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Consolidated
Financial Statements
For
the Years Ended December 31, 2024 and 2023
Management’s
Responsibility for Financial Statements
The
accompanying audited consolidated financial statements of Centerra Gold Inc. were prepared by management in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board. Management acknowledges responsibility for significant
accounting judgments and audited annual consolidated financial statements, including responsibility for significant accounting judgments
and estimates and the choice of accounting principles and methods that are appropriate to the Company’s circumstances.
The
Board of Directors is responsible for reviewing and approving the audited annual consolidated financial statements together with other
financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. The Board of
Directors carries out this responsibility principally through its Audit Committee.
The
Audit Committee is appointed by the Board of Directors and all of its members are non-management directors. The Audit Committee reviews
the consolidated financial statements, management’s discussion and analysis and the external auditors’ report; examines
the fees and expenses for audit services; and considers the engagement or reappointment of the external auditors. The Audit Committee
reports its findings to the Board of Directors for its consideration when approving the consolidated financial statements for issuance
to the shareholders. KPMG LLP, the external auditors, have full and free access to the Audit Committee.
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|
| Original
signed by: |
Original
signed by: |
| Paul
Tomory |
Ryan Snyder |
| President
and Chief Executive Officer |
Executive
Vice President and Chief Financial Officer |
February
20, 2025
Management’s
Report on Internal Control over Financial Reporting
The
Management of Centerra Gold Inc. (“Centerra”) is responsible for establishing and maintaining adequate internal control over
financial reporting, and have designed such internal control over financial reporting to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board.
Management
has used the Internal Control—Integrated Framework (2013) to evaluate the effectiveness of internal control over financial reporting,
which is a recognized and suitable framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Because
of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Management
has evaluated the design and operation of Centerra’s internal control over financial reporting as of December 31, 2024, and has
concluded that such internal control over financial reporting is effective.
The
effectiveness of Centerra’s internal control over financial reporting as of December 31, 2024 has been audited by KPMG LLP, independent
registered public accounting firm, as stated in their report that appears herein.
|
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|
|
| Original
signed by: |
Original
signed by: |
| Paul
Tomory |
Ryan Snyder |
| President
and Chief Executive Officer |
Executive
Vice President and Chief Financial Officer |
February
20, 2025
Report
of Independent Registered Public Accounting Firm
To
the Shareholders and Board of Directors of Centerra Gold Inc.
Opinion
on the Consolidated Financial Statements
We
have audited the accompanying consolidated statements of financial position of Centerra Gold Inc. (the Company) as of December 31, 2024
and 2023, the related consolidated statements of earnings (loss) and comprehensive income (loss), shareholders’ equity, and cash
flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024
and 2023 and its financial performance and its cash flows for each of the years then ended, in conformity with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s
internal control over financial reporting as of December 31, 2024, based on criteria established in Internal
Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 20, 2025,
expressed
an unqualified opinion
on the effectiveness of the Company’s internal control over financial reporting.
Basis
for Opinion
These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.
Critical
Audit Matter
The
critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material
to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are
not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or
disclosures to which it relates.
