Centerra Gold Reports Feasibility Study Results for Öksüt Project

Centerra Gold Inc. (TSX:CG) announced its feasibility results from its  Öksüt project in Turkey, with a projected gold production target early in the second quarter of 2017.
As quoted in the press release:

The Company expects to begin development of the Öksüt Project in the first quarter of 2016 with first gold production anticipated in the second quarter of 2017. Detailed engineering and the ordering of long lead items are expected to begin in the second half of 2015. Pre-production expenditures are estimated to be $221 million including a $25 million contingency.
Based on the positive feasibility study, an estimated 1.2 million ounces of contained gold (26.1 million tonnes at an average grade of 1.4 g/t) of measured and indicated resources have been converted to probable reserves, using a gold price of $1,250 per ounce and a cut-off grade of 0.3 g/t gold.
The feasibility study envisions a conventional open-pit and heap leach operation. The heap leach pad has been designed with an ultimate ore capacity of 40 million tonnes. Electrical power is expected to be supplied to the project by a dedicated 28 kilometre power line tied into the local power grid. Water supply is expected to be sourced from two Company owned water wells, which have been fully permitted.

Highlights:

• Probable reserves of an estimated 1.2 million contained ounces of gold (26.1 million tonnes at an average grade of 1.4 g/t gold using a cut-off grade of 0.3 g/t gold).
• Average annual gold production of 155,000 ounces in the first four years.
• Life-of-mine gold production of 895,000 ounces.
• 8 year mine life.
• All-in sustaining cost(2) of $490 per ounce.
• All-in cost(2) for the project including pre-production expenditures and construction capital of $725 per ounce sold.
• All-in cost including taxes(2) of $777 per ounce for the project.
• Pre-production expenditures and construction capital of $221 million, including a $25 million contingency.
• Payback on construction capital and pre-production expenditures is expected to be 2.5 years after production begins.
• Total life-of-mine sustaining capital(2) of $10 million, excluding $30 million of capitalized stripping.
• 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) (1)

Feasibility study and life-of-mine plan assume a gold price of $1,250 per ounce. (2) Non-GAAP measure. See description of “Non-GAAP Measures” in the Company’s Management Discussion & Analysis (MDA) dated July 28, 2015 filed on SEDAR.

Ian Atkinson, president and CEO of Centerra Gold, commented:

Development of the Öksüt Project in Turkey is another step in Centerra’s strategy of diversifying its portfolio of profitable assets. The feasibility study shows a very attractive rate of return of almost 43 percent and that the project is profitable at significantly lower gold prices. In fact, using an 8% discount rate, the project breaks even with a gold price of $767 per ounce. Centerra has a strong balance sheet with cash available for construction as well as a number of financing opportunities with lending institutions. We are ready to move forward with the development of the Öksüt Project and are targeting mid-2016 to commence mining, pending the receipt of the final approval of the Turkish environmental impact assessment (EIA) and receipt of all required permits and other regulatory approvals. We have established an experienced operational management team in Turkey and we now expect first gold production early in the second quarter of 2017. There is still further upside on the property which we will continue to follow-up on through additional exploration and drilling.

Click here to read the full Centerra Gold Inc. (TSX:CG) press release.