Centerra Gold Inc.

Welcome to the Centuria Gold 2021 Second Quarter Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded Tuesday, August 10, 2021. Now let's turn the conference over to Mr. John Pearson, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Maria. Welcome to Sentara Gold's second quarter 2021 results conference call. Summary slides are available on Sentara Gold's website to accompany each of the speakers' remarks. Today's call is open to all members of the investment community and media in listen-only mode. Following the formal remarks, the operator will give the instructions for asking a question, and then we will open the phone lines to those questions. Please note that all figures are in U.S. dollars unless otherwise noted. Joining me on the call today is Scott Perry, President and Chief Executive Officer, Dan Desjardins, Chief Operating Officer, and Darren Millman, Chief Financial Officer. I would like to caution everyone that certain statements made today may be forward-looking statements and as such are subject to known and unknown risks which may cause our actual results to differ from those expressed or implied. Also, certain of these measures we will discuss today are non-GAAP measures, so please refer to our description of non-GAAP measures in our news release in MD&A issued earlier this morning. For a more detailed discussion of the material assumptions, risks, and uncertainties, please refer to our news release and MD&A, along with the unaudited financial statements and notes, and all of our other filings, which can be found on CDAR and EDGAR and on the company's website at centeragold.com. Now, I'll turn the call over to Scott.

Thanks, John, and good day, everyone. Thank you for joining us for our earnings conference call. I'm just referencing our accompanying slide presentation deck, and I'm just starting off on slide number five. I just want to start with some of the recent developments in the Kogi's Republic with regards to our Kumtor mine, and just some prepared remarks that I just want to iterate here. So look, it's been nearly three months since the Kyrgyz Republic took control of the Kumtor mine, and I would like to give an update on where things stand with regards to the company. We here at Sentera are very saddened for what our employees and friends who worked at Kumtor are going through. Our thoughts and best wishes go out to all those that were so closely affected by what the Kyrgyz government has done. It's important to note A key takeaway from the call today and our results is it's important to note that Sentera remains financially strong with solid performance and a healthy outlook at our other operations and businesses. These comprise the Mount Milligan Gold and Copper Mine, the Oxford Gold Mine, and our Molybdenum business unit. As illustrated in our Q2 results, our cash position at the end of June was up by almost $60 million US quarter on quarter and currently represents some $883 million. This represents total liquidity of almost $1.3 billion U.S. We remain on track to achieve our 2021 production and cost guidance at both the Mount Milligan and Oxford mines. Regarding the situation at Kumtor, it remains largely unchanged since we updated you after the Kyrgyz government seized the mine in mid-May, using unsubstantiated environmental, tax, and safety claims to appoint a so-called external manager to run the operation. Sadly, the government's unjustified actions have put thousands of well-paying jobs for Kyrgyz nationals and the businesses of hundreds of Kyrgyz suppliers at risk. The government's behavior has also threatened the future of foreign investment in the country. As you know, global investors want certainty. They want to know that a government will respect signed agreements and not change the rules without warning. So that is the state of play. As we've said all along, we prefer to engage in a constructive dialogue with the Kyrgyz authorities to resolve this dispute, as we have done in the past. But so long as the Kyrgyz authorities refuse to engage, we will continue to pursue legal steps to preserve the value of our assets and to protect the interests of our shareholders and our various other stakeholders. That includes binding international arbitration proceedings that we have initiated, as well as the court actions in Toronto and New York. As we said, while we continue to believe that the Kumtor mine is a valuable asset, with or without it, our company is financially strong, with significant cash on hand, no meaningful debt, and a robust outlook at our continuing operations in Canada and Turkey. Using that as a segue, if I can now transition to the next slide on slide six, I just want to provide some of the key highlights from our recent reported Q2 results. So the first bullet point here, First and foremost, in terms of safety, we continue to see our company-wide WorkSafe, HomeSafe leadership program paying dividends to the organization. During the quarter, a key highlight at our Oxford mine was where they achieved one million hours of consecutive lost-time, incident-free operations. All our sites are maintaining proactive COVID-19 measures, and in terms of our vaccination rollout, we're seeing very good progress, whereby we have now provided second vaccine second vaccines to 64% and 