"In November last year we announced the expansion of the open pit at Kumtor. This very exciting development resulted in a significant increase in value of the Kumtor deposit and included a 58% increase in proven and probable reserves to a total of 9.7 million contained ounces. Just as important, the new plan is expected to deliver consistent annual gold production averaging 650,000 ounces per year for next ten years."
"Finally, we and many of our peers in the industry are moving toward reporting an "all-in cash cost" methodology for our gold production. Having first reported along these lines with our announcement of the revised life-of-mine plan for Kumtor, we believe an all-in cash cost measure more fully reflects the actual cost of producing gold. Centerra's projected consolidated all-in cash cost per ounce produced for 2013, described in this release, is within a range of $1,067 to $1,164, and includes all costs except revenue-based taxes in the Kyrgyz Republic and income taxes. This demonstrates the Company's good margins at the current gold price and leverage to increases in the gold price. We continue to focus on our exploration and business development efforts as we look for additional operating platforms in an effort to increase our future gold production, diversify our regions of operation and help us achieve our goal of producing 1.5 million ounces of gold annually."
Outlook for 2013Centerra's 2013 gold production and unit costs are forecast as follows:---------------------------------------------------------------------------- 2013 Cash Operating 2013 Production Cost(1) 2013 All-in Cost(2) Forecast ($ per ounce ($ per ounce (ounces of gold) produced) produced)---------------------------------------------------------------------------- Kumtor 550,000 - 600,000 $ 342 - 373 $ 853 - 931---------------------------------------------------------------------------- Boroo 55,000 - 60,000 $1,055 - 1,151 $1,225 - 1,336---------------------------------------------------------------------------- Consolidated 605,000 - 660,000 $ 406 - 443 $1,067 - 1,164----------------------------------------------------------------------------(1) Cash operating cost per ounce produced is a non-GAAP measure and includes mine operating costs such as mining, processing, regional office administration, royalties and production taxes (except at Kumtor where revenue-based taxes are excluded), but excludes amortization, reclamation costs, financing costs, capital development, community investments, exploration and corporate general and administration expenses.(2) All-in cost per ounce produced is a non-GAAP measure and includes cash operating cost, sustaining and growth capital, corporate general and administrative expenses, global exploration expenses, and community investments, but excludes revenue-based taxes at Kumtor and income taxes.
2013 Production
Centerra's 2013 consolidated gold production is forecast to be in the 605,000 to 660,000 ounce range.
In 2013, approximately 50% of Kumtor's gold production is expected to occur in the fourth quarter creating a greater potential variability to Kumtor's 2013 production guidance. Centerra estimates that the Kumtor mine will produce between 550,000 and 600,000 ounces in 2013. Ore production in the fourth quarter is planned to come from the high-grade SB Zone ore that has several years of production history. The high-grade ore from the SB Zone is only available for mining at the end of the third quarter when it is exposed by Cut Back 15.
