All figures are in United States dollars and all production figures are on a 100% basis, unless otherwise stated. All references in this document denoted with NG, indicate a non-GAAP term which is discussed under “Non- GAAP Measures” and reconciled to the most directly comparable GAAP measure.

Toronto, Canada, October 30, 2019: Centerra Gold Inc. (“Centerra”) (TSX: CG) today reported third quarter 2019 results. Highlights of the quarter included:

• Net loss of $165.1 million, ($0.56) per common share (basic), and adjusted earningsNG of $75.4 million $0.26 per common share (basic) after including an adjustment for the impairment recorded on the Mount Milligan Mine and the additional settlement expense relating to Kyrgyz Republic Strategic Agreement.
• Cash flow from operations was $31.9 million in the period. Adjusted cash flowNG from operations was $94.5 million after adjusting for the Kyrgyz Republic settlement payments of $62.6 million.
• Production of 205,660 ounces of gold in the period, which includes 150,305 ounces at Kumtor and 55,355 ounces at Mount Milligan. Mount Milligan also produced 21.2 million pounds of copper.
• All-in sustaining costs per ounce soldNG of $666 per ounce, including $626 per ounce at Kumtor and $557 per ounce at Mount Milligan and reported consolidated cost of sales of $236.6 million on revenue of $388.3 million.
• 2019 Guidance for gold production and sales increased to 730,000 – 765,000 ounces and 745,000 – 785,000 ounces, respectively, from previously issued guidance of 705,000 – 750,000 ounces. Consolidated all-in sustaining costs per ounce soldNG guidance remains unchanged from previously issued guidance of $713 – $743 per ounce.
• Construction at the Öksüt Project in Turkey is now 79% complete and remains on schedule with first gold pour expected in January of 2020.
• An impairment charge of $230.5 million was recorded on our Mount Milligan Mine reducing the carrying value to $522.6 million, primarily due to a reduction in gold recoveries and a higher unit cost profile which will continue over the short to medium term.
• The Company has begun a comprehensive technical review of the Mount Milligan mine with the objective of publishing an updated NI 43-101 technical report in the coming months. The extent of any change in reserves and resources cannot be precisely determined until all of the relevant studies and modelling are completed, including studies to optimize the economics of the mine and further work to incorporate results of the Company’s exploration drilling in 2019. However, based upon the work performed in connection with the impairment test, the Company’s expectation is that Mount Milligan’s mineral reserves and resources will be materially reduced.
• Completed Strategic Agreement with the Kyrgyz Republic Government; an additional expense of $10 million was recorded in the period and cash payments of $62.6 million, were made.
• Gordon D. Reid, Vice President and Chief Operating Officer has announced his retirement effective January 1, 2020. Dan Desjardins, currently the President of our Kumtor Mine, will succeed Gordon.

Commentary

Scott Perry, President and Chief Executive Officer of Centerra stated, “During the quarter we achieved a number of significant Lost Time Injury Free milestones including one million work hours at our Öksüt Project and Mount Milligan, one full year at Kumtor and most recently six full years without incurring a lost time injury to our employees or contractors at the Endako Mine. These achievements validate that Zero Harm is within our reach at Centerra and demonstrates our workforce’s commitment to Centerra’s Work Safe – Home Safe program as we continue to build a team-based culture of excellence that responsibly delivers sustainable value and growth.”

“The operations produced a total of 205,660 ounces of gold and 21.2 million pounds of copper in the quarter. Kumtor had another strong quarter as we got into higher-grade ore earlier than expected producing 150,305 ounces of gold. Mount Milligan had a strong quarter, the mill throughput averaged 55,727 tonnes per calendar day, producing 55,355 ounces of gold and 21.2 million pounds of copper.”

“Company-wide our all-in sustaining costs (before taxes)NG were $666 per ounce sold for the quarter reflecting Mount Milligan achieving all-in sustaining costs (before taxes)NG of $557 per ounce and Kumtor realizing all-in sustaining costs (before taxes)NG of $626 per ounce.”

“As part of our recent annual budgeting process, we identified that long term recoveries are expected to decrease and recent cost escalation will continue at current levels in the short to medium term at the Mount Milligan mine. This triggered the need to complete an impairment test on Mount Milligan’s long-lived assets. The test identified an impairment of $230.5 million which we reflected in the quarter. The company has begun a comprehensive technical review of Mount Milligan with the objective of publishing an updated NI 43-101 technical report in the coming months. The extent of any change in reserves and resources cannot be precisely determined until all of the relevant studies and modelling are completed, including studies to optimize the economics of the mine and further work to incorporate results of the Company’s exploration drilling through 2019. However, based upon the work performed in connection with the impairment test, the Company’s expectation is that Mount Milligan’s mineral reserves and resources will be materially reduced.”

“Construction activity continued at the Öksüt Project in Turkey and the project is now 79% complete with the crushing circuit and Absorption Desorption Regeneration (“ADR”) plant commissioned, mining commenced in both the Keltepe and Güneytepe pits and the completion of the Heap Leach Pad readying it for the stacking of ore. The project remains on schedule with first gold pour expected in January of 2020.”