Assessment
of the Accounting and Valuation of the Additional Royal Gold Agreement
As
discussed in Note 24a to the consolidated financial statements, on February 13, 2024, the Company entered into an additional agreement
with Royal Gold (the “Additional Royal Gold Agreement”) relating to the Mount Milligan Mine. As part of the Additional Royal
Gold Agreement, Royal Gold has agreed, among other things, to increase cash payments for Mount Milligan Mine’s gold ounces and copper
pounds delivered to Royal Gold, starting after the first threshold date (“First Threshold Date”) and further increase these
cash payments after the second threshold (gold) date (“Second Threshold (Gold) Date”) and the second threshold (copper) date
(“Second Threshold (Copper) Date”). The Company determined that the Additional Royal Gold Agreement modifies an existing contract
with a customer under IFRS 15, Revenue
from
contracts with customers, whereby the Company received a financial asset. The financial asset is comprised of Threshold Payments that
the Company is entitled to in the future and payments to Royal Gold, including the initial cash payment, Deferred Gold Consideration,
Free Cash Flow Interest Payments and a potential tax indemnity. The Company accounted for the component pieces of the financial asset
at fair value on the transaction date in accordance with IFRS 9, Financial instruments. The consideration received in the form of the
financial asset was recognized as deferred revenue, which is to be recognized as revenue upon the satisfaction of the Company’s
performance obligations over the life of the Mount Milligan Mine. Subsequent to the initial recognition, payments and receipts related
to the Additional Royal Gold Agreement will be settled against the financial asset and the fair value of the financial asset will be re-measured
at each reporting date with changes in fair value recorded as a gain or loss in other operating expenses. The fair value of the financial
asset was determined using a combination of a Monte Carlo simulation method and discounted cash flow method.
We
identified the assessment of the accounting and valuation of the Additional Royal Gold Agreement as a critical audit matter. A high degree
of auditor judgment was required to evaluate that the transaction represented a modification of a contract with a customer, under IFRS
15 whereby the Company received the consideration in the form of a financial asset under IFRS 9. Significant judgment was also required
in determining that the consideration received represented deferred revenue and in determining that all the cash flows in the Additional
Royal Gold Agreement should be accounted for as a single financial asset under IFRS 9. Significant auditor judgment was required to assess
the significant assumptions of short-term and long-term gold prices, long-term copper prices, discount rate, and recoverable production
used to determine the fair value of the financial asset. In addition, auditor judgment was required to assess the mineral reserves and
resources which form the basis of the life of mine plan.
The
following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating
effectiveness of certain internal controls over the Company’s process to assess the accounting and valuation of the Additional Royal
Gold Agreement. This included controls related to the determination of the accounting and the future cash flows in the life of mine model
used to estimate the valuation of the financial asset and the development of the significant assumptions. We evaluated the Company’s
accounting assessment by inspecting the terms and conditions of the Additional Royal Gold Agreement and assessing against the requirements
of IFRS 15 and IFRS 9. We involved accounting professionals with specialized skills and knowledge, who assisted in evaluating the accounting
treatment applied to the Additional Royal Gold Agreement. We assessed the estimates of recoverable production used in the life of mine
plan by comparing them to historical results. We evaluated the Company’s mineral reserves and resources by analyzing changes from
the prior year. We assessed the competence, capabilities and objectivity of the Company’s personnel who prepared the historical
reserve and resource information, including the industry and regulatory standards they applied. We involved valuation professionals with
specialized skills and knowledge, who assisted in:
–Evaluating
the short-term and long-term gold prices and long-term copper prices by comparing to third party estimates
–Evaluating
the discount rate assumption by comparing to an estimate that was independently developed using publicly available third-party sources.
/s/
KPMG LLP
Chartered
Professional Accountants, Licensed Public Accountants
We
have served as the Company’s auditor since 2004.
