Kumtor Operating Company

Bishkek, Kyrgyzstan

Kumtor Operating Company

Bishkek, Kyrgyzstan
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News Article | November 7, 2016
Site: www.marketwired.com

This news release contains forward-looking information that is subject to the risk factors and assumptions set out on page 29 and in the Cautionary Note Regarding Forward-looking Information on page 35. It should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements and notes for the three and nine months ended September 30, 2016 and the associated Management's Discussion and Analysis. The condensed interim consolidated financial statements of Centerra are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. All figures are in United States dollars unless otherwise stated. To view Management's Discussion and Analysis and the Unaudited Interim Consolidated Financial Statements and Notes for the three and nine months ended September 30, 2016, please visit the following link: http://media3.marketwire.com/docs/CG1107-mdafs.pdf Centerra Gold Inc. (TSX: CG) today reported net earnings of $66.9 million or $0.28 per common share (basic) in the third quarter of 2016, compared to a net loss of $18.1 million or $0.08 per common share (basic) for the same period in 2015. This reflects the processing of higher grade material from cut-back 17 at Kumtor, 19% higher average realized gold price1 in the period and an inventory impairment reversal of $15.4 million ($0.06 per share), while the comparative period in 2015 included a non-cash goodwill impairment charge of $18.7 million ($0.08 per share). For the first nine months of 2016, the Company recorded net earnings of $87.9 million or $0.36 per common share (basic), compared to a net earnings of $44.5 million or $0.19 per common share (basic) in the comparative period of 2015. This reflects the reversal of an inventory impairment of $27.2 million ($0.11 per share) and 34% lower corporate administration costs in the first nine months of 2016 and the recording of an $18.7 million ($0.08 per share) non-cash goodwill impairment in the comparative period. Centerra's third quarter results described in this news release do not include financial and operation data from Thompson Creek Metals Company Inc., which was acquired on October 20, 2016. Centerra's Kyrgyz Republic operating subsidiary, KGC is subject to an interim order of the Bishkek Inter-District Court in the Kyrgyz Republic prohibiting KGC from taking any actions relating to certain financial transactions, including transferring property or assets, declaring or paying dividends or making loans to Centerra. While such order does not prohibit KGC from continuing to use its cash resources to operate the Kumtor mine, cash generated from the Kumtor Project continues to be held in KGC and is not being distributed to Centerra. The interim order purports to secure KGC's potential liability for a previously disclosed claim brought by the Kyrgyz Republic State Agency for Environmental Protection and Forestry. The Company believes that such claim and the interim order are without foundation and violate the fundamental investment protections contained in the 2009 agreements governing the Kumtor Project, as, in particular, the order deprives Centerra of the fundamental economic benefits of ownership of the Kumtor Project. KGC appealed the interim order to the Kyrgyz Republic Supreme Court but such appeal was denied on October 19, 2016. Centerra has included the dispute in the ongoing international arbitration proceeding against the Kyrgyz Republic (see "Other Corporate Developments - Notice of Arbitration"). As at September 30, 2016, the cash balance of KGC was $121.6 million and is expected to continue to increase over time. In light of the continued inability of the Company to access cash generated by the Kumtor Project, including as a result of the denial by the Kyrgyz Republic Supreme Court of KGC's appeal of the interim order, the Company is deferring until its next regularly scheduled board meeting in December the consideration of declaring a quarterly dividend. The Company believes its cash at hand, cash from the Company's existing credit facilities, and cash flow from the Company's Mount Milligan operations will be sufficient to fund its anticipated operating cash requirements through to the end of 2017, although there can be no assurance of this. Absent access to cash held by KGC, the Company expects that it will be required to raise financing in order to fund construction and development expenditures on its development properties or to defer such expenditures. Centerra's cash, cash equivalents and short-term investments at the end of the third quarter of 2016 was $479 million (excluding cash restricted as a result of a court order in the Kyrgyz Republic, and the proceeds from the offering of Subscription Receipts which was completed in connection with the acquisition of Thompson Creek and held in restricted cash) compared to $542 million at December 31, 2015. The pro-forma cash, cash equivalents and short-term investments giving effect to the acquisition of Thompson Creek as at September 30, 2016 was $106 million (excluding the cash restricted by the Kyrgyz Republic court order). This amount gives effect to the payments made to discharge or redeem the outstanding Thompson Creek Senior Secured Notes. As at September 30, 2016, the Company had drawn $100 million on its $150 million corporate revolving credit facility with the European Bank for Reconstruction and Development (EBRD). Subsequent to the end of the third quarter, the Company drew an additional $50 million under the EBRD credit facility which is intended to be used solely for the Gatsuurt Project and related corporate overhead. The Company does not expect to expend such additional funds until it has signed a definitive investment agreement relating to the Gatsuurt Project with the Government of Mongolia. The additional $50 million was made available under the EBRD credit facility on the condition that the funds are to be re-paid if an investment agreement relating to the Gatsuurt Project has not been concluded with the Government of Mongolia by February 2018. The Company also intends to draw on the remaining $25 million available under the TCM Credit Facility which funds are expected to be used for working capital purposes at Centerra's Thompson Creek operations during the fourth quarter of 2016. Although the Company expects that such funds will be sufficient to fund operations at its Thompson Creek operations, there are no assurances in this regard. OMAS, the Company's wholly-owned Turkish subsidiary, entered into a $150 million credit facility agreement with UniCredit Bank AG and EBRD which expires on December 30, 2021 (the "OMAS Facility"). The purpose of the OMAS Facility is to assist in financing the construction of the Company's Öksüt Project. Access to the OMAS Facility is dependent on the satisfaction of certain conditions by November 30, 2016, including the receipt of all necessary permits. If the conditions are not satisfied or waived by such date, or an extension is not granted by the lenders, the commitments under the OMAS Facility will be cancelled. The Company continues to work on satisfying the conditions precedents by such deadline; however some conditions, such as the receipt of the pastureland permit, are beyond Centerra's control. There are no assurances that all conditions will be satisfied by the deadline, or that the lenders will provide any waivers or extensions. 1 Non-GAAP measure, see discussion under "Non-GAAP Measures". All-in sustaining costs exclude revenue-based taxes in the Kyrgyz Republic and income taxes. CEO Commentary Scott Perry CEO of Centerra Gold stated, "As we mined and processed the higher grade material from the SB Zone, Kumtor delivered strong gold production in the quarter, producing 166,000 ounces. Kumtor's all-in sustaining costs1 were in the lower cost quartile of the gold industry at $555 per ounce sold, well below our revised guidance for the year. During the third quarter, Kumtor generated $106 million of free cash, however without access to the cash generated from the Kumtor Project, the Company has decided to defer until December the consideration of declaring a quarterly dividend." "With our third quarter earnings release today, the Company increased its gold production guidance for Kumtor for the year to 520,000 - 560,000 ounces. We also lowered our expected all-in sustaining costs1 by 6% at Kumtor to $692 per ounce sold. The Company's consolidated (excluding Thomson Creek) all-in sustaining costs reduced by 7% to $744 per ounce sold, based on the mid-point of the ranges. We are well positioned to achieve our revised gold production and cost guidance for the year." "Following the quarter end, we successfully closed the $1 billion acquisition of Thompson Creek that creates a geographically diversified, high-quality, low cost gold producer with a strong growth pipeline. It diversifies Centerra's operating platform and adds high quality, low risk production and cash flow from the long-lived Mount Milligan mine. Centerra now has two cornerstone, high quality, low cost operating assets with the Kumtor and Mount Milligan mines, a more balanced operating asset base with a lower overall jurisdictional risk profile, significant low-cost gold production that will underpin significant cash flows into the future and we have retained optionality to stronger molybdenum prices through our new molybdenum asset base." Thompson Creek Update On October 20, 2016, the Company completed the acquisition of Thompson Creek Metals Company Inc. ("the Acquisition") for $1.03 billion. This included the redemption, at their call prices plus accrued and unpaid