Centerra Gold announces US$150M financing for Oksut project
Centerra Gold Inc. (TSX: CG) announced today that its wholly-owned Turkish subsidiary Öksüt Madencilik Sanayi ve Ticaret A.S. ("OMAS") has entered into a project financing term loan facility for its Öksüt Project in Turkey (the "Facility"). The Facility is secured by the Öksüt assets and is non-recourse to Centerra. The 5.75-year term facility of up to $150 million is fully underwritten by UniCredit Bank AG as sole mandated lead arranger and bookrunner. The interest rate is LIBOR plus 2.65% to 2.95% (dependent on project completion status) with no mandatory gold hedging requirements. Advances under the Facility are subject to customary conditions precedent including receipt of applicable project permits and approvals.
OMAS will use the Facility to finance a substantial portion of the construction, development and operation of the Öksüt gold mine and its related infrastructure in the Kayseri region of central Turkey.
Scott Perry, Chief Executive Officer of Centerra Gold stated, "We are pleased to have been able to arrange this attractive non-recourse project financing to fund a substantial portion of the development and construction of the Öksüt Project. This is a testament to the robustness and strength of the Öksüt Project. This facility will provide us with continued financial flexibility and help maintain our balance sheet strength to enable us to deliver on our growth pipeline."
Highlights of the Öksüt feasibility study and life-of-mine plan (LOM)(1) include:
- Average annual gold production of 155,000 ounces in the first four years.
- Life-of-mine gold production of 895,000 ounces.
- All-in sustaining cost(2)of $490 per ounce.
- All-in cost including taxes(2)of $777 per ounce for the project.
- Payback of the $221 million construction capital and pre-production expenditures is expected to be 2.5 years after production begins.
- After-tax net present value (NPV) of $242 million using an 8% discount rate and the project has a 42.5% project internal rate of return (IRR).
- Öksüt feasibility study and life-of-mine plan assume a gold price of $1,250 per ounce.
- Non-GAAP measure. See description of "Non-GAAP Measures" in the Company's Management Discussion & Analysis (MDA) filed on SEDAR.
The feasibility study and life-of-mine plan are subject to a number of key assumptions, parameters and methods used to estimate mineral resources and reserves, as well as the technical, regulatory, legal, political, environmental and others risks are described in the Technical Report on the Öksüt Gold Project, Turkey prepared for Centerra Gold Inc. dated September 3, 2015, effective date June 30, 2015, which has been filed on SEDAR atwww.sedar.com.
Qualified Person & QA/QC
The feasibility study and life-of-mine plan were undertaken by Centerra staff with the assistance of several external consultants. Reserve and resource estimates, life-of-mine plan 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 National Instrument 43-101 — Standards of Disclosure for Mineral Projects ("NI 43-101") and were 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. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the exploration drilling programs on the Öksüt Project have been done consistent with industry standards and independent certified assay labs have been used. Available quality control data indicates that the gold assay data used for resource estimation are reliable.
The Öksüt deposit is described in Centerra's 2015 Annual Information Form and in a technical report dated September 3, 2015 prepared in accordance with NI 43-101, which is available on SEDAR at www.sedar.com. The technical report describes the exploration history, geology and style of gold mineralization at the Öksüt deposit. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs at the Öksüt site are the same as, or similar to, those described in the technical report.