Despite trouble at both its Boroo mine in Mongolia and its Kumtor mine in Kyrgyzstan, Centerra Gold (CG-T) managed to boost profits by 19.5% during the third quarter.
Earnings climbed to US$20.2 million or 9¢ a share on revenues of US$158.8 million, up from US$16.9 million or 8¢ per share on revenues of $139.4 million in last year’s corresponding period.
A higher realized gold price — US$959 per oz. against US$860 per oz. in the year-earlier period — and lower cash costs offset a drop in production at the company’s Boroo gold mine. Overall, Centerra produced 165,880 oz. gold during the period, compared with last year’s third-quarter production of 186,150 oz. However, cash costs also came down about 5% (due to lower operating expenses), coming in at US$424 per oz. gold. Gold sales were up a modest 2% to 134,800 oz.
Production fell 34% at the company’s Boroo mine against last year’s third quarter because of the suspension of the mine’s operating licences in June and an earlier shutdown of heap-leach operations. Mining and milling was allowed to resume at the end of July, but Centerra is still awaiting the green light to reopen its heap-leach pad. A temporary operating permit for the pad expired in April.
At the Kumtor mine, production held steady, with slightly lower grades and recoveries offset by higher throughput.
But access to a high-grade area of the SB Zone at the Kumtor open pit was delayed by the movement of ice and waste into the pit. (A portion of the orebody was initially covered by a glacial ice cap, and mine waste is currently stockpiled on ice.) The company says it has developed a plan to manage the movement.
Total production for 2009 is expected to come in at 620,000-630,000 oz. gold.
Centerra was spun off from Cameco (CCO-T) in 2004 as a joint venture with the Kyrgyz government. An agreement signed in June with the government reduced Cameco’s stake to under 50% and increased the government’s interest.
In Toronto, Centerra shares fell 2% or 20¢ to $8.30 on the news. The stock has a 52-week trading range of 93¢ (a low reached last November) to $8.74.
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