Stable operating performance at current enterprises. At the end of 2018, the Company produced 730 koz of gold and 21.4 ktons of copper at Kumtor and Mount Milligan, respectively, exceeding the production plan of 665-705 koz of gold and 18.1-21.3 ktons of copper. Centerra Gold confirms operational forecasts for 2019 in the amount of 690-740 koz of gold and 29.5-34 tons of copper.
Launch of the new Oksut project in 2020. Thanks to the low-cost Oksut gold deposit, Centerra Gold will diversify its asset portfolio in the medium term and reduce the risks associated with political and operational factors in current operations. The company plans to launch the Oksut project in 1Q2020 and achieve project indicators for gold production in the amount of 110 koz by 2021-2022.
Low cash cost of production at future projects. According to SNL Metals (Global Mining Intelligence), Oksut and Kemess are low-cost deposits located in the first quartile of the global cost curve. After launching projects, the Company will be able to generate stable free cash flows in the long-term horizon.
Positive dynamics of gold and copper prices. An increase in gold and copper prices will significantly affect the Company's value. According to the market forecast of metal prices, the average annual increase in prices for gold (+2%) and copper (+3%) in the period 2019-2022 will provide positive support for the Company's financial performance.
Potential risks at Kumtor and Mount Milligan. We do not rule out increasing political risks at Kumtor and the resumption of operational problems on Mount Milligan on a distant horizon. On Mount Milligan, the Company annually expects to replenish water reserves during spring floods and already in April 2019 have upgraded infrastructure to gain access to nearby lakes to improve mine capacity. At Kumtor, there is still political risk associated with the extension of the strategic agreement with the government of Kyrgyzstan.
Recommendation Buy and 12M TP 9.35 CAD/share. An improvement at Mount Milligan operations, stable operating performance at Kumtor and asset diversification will have a positive impact on the Company's bottom line. The launch of Oksut and Kemess projects will allow the Company to increase production in gold equivalent by 14% by the end of 2026.
Stable operating performance at current enterprises. At the end of 2018, the Company produced 730 koz of gold and 21.4 ktons of copper at Kumtor and Mount Milligan, respectively, exceeding the production plan of 665-705 koz of gold and 18.1-21.3 ktons of copper. Centerra Gold confirms operational forecasts for 2019 in the amount of 690-740 koz of gold and 29.5-34 tons of copper.
Launch of the new Oksut project in 2020. Thanks to the low-cost Oksut gold deposit, Centerra Gold will diversify its asset portfolio in the medium term and reduce the risks associated with political and operational factors in current operations. The company plans to launch the Oksut project in 1Q2020 and achieve project indicators for gold production in the amount of 110 koz by 2021-2022.
Low cash cost of production at future projects. According to SNL Metals (Global Mining Intelligence), Oksut and Kemess are low-cost deposits located in the first quartile of the global cost curve. After launching projects, the Company will be able to generate stable free cash flows in the long-term horizon.
Positive dynamics of gold and copper prices. An increase in gold and copper prices will significantly affect the Company's value. According to the market forecast of metal prices, the average annual increase in prices for gold (+2%) and copper (+3%) in the period 2019-2022 will provide positive support for the Company's financial performance.
Potential risks at Kumtor and Mount Milligan. We do not rule out increasing political risks at Kumtor and the resumption of operational problems on Mount Milligan on a distant horizon. On Mount Milligan, the Company annually expects to replenish water reserves during spring floods and already in April 2019 have upgraded infrastructure to gain access to nearby lakes to improve mine capacity. At Kumtor, there is still political risk associated with the extension of the strategic agreement with the government of Kyrgyzstan.
Recommendation Buy and 12M TP 9.35 CAD/share. An improvement at Mount Milligan operations, stable operating performance at Kumtor and asset diversification will have a positive impact on the Company's bottom line. The launch of Oksut and Kemess projects will allow the Company to increase production in gold equivalent by 14% by the end of 2026.
