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Oksut mine halt eclipses Centerra Gold’s Q1 results

The Öksüt mine is located in the Kayseri province of south-central Turkey. (Image courtesy of Centerra Gold.)

Centerra Gold (TSX: CG) (NYSE: CGAU) saw first quarter results hit by the suspension of its Öksüt mine in Turkey, where the adsorption-desorption recovery (ADR) plant has been out of commission since March 18, with no clear timeline for its reopening.

The Canadian gold miner posted net earnings of $89.4 million in the first three months of the year, compared to $167.4 million in the first quarter of 2021.

Centerra said the drop was due mainly to higher current income tax expense related to the Öksüt mine and a $72.3 million gain recognized on the sale of the company’s interest in the Greenstone Gold Mines Partnership.

Production for the period stood at 93,784 ounces of gold and 20.6 million pounds of copper. From the figure, Öksüt was responsible for 54,891 ounces, while Mount Milligan, in Canada, delivered 39,093 ounces of gold.

“While the ADR plant at the Öksüt mine remains currently on a shutdown, mining, crushing, stacking, and leaching activities continue according to plan up to the stage of loading gold onto carbon,” chief executive Scott Perry said in a conference call.

He noted the company continues to evaluate options to remediate the issue at the ADR plant and is looking at other ways to monetize gold in carbon material. Such alternative would provide a temporary solution until gold doré bar production at Öksüt can be restarted, or over the life-of-mine with minimal equipment required at the ADR plant, Perry said.

The miner noted full-year 2022 guidance for Öksüt and consolidated Centerra remained under review while production forecast for Mount Milligan was unchanged at between 190,000 and 210,000 gold ounces.

The Öksüt mine became Centerra’s third operating mine in January 2020 when it poured its first gold. About 28.2 million tonnes of ore grading 1.3 g/t gold, containing a total of 1.2 million ounces, are expected to be mined and stacked over an eight-year mine life.

Adiós to Kumtor

The Toronto-based company highlighted the resolution of a long-dragged conflict with the Kyrgyz Republic over ownership and profit-sharing at the massive Kumtor gold mine, which was seized by the government in May 2021.

As part of the out-of-court deal, Centerra transferred ownership of the mine to its wholly owned subsidiary Kumtor Gold and an affiliate to state-owned refiner Kyrgyzaltyn OJSC.

Kumtor was the largest of Centerra’s gold mines, contributing to more than 50% of the company’s total output.