interest, or satisfaction and discharge, all of Thompson Creek's outstanding Senior Secured Notes due in 2017 and Unsecured Notes due in 2018 and 2019, representing $326.1 million, $349.7 million and $205.2 million, respectively. Concurrently with the Acquisition, the streaming arrangement with Royal Gold Inc. ("Royal Gold") associated with the Mount Milligan mine was amended, whereby Royal Gold's 52.25% gold stream at Mount Milligan has been converted to a 35% gold stream and an 18.75% copper stream. Royal Gold will continue to pay us US$435 per ounce of gold delivered to them and will pay 15% of the spot price per metric tonne of copper delivered to them. As part of the transaction, the Company closed a public offering pursuant to which the underwriters purchased on a bought deal basis 26,599,500 subscription receipts, at a price of Cdn$7.35 per subscription receipt for gross proceeds to the Company of approximately Cdn$195.5 million (the "Offering"). The funds were held by an escrow agent until the transaction was completed on October 20, 2016. Upon completion of the Acquisition, the net proceeds of the Offering, Cdn$185.7 million, were used to partially fund the redemption of the Secured and Unsecured Notes of Thompson Creek. The Acquisition involved the exchange of common shares, whereby one Thompson Creek share was exchanged for 0.0988 Centerra common shares. Thompson Creek preferred share units ("PSU") and restricted share units ("RSU") were exchanged for an equivalent number of Thompson Creek common shares, which were then exchanged for Centerra common shares at the exchange rate. In total, Centerra issued 22,327,218 Centerra common shares in accordance with the exchange ratio, representing approximately 8% of Centerra's issued and outstanding common shares following closing. The Centerra shares issued were equivalent to $112.3 million (including $1.6 million relating to the settled Thompson Creek PSUs and RSUs) using the October 19, 2016 closing price of Centerra's common share price of Cdn$6.60. Holders of Thompson Creek's stock options were issued 111,341 options to acquire common shares of Centerra, with the number of shares and exercise price adjusted for the exchange conversion ratio, and other terms consistent with Thompson Creek's outstanding stock options. Concurrently with the closing of the Acquisition, Centerra B.C. Holdings (a newly formed wholly-owned subsidiary of Centerra) entered into a $325 million credit agreement with a lending syndicate to finance a portion of the Acquisition and to pay certain related fees and expenses. The 5-year term facilities consists of a $75 million senior secured revolving credit facility (the "Revolving Facility") and a $250 million senior secured non-revolving term credit facility (the "Term Facility", collectively, the "TCM Credit Facility"). Centerra B.C. Holdings' obligations under the TCM Credit Facility are guaranteed by the assets of Thompson Creek and certain of Thompson Creek's material subsidiaries. For further information, refer to the Company's news releases dated July 5, 2016, July 20, 2016 and October 20, 2016 filed on SEDAR. The following is operating data from Thompson Creek regarding Mount Milligan for the first three quarters of 2016 and pre-dates the closing of the Acquisition. Information for the first and second quarters are taken from the public filings for Thompson Creek, however third quarter results have not been previously publicly disclosed nor were they reviewed by Thompson Creek's or Centerra's auditors. The operating data below is not included in Centerra's third quarter 2016 results. During the third quarter of 2016, Mount Milligan continued to achieve excellent safety performance. Construction of the permanent secondary crushing circuit continued to proceed on schedule. As previously announced, commissioning of major equipment and components of the secondary crusher commenced earlier in October, with routine testing and commissioning of all equipment and process circuits to continue over the next several weeks. First feed through the secondary crusher is expected in the fourth quarter of 2016. During the third quarter of 2016, Mount Milligan underwent a ten-day scheduled maintenance shutdown, which impacted mill throughput and availability, in connection with the planned semi-annual change of liners in the SAG mill and the integration of the existing ore handling conveyor systems with the new secondary crushing plant facility. For the nine months ended September 30, 2016, average daily mill throughput was 52,793 tonnes per day and mill availability was 92.6%. Copper and gold payable in copper concentrate produced for the third quarter of 2016 was 12.3 million copper pounds and 50,100 ounces, this was lower compared to the prior quarter (second quarter, 2016: 14.6 million copper pounds and 46,400 gold ounces), as a result of the scheduled maintenance shutdown as described above, as well as lower copper grades and lower copper and gold recoveries due to operational challenges in the flotation circuits. For the remainder of 2016, the primary operational focus will be to continue to optimize the mine and mill with the expectation to gradually increase recoveries. Third Quarter 2016 compared to Third Quarter 2015 1 Non-GAAP measure, see discussion under "Non-GAAP Measures". 2 Non-GAAP measure, see discussion under "Non-GAAP Measures". First Nine Months 2016 compared to First Nine Months 2015 At the Kumtor mine in the Kyrgyz Republic, mining activities in the third quarter of 2016 focused on mining the higher grade ore from the SB Zone from cut-back 17. In early October 2016, Kumtor completed cut-back 17, and is now developing cut-back 18. The mine has stockpiled sufficient inventory to process higher grade material through the remainder of 2016. Total waste and ore mined in the third quarter of 2016 decreased 17% to 34.8 million tonnes compared to 41.9 million tonnes in the comparative period of 2015. The decrease was mainly due to a 28% increased average haulage distance compared to the same period of 2015, as mining in the third quarter of 2016 was at greater depth and longer hauls were required. The Company mined 4.0 million tonnes of ore at 5.32 g/t in the third quarter of 2016 compared to 1.1 million tonnes of ore at 1.80 g/t in the comparative quarter. During the third quarter of 2016, Kumtor continued to process ore from cut-back 17. Gold production for the third quarter of 2016 was 166,030 ounces of gold compared to 103,701 ounces in the comparative period of 2015. The increase in ounces poured was the result of mining and milling higher grade ore from the SB Zone, while in the third quarter of 2015 the Company processed lower grade ore stockpiled from cut-back 16 and lower grade material within cut-back 17. During the third quarter, Kumtor processed 1.6 million tonnes, 5% more than the third quarter of 2015. Kumtor's average mill head grade was 4.11 g/t with a recovery of 81.4% in the third quarter of 2016, compared to 2.83 g/t with a recovery of 75.7% for the same period of 2015. The mill achieved increased throughput in the third quarter of 2016 averaging 17,074 tonnes per day compared to 16,262 tonnes per day in the comparative quarter. Mill throughput has increased as a result of blending harder and softer ore, opening screens in the SAG mill and increasing the grinding media sizes in the SAG and ball mills. Operating costs (on a sales basis)1 increased by $13.2 million predominantly due to increased sales of $46.7 million. The movements in the major components of operating costs (mining, milling and site support) in the third quarter of 2016 compared to the same period of 2015 are as follows: DD&A associated with sales, increased to $51.3 million in the third quarter of 2016 from $39.3 million in the comparative quarter of 2015. The increase in DD&A is mainly due to the increased depreciation charges relating to the ounces processed from cut-back 17 compared to the ounces processed in the comparative period and the higher ounces sold in the third quarter of 2016. All-in sustaining costs per ounce sold1, which excludes revenue-based taxes, for the third quarter of 2016 decreased 45% to $555 in the third quarter of 2016 compared to $1,000 in the third quarter of 2015. The decrease was primarily a result of lower operating costs per ounce sold, as explained above, (driven by processing higher mining grades from the SB Zone of cut-back 17, improving mill recovery through the year (81.4% by the third quarter) and the reversal of $27.2 million in inventory impairment), in addition to lower sustaining capital expenditures in the quarter. All-in costs per ounce sold2, which excludes revenue-based taxes, in the third quarter of 2016 was $574 compared to $1,014 in the same period of 2015, representing a decrease of 43%, for the same reasons explained above. Capital expenditures in the third quarter of 2016 totaled $54.9 million which includes $13.0 million of sustaining capital1 mainly on equipment rebuilds and overhauls, $3.2 million invested in growth capital1 and $38.7 million for capitalized stripping ($28.2 million cash). Capital expenditures the comparative quarter of 2015 totaled $80.7 million, consisting of $14.4 million for sustaining capital1, $1.4 million for growth capital1 and $64.9 million of capitalized stripping ($49.1 million cash). Öksüt Project At the Öksüt Project in Turkey, the Company spent $4.7 million and $10.0 million during the three and nine months ended September 30, 2016 respectively ($2.4 million and $6.0 million in the three and nine months ended September 30, 2015) on development activities to progress the ESIA (Environmental Social Impact Assessment), access and site preparation and detailed engineering works. With