Our CEO Paul Tomory shares insights, reflections, and plans for the future as we continue to unlock opportunities, maximize value, and drive future growth for Centerra. Our value-maximizing strategy is focused on demonstrating the unrecognized value of each asset through operational enhancements, technical optimization, and strategic deals. At the same time, we are committed to prioritizing our people, environment, and communities.
The President and CEO of Centerra Gold Paul Tomory participated in a fireside chat at the Gold Forum Americas 2024. It was a valuable opportunity to discuss Centerra’s strategy and value-maximizing plan for each of the assets in Centerra’s portfolio.
Centerra’s recent strategy is centered on driving value from our portfolio. Our focus is on demonstrating the unrecognized value of each asset through operational enhancements, technical optimization, and strategic deals, such as our recently announced additional agreement with Royal Gold. We are committed to progressively revealing the true worth of our assets, proving that they are more valuable than currently perceived by the market.
Mount Milligan is a copper-gold porphyry deposit in British Columbia, with permits and local agreements in place. It has measured and indicated resources that can support another decade of mine life. We’ve launched a preliminary economic assessment to evaluate the potential of a mine life extension beyond 2035. We continue to invest in exploration drilling to unlock the large mineral endowment at Mount Milligan, setting the stage for potential future resource additions.
In February 2024, Centerra and Royal Gold announced a mutually beneficial additional agreement that allowed us to immediately unlock incremental reserves and resources at Mount Milligan, extending the mine life to 2035. This allows Centerra Gold to look at the Mount Milligan copper-gold porphyry deposit much more broadly, and to assess its potential to be a multi-decade operation.
We are working on a site-wide optimization program, assessing all aspects of the operation to maximize the potential of the orebody. The program is focused on several key areas and its goal is to set up Mount Milligan for long-term success.
Our mine life at the Öksüt mine is to 2029. We do not anticipate significant extensions to the mine’s life, although we are doing some exploration. The Öksüt mine is generating cash and remains a strategic asset in Centerra’s portfolio.
We believe there are exciting opportunities in Türkiye, due to the very strong geology in the country. We believe there are valuable deposits in the region, and that there is an incumbency advantage for companies already operating in Türkiye.
Centerra has two mines in care and maintenance, both with significant resources. Molybdenum is considered by many to be a critical metal. The demand for molybdenum is driven by performance steel, used in nuclear, solar, offshore wind, gas infrastructure, and many other applications. The company’s strategy for its molybdenum business unit is centered on maximizing the value of its assets through a phased restart of operations at the Thompson Creek Mine in Idaho, leveraging significant synergies with the Langeloth Metallurgical Processing Facility in Pittsburgh.
Centerra’s revised strategy for the Goldfield project is to maximize returns by adopting a lower capital flowsheet. The focus of exploration has shifted to oxide and transition material, and we are running metallurgical testwork on run-of-mine heap leaching. This strategic pivot requires less capital and results in lower operating complexity. Despite these changes, the company remains confident in the project’s potential, and will be working on proving that concept.
Centerra is looking at M&A, focusing on assets in North America and Türkiye, where it currently operates, or other stable jurisdictions. M&A is a key part of our capital allocation strategy. We are also committed to dividends and continued buybacks. Finally, we expect to continue to invest in our internal projects and exploration within Centerra’s current portfolio.
NOTE: Discussion of the valuation as at February 2024.We acknowledge that the perceived undervaluation in the market may partly result from our exposure to molybdenum and past operational missteps, and the need to rebuild credibility. To do that, we intend to continue to allocate capital to our own assets, demonstrating their value, and to deliver every quarter, generating strong cash flow, paying dividends, and being a reliable operator.
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