VANCOUVER (miningweekly.com) – Canadian gold producer Centerra Gold has started construction of the Öksüt gold project, in Turkey.
The Toronto-headquartered miner received the last outstanding pastureland permit in January, paving the way for the project’s future development. Centerra has ramped up expenditures at the site, spending $5.4-million on the project during the first three months of this year, as construction crews mobilised and building of the main access road started.
Centerra expects to pour first gold from the mine in the first quarter of 2020. Subsidiary Öksüt Madencilik Sanayi ve Ticaret (Omas) is expected to invest about $220-million over 22 months to bring the Öksüt project into production, Centerra said.
Centerra has had an eventful quarter, closing the C$310-million friendly acquisition of rival AuRico Gold, and staving off an unsolicited offer from Aim-listed miner Chaarat Gold for the Kumtor mine, in Kyrgyzstan, valuing the flagship asset at about $800-million, Chaarat disclosed on Tuesday.
Headline earnings for the three-month period came in at $13.5-million, or $0.05 a share – down 76% year-on-year, but still beating the average analyst forecast calling for earnings of $0.02 a share.
Net earnings fell 84% to $9-million, or $0.03 a share, and included a charge related to the AuRico acquisition.
Revenues for the period fell 18% to $235.4-million, as lower production and sales impacted the bottom line.
Gold production fell 25% year-on-year to 129 764 oz of gold, with sales falling 30% to 132 432 oz. Copper output fell 51% over the comparable period of 2017 to 6.14-million pounds of copper, with sales dwindling 67% to 4.5-million pounds of red metal.
Centerra said the lower earnings in the first quarter reflected the shutdown and partial restart of milling operations at Mount Milligan, in British Columbia, owing to a water shortage. Also negatively impacting earnings was lower gold output at Kumtor, mainly owing to processing complex Sarytor reporting lower average gold head grades and lower recoveries, partially offset by a 9% higher realised gold price at 1 277/oz.
Centerra’s 2018 gold production is expected to be between 645 000 oz and 715 000 oz, which is unchanged from the previous guidance. The copper production guidance also remained unchanged at between 47-million and 52-million pounds.
All-in sustaining costs for the year are pegged at between $799/oz to $885/oz on a by-product basis, the company advised.
Since the start of the year, Centerra’s TSX-quoted equity has gained more than 20% in value, but on Wednesday lost about 2.64% to trade at C$7.75 a share.