the approval of the feasibility study in July 2015, development costs at the Öksüt Project are now being capitalized. Following approval of the business opening permit from local authorities in December 2015, applications were submitted for the land usage permits (Forestry and Pastureland). On July 14, 2016, the Company's wholly-owned Turkish subsidiary Öksüt Madencilik Sanayi ve Ticaret A.S. ("OMAS") received the Forestry Usage Permit for the project and the operation permit for forestry area was obtained on August 26, 2016. The Pastureland permit is currently outstanding and the Company is working with the relevant agencies to obtain the permit. There are no assurances that the approval of the Pastureland permit or other permits will be obtained by the Company in a timely manner or at all. Even if the pastureland permit was received in the fourth quarter of 2016, the Company would not expect to begin construction activity at the Öksüt Project until April 2017 due to the advent of the winter season. As a result, first gold production would not be expected to occur before mid-2018. On April 5, 2016, OMAS entered into a $150 million credit facility agreement with UniCredit Bank AG to assist in financing the construction of the Company's Öksüt Project and in August 2016, EBRD became a lender under the OMAS Facility, underwriting $75 million. The interest rate on the Öksüt Facility is LIBOR plus 2.65% to 2.95% (dependent on project completion status). It is secured by Öksüt assets and is non-recourse to the Company. Availability of the Öksüt Facility is subject to customary conditions precedent, including receipt of all necessary approvals. If the conditions are not satisfied or waived by the deadline of November 30, 2016, or an extension is not granted by the lenders, the commitments under the OMAS Facility will be cancelled. The Company continues to work on satisfying the conditions precedents by such deadline, however some conditions, such as the receipt of the pastureland permit, are beyond Centerra's control. There are no assurances that all conditions will be satisfied by the deadline, or that the lenders will provide any waivers or extensions. Gatsuurt Project The Company continued to engage in discussions with the Mongolian Government regarding the definitive agreements relating to the Gatsuurt Project, during the quarter. During the quarter, the Company continued drilling on the property and carrying out resource definition, metallurgical, exploration, geo-technical and hydrogeological drilling in support of eventual project development. See "Other Corporate Developments - Mongolia". Greenstone Gold Property In the third quarter of 2016, the Company funded $5.3 million ($16.2 million in the first nine months of 2016) on project development activities ($33.5 million, cumulative to date) at Greenstone Gold Mine Limited Partnership ("GGM"). During the third quarter, work continued on preparing the bankable feasibility study for the Hardrock Project. In the first nine months of 2016, GGM recorded $5.0 million of costs relating to acquiring houses and land surrounding the project area. GGM submitted a draft Environmental Impact Study/Environmental Assessment ("EIS/EA") in February 2016 and received comments from the various provincial and federal regulatory agencies, as well as from other stakeholders. The comments received related primarily to the location and management of the tailings storage, the management and location of the waste dumps, and on water quality. Responses to the comments will be incorporated into the final EIS/EA submission scheduled to be made at the end of the first quarter of 2017. GGM continues to engage and consult with local communities of interest regarding mutually beneficial impact benefit agreements. Non-GAAP Measures This news release contains the following non-GAAP financial measures: all-in sustaining costs, all-in costs, and all-in costs (excluding development projects), all three measures with and without revenue-based taxes and income taxes. In addition, non-GAAP financial measures include adjusted operating costs in dollars (millions) and per ounce sold, as well as cost of sales per ounce sold, capital expenditures (sustaining), capital expenditures (growth) and average realized gold price. These financial measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers, even as compared to other issuers who may be applying the World Gold Council ("WGC") guidelines, which can be found at http://www.gold.org. Management believes that the use of these non-GAAP measures will assist analysts, investors and other stakeholders of the Company in understanding the costs associated with producing gold, understanding the economics of gold mining, assessing our operating performance, our ability to generate free cash flow from current operations and to generate free cash flow on an overall Company basis, and for planning and forecasting of future periods. However, the measures do have limitations as analytical tools as they may be influenced by the point in the life cycle of a specific mine and the level of additional exploration or expenditures a company has to make to fully develop its properties. Accordingly, these non-GAAP measures should not be considered in isolation, or as a substitute for, analysis of our results as reported under GAAP. Definitions The following is a description of the non-GAAP measures used in this news release. The definitions are similar to the WGC's Guidance Note on these non-GAAP measures: Adjusted Operating Cost, All-in Sustaining Costs and All-in Costs, excluding development project costs (including and excluding revenue-based taxes and income taxes) are non-GAAP measures used in this news release and can be reconciled as follows: Sustaining capital, growth capital and capitalized stripping presented in the All-in measures can be reconciled as follows: During the third quarter of 2016, exploration expenditures totaled $3.5 million, compared to expenditures of $3.1 million in the third quarter of 2015. Exploration activities during the quarter included: drilling, trenching, geological mapping, soil/chip and channel sampling, and ground geophysics. Mongolia Gatsuurt During the third quarter exploration drilling was completed in four areas at the Gatsuurt Project, the Northeast extension of Central Zone to GT-60, South Slope in an area northeast and upslope from the Central Zone ultimate pit limit, the southwest extension of Main Zone and the 49 Zone: Highlights of such drilling include Best results from drilling at the Northeast (GT-60) extension of the Central Zone and transitional area between the two zones include: The results from drilling expands incrementally the surface projection of GT-60 zone, but failed to connect the Central Zone and the Northeast extension. However, the ultimate boundaries GT-60 open-pit could be increased. Best results from drilling the South Slope in areas northeast and upslope from the ultimate open pit boundaries include: These holes expand South Slope mineralization further southeast outside of the ultimate open pit boundary. The best results from drilling at the Southwest extension of the Main Zone include: These holes suggest that economic grades may be further southwest of the Main Zone along the Sujigtei Fault. The drill holes produced mixed results with a combination of high-grade and low-grade mineralized envelope along the Sujigtei Fault. The above mineralized intercepts were calculated using a cut-off grade of 1 g/t Au and a maximum internal dilution interval of 4.0 metres. Drill collar locations and associated graphics are available at the following link: http://media3.marketwire.com/docs/CG1107-exp.pdf A listing of the drill results, drill hole locations and plan map for the Gatsuurt Project have been filed on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com and are available at the Company's web site. Other Projects Centerra continues to advance other projects in Armenia, Canada, Mexico, Nicaragua, Portugal and Turkey. Qualified Person & QA/QC Exploration information and related scientific and technical information in this news release regarding the Gatsuurt Project were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and NI 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and were prepared, reviewed, verified and compiled by Centerra's geological and mining staff under the supervision of Boris Kotlyar, a Certified Professional Geologist, Centerra's Director, Exploration, North America and Central America, who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the exploration drilling programs are done consistent with industry standards and independent certified assay labs are used. Production information and other scientific and technical information in this news release regarding the Mount Milligan Project were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and NI 43-101 and were prepared, reviewed, verified and compiled by Mt. Milligan's geological and mining staff under the supervision of Ian Berzins, Professional Engineer and Mount Milligan's Vice-President General Manager, who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the exploration drilling programs are done consistent with industry standards and independent certified assay labs. Except as noted above, all production information and other scientific and technical information in this news release were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and NI 43-101 and were prepared, reviewed, verified and compiled by Centerra's geological and mining staff under the supervision of Gordon Reid, Professional Engineer and Centerra's Vice-President and Chief Operating Officer, who is the qualified person for the purpose of NI 43-101, excluding Mount Milligan. