking the question. So, Paul, I saw the CAPEX increase at Thompson Creek, and a range was provided. So what represents the lower and the upper end of this range? And is the CAPEX to restart subject to potential further increases, or do you have fixed price contracts or other mechanisms in place that might mitigate future increases?

That increase was driven by a whole grab bag of different factors, and Ryan can detail how we worked up that increase estimate.

Yeah, hi, Don. Yeah, I think as Paul mentions, there's a whole host of things in there. A little bit of that is inflation. A little bit of it is extra maintenance on our equipment. There's not a huge amount of physical equipment being purchased that, you know, you need to lock in on fixed price contracts. We are obviously starting the no refurbishment. We have been signing some of the long-term contracts related to that. But a lot of this CapEx number is the actual mining and stripping, right? And that's impacted by how quickly you're able to mine, maintenance on your equipment, labor, and things like that. And so it's tough to exactly fix that number. That's why we gave a range to take into account the variability on the ongoing cost to do the stripping. But I don't think there's big changes in physical equipment costs that are going to impact that.

Okay, great. Thanks for that. So second question then. So you're showing strong cost discipline, both in finishing below the lower end of the full-year guidance last year and with only modest year-over-year cost increases in 26, whereas we see sector peers trending much higher in some cases. So broadly speaking, what underlies your cost performance across your portfolio and the cost discipline that you're showing in the 26?

If we start with Mount Milligan, which is the main part of our stability and cost, We have, as you know, been working on a site-wide optimization program over the last couple of years, and that has yielded really good cost discipline and cost control. The challenges in the past at Mount Milligan have been more grade and recovery-related, while our efforts on cost control have proceeded very well. The other benefit we're getting is on the byproducts from copper, and the strong copper prices have benefited us at Mount Milligan with Copper trading well above $4 here. That will continue. But it's first and foremost strong discipline on operating performance. On offshoot, I'll remind you of something that Dave said in his prepared remarks. A big part of the ASIC is, in fact, a royalty that is being paid at the higher gold price. So it comes with the significant margin expansion with a higher gold price. But because of the royalty scale, we are paying now a significant per ounce royalty cost at offshoots.

Okay, thanks for that, caller. That's all from me. I'll go step back into the queue. Thanks, Don.

Again, if you have a question, please press star and then one. Our next question comes from Brian MacArthur with Raymond James. Please go ahead.

Good morning. Thank you for taking my question. Paul, over the last few years, you've done a good job of highlighting internal growth, whether it's goldfields, extending, Mount Milligan, chemists, The other thing that's still sitting there is the NDACO mill. Given there's a lot of people wanting to build things at the moment in the world, is there any update on how you may be able to highlight some value there going forward? Thank you.

Well, I think you know NDACO better than most. It still has substantial militant resource and a world-class process plant. Our current strategy is to proceed and reopen the Thompson Creek mine, feed Langloff with concentrate from there, and our current strategy has Indaco coming online after Thompson Creek is mined out. So we're talking 10 years before that comes online. As conditions change, we may reassess that, but the current strategy is to not do anything at Indaco until Thompson Creek has been mined out.

Would you be willing to sell the mill to someone else?

Well, at the right price, we might consider it.

Great. Thank you very much for the update.

Thanks, Brian.

This concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.