“Financially, the business delivered $32 million of cash from operations in the quarter. Excluding the $63 million payment for the completion of the Strategic Agreement, the adjusted cash flow from operationsNG was $95 million. At the operating level, Kumtor and Mount Milligan generated $74 million and $37 million, respectively, of cash from operations before working capital changesNG in the quarter. During the third quarter, Kumtor generated $42 million of free cash flowNG before reflecting the completion payment and Mount Milligan generated $31 million of free cash flowNG.”

Exploration Update

Exploration activities in the third quarter of 2019 included drilling, surface sampling, geological mapping and geophysical surveying at the Company’s various projects (including earn-in properties) targeting gold and copper mineralization in Turkey, Canada, Mexico, Sweden, Finland and Burkina Faso.  Exploration expenditures totaled $7.6 million in the third quarter of 2019 compared to $7.2 million in the same quarter of 2018 ($18.9 million compared to $14.3 million, year-to-date). The Company’s 2019 exploration program is primarily focused on brownfield exploration at Kumtor, Mount Milligan, Öksüt and Kemess.

Kumtor Mine

At Kumtor, planned exploration work is aimed at defining additional resources on the flanks of the Central Pit, focusing on the Hockey Stick Zone and the SB Zone deep extension to add to the open pit mine life. Exploration drilling focused on testing zones of mineralization near the surface for additional open pit resources on the north-east side of the Central Pit, at the corridor between the Central and Southwest pits, and on the flanks of the Sarytor target area. During the third quarter of 2019, sixty-seven diamond drill holes for 18,215 metres were completed, including 11,472 metres of infill drilling in the Hockey Stick Zone.

Central Pit

In the Hockey Stick Zone, eight exploration and forty-three infill drill holes for 2,109 and 11,472 metres, respectively, and two RC drill holes for 323 metres were completed. The drilling results revealed intersections of gold mineralization and selected best intercepts, are reported below.

Southwest Area

One RC drill hole was completed between the Southwest and Central pits for a total of 216 metres.

Sarytor Area

In the Sarytor area, twelve drill holes were completed for a total of 3,880 metres. The best selected intercepts are:

The above mineralized intercepts were calculated using a cut-off grade of 1.0 g/t Au, minimum interval of

4.0 metres and a maximum internal dilution interval of 5.0 metres. Drill collar locations and associated graphics are available at the following link:

http://ml.globenewswire.com/Resource/Download/98e07913-f3ae-4d97-91c8-74c4db53e763

A complete listing of the drill results, drill hole locations and plan map for the Kumtor Mine 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 www.centerragold.com.

Mount Milligan Mine

At Mount Milligan, the 2019 exploration program is focused on expanding resources to the west and at depth and drilling other exploration targets adjacent to the mine lease. A total of 8,901 metres in drilling was completed during the third quarter of 2019. Selected best assay results are reported below.

Great Eastern Fault Zone

In the Great Eastern Fault Zone, exploration is related to early-stage vein fragments and mineralized clasts in fault breccia. The best intercept is:

Saddle Zone and MBX Zone

In the Saddle and MBX Zones exploration is associated with monzonite dykes or stocks, magnetite-bearing potassic alteration, magnetite veins and local breccia cement; and early-to-transitional (pyrite ± chalcopyrite) stage veins. The best intercepts of the Saddle Zone are:

South Boundary-Satellite Pit

In the Southern Star Zone and SB-Satellite Pit area, exploration is related to monzonite dykes and hydrothermal breccia with magnetite-bearing potassic alteration overprinted by albite-bearing propylitic or quartz-sericite-pyrite-carbonate (fault related) alteration, and with transitional to late stage veins. The best intercepts are:

Oliver Zone

In the Oliver Zone, similar to the Goldmark-Oliver Zone (see brownfields below), exploration is related to quartz-sericite-pyrite-carbonate alteration near faults and may overprint residual magnetite-bearing potassic alteration with early-to-transitional stage veins. The best intercepts are:

The 2019 Phase-2 of the near pit infill/expansion drilling program at Mount Milligan began mid-September and is ongoing. As of September 30, 2019, a total of 2,159 metres has been drilled in five holes in the MBX Footwall Zone. The Phase-2 program is planned for completion in the fourth quarter of 2019 and will be comprised of 8,000 metres of drilling in five zones (Great Eastern Fault, Oliver, MBX Footwall, Southern Star East, Rainbow Fault Central).

Brownfield exploration drilling

The 2019 Phase-1 Brownfield (within mine lease, outside ultimate pit) exploration drilling program at Mount Milligan was completed in August 2019, totaling 9,900 metres in twenty-three drill holes. A total of 5,181 metres in twelve drill holes were completed in the third quarter of 2019.

Geology in all brownfield zones, Goldmark, Goldmark-Oliver, Saddle West and South Boundary, relate to quartz-sericite-pyrite-carbonate or albite-bearing propylitic alteration, and transitional-to-late stage veins (or pyrite replacement style veins) proximal to shear zones, faults, fault breccia, calcite-cemented hydrothermal breccias and monzonite dyke contacts. Remnant potassic alteration and early stage veins may also be present. There may also be a spatial association with pyrrhotite in some areas.