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the exploration drilling programs are done consistent with industry standards and independent certified assay labs. Other Corporate Developments The following is a summary of corporate developments with respect to matters affecting the Company and its subsidiaries. Readers are cautioned that there are a number of legal and regulatory matters that are currently affecting the Company and that the following is only a brief summary of such matters. For a more complete discussion of these matters, see the Company's most recently filed Annual Information Form available on SEDAR at www.sedar.com. The following summary also contains forward-looking statements and readers are referred to "Caution Regarding Forward-looking Information". Kyrgyz Republic Notice of Arbitration On October 12, 2016, the Permanent Court of Arbitration in The Hague, Netherlands appointed a sole arbitrator for the arbitration proceeding brought by Centerra against the Kyrgyz Republic and Kyrgyzaltyn earlier this year. An initial conference with the arbitrator to establish arbitration procedures is scheduled for November 30, 2016. As previously disclosed, on May 30, 2016, Centerra delivered a notice of arbitration to the government of the Kyrgyz Republic and Kyrgyzaltyn in connection with certain ongoing disputes relating to the Kumtor Project. These include, among other things: (i) each of the claims brought by the Kyrgyz Republic State Inspectorate for Environment and Technical Safety ("SIETS") and the Kyrgyz Republic State Agency for Environmental Protection and Forestry ("SAEPF") and the decisions of the Kyrgyz Republic courts related thereto; and (ii) the previously announced claims of the Kyrgyz Republic General Prosecutor's Office ("GPO") seeking to unwind a US$200 million inter-corporate dividend paid by KGC to Centerra in December 2013 and the related search of KGC's Bishkek office conducted on April 28, 2016. On July 12, 2016, the Company delivered an amended notice of arbitration to the Kyrgyz Republic Government and Kyrgyzaltyn to include, among other things, subsequent court decisions of the Kyrgyz Republic courts in relation to the claims of SIETS and SAEPF and actions by Kyrgyz Republic instrumentalities, including the GPO, which interfere with KGC's operations. Under Centerra's Restated Investment Agreement with the Kyrgyz Republic dated as of June 6, 2009 (the "2009 Restated Investment Agreement"), the arbitration will be determined by a single arbitrator. The arbitration will be conducted under UNCITRAL Arbitration Rules in Stockholm, Sweden, disputes arising out of the 2009 Restated Investment Agreement will be governed by the law of the State of New York, USA and the conduct and operations of the parties will be governed by the 2009 Restated Investment Agreement, the 2009 Restated Concession Agreement and the laws of the Kyrgyz Republic. Even if the Company is successful in convincing the arbitrator to reduce the amounts claimed or overturn the claims brought by SIETS, SAEPF or other matters which the Company believes are subject to the notice of arbitration, there are no assurances that such an arbitration award would be recognized and enforced by courts in the Kyrgyz Republic, as the courts of the Kyrgyz Republic have held that certain claims brought by SIETS and SAEPF are not within the scope of the arbitration provision of the 2009 Restated Investment Agreement. Accordingly, the Company may be obligated to pay part of or the full amounts of, among others, the SIETS and SAEPF claims regardless of the action taken by the arbitrator. The Company does not have insurance or litigation reserves to cover these costs. If the Company were obligated to pay these amounts, it would have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial condition. Kyrgyz Permitting and Regulatory Matters As previously noted, KGC now has all the necessary permits and approvals in place for continuous operations at the Kumtor Project through the end of 2016. However, the Company notes that on July 11, 2016, SAEPF again expressed concerns to KGC about approving Kumtor's Ecological Passport due to the application of the 2005 Kyrgyz Republic Water Code and would not provide the renewed Ecological Passport. The Ecological Passport identifies some of the permits and approvals required by Kumtor for its operations. KGC continues to be in discussions with SAEPF but does not believe that the absence of the Ecological Passport will have any effect on the Kumtor Project operations. While KGC management will continue to work closely with SAEPF and the Kyrgyz State Agency for Geology and Mineral Resources to obtain all necessary permits and approvals for continued operation of the Kumtor Project beyond December 31, 2016, Centerra can provide no assurance that such permits and approvals will be granted in a timely fashion or at all. Failure to obtain the necessary permits and approvals in a timely fashion could lead to suspension of Kumtor Project operations until such permits and approvals are obtained. KGC continues to operate fully in compliance with permits as granted. The Company understands that the delay in obtaining the necessary approvals and permits related to, among other things, concerns regarding the mining of ice at Kumtor. With regard to the mining of ice, regulatory authorities referenced the 2005 Water Code of the Kyrgyz Republic (Water Code) and its prohibition regarding the mining of ice. Centerra has repeatedly disputed the interpretation of the Water Code by the regulatory agencies based on the rights provided to Centerra and KGC under the agreements governing the Kumtor Project. Should Kumtor be prohibited from moving ice (as a result of the purported application of the Water Code) or if any required permits are withdrawn or not renewed, the entire December 31, 2015 mineral reserves at Kumtor, and Kumtor's current life-of-mine plan would be at risk, leading to an early closure of the operation. Centerra believes that any disagreements with respect to the foregoing would be subject to international arbitration under the Kumtor Project Agreements. Draft Kyrgyz Republic Bills In June 2016, the Kyrgyz Republic Parliament posted a draft bill, for public comment, of the "Law on Nationalization of Kumtor Gold Company CJSC's Property". The draft bill proposes the nationalization of all assets of KGC, and the suspension of the effect of the 2009 Restated Investment Agreement, among other laws and agreements relating to the Kumtor Project. In addition in June 2016, the Kyrgyz Republic Parliament posted a draft bill, for public comment, of the "Law On legal responsibility of persons committing offenses against Kumtor gold field" which proposes to amend the Kyrgyz Republic Constitution to remove the statute of limitations for crimes committed in connection with the Kumtor Project. In November 2016, the Kyrgyz Republic called a referendum, scheduled for December 11, 2016, on the question of whether to amend the Kyrgyz Republic constitution in order to eliminate the limitation period for criminal offenses committed in connection with the Kumtor Project. As previously noted, the Company is not aware of any basis for allegations of misconduct in connection with the development of the Kumtor Project. Centerra has previously asked the Kyrgyz Republic government for evidence of such wrongdoing but has never received any such evidence. As previously disclosed, the Kumtor Project has in recent years been threatened with proposed Parliamentary decrees and draft laws that would have the effect of nationalization. While the Company believes that it is unlikely that such bills will be adopted, it cannot predict with certainty the likelihood of adoption. If such bills were passed, they could have a material adverse impact on the Company's interest in the Kumtor Project, future cash flows, earnings, results of operations and financial condition. SIETS and SAEPF Claims As previously disclosed, the Kumtor Project is subject to a number of claims made by, among others, Kyrgyz Republic state environmental agencies. The Company believes that such claims are, in substance, an attempt by the Kyrgyz Republic to impose additional taxes and payments on the Kumtor Project which are prohibited by the terms of the 2009 Restated Investment Agreement. Such claims are not based on allegations of improper environmental practices or damage to the environment. The latest such claim, originally filed on August 23, 2016 by the Chui-Bishkek-Talas Local Fund of Nature Protection and Forestry Development of SAEPF, seeks compensation for environmental pollution in the amount of 40,340,819.01 Kyrgyz soms (approximately US$600,000). As previously disclosed, on May 25, 2016, the Bishkek Inter-District Court in the Kyrgyz Republic ruled against Kumtor Operating Company ("KOC"), Centerra's wholly-owned subsidiary, on two claims made by SIETS in relation to the placement of waste rock at the Kumtor waste dumps and unrecorded wastes from Kumtor's effluent and sewage treatment plants. The Inter-District Court awarded damages of 6,698,878,290 Kyrgyz soms (approximately US$99.4 million, based on an exchange rate of 67.4 Kyrgyz soms per US$1.00) and 663,839 Kyrgyz soms (approximately US$10,000), respectively. On June 1, 2016, the Inter-District Court ruled against KOC on two other claims made by SIETS in relation to alleged land damage and failure to pay for water use. The Inter-District Court awarded damages of 161,840,109 Kyrgyz soms (approximately US$2.4 million) and 188,533,730 Kyrgyz soms (approximately US$2.8 million), respectively. Centerra and KOC strongly dispute the SIETS claims and have appealed the decisions to the Bishkek City Court and will, if