GOLD NEWS

Centerra Gold achieves $1 billion revenue milestone in 2011

Centerra's 2011 gold production declined 5%, but net earnings for the year were up on 27% lift in the gold price received. CEO predicts cash costs of $465-500/oz in 2012.

RENO (MINEWEB) - 

Centerra Gold Thursday reported 2011 gold production was within the company's guidance at 642,380 ounces, but dropped 5% from the 678,941 ounces mined in 2010.

The decrease was attributed to lower production at Boroo, which plunged 47% "as a result of lower head grades and recoveries processed through the mill. Mining ceased at Boroo last year , but resumed in January 2012.

Consolidated gold production for the fourth-quarter of 2011 totaled 151,562 ounces at a total cash cost of $603/oz, down from 249,866 ounces at a total cash cost of $308 per ounce in the same quarter of 2010.

As of Dec. 31, 2011, Centerra reported 8.1 million ounces in proven and probable gold reserves, which represents a 9% increase before accounting for 793,000 contained ounces processed at Kumtor and Boroo during 2011.  Centerra measured and indicated resources increased by 36% or 1.8 million ounces to total 6.7 million ounces of contained gold, compared to 4.9 million ounces at the end of 2010.

Centerra CEO Steven Lang said, "For 2012, consolidated gold production is expected to be in the 630,000 to 685,000 ounce range and total cash costs are expected in the $465 to $500 per ounce range."

Net earnings for 2011 were $370.9 million or $1.57 per share, up from $322.3 million or $1.37 per share in 2010. The increase reflects a 27% increase in the realized gold price in the year, and settlements of $14.1 million with the Kyrgyz Social Fund and $2.6 million with the Mongolian government and the contribution of $10 million to the Kyrgyz government for schools in the country.

Nevertheless, Centerra reported its achieved the milestone of $1 billion in revenue last year.

Exploration expenditures in 2011 were $39.6 million, reflecting higher spending in Mongolia and an increase in exploration activities elsewhere.

Capital expenditures total $187.9 million for 2011.

For the fourth-quarter 2011 Centerra reported net earnings of $79.4 million or 34-cents per share, down from net earnings of $150.8 million or 64-centers per share for the same quarter of 2010, due to lower gold sales in 4Q11.