Centerra earnings shrink on Kumtor performance (January 31, 2006)

Lower head grades at the Kumtor gold mine in Kyrgyzstan increased production costs at Centerra Gold (CG-T) in 2005, leaving the gold miner with net earnings of US$42.4 million (US59 per share) on revenues of US$338.6 million.

Increased gold prices and higher production from the Boroo gold mine in Mongolia cushioned the effect but earnings were considerably lower than in 2004, when the company posted a profit of US$50.6 million on revenues of US$245.4 million.

Total cash costs — operating costs plus royalties — increased to US$241 per oz. in 2005 from US$187 the year before, largely on the back of an increase to US$274 at Kumtor, US$74 higher than in 2004. Production at Kumtor fell to 501,000 oz. from 657,000 oz., as mill head grade dipped to 3.4 grams per tonne from 4.4 a year ago.

At Boroo, production increased to 286,000 oz. from 218,000 in the ten months it was in production in 2004. Total cash costs rose to US$183 per oz. from US$149.

Centerra had US$305 million in current assets, including US$202 million in cash, at year-end.