Welcome!

News Feed Item

Centerra Gold Completes Preliminary Economic Assessment of the Oksut Project

TORONTO, ONTARIO -- (Marketwired) -- 02/19/14 -- All figures are in United States dollars

Centerra Gold Inc. (TSX: CG) announces the completion of a preliminary economic assessment study (PEA) on its 100% owned Oksut project located in south-central Turkey, about 295 kilometres southeast of the capital city of Ankara. The Oksut project is currently comprised of the Keltepe deposit and the smaller Guneytepe deposit.

The resource estimate used as the basis for the PEA was made as of December 31, 2013 using a cut-off grade of 0.2 grams per tonne of gold and a gold price of $1,300 per ounce and was announced in a news release dated February 5, 2014. The resource estimate consists of: (i) indicated mineral resources from the Keltepe deposit, estimated at 29 million tonnes grading 1.2 grams per tonne of gold for 1.1 million contained ounces of gold; and (ii) inferred mineral resources located at the Guneytepe deposit, estimated at 4.7 million tonnes grading 0.9 grams per tonne of gold for 134,000 contained ounces of gold.

The PEA envisions a conventional open-pit and heap leach facility with an expected 34 million tonnes of ore to be stacked at a maximum rate of 11,000 tonnes per day.

Highlights of the PEA study (using a $1,300 per ounce gold price) include:


--  11 year mine life (2016 to 2027),
--  Life of mine gold production of 893,000 ounces, average annual gold
    production of 125,000 ounces in years 4 through 6,
--  Total construction capital and preproduction costs of $166 million,
--  Total sustaining capital of $9 million,
--  All-in costs(1) for the project of $849 per ounce,
--  All-in costs including taxes(1) for the project of $914 per ounce,
--  After tax net present value (NPV) of $117 million at an 8% discount rate
    with a 19% project internal rate of return,
--  Payback on construction capital and pre-production costs is expected to
    be 4.5 years after production begins.

(1)  Non-GAAP measure. Centerra has adopted the World Gold Council's (WGC)
     guidelines regarding "all-in-costs". These financial measures do not
     have any standardized meaning prescribed by GAAP and are therefore
     unlikely to be comparable to similar measures presented by other
     issuers, even issuers applying the WGC's guidelines. See description of
     "Non-GAAP Measures" in the Company's Management Discussion & Analysis
     dated February 19, 2014 and filed on SEDAR.

The PEA is preliminary in nature and includes the use of inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Thus, there is no certainty that the PEA will be realized. Actual results may vary, perhaps materially. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA is subject to a number of assumptions, including, among others, that an environmental impact assessment will be completed within the required timelines, all required permits will be obtained in a timely manner, the Company will continue to have the support of local communities, a constant regulatory environment and no material increase occurs to the estimated costs. A full list of the relevant assumptions will be set out in the PEA.

Ian Atkinson, President and CEO of Centerra Gold stated, "We are very pleased with the positive results of the PEA study which confirmed our expectations based on the known resources. The Keltepe deposit is still open to the south in the direction of the Guneytepe deposit and we have additional exploration targets on our land package which we will continue to follow-up on through exploration and drilling. Now we will move forward with a feasibility study for the project with the target of achieving initial gold production sometime in late 2016."

The PEA study envisions a conventional open pit and heap leach facility with the mining of the two pits completed by a local mining contractor. The heap leach pad design is based on an expected 34 million tonnes of ore to be stacked at a maximum rate of 11,000 tonnes per day, with a nominal crush size of 80% less than 37.5 mm.

Over the life of mine, mining costs are estimated to average $2.77 per tonne mined, processing costs are estimated to average $4.00 per tonne processed and administrative costs will average about $9 million per operating year.

To account for mining dilution and losses during the mining process, the mineral resources have had a 95% factor applied to the gold grades in the production schedule and are constrained by an optimized pit shell defined using optimization software, a gold price of $1,300 per ounce, an overall metallurgical recovery of 77%, and estimated average mining, processing and administrative costs. Overall pit-slope angles range from 38 degrees to 42 degrees depending on the location in the pit and result in a low overall stripping ratio of 2.0 over the mine life.

Using a gold price of $1,300 per ounce and a discount rate of 8%, the Oksut open pit LOM outlined in the PEA has an estimated project NPV (after tax) of approximately $117 million and a project internal rate of return of 19% after accounting for all operating costs and capital expenditures related to the open pit operation as well as required tax and royalty payments. Additional exploration costs going forward have not been included in the financial analysis.

Sensitivities of the project NPV to the gold price, discount rate and other project variables are as follows:


 Sensitivities of Oksut Project Net Present Value to Gold Price and Discount
                                    Rate
                            (millions of dollars)

                 ------------------------------------------
                                      Discount Rate
                             ------------------------------
                 Gold Price
                  ($/ounce)          5%        8%       10%
                 ------------------------------------------
                 $1,100        $   81.0  $   36.7  $   14.5
                 ------------------------------------------
                 $1,200        $  131.8  $   77.7  $   50.3
                 ------------------------------------------
                 $1,300        $  181.1  $  117.7  $   85.2
                 ------------------------------------------
                 $1,400        $  224.7  $  153.4  $  116.7
                 ------------------------------------------
                 $1,500        $  267.8  $  188.6  $  147.6
                 ------------------------------------------

   Sensitivities of Oksut Project Net Present Value to other Variables at
                 $1,300 per ounce gold and 8% discount rate
                            (millions of dollars)

----------------------------------------------------------------------------
Variable                     Operating Costs   Capital Costs      Gold Grade
----------------------------------------------------------------------------
+15%                          $         75.4  $         99.9  $        181.3
----------------------------------------------------------------------------
Base Case                     $        117.7  $        117.7  $        117.7
----------------------------------------------------------------------------
-15%                          $        156.1  $        131.2  $         45.4
----------------------------------------------------------------------------

The inferred mineral resources located at the Guneytepe deposit have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of inferred mineral resources will ever be upgraded to a higher category.

