Centerra production falls, posts loss
miningweekly.com
By: Liezel Hill
30th July 2009
Updated 3 hours ago
TORONTO (miningweekly.com) – Toronto-based gold-miner Centerra Gold posted a net loss of $79,6-million for the second quarter, compared with a $56-million profit a year earlier, after output declined and costs rose.
Centerra owns the Kumtor mine, in Kyrgyzstan and the Boroo operation, in Mongolia. It is also trying to secure an investment agreement before building a second Mongolian mine, Gatsuurt.
Stripping out once-off items, the company reported an adjusted net loss of $30,3-million, compared with a profit of $13,8-million in the second quarter of 2008.
Centerra produced 110 457 oz in the quarter, compared with 158 303 oz a year earlier, after the company mined less ore and lower grades, and the Boroo mine was hit by a strike and subsequently had its licence suspended.
The strike ended in June, however, and Centerra announced earlier this week that the permit had been reinstated.
Mining and milling activities at Boroo are expected to be fully operational by August 1, CEO Steve Lang said in a statement.
Revenue in the second quarter fell to $104,3-million, from $142,6-million in the same period a year ago.
Although it continues to encounter difficulties in Mongolia, Centerra was at least able to resolve long-running uncertainty over its Kumtor mine during the quarter.
Centerra and majority shareholder Cameco agreed to give the Kyrgyz government an increased share in Centerra, in exchange for security of tenure, a bigger concession area and a simplified, fixed tax regime of 14% of the gross revenue for the Kumtor mine.
The agreement with Kyrgyzstan helped ease investor uncertainty that had tainted Centerra since 2007, when the government considered a law which would challenge the validity of earlier Kumtor agreements, require the company to pay additional taxes, including on past activities, and proposed nationalising all the country's gold deposits under a State mining company. |
