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Centerra
Gold Inc. (TSX:CG - News) announced that it has
filed on SEDAR today an updated technical report for the Kumtor
Mine, which is located in the Kyrgyz Republic. The updated technical report
describes in detail Kumtor's new life-of-mine plan
(LOM), which extends the open-pit mining and milling operations of the Kumtor Project to 2021. The LOM plan is based only on
open-pit mineral reserves and has no provision for production from
underground mining activities. The LOM plan, including mining tonnage, grade,
recovery, and operating and capital cost estimates are described in detail in
Centerra's February 7, 2011 news release.
Using a gold price of $1,000 per ounce, the Kumtor
open-pit LOM plan has been used to project the net cash flow for the open pit
operations for the period of January 1, 2011 to 2021. Total gross revenue
from the sale of gold and minor silver credits are estimated to be nearly
$5.0 billion while direct operating costs are estimated to be $1.9 billion or
$385 per recovered ounce of gold produced. After further capital investments
of $405 million of sustaining and expansion capital, $505 million pre-strip
capital, and the payment of revenue-based taxes of $699 million in accordance
with the Agreement on New Terms, the resulting net cash flow for the Kumtor Project is estimated to be approximately $1.5
billion dollars.
Capital expenditure of $405 million includes $244 million for
sustaining capital, mostly related to the maintenance or replacement of
current open-pit mining equipment, and $161 million of expansion capital,
mostly related to the purchase of additional mining equipment and expansion
of the tailings management facility.
In 2011, costs related to the ongoing exploration are estimated to be
$12.4 million. The underground development and infill drilling project is
estimated to be $52 million for 2011. Neither of these are
considered in the cash flow projection.
A gold price of close to $654 per ounce is required to achieve neutral
net cash flow under the current open-pit LOM while meeting all anticipated
requirements for operations and capital expenditures, but excluding
exploration and underground development expenditures.
The technical report is available on SEDAR at www.sedar.com
and the Company's website at www.centerragold.com.
Qualified Persons
The scientific and technical information in this news release was
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 was reviewed,
verified and compiled by Dan Redmond, Centerra Gold
Inc., Jack Seto, BGC Engineering Inc. and Henrik Thalenhorst, Strathcona Mineral Services Limited, who are the
qualified persons for the purpose of NI 43-101 and who are the authors of the
updated technical report. The updated technical report describes the
exploration history, geology and style of gold mineralization at the Kumtor deposit. Sample preparation, analytical
techniques, laboratories used and quality assurance-quality control protocols
used during the drilling programs at the Kumtor
site and satellite deposits are described in the updated technical report. A
copy of the updated technical report can be obtained on SEDAR at
www.sedar.com and the Company's website at www.centerragold.com.
Cautionary Note Regarding Forward-looking Information
This news release and the documents referred to herein contain
statements which are not statements of current or historical facts and are
"forward-looking information" within the meaning of applicable
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. Wherever possible, words such as
"believe", "expect", "anticipate",
"contemplate", "target", "plan",
"intends", "continue", "budget",
"forecast", "projections", "estimate",
"may", "will", "schedule",
"potential", "strategy" and other similar expressions
have been used to identify forward-looking information. These forward-looking
statements relate to, among other things, Centerra's
expectations regarding future growth, results of operations (including,
without limitation, future production and sales, and operating and capital
expenditures), performance (both operational and financial), business and
political environment and business prospects (including the timing and
development of new deposits and the success of exploration activities) and
opportunities.
Although the forward-looking information in this news release reflects
Centerra's current beliefs as of the date of this
news release based on information currently available to management and based
upon what management believes to be reasonable assumptions, Centerra cannot be certain that actual results,
performance, achievements, prospects and opportunities, either expressed or
implied will be consistent with such forward-looking information.
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. Known and unknown factors could
cause actual results to differ materially from those projected in the
forward-looking information.
Factors that could cause actual results or events to differ materially
from current expectations include, among other things: the sensitivity of the
Company's business to the volatility of gold prices; the political risks
associated with the Company's operations in the Kyrgyz Republic; the impact
of changes in, or more oppressive enforcement of, laws, regulations and
government practices in the Kyrgyz Republic the impact of changes to, or the
increased enforcement of, environmental laws and regulations relating to the
Company's operations; the Company's ability to replace its reserves; ground
movements at the Kumtor Mine; waste and ice
movement at the Kumtor Mine; litigation; the
accuracy of the Company's reserves and resources estimate; the accuracy of
the Company's production and cost estimates; the success of the Company's
future exploration and development activities; competition for mineral
acquisition opportunities; the adequacy of the Company's insurance;
environmental, health and safety risks; defects in title in connection with
the Company's properties; the impact of restrictive covenants in the
Company's revolving credit facility; seismic activity in the vicinity of the
Company's operations in the Kyrgyz Republic; long lead times required for
equipment and supplies given the remote location of the Company's properties;
the Company's ability to enforce its legal rights; the Company's ability to
accurately predict decommissioning and reclamation costs; the Company's
ability to obtain future financing; the impact of current global financial
conditions; the impact of currency fluctuations; the effect of recent market
conditions on the Company's short-term investments; the Company's ability to
attract and retain qualified personnel; the Company's ability to make
payments including payments of principal and interest on the Company's debt
facilities; risks associated with the conduct of joint ventures; risks
associated with the Company's largest shareholder, the Kyrgyz government; and
possible director conflicts of interest. There may be other factors that
cause results, assumptions, performance, achievements, prospects or
opportunities in future periods not to be as anticipated, estimated or
intended. See "Risk Factors" in the Company's most recently filed
AIF available on SEDAR at www.sedar.com.
Furthermore, market price fluctuations in gold, as well as increased
capital or production costs or reduced recovery rates may render ore reserves
containing lower grades of mineralization uneconomic and may ultimately
result in a restatement of reserves. The extent to which resources may
ultimately be reclassified as proven or probable reserves is dependent upon
the demonstration of their profitable recovery. Economic and technological
factors which may change over time always influence the evaluation of
reserves or resources. Centerra has not adjusted
mineral resource figures in consideration of these risks and, therefore, Centerra can give no assurances that any mineral resource
estimate will ultimately be reclassified as proven and probable reserves.
Centerra's
mineral reserve and mineral resource figures are estimates and Centerra can provide no assurances that the indicated
levels of gold will be produced or that Centerra
will receive the gold price assumed in determining its mineral reserves. Such
estimates are expressions of judgment based on knowledge, mining experience,
analysis of drilling results and industry practices. Valid estimates made at
a given time may significantly change when new information becomes available.
While Centerra believes that these mineral reserve
and mineral resource estimates are well established and the best estimates of
Centerra's management, by their nature mineral
reserve and mineral resource estimates are imprecise and depend, to a certain
extent, upon analysis of drilling results and statistical inferences which
may ultimately prove unreliable. If Centerra's
reserve or reserve estimates for its properties are inaccurate or are reduced
in the future, this could have an adverse impact on Centerra's
future cash flows, earnings, results or operations and financial condition.
Centerra
estimates the future mine life of its operations. Centerra
can give no assurance that mine life estimates will be achieved. Failure to
achieve these estimates could have an adverse impact on Centerra's
future cash flows, earnings, results of operations and financial condition.
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 in this news release. 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 March 22, 2011. 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 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 a
leading North American-based gold producer and 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, Canada.
Additional information
Additional information on Centerra is
available on the Company's website at www.centerragold.com and on SEDAR at
www.sedar.com.
Contact:
John W. Pearson
Centerra Gold Inc.
Vice President, Investor Relations
416-204-1241
john.pearson@centerragold.com
www.centerragold.com
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