55% of our site employees at Mount Milligan and Oxford respectively second bullet point here one of the key notable achievements during the quarter that we're very proud of with regards to our Mount Milligan team is the ongoing improvements that they're demonstrating in the mill productivity during the quarter we saw excellent mechanical availability and Mount Milligan actually achieved record throughput to the quarter, exceeding 60,000 tons per calendar day. This is an excellent result. Third bullet point here, Darren, our Chief Financial Officer, will talk about this in more detail, but obviously following the seizure of the Kumtor mine, you're seeing the appropriate accounting classifications in our financial results whereby we have deconsolidated Kumtor and classified this as a discontinued operation during the quarter. This resulted in a change of control loss of some $926 million US. In terms of our continuing operations, in terms of the fourth bullet point here, we saw, again, a very good quarter of production. We're seeing very good productivity and very good unitary costs at our operations. Our company-wide gold output from our continuing operations was just under 70,000 ounces of gold and some 20 million pounds of copper output. In terms of the corresponding oil and sustaining costs in the sixth bullet point here, you can see company-wide we had a very low competitive oil and sustaining cost of some $676 per ounce. On the second last bullet point here, in terms of our guidance for this year, we're continuing to reiterate our guidance for Mount Newly and OXA, and I think if you look at the performance for the first half of this year, both operations are in excellent stead to achieve their guided outlook. Also, the very last bullet point, as you can see, we continue to be a financially strong company, a very profitable company. We're generating meaningful free cash flow. You can see our guidance here for this year. We're guiding for free cash flow up to $175 million from our continuing operations. Just moving on to the next slide, on slide seven, just some other key highlights here. The fourth bullet point, as I mentioned, we saw good production, good levels of gold output. Our corresponding all and sustaining cost was very low, so we saw good margins. And you can see here in the fourth bullet point, our continuing operations generated just under $31 million of positive free cash flow. In terms of our treasury position, the second last bullet point, we continue to have a peer-leading balance sheet. It's debt-free, and we finished the quarter with just under $883 million in cash. The last bullet point, you know, again, the board recognizing, you know, Recognizing the strong operating performance and financial performance during the quarter, we've increased our quarterly dividend to Canadian $0.07 per share. Just moving on to the next slide on slide eight, just again in terms of the company's cash flow profile and treasury profile, you can see the chart here in the top right. It's just an illustration of our balance sheet over the last five to six years. And you can see increasingly we've been building out our balance sheet just given the strong free cash flow levels that we've been generating from the operation. So as I mentioned earlier, it's a debt-free balance sheet, and we've got some $883 million in cash. Referencing the chart down the bottom, particularly the middle chart, this is Oxert, our newest operation in Turkey. We've had a great experience with Oxert in Turkey. We built this mine on time, on budget. Last year was a very successful year whereby the mine generated some $105 million in positive free cash flow. And as of today, we've essentially recouped more than half of our investment already. Here at Oxford, we're now transitioning into a higher grade profile. In the back half this year, you will see growing levels of gold output. And that will continue into 2022 and 2023 where we're expecting meaningful increases in gold output. So suffice to say, given that growing level of gold output, we're also expecting a meaningful increase in terms of profitability and free cash flow at Oxfam. Just moving on to slide nine, just in terms of our environmental social governance profile, a number of bullet points here. First bullet point, as I mentioned at the outset, safety is obviously absolutely paramount, and we continue to pursue a zero-harm environment. And we're seeing a number of milestones demonstrating that we're on track in that regard. The third bullet point, we had no environmental incidents during the quarter, which is as it should be. And the second last bullet point here, we're continuing the journey in terms of advancing our diversity, equity, and inclusion initiatives, including our current state assessment that was completed recently. Then the last bullet point, Sunterra is a member of the World Gold Council, and the approximately 18 months ago, rolled out their responsible gold mining principles. We are a signatory to these principles, and we are currently implementing these in our operations, and we are in good stead in terms of being able to attest to our full compliance to these principles in the coming 18 months. With that, I now want to pass the call over to Dan Desjardins, our chief operating officer. Dan, please.