Centerra Gold's Goldfield Project Promises Strong Returns and Growth

Centerra Gold Highlights Economic Potential of Goldfield Project

The Goldfield Project showcases attractive financial metrics, aiming for an after-tax NPV of $245 million and an internal rate of return (IRR) of 30%.

Centerra Gold Inc. is excited to share the promising prospects of its Goldfield Project in Nevada. Following a detailed technical study, the company concludes that the project has a significant after-tax net present value (NPV) at 5% of $245 million and an impressive internal rate of return (IRR) of 30%. These projections are based on a long-term gold pricing assumption of $2,500 per ounce, together with the expected impacts from gold hedging strategies in the years ahead. Centerra intends to initiate detailed engineering and procurement activities right away, paving the way for project development and construction.

Centerra's President and CEO, Paul Tomory, expressed enthusiasm about advancing the Goldfield project. He remarked on the extensive technical work undertaken recently, contributing to enhanced project value and risk reduction. The combination of favorable gold prices and these improvements places the Goldfield project in a strong position to deliver substantial returns. The company plans to fund the project using its existing liquidity and anticipates a seven-year mine life, with average annual gold production reaching around 100,000 ounces during peak years, at an all-in sustaining cost of approximately $1,392 per ounce. Initial capital investment is projected at about $250 million, with production expected to begin by the end of 2028, contributing significantly to Centerra's production capabilities and cash flow.

Key Highlights of the Goldfield Project

Attractive Economic Outlook

The Goldfield Project is set to yield compelling economic outcomes, boasting low execution risk within a reliable mining jurisdiction. The expected after-tax NPV of $245 million and IRR of 30% make a robust case for the project. The strategic approach includes a hedging strategy aimed at locking in profits during the early phases of production, thus ensuring stability in cash flows. Centerra estimates the initial capital outlay for the project at $252 million, which covers essential pre-production costs, including stripping.

Favorable Gold Pricing and Market Strategy

The price of gold has surged by 30% since the start of the year, leading to increasing estimates for long-term prices. Centerra has adopted a proactive gold hedging strategy for part of its production in 2029 and 2030, ensuring strong profit margins while maintaining exposure to the uncertainties of the market. Nearly 80% of planned production remains unhedged, allowing for participation in the upside of rising gold prices over the mine's lifespan.

Enhanced Technical Assessments

Through diligent technical advances, Centerra aims to refine its processing strategy, introducing a hybrid approach to optimize metal recovery. Special attention has been directed to the processing of high-grade materials through improved crushing techniques, which is expected to significantly enhance recovery rates.

Contribution to Centerra’s Production Pipeline

The Goldfield Project is anticipated to amplify Centerra’s gold output, acting as a vital asset as the company leads towards potential growth in higher-capacity gold and copper projects elsewhere. This project addresses natural declines seen in the Öksüt Mine and stands to position Centerra favorably in its expanding production portfolio.

Overview of the Goldfield Project Developments

The Goldfield Project, characterized as a conventional open-pit heap leach initiative, is set against the backdrop of a premier mining area in Nevada. After comprehensive assessments, the outcomes indicate a seven-year life expectancy, with a target production of around 100,000 ounces annually during the peak years, while operating at an AISC of $1,392 per ounce. The anticipated cash inflow from Goldfield is projected to play a crucial role in sustaining Centerra’s ongoing business viability.

Permitting and Community Engagement

Permit acquisition is progressing in harmony with the project’s phased development strategy. Centerra has gained community support, signing partnership agreements that focus on mutually beneficial outcomes for residents. The project is poised to create local employment opportunities, alongside significant economic contributions to public funds.

With initial capital costs estimated around $252 million, the Goldfield Project is engineered to propel Centerra's operational and financial capacity forward, fostering a wave of development that champions economic growth for stakeholders.

Frequently Asked Questions

What is the expected financial outlook for the Goldfield Project?

The Goldfield Project is projected to achieve an after-tax NPV of $245 million and an IRR of 30%, making it financially attractive.

When is the first production expected from the Goldfield Project?

Centerra anticipates that first production will commence by the end of 2028.

How much is the initial capital cost for the Goldfield Project?

The total initial capital investment required for the Goldfield Project is estimated at approximately $252 million.

What strategies does Centerra have in place for gold price fluctuations?

Centerra has implemented a gold hedging strategy, covering 50% of expected production in 2029 and 2030, to lock in profit margins while keeping a large portion unhedged to benefit from rising prices.

What community benefits will the Goldfield Project provide?

The project is expected to create substantial employment opportunities and contribute over $300 million to local suppliers and services throughout its operational life.

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