The PEA will be available on the Company's website in middle of March, 2014.

Qualified Person & QA/QC

The PEA report was undertaken by Centerra staff with the assistance of several external consultants. Resource estimates, life-of-mine plan and other scientific and technical information in this news release and on Centerra's website were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and were reviewed, verified and compiled by Centerra's geological and mining staff under the supervision of Dan Redmond, Ontario Professional Geoscientist, Centerra's Director, Technical Services - Mining, who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the exploration drilling programs on the Oksut project have been done consistent with industry standards and independent certified assay labs have been used. Available quality control data indicates that the gold assay data used for resource estimation are reliable.

Cautionary Note Regarding Forward-looking Information

Information contained in this news release and the documents referred to herein which are not statements of historical facts, may be "forward-looking information" for the purposes of Canadian securities laws. Such forward looking information involves risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward looking information. The words "believe", "expect", "envision", "target", "intends", "estimate", "may", "will", and similar expressions identify forward-looking information. These forward-looking statements relate to, among other things, mineral resource estimates and Centerra's plans to conduct additional exploration and drilling work and to commence a feasibility study for its Oksut property in 2014.

Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by Centerra, are inherently subject to significant political, business, economic and competitive uncertainties and contingencies. There may be factors that cause results, assumptions, performance, achievements, prospects or opportunities in future periods not to be as anticipated, estimated or intended. These factors include: (i) tight time lines for the completion of an environmental impact assessment and permitting, since the project has to receive all necessary permits prior to January 2016 and the possibility of forfeiting the operating license as a result of any delays in such timelines; (ii) delays in recent years in the issuance of permits, particularly for State Forestry Land which covers part of the Oksut project area and on which the two open pits and part of the waste dump are located; (iii) the absence of condemnation drilling of the heap-leach and waste-dump sites, which may result in those sites being poorly located or requiring additional capital costs; (iv) potential opposition to the project by local communities or civil groups related to concerns over water usage in competition with agriculture, water quality, environmental impact from cyanide use in gold leaching, visual impacts, acoustic impacts, ambient air impacts or failure of the company to agree to local demands; (v) potential material increases in project development or operation costs due to increases in key consumables, inflation, imposed demands for infrastructure development or regulatory changes; (vi) further column tests being required to determine the variability of the metallurgical parameters and response of the Oksut oxide ore; (vii) the planning, design and costing of the key project infrastructure such as power, water and access being at a high level conceptual stage in the PEA; (viii) closure costs to cap waste rock and heap leach dumps; (ix) mine design, mining schedules, metallurgical flow sheets and process designs will require additional detailed work and economic analysis; and (x) internal studies to ensure satisfactory operational conditions and decisions regarding future targeted production must be carried out. See also "Risks that can affect our business" in the Company's Annual Information Form for the year ended December 31, 2012, available on SEDAR at www.sedar.com.

There can be no assurances that forward-looking information and statements will prove to be accurate, as many factors and future events, both known and unknown could cause actual results, performance or achievements to vary or differ materially, from the results, performance or achievements that are or may be expressed or implied by such forward looking statements contained herein or incorporated by reference. Accordingly, all such factors should be considered carefully when making decisions with respect to Centerra, and prospective investors should not place undue reliance on forward-looking information. Forward looking information is as of February 19, 2014. Centerra assumes no obligation to update or revise forward-looking information to reflect changes in assumptions, changes in circumstances or any other events affecting such forward looking information, except as required by applicable law.

About Centerra

Centerra Gold Inc. is a gold mining company focused on operating, developing, exploring and acquiring gold properties primarily in Asia, the former Soviet Union and other emerging markets worldwide. Centerra is the largest Western-based gold producer in Central Asia. Centerra's shares trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is based in Toronto, Ontario, Canada.

Additional information on Centerra is available on the Company's web site at www.centerragold.com and at SEDAR at www.sedar.com.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
To leverage Continuous Delivery, enterprises must consider impacts that span functional silos, as well as applications that touch older, slower moving components. Managing the many dependencies can cause slowdowns. See how to achieve continuous delivery in the enterprise.
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
Aspose.Total for .NET is the most complete package of all file format APIs for .NET as offered by Aspose. It empowers developers to create, edit, render, print and convert between a wide range of popular document formats within any .NET, C#, ASP.NET and VB.NET applications. Aspose compiles all .NET APIs on a daily basis to ensure that it contains the most up to date versions of each of Aspose .NET APIs. If a new .NET API or a new version of existing APIs is released during the subscription peri...
Security, data privacy, reliability, and regulatory compliance are critical factors when evaluating whether to move business applications from in-house, client-hosted environments to a cloud platform. Quality assurance plays a vital role in ensuring that the appropriate level of risk assessment, verification, and validation takes place to ensure business continuity during the migration to a new cloud platform.
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Ovum, a leading technology analyst firm, has published an in-depth report, Ovum Decision Matrix: Selecting a DevOps Release Management Solution, 2016–17. The report focuses on the automation aspects of DevOps, Release Management and compares solutions from the leading vendors.
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
StackIQ has announced the release of Stacki 3.2. Stacki is an easy-to-use Linux server provisioning tool. Stacki 3.2 delivers new capabilities that simplify the automation and integration of site-specific requirements. StackIQ is the commercial entity behind this open source bare metal provisioning tool. Since the release of Stacki in June of 2015, the Stacki core team has been focused on making the Community Edition meet the needs of members of the community, adding features and value, while ...
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.