necessary, appeal to the Kyrgyz Republic Supreme Court. On June 3, 2016, the Inter-District Court held a hearing in respect of the claim made by SAEPF alleging that Kumtor owes additional environmental pollution fees in the amount of approximately US$220 million. The court did not issue a decision on the merits of the claim itself. However, at the request of SAEPF, the court granted an interim order against KGC, to secure SAEPF's claim. The interim order purports to prohibit KGC from taking any actions relating to certain financial transactions including, transferring property or assets, declaring or paying dividends or making loans. The cash generated from the Kumtor Project which is held in KGC is however available to fund Kumtor's operation. KGC's appeal of the Inter-District Court's order to Bishkek City Court was dismissed on July 19, 2016 and its subsequent appeal to the Kyrgyz Republic Supreme Court was dismissed on October 19, 2016. As a result of the appeal by KGC, the proceedings on the merits of the SAEPF claim were suspended, however, the Company now expects such hearings on the merits to resume. As noted above, a Kyrgyz Republic court order purports to; (i) require cash generated from the Kumtor Project to continue to be held in KGC; and (ii) prevent distribution of such cash to Centerra. As at September 30, 2016, KGC and KOC's cash balance was $121.6 million. Criminal Proceedings Against Unnamed KGC Managers On May 30, 2016, a criminal case was opened by the GPO against unnamed KGC managers alleging that such managers engaged in transactions that deprived KGC of its assets or otherwise abused their authority, causing damage to the Kyrgyz Republic. Specifically, the case appears to be focused on the commercial reasonableness of certain of KGC's commercial transactions and in particular, the purchase of goods and supplies in the normal course of its business operations and the expenses relating to the relocation of the Kumtor Project's camp in 2014 and 2015. Further to such investigation, the GPO has carried out searches of KGC's offices and seized documents and records. The Company and KGC strongly dispute the allegation that any such commercial transactions or the actions of KGC managers were in any way improper. The Company and KGC will challenge the actions of the GPO in the courts of the Kyrgyz Republic as well as in international arbitration. 2013 KGC Dividend Civil and Criminal Proceeding On June 3, 2016, the Inter-District Court renewed a claim previously commenced by the GPO seeking to unwind the $200 million dividend paid by KGC to Centerra in December 2013 (the "2013 Dividend"). The Company understands that the GPO has also initiated a criminal investigation of executives of the Company and KGC in respect of the 2013 Dividend but that investigation is currently suspended. KGC Employee Movement Restrictions In connection with the foregoing criminal investigations, restrictions have been imposed on certain KGC managers and employees, which prohibit them from leaving the Kyrgyz Republic. GPO Review of Kumtor Project Agreements On June 14, 2016, according to reports in the Kyrgyz Republic, the Kyrgyz Republic President instructed the GPO to investigate the legality of the agreements relating to the Kumtor Project which were entered into in 2003, 2004 and 2009. The 2009 Restated Investment Agreement governing the Kumtor Project which was entered into in 2009 superceded entirely the 2003 and 2004 agreements. The 2009 Restated Investment Agreement was negotiated with the Kyrgyz Republic government, Kyrgyzaltyn JSC and their international advisers, and approved by all relevant Kyrgyz Republic state authorities, including the Kyrgyz Republic Parliament and any disputes under the 2009 Restated Investment Agreement are subject to resolution by international arbitration. Criminal Charges Regarding 2016 Casualty at Kumtor Mill On June 16, 2016, the Investigator of the Jety-Oguz District Department of Interior Affairs initiated criminal proceedings against two KGC managers in relation to the previously disclosed death of a KGC employee due to an industrial accident which occurred in January 2016. Management Assessment of Claims The Company remains committed to working with Kyrgyz Republic authorities to resolve these issues in accordance with the agreements governing the Kumtor Project ("Kumtor Project Agreements"), which provide for all disputes to be resolved by international arbitration, if necessary. Although the Company has reviewed the various claims discussed above and believes that all disputes related to the 2009 Restated Investment Agreement should be determined in arbitration, there is a risk that the arbitrator may reject the Company's claims. There are also risks that an arbitrator will determine it does not have jurisdiction and/or may stay the arbitration pending determination of certain issues by the Kyrgyz Republic courts. These claims include, but are not limited to, (i) the validity or enforceability of the 2009 Restated Investment Agreement itself, (ii) criminal claims and (iii) any claims that a non-party to the 2009 Restated Investment Agreement has brought in Kyrgyz Republic courts. There is also risk that a Kyrgyz Republic court would not confirm and/or enforce an arbitration award issued by the arbitrator. There are also no assurances that: (i) the Company will be able to successfully resolve any or all of the outstanding matters affecting the Kumtor Project; (ii) any discussions between the Kyrgyz Republic government and Centerra will result in a mutually acceptable solution regarding the Kumtor Project Agreements; (iii) Centerra will receive the necessary legal and regulatory approvals under Kyrgyz law and/or Canadian law for any such solution; or (iv) the Kyrgyz Republic government and/or Parliament will not take actions that are inconsistent with the government's obligations under the Kumtor Project Agreements, including adopting a law "denouncing" or purporting to cancel or invalidate the Kumtor Project Agreements or laws enacted in relation thereto. The inability to successfully resolve all such matters could lead to suspension of operations of the Kumtor Project and would have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial condition. Mongolia Gatsuurt - Development Throughout the first half of 2016, the Company held discussions with the Mongolian Government to implement the previously disclosed 3% special royalty in lieu of the Government's 34% direct interest in the Gatsuurt project. Various working groups were established by the Mongolian Government to negotiate with Centerra and its wholly owned subsidiary, Centerra Gold Mongolia ("CGM"), the definitive agreements relating to the Gatsuurt Project. The Company continued such discussions through the third quarter. Concurrent with the negotiations of such agreements, the Company is undertaking economic and technical studies to update the existing studies on the project, which were initially completed and published in May 2006. There are no assurances that Centerra will be able to negotiate definitive agreements with the Mongolian Government (in a timely fashion or at all) or that such economic and technical studies will have positive results. The inability to successfully resolve all such matters could have a material impact on the Company's future cash flows, earnings, results of operations and financial condition. Gatsuurt - Illegal Mining CGM and Centerra continue to work with appropriate Mongolian federal and aimag (local) governments, relevant state bodies and police to clear the Gatsuurt site from artisanal miners and to restrict their access to the site. Centerra does not support any violence or excessive use of force in encounters between Mongolian authorities and artisanal miners and has made this explicitly clear to the Mongolian authorities. Claim Against the Mongolian Mineral Resources Authority to Revoke Gatsuurt Mining Licenses In the first quarter of 2016, a non-governmental organization called "Movement to Save Mt. Noyon" filed a claim against the Mongolian Mineral Resources Authority (MRAM) requesting that MRAM revoke the two principle mining licenses underlying the Gatsuurt Project. CGM, the holder of these two mining licenses, is involved in the claim as a third party. Such proceedings are ongoing. Corporate Ontario Court Proceedings Involving the Kyrgyz Republic and Kyrgyzaltyn Since 2011, there have been four applications commenced in the Ontario courts by different applicants against the Kyrgyz Republic and Kyrgyzaltyn, each seeking to enforce in Ontario international arbitral awards against the Kyrgyz Republic. None of these disputes relate directly to Centerra or the Kumtor Project. In each of these cases, the applicants have argued that the Kyrgyz Republic has an interest in the Centerra common shares held by Kyrgyzaltyn, a state controlled entity, and therefore that such applicant(s) are entitled to seize such number of common shares and/or such amount of dividends as necessary to satisfy their respective arbitral awards against the Kyrgyz Republic. On July 11, 2016, the Ontario Superior Court of Justice released a decision on the common issue in these four applications -- whether the Kyrgyz Republic has an exigible ownership interest in the Centerra common shares held by Kyrgyzaltyn. The Ontario Superior Court of Justice determined that the Kyrgyz Republic does not have any equitable or other right, property, interest or equity of redemption in the common shares held by Kyrgyzaltyn. As a result, on July 20, 2016, the Ontario Superior Court of Justice set aside previous injunctions which prevented Centerra from, among other things, paying any dividends to Kyrgyzaltyn. Accordingly, Centerra has now released to Kyrgyzaltyn approximately Cdn$18.9 million which was previously held in trust for the benefit of two Ontario court proceedings. The Company understands that two plaintiffs, Valeri Belokon and Entes Industrial Plant Construction & Erection Contracting Co. Inc. have filed notices of appeal in respect of the July 20, 2016 decision of the Ontario court. 