Capitalized stripping costs related to the development of the open pit includes $212 million cash and $77 million non-cash for a total forecast of $289 million.
Mongolia (Boroo & Gatsuurt)
At Boroo, 2013 sustaining capital expenditures are expected to be $10 million primarily for raising the tailings dam at Boroo ($6 million), and maintenance rebuilds and overhauls.
Growth capital for the Gatsuurt deposit is forecast at $1 million, related to environmental studies.
2013 Corporate Administration and Community Investment
Corporate and administration expenses for 2013 are forecast at $45 million, which includes $7 million for business development activities.
Total community investments for 2013 are forecast at $27.5 million, in accordance with Centerra's Community Investment policy. This investment includes $7.5 million for donations and sustainable development projects in the various communities in which Centerra operates and $20 million for strategic community investment projects. Note that these costs are not included in cash operating cost per ounce.
Material Assumptions & Risks
Material assumptions or factors used to forecast production and costs for 2013 include the following:
-- a gold price of $1,700 per ounce,-- exchange rates: -- $1USD:$0.99 CAD -- $1USD:47.0 Kyrgyz som -- $1USD:1,375 Mongolian tugriks -- $1USD:0.78 Euro-- diesel fuel price assumption: -- $0.80/litre at Kumtor -- $1.18/litre at Boroo
The assumed diesel price of $0.80/litre at Kumtor assumes that no Russian export duty will be paid on the fuel exports from Russia to the Kyrgyz Republic. Diesel fuel is sourced from separate Russian suppliers for both sites and only loosely correlates with world oil prices. The diesel fuel price assumptions were made when the price of oil was approximately $87 per barrel.
Other material assumptions include the following:
-- any recurrence of political and civil unrest in the Kyrgyz Republic will not impact operations, including movement of people, supplies and gold shipments to and from the Kumtor mine,-- the activities of the Parliamentary Committee and State Commission, referred to under the heading "Other Corporate Developments - Kyrgyz Republic - Kyrgyz Republic Parliamentary Commission Report and State Commission" in Centerra's management's discussion and analysis for the quarter ended September 30, 2012 filed on November 7, 2012 (the "Q3 2012 MD&A") do not have an impact on operations or financial results. No assurances can be given by the Company in this regard,-- the Government of the Kyrgyz Republic taking no action in connection with the matters referred to under the heading "Other Corporate Developments - Kyrgyz Republic - Kyrgyz Republic Parliamentary Commission Report and State Commission" in the Q3 2012 MD&A that has an impact on operations or financial results. No assurances can be given by the Company in this regard,-- the previously disclosed environmental claims received from the Kyrgyz regulatory authorities in the amount of $152 million, in aggregate, (see news release of December 14, 2012) and any further claims that may result from the State Commission, are resolved without material impact on Centerra's operations or financial results. No assurances can be given by the Company in this regard,-- grades and recoveries at Kumtor will remain consistent with the life-of- mine plan to achieve the forecast gold production,-- the Company is able to manage the risks associated with the increased height of the pit walls at Kumtor,-- the design of the new and expanded waste dumps at Kumtor adequately address the risks associated with size and stability,-- the dewatering program at Kumtor continues to produce the expected results and the water management system works as planned,-- the Company is able to satisfactorily manage the ice movement and to unload the ice and waste in the southeast portion of the Kumtor pit,-- prices of key consumables are not significantly higher than prices assumed in planning,-- no unplanned delays in or interruption of scheduled production from our mines, including due to civil unrest, natural phenomena, regulatory or political disputes, equipment breakdown or other developmental and operational risks,-- the royalty paid by Boroo increases to 10% after the Boroo stability agreement expires in July 2013 and the current 25% income tax rate remains unchanged, and-- all necessary permits, licenses and approvals are received in a timely manner.