Selected best assay results from ten drill holes completed in the second quarter and the twelve drill holes drilled in the third quarter of 2019 are reported below.

Goldmark Zone

Goldmark-Oliver Zone

Saddle West Zone

South Boundary Zone

The 2019 Phase-2 Brownfield drilling program at Mount Milligan began in late August and comprises 6,000 metres of drilling in four zones (Goldmark-Oliver, Saddle West, Southern Star West and Rainbow Fault SE). As of September 30, 2019, a total of 946 metres has been drilled in two holes in the Goldmark- Oliver Zone. Selected drill hole results summarized below:

Goldmark-Oliver Zone

The above mineralized intercepts were calculated using a cut-off grade of 0.1 g/t Au and a maximum internal dilution interval of 4 metres. Drill collar locations and associated graphics are available at the following link:  http://ml.globenewswire.com/Resource/Download/98e07913-f3ae-4d97-91c8-74c4db53e763

A listing of the drill results, drill hole locations and plan map for the Mount Milligan Mine 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 www.centerragold.com.

Kemess Project

The 2019 Kemess Phase-1 exploration drilling program was completed in August 2019 for a total of 6,452 metres. A total of 5,347 metres was completed in four holes in the third quarter of 2019, including three holes (3,521 metres) in the Nugget Zone and one hole (1,826 metres) proximal to the Kemess Underground deposit (KUG). Drilling encountered only anomalous gold and copper intervals. Best results include:

Nugget Zone

The above mineralized intercepts were calculated using a cut-off grade of 0.1 g/t Au and a maximum internal dilution interval of 10.0 metres.

Öksüt Project

At the Öksüt Project, the 2019 diamond drilling program continued with three drill rigs. During the third quarter of 2019, twenty-three drill holes for 5,908 metres were completed. The drill holes were designed to expand the current oxide gold resources (Keltepe deposit), and to target new oxide gold mineralization adjacent to the known deposits (Keltepe North Prospect). The Keltepe North Prospect was discovered after encouraging mineralized intercepts were returned from shallow depths. The drilling program will continue in the fourth quarter of 2019, targeting new oxide gold mineralization and aiming to expand current resources. Assay results have been received from all the completed drill holes. The best intercepts are:

Keltepe deposit (Infill – testing for oxide gold resource expansion)

Keltepe North Prospect (Exploration – testing for oxide gold resources)

The above mineralized intercepts were calculated using a cut-off grade of 0.2 g/t Au and a maximum internal dilution interval of 5.0 metres. Drill collar locations and associated graphics are available at the following link: http://ml.globenewswire.com/Resource/Download/98e07913-f3ae-4d97-91c8-74c4db53e763

A listing of the drill results, drill hole locations and plan map for the Öksüt 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 www.centerragold.com.

Qualified Person & QA/QC

All mineral reserve and mineral resource estimates 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 (except as set out below) 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. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs are consistent with industry standards and independent certified assay labs are used, with the exception of the Kumtor Project as described in its technical report dated March 20, 2015 (with an effective date of December 31, 2014), prepared in accordance with NI 43-101 (the “Kumtor Technical Report”).

Exploration information and other related scientific and technical information in this news release regarding the Kumtor Mine were prepared in accordance with the standards of NI 43-101 and were prepared, reviewed, verified and compiled by Boris Kotlyar, a member with the American Institute of Professional Geologists (AIPG), Chief Geologist, Global Exploration with Centerra, 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 as described in the Kumtor Technical Report. The Kumtor deposit is described in Centerra’s most recently filed Annual Information Form and the Kumtor Technical Report, which are both filed on SEDAR at www.sedar.com.

Exploration information and other related scientific and technical information in this news release regarding the Mount Milligan Mine were prepared in accordance with the standards of NI 43-101 and were prepared, reviewed, verified and compiled by C. Paul Jago, Member of the Engineers and Geoscientists British Columbia, Exploration Manager at Centerra’s Mount Milligan Mine, who is the qualified person for the purpose of NI 43101. 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. The Mount Milligan deposit is described in Centerra’s most recently filed Annual Information Form and a technical report dated March 22, 2017 (with an effective date of December 31, 2016) prepared in accordance win NI 43-101, both of which are available on SEDAR at www.sedar.com.

Exploration information and other related scientific and technical information in this news release regarding the Öksüt Project were prepared, reviewed, verified and compiled in accordance with NI 43-101 by Mustafa Cihan, Member of the Australian Institute of Geoscientists (AIG), Exploration Manager Turkey at Centerra’s Turkish subsidiary Centerra Madencilik A.Ş., 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. The Öksüt deposit is described in Centerra’s most recently filed Annual Information Form and in a technical report dated September 3, 2015 (with an effective date of June 30, 2015) prepared in accordance with NI 43-101 both of which are available on SEDAR at  www.sedar.com.

Original Article: https://s3.amazonaws.com/centerragold/news/October2019/X4UX20He7yE9SQ7SXk81.PDF