2016 Outlook Centerra's 2016 gold production has been revised to reflect an increased production forecast at Kumtor. The Company has not included in its forecast any production and cost guidance for the recently acquired Thompson Creek operations (including Mount Milligan) as the process of integrating Centerra's and Thompson Creek Metals' operations is still ongoing. Kumtor's production forecast has been increased from the previous guidance of 500,000 ounces to 530,000 ounces provided in the July 26, 2016 news release to a new guidance of 520,000 ounces to 560,000. The Mongolian operations will continue with care and maintenance activities at the Boroo mine mainly focusing on reclamation work. Any revenue from Boroo gold production from the drain down of the heap leach pad will be offset against care and maintenance costs. The 2016 production forecast assumes no gold production from Boroo, Gatsuurt or Öksüt, which is unchanged from the previous guidance. Centerra has updated its 2016 guidance for all-in sustaining costs per ounce sold1 and all-in costs (excluding Mount Milligan and the Öksüt, Greenstone, and Gatsuurt development projects) per ounce sold1 as follows: The Company has revised its 2016 forecast for operating costs at the Kumtor mine due to realized and forecasted cost savings from lower costs for diesel fuel, blasting materials and reagents. 2016 Corporate General and Administrative Costs The forecast for the 2016 corporate general and administrative costs has been revised to $32 million from $31 million in the previous guidance to reflect additional business development costs. 2016 Exploration Expenditures 2016 planned exploration expenditures excluding exploration at Greenstone Gold property are forecasted to be $13 million ($12.4 million in the previous guidance) due to new exploration projects. 2016 Capital Expenditures Centerra's projected capital expenditures for 2016, excluding capitalized stripping, have been revised to $124 million ($140 million in the previous guidance), including $69 million of sustaining capital1 ($76 million in the previous guidance) and $55 million of growth capital1 ($64 million in the previous guidance). The changes in capital expenditure forecasts are described below. Projected capital expenditures do not include sustaining and growth capital for Mount Milligan. Projected capital expenditures for our other projects (excluding capitalized stripping) are: Kumtor At Kumtor, 2016 total capital expenditures, excluding capitalized stripping, are forecast to be $85 million, which is $12 million lower than the previous guidance. The Company decreased its forecast for sustaining capital1 from $75 million in the previous guidance to $68 million due to further cancelations or deferral of major overhauls and replacements of certain heavy duty mine equipment ($7 million). 2016 forecast for growth capital investment at Kumtor has been reduced to $17 million ($22 million in the previous guidance) reflecting lower cost estimates for relocation of certain infrastructure at Kumtor relating to the ongoing Kumtor pit expansion ($5 million). The projected cash component of capitalized stripping costs related to the development of the open pit is expected to be $122 million ($108 million in the previous guidance) due to increased overburden stripping at the cut-back 18. Total capitalized stripping costs, including DD&A, are forecasted at $150 million for 2016 ($145 million in the previous guidance). Mongolia (Boroo and Gatsuurt) At Boroo, 2016 sustaining capital1 expenditures are expected to be minimal and no growth capital1 is forecast for Boroo, which is unchanged from the previous guidance. The Company is carrying out additional exploration drilling to expand the Gatsuurt resource base as well as geo-technical and hydrogeological drilling in support of the eventual project development. The Company has increased its 2016 forecast to $10 million from $6 million in the previous guidance (excluding $1.4 million for additional exploration) for additional feasibility study work for the Gatsuurt Project. Öksüt Project The Company has decreased its 2016 forecast for capital construction expenditures at the Öksüt property from $25 million in the previous guidance to $14 million in the current guidance due to delays in obtaining permits. Greenstone Gold Property The Company has revised its guidance for 2016 expenditures for the Greenstone Gold Property to approximately $29 million (Cdn$38 million) compared to $37 million (Cdn$49 million) in the previous guidance. Currently, the Greenstone Partnership is in the final stages of completing the feasibility study. Sensitivities Centerra's revenues, earnings and cash flows for the remaining three months of 2016 are sensitive to changes in certain key inputs or currencies. The Company has estimated the impact of any such changes on revenues, net earnings and cash from operations. Material Assumptions and Risks Material assumptions or factors used to forecast production and costs for the remaining three months of 2016 include the following: The assumed diesel price of $0.47/litre at Kumtor assumes that no Russian export duty will be paid on the fuel exports from Russia to the Kyrgyz Republic. Diesel fuel is sourced from Russian suppliers and correlates in part with world oil prices. The diesel fuel price assumptions were made when the price of oil (Brent) was approximately $49 per barrel. During the first nine months of 2016 diesel prices at Kumtor averaged approximately $0.38/litre, while average price of oil (Brent) was about $42 per barrel. During the same period average exchange rate of the United States dollar to the Kyrgyz som was about 70 soms per 1 U.S. dollar. The lower costs of diesel fuel and favourable exchange for the Kyrgyz som have provided significant year-to-date costs savings for the Kumtor operations. Centerra's management continues to monitor the prices of diesel and exchange rates affecting the Company's operations. Other material assumptions were used in forecasting production and costs for the fourth quarter of 2016. These material assumptions include the following: The Company cannot give any assurances in this regard. Production, cost and capital forecasts for 2016 are forward-looking information and are based on key assumptions and subject to material risk factors that could cause actual results to differ materially and which are discussed herein under the headings "Material Assumptions & Risks" and "Cautionary Note Regarding Forward-Looking Information" in this news release and under the heading "Risk Factors" in the Company's third quarter 2016 MD&A and in the Company's Annual Information Form for the year ended December 31, 2015. To view the Management's Discussion and Analysis and the Financial Statements and Notes for the three and nine months ended September 30, 2016, please visit the following link: http://media3.marketwire.com/docs/CG1107-mdafs.pdf The Unaudited Condensed Consolidated Interim Financial Statements and Notes for the three and nine months ended September 30, 2016 and Management's Discussion and Analysis for the three and nine months ended September 30, 2016 have been filed on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com and are available at the Company's web site at: www.centerragold.com. Caution Regarding Forward-Looking Information Information contained in this news release which are not statements of historical facts, and the documents incorporated by reference herein, may be "forward-looking information" for the purposes of Canadian securities laws. Such forward-looking information involves risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward looking information. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward-looking information. These forward-looking statements relate to, among other things: expectations regarding the sufficiency of the Company's cash resources to fund ongoing expenditures; expectations regarding commencement of the permanent secondary crushing plant at the Mt. Milligan mine; matters relating to the Öksüt Project, including as to applications for and receipt of permits, commencement of project development and timing of first gold production; timing of EIS/EA submissions relating to the Hardrock Project feasibility study; GGM's ongoing discussion with local communities; claims and investigations made by Kyrgyz Republic state agencies, including the GPO, SIETS and SAEPF and arbitration proceedings involving KGC and the Kumtor Project, related Kyrgyz Republic court orders, the potential effects of such court orders and the Company's intentions relating thereto; permitting and regulatory matters, including the Ecological Passport, relating to the Kumtor Project, and the potential effect on the Kumtor Project of Kumtor being prevented from moving ice; estimates relating to the Company's cash and short-term investments; expectations relating to the Company's production, capital expenditures and costs for 2016. