Centerra Gold 2015 Third Quarter Results

Press Releases

This news release contains forward-looking information that is subject to the risk factors and assumptions set out on page 29 and in the Cautionary Note Regarding Forward-looking Information on page 34. It should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements and notes for the three and nine months ended September 30, 2015 and associated Management’s Discussion and Analysis. The condensed consolidated interim financial statements of Centerra are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. All figures are in United States dollars unless otherwise stated.

To view Management’s Discussion and Analysis and the Unaudited Interim Condensed Consolidated Financial Statements and Notes for the three and nine months ended September 30, 2015, please visit the following link:

http://media3.marketwire.com/docs/cg1027mdafs.pdf

Toronto, Canada, October 27, 2015: Centerra Gold Inc. (TSX: CG) today reported a net loss of $18.1 million or $0.08 per common share (basic) in the third quarter of 2015, compared to a net loss of $3.2 million or $0.01 per common share (basic) for the same period in 2014. The 2015 loss was the result of a non-cash impairment charge of $18.7 million ($0.08 per share) of the goodwill in the Kyrgyz reporting segment. Additionally, the third quarter of 2015 reflects lower operating costs and lower taxes, partially offset by fewer ounces sold and lower average realized gold price¹, in the quarter.

For the first nine months of 2015, the Company recorded net earnings of $44.5 million or $0.19 per common share (basic), compared to a net loss of $32.8 million or $0.14 per common share (basic) in the comparative period of 2014, reflecting a 28% increase in gold ounces sold and lower operating costs year-to-date and a non-cash impairment charge of $18.7 million ($0.08 per share).

2015 Third Quarter Highlights

Announced positive feasibility study results and the planned development of the Company’s 100% owned Öksüt Gold Project, subject to final approval of the Turkish environmental impact assessment (EIA) and receipt of all required permits.
Lowered all-in sustaining cost¹ guidance for the year to $827 to $875 per ounce sold reflecting lower diesel fuel prices and favourable exchange rates for local currencies at Kumtor.
Produced 107,485 ounces of gold in the third quarter, which includes 103,701 ounces at Kumtor and 3,784 ounces at Boroo, and 403,256 ounces of gold year-to-date.
All-in sustaining costs per ounce sold¹ of $1,089 for the third quarter and $881 year-to-date, which excludes revenue-based tax in the Kyrgyz Republic and income taxes.
Cash provided by operations in the third quarter totaled $41.1 million.
Kumtor received approval from the Kyrgyz State Agency for Environmental Protection and Forestry of its 2015 annual mine plan.
Following the quarter-end, announced the appointment of Scott Perry as CEO, effective November 1, 2015, to replace Ian Atkinson who is retiring and the appointment of Frank Herbert as President.

Centerra’s cash, cash equivalents and short-term investments at the end of the third quarter of 2015 decreased to $537.4 million after investing $69.1 million in its properties, making a $8.3 million payment to the Greenstone Gold Mines LP (the “Greenstone Partnership”) and paying $7.2 million in dividends in the quarter compared to $562.0 million at December 31, 2014. As at September 30, 2015, the Company had drawn $76 million on its $150 million revolving credit facility with the European Bank for Reconstruction and Development (EBRD), leaving a balance of $74 million undrawn. The amount drawn is due to be repaid in February 2016. Centerra believes, based on its current forecast, that it has sufficient cash and short-term investments to carry out its business plan in 2015 (see “2015 Outlook”).

Commentary

Ian Atkinson, President and CEO of Centerra Gold stated, “Kumtor again performed well during the quarter producing 103,701 ounces of gold and mining accessed the upper parts of the SB Zone as expected. We are on track to meet our production guidance and have lowered our all-in sustaining¹ and all-in cost¹ guidance reflecting lower diesel fuel prices, favourable exchange rates and overall better operating performance at Kumtor. Financially, the Company is in good shape with cash, cash equivalents and short-term investments of $537 million or $461 million, net of debt, at September 30, 2015. During the third quarter cash provided by operations was $41.3 million.”

“At the Öksüt Project in Turkey, we announced the development decision for the project, subject to final approval of the Turkish EIA and receipt of all required permits. The EIA process continues with formal approval from the Turkish regulatory authorities expected in the fourth quarter 2015, which will allow us to apply for all required permits. We expect to begin development of the Öksüt Project in the first quarter of 2016 with first gold production anticipated in the second quarter of 2017. Drilling at Öksüt in the quarter extended the Guneytepe deposit to the north and identified additional oxide gold mineralization which is expected to add to the existing resource estimate and drilling on the Keltepe NW prospect identified oxide mineralization which suggests the potential of additional oxide gold resources to complement the Keltepe and Guneytepe resources.”

“In Mongolia, we continued our discussions with the Government regarding Gatsuurt and have agreed to a 3% special royalty in place of the Government acquiring a 34% ownership interest in Gatsuurt. It is our understanding that the Government has recently submitted a revised proposal regarding its ownership interest in the Gatsuurt Project to Parliament for review.”

“At the Greenstone Gold Property, an updated resource calculation was completed during the quarter. As a result Centerra contributed to the partnership an additional C$11 million ($8.3 million) based on the results.”

“In the Kyrgyz Republic, on September 21, 2015, Kumtor received approval of its 2015 annual mine plan from the State Agency for Environmental Protection and Forestry. We have now received all approvals for the 2015 annual mine plan from the relevant Kyrgyz Republic agencies. On October 4, 2015, the country successfully held its parliamentary elections and we await the formation of the new government, which we will work with toward a resolution of all outstanding matters affecting the Kumtor Project. As we have stated previously any proposed resolution would need to be fair to all shareholders of Centerra,” Mr. Atkinson concluded.

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