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by Centerra, are inherently subject to significant political, business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward looking information. Factors that could cause actual results or events to differ materially from current expectations include, among other things: (A) strategic, legal, planning and other risks, including: political risks associated with the Company's operations in the Kyrgyz Republic, Mongolia and Turkey; resource nationalism including the management of external stakeholder expectations; the impact of changes in, or to the more aggressive enforcement of, laws, regulations and government practices in the jurisdictions in which the Company operates including any unjustified civil or criminal action against the Company, its affiliates or its current or former employees; the impact of any actions taken by the Kyrgyz Republic Government and Parliament relating to the Kumtor Project Agreements which are inconsistent with the rights of Centerra and KGC under the Kumtor Project Agreements; any impact on the purported cancellation of Kumtor's land use rights at the Kumtor Project pursuant to a court claim commenced by the Kyrgyz Republic GPO; the risks related to other outstanding litigation affecting the Company's operations in the Kyrgyz Republic and elsewhere; the impact of the delay by relevant government agencies to provide required approvals and permits, including the delay currently being experienced at the Kumtor Project over the Ecological Passport; the potential impact on the Kumtor Project of investigations by Kyrgyz Republic instrumentalities and movement restrictions on KGC employees and managers; the rights of the Mongolian Government to take an interest in the Gatsuurt Project as a result of the deposit being declared a strategic deposit, and the terms of any such participation, or to take a special royalty rate which has yet to be defined; the impact of changes to, the increased enforcement of, environmental laws and regulations relating to the Company's operations; the impact of any sanctions imposed by Canada, the United States or other jurisdictions against various Russian individuals and entities; the ability of the Company to negotiate a successful deposit development agreement for Gatsuurt; potential defects of title in the Company's properties that are not known as of the date hereof; the inability of the Company and its subsidiaries to enforce their legal rights in certain circumstances; the presence of a significant shareholder that is a state-owned company of the Kyrgyz Republic; risks related to anti-corruption legislation; risks related to the concentration of assets in Central Asia; Centerra's future exploration and development activities not being successful; Centerra not being able to replace mineral reserves; difficulties with Centerra's joint venture partners; and aboriginal claims and consultative issues relating to the Company's 50% interest in the Greenstone Gold Property; potential risks related to kidnapping or acts of terrorism; (B) risks relating to financial matters, including: sensitivity of the Company's business to the volatility of gold prices, the imprecision of the Company's mineral reserves and resources estimates and the assumptions they rely on, the accuracy of the Company's production and cost estimates, the impact of restrictive covenants in the Company's revolving credit facilities which may, among other things, restrict the Company from pursuing certain business activities, the Company's ability to obtain future financing, the impact of global financial conditions, the impact of currency fluctuations, the effect of market conditions on the Company's short-term investments, the Company's ability to make payments including any payments of principal and interest on the Company's debt facilities depends on the cash flow of its subsidiaries; and (C) risks related to operational matters and geotechnical issues, including: movement of the Davidov Glacier and the waste and ice movement at the Kumtor Project and the Company's continued ability to successfully manage such matters, including the continued performance of the buttress; the occurrence of further ground movements at the Kumtor Project and mechanical availability; the success of the Company's future exploration and development activities, including the financial and political risks inherent in carrying out exploration activities; inherent risks associated with the use of sodium cyanide in the mining operations; the adequacy of the Company's insurance to mitigate operational risks; mechanical breakdowns; the Company's ability to obtain the necessary permits and authorizations to (among other things) raise the tailings dam at the Kumtor Project to the required height; the Company's ability to replace its mineral reserves; the occurrence of any labour unrest or disturbance and the ability of the Company to successfully re-negotiate collective agreements when required; the risk that Centerra's workforce may be exposed to widespread epidemic; seismic activity in the vicinity of the Company's operations in the Kyrgyz Republic and Mongolia; long lead times required for equipment and supplies given the remote location of some of the Company's operating properties; reliance on a limited number of suppliers for certain consumables, equipment and components; illegal mining on the Company's Mongolian properties; the Company's ability to accurately predict decommissioning and reclamation costs; the Company's ability to attract and retain qualified personnel; competition for mineral acquisition opportunities; and risks associated with the conduct of joint ventures/partnerships, including Greenstone Gold Mines LP; the Company's ability to manage its projects effectively and to mitigate the potential lack of availability of contractors, budget and timing overruns and project resources. See "Risk Factors" in the Company's 2015 Annual Information Form available on SEDAR at www.sedar.com. Furthermore, market price fluctuations in gold, as well as increased capital or production costs or reduced recovery rates may render ore reserves containing lower grades of mineralization uneconomic and may ultimately result in a restatement of reserves. The extent to which resources may ultimately be reclassified as proven or probable reserves is dependent upon the demonstration of their profitable recovery. Economic and technological factors which may change over time always influence the evaluation of reserves or resources. Centerra has not adjusted mineral resource figures in consideration of these risks and, therefore, Centerra can give no assurances that any mineral resource estimate will ultimately be reclassified as proven and probable reserves. Mineral resources are not mineral reserves, and do not have demonstrated economic viability, but do have reasonable prospects for economic extraction. Measured and indicated resources are sufficiently well defined to allow geological and grade continuity to be reasonably assumed and permit the application of technical and economic parameters in assessing the economic viability of the resource. Inferred resources are estimated on limited information not sufficient to verify geological and grade continuity or to allow technical and economic parameters to be applied. Inferred resources are too speculative geologically to have economic considerations applied to them to enable them to be categorized as mineral reserves. There is no certainty that mineral resources of any category can be upgraded to mineral reserves through continued exploration. There can be no assurances that forward-looking information and statements will prove to be accurate, as many factors and future events, both known and unknown could cause actual results, performance or achievements to vary or differ materially, from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained herein or incorporated by reference. Accordingly, all such factors should be considered carefully when making decisions with respect to Centerra, and prospective investors should not place undue reliance on forward looking information. Forward-looking information is as of November 7, 2016. Centerra assumes no obligation to update or revise forward looking information to reflect changes in assumptions, changes in circumstances or any other events affecting such forward-looking information, except as required by applicable law. About Centerra Centerra Gold Inc. is a Canadian-based gold mining company focused on operating, developing, exploring and acquiring gold properties in North America, Asia, and other markets worldwide. Centerra is the largest Western-based gold producer in Central Asia. Centerra's shares trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is based in Toronto, Ontario, Canada. Additional information on Centerra is available on the Company's website at www.centerragold.com and at SEDAR at www.sedar.com. Conference Call Centerra invites you to join its 2016 third quarter conference call on Monday, November 7, 2016 at 11:00AM Eastern Time. The call is open to all investors and the media. To join the call, please dial Toll-Free in North America (888)-225-2734 or International callers dial +1 (303) 223-4367. The conference call will also be broadcast live by Thomson Reuters and can be accessed at Centerra Gold's website at www.centerragold.com. A slide presentation of the third quarter results will also be accessible on Centerra Gold's website at www.centerragold.com. Alternatively, audio recording of the call will be available approximately two hours after the call via telephone until midnight Eastern Time on Monday, November 14, 2016. The recording can be accessed by calling (416) 626-4100 or (800) 558-5253 and using the passcode 21818089. In addition the webcast will be archived on Centerra Gold's website www.centerragold.com. Additional information on Centerra is available on the Company's web site at www.centerragold.com and at SEDAR at www.sedar.com. 1 Non-GAAP measure, see discussion under "Non-GAAP Measures". All-in sustaining costs exclude revenue-based taxes in the Kyrgyz Republic and income taxes.


News Article | November 30, 2016
Site: www.marketwired.com

TORONTO, ONTARIO--(Marketwired - Nov. 30, 2016) - ("Kirkland Lake Gold" or the "Company") (TSX:KLG), is pleased to announce the appointment of Philip Yee as Executive Vice President and Chief Financial Officer (effective December 1, 2016). In addition, the Company announces that Mr. Perry Ing - CFO, Mr Keyvan Salehi - VP Corp Dev and Technical Services and Ms Suzette Ramcharan - Director of Investor Relations are no longer with the Company. The Company thanks all the above personnel for their efforts and wish them continued success in their future roles. Anthony (Tony) Makuch, President and CEO of the Company, commented: "We are very pleased to be gaining the wealth of experience that Phil Yee brings to his role as CFO at Kirkland Lake Gold. Phil has worked for several years in the mining sector, his most recent role being as Chief Financial Officer for Lake Shore Gold Corp. He brings valued expertise to our existing management team. Philip C. Yee is an experienced senior finance executive with an extensive background in financial management and reporting, financial and operational recovery, M&A, international risk management and strategy development. He is a Chartered Professional Accountant with 25+ years of experience and success including 15+ years as a member of high caliber senior management teams leading world-class mining operations. Most recently, Phil was SVP & CFO of Lake Shore Gold Corp. from May 2013 to April 2016 when the business combination with Tahoe Resources was completed. Prior to this role, Phil was CFO of Patagonia Gold Plc from May 2011 to April 2013 and Vice President Finance for Kumtor Operating Co., the flag-ship subsidiary of Centerra Gold Inc. and a subsidiary of Cameco Corporation from June 2001 to May 2011. Phil received his Bachelor of Commerce from the University of Saskatchewan and has served on the Board of Directors for Kumtor Operating Company, the Eurasia Foundation Central Asia and the American Chamber of Commerce Bishkek. Kirkland Lake Gold Inc. is a Canadian focused, intermediate gold producer with assets in the historic Kirkland Lake gold camp, and east of the Timmins gold camp along the Porcupine-Destor Fault Zone, both in northeastern Ontario. The Company is currently targeting annual gold production of between 280,000 to 290,000 ounces from its cornerstone asset, the Macassa Mine Complex and the Holt Mine Complex that includes the Holt, Holloway and Taylor mines. The Company is committed to building a sustainable mining company that is recognized as a safe and responsible gold producer with quality assets in safe mining jurisdictions. The Toronto Stock Exchange has neither reviewed nor accepts responsibility for the adequacy or accuracy of this news release. This Press Release contains statements which constitute "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to the future business activities and operating performance of the Company. The words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, are intended to identify such forward-looking statements. Investors are cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made such as, without limitation, opinion, assumptions and estimates of management regarding the Company's business, including but not limited to; the continued exploration programs on the SMC mineralization, the timing and results thereof; the ability to continue to expand the SMC and to increase its level of resources and the timing thereof; and the potential to increase the level of resources and reserves. Such opinions, assumptions and estimates, are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the Company's expectations in connection with the projects and exploration programs being met, the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating gold prices, currency exchange rates (such as the Canadian dollar versus the United States Dollar), possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company's corporate mineral reserves and resources, changes in project parameters as plans continue to be refined, changes in project development, construction, production and commissioning time frames, the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, and limitations on insurance, as well as those risk factors discussed or referred to in the Company's annual Management's Discussion and Analysis and Annual Information Form for the year ended December 31, 2015, and the Company's Management's Discussion and Analysis for the interim period ended September 30, 2016, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements except as otherwise required by applicable law.


Vinnikov D.,Kumtor Operating Company | Brimkulov N.,Kyrgyz State Medical Academy | Redding-Jones R.,Kumtor Operating Company | Jumabaeva K.,Kumtor Operating Company
Respiratory Physiology and Neurobiology | Year: 2011

The aim of this study was to assess how exhaled nitric oxide (NO) levels in healthy subjects changed upon exposure to intermittent hypoxia at high altitude. Eighty-one healthy subjects with a mean age of 31.8±6.7 years, well acclimatized at altitudes of 3800-4000m above sea level, and employed by a gold-mining company were recruited for the study. Baseline, altitude-corrected partial exhaled NO levels (PENO) were measured in Bishkek, Kyrgyzstan (780m). Measurements were then taken on day 1 of the ascent to the mine, which is located at an altitude of 4000m, on day 3 and finally at the end of the 2- or 3-week shifts. The mean PENO level was 9.49±3.66nmHg in Bishkek and was lower in females than in males (9.76±3.58nmHg vs. 7.03±3.71nmHg). When compared to the first day at altitude, exhaled NO was reduced by 17.2% on day 3 (p=0.001) and 29.6% by the end of the shift (p<0.001). In summary, this study of well-acclimatized high-altitude miners demonstrates that despite the absence of clinical signs of desadaptation, there is an apparent reduction in exhaled NO. © 2010 Elsevier B.V.


Vinnikov D.,Kumtor Operating Company | Brimkulov N.,Kyrgyz State Medical Academy | Redding-Jones R.,Kumtor Operating Company
High Altitude Medicine and Biology | Year: 2011

The aim of this study was to determine if work at high altitude is associated with accelerated lung function decline and if smoking could further accelerate this decline. Subjects working at high altitude (3800 to 4500 m) in a gold mine on shift-rotation basis were included, and 7320 spirometry reports were obtained throughout a 4-yr observation period (2005-2009). Out of 3368 selected reports with acceptable quality, for 842 patients aged 38.9 ± 8.6 yr we analyzed annual decline in vital capacity (VC), forced vital capacity (FVC), and forced expiratory volume during the first second (FEV1). VC was reduced by 46.5 mL, FVC by 67.8 mL, and FEV1 by 74.5 mL a year, greater than in historical controls. In those having initial FEV 1/FVC below 70%, yearly VC decline was 59.4 mL, FEV1 -58.6 mL. In long-term workers with no initial obstruction, FEV1 declined slower (67.2 vs. 101.3 mL/yr (p < 0.001); but VC and FVC decline did not differ. Work at high altitude for years may be a factor that accelerates lung function decline, and the rate of decline along with confounding factors should be the subject of future studies. © Mary Ann Liebert, Inc. 2011.


Abduvaliev A.M.,Kumtor Operating Company
Gornyi Zhurnal | Year: 2013

The author examines issues of water monitoring in the Kumtor River in the area of influence of the high-altitude Kumtor Mine currently in operation. The article shows concentrations of aluminum, iron, nickel, sulphates and suspended particles in the Kumtor River basin. The operating mine exerts, although low, impact on the Kumtor River being the main water body in the mining lease area. Higher concentrations of sulphates and suspended particles are observed in the mine influence zones. For instance, the Davydov glacier-derived runoff containing the Kumtor Mine water exhibits high concentrations of sulphates whereas the mine water can be reused at preparation plan for process needs. To reduce concentrations of suspended particles, it is required to clean gold washing cradles from accumulations of suspended particles using earthmoving machines twice a year: before thawing period and, later on, before wintertime.


PubMed | Kumtor Operating Company
Type: Journal Article | Journal: High altitude medicine & biology | Year: 2011

The aim of this study was to determine if work at high altitude is associated with accelerated lung function decline and if smoking could further accelerate this decline. Subjects working at high altitude (3800 to 4500m) in a gold mine on shift-rotation basis were included, and 7320 spirometry reports were obtained throughout a 4-yr observation period (2005-2009). Out of 3368 selected reports with acceptable quality, for 842 patients aged 38.98.6 yr we analyzed annual decline in vital capacity (VC), forced vital capacity (FVC), and forced expiratory volume during the first second (FEV(1)). VC was reduced by 46.5mL, FVC by 67.8mL, and FEV(1) by 74.5mL a year, greater than in historical controls. In those having initial FEV(1)/FVC below 70%, yearly VC decline was 59.4mL, FEV(1) -58.6mL. In long-term workers with no initial obstruction, FEV(1) declined slower (67.2 vs. 101.3mL/yr (p<0.001); but VC and FVC decline did not differ. Work at high altitude for years may be a factor that accelerates lung function decline, and the rate of decline along with confounding factors should be the subject of future studies.

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