Toronto,
Canada
February
20, 2025
Report
of Independent Registered Public Accounting Firm
To
the Shareholders and Board of Directors of Centerra Gold Inc.:
Opinion
on Internal Control Over Financial Reporting
We
have audited Centerra Gold Inc.’s (the Company) internal control over financial reporting as of December 31, 2024, based on criteria
established in
Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal
Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited,
in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements
of financial position of the Company as of December 31, 2024 and 2023, the related consolidated statements of earnings (loss) and comprehensive
income (loss), shareholders’ equity, and cash flows for each of the years then ended and the related notes (collectively, the consolidated
financial statements), and our report dated February 20, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis
for Opinion
The
Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting
based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit
of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing
the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
Definition
and Limitations of Internal Control Over Financial Reporting
A
company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate
/s/
KPMG LLP
Chartered
Professional Accountants, Licensed Public Accountants
Toronto,
Canada
February
20, 2025
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| Centerra
Gold Inc. |
|
Consolidated Statements
of Financial Position |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
| As
at December 31, |
|
|
2024 |
|
2023 |
| (Expressed
in thousands of United States dollars) |
|
|
|
|
|
|
|
|
|
|
|
| Assets |
Notes |
|
|
|
|
| Current
assets |
|
|
|
|
|
| Cash
and cash equivalents |
|
|
$ |
624,673 |
|
|
$ |
612,941 |
|
| Amounts
receivable |
7 |
|
75,041 |
|
|
70,763 |
|
| Inventories |
8 |
|
234,249 |
|
|
257,302 |
|
|
Current
financial assets |
24 |
|
625 |
|
|
10,304 |
|
| Other
current assets |
9 |
|
58,474 |
|
|
14,717 |
|
|
|
|
993,062 |
|
|
966,027 |
|
|
|
|
|
|
|
| Property,
plant and equipment |
10 |
|
1,101,536 |
|
|
1,237,506 |
|
| Deferred
income tax assets |
19 |
|
60,133 |
|
|
57,900 |
|
|
Non-current financial
assets |
24 |
|
67,217 |
|
|
5,332 |
|
| Other
non-current assets |
11 |
|
43,185 |
|
|
14,001 |
|
|
|
|
1,272,071 |
|
|
1,314,739 |
|
| Total
assets |
|
|
$ |
2,265,133 |
|
|
$ |
2,280,766 |
|
|
|
|
|
|
|
| Liabilities
and shareholders' equity |
|
|
|
|
|
| Current
liabilities |
|
|
|
|
|
| Accounts
payable and accrued liabilities |
12 |
|
$ |
233,094 |
|
|
$ |
201,707 |
|
| Income
tax payable |
19 |
|
18,731 |
|
|
40,952 |
|
|
Current
financial liabilities |
24 |
|
12,707 |
|
|
2,965 |
|
| Other
current liabilities |
9 |
|
19,348 |
|
|
51,813 |
|
|
|
|
283,880 |
|
|
297,437 |
|
|
|
|
|
|
|
| Deferred
income tax liabilities |
19 |
|
18,400 |
|
|
16,809 |
|
| Provision
for reclamation |
13 |
|
266,195 |
|
|
272,566 |
|
|
Non-current financial
liabilities |
24 |
|
5,208 |
|
|
366 |
|
| Other
non-current liabilities |
11 |
|
35,534 |
|
|
19,346 |
|
|
|
|
325,337 |
|
|
309,087 |
|
| Shareholders'
equity |
|
|
|
|
|
| Share
capital |
20 |
|
826,694 |
|
|
861,536 |
|
| Contributed
surplus |
|
|
32,147 |
|
|
33,869 |
|
|
Accumulated
other comprehensive (loss) income |
|
|
(11,195) |
|
|
7,451 |
|
| Retained
earnings |
|
|
808,270 |
|
|
771,386 |
|
|
|
|
1,655,916 |
|
|
1,674,242 |
|
| Total
liabilities and shareholders' equity |
|
|
$ |
2,265,133 |
|
|
$ |
2,280,766 |
|
| Commitments
and contingencies (note 22) |
|
|
|
|
|
|
|
|
|
|
|
|
Subsequent events (note
20) |
|
|
|
|
|
The
accompanying notes form an integral part of these consolidated financial statements.
|
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|
|
| Approved
by the Board of Directors |
|
| Original
signed by: |
|
| Michael
S. Parrett |
Wendy
Kei |
|
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| Centerra
Gold Inc. |
|
Consolidated Statements
of Earnings (Loss) and Comprehensive Income (Loss) |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For
the years ended December 31, |
|
|
|
|
| (Expressed
in thousands of United States dollars) |
|
|
|
|
2024 |
|
2023 |
| (except
per share amounts) |
Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
15 |
|
|
|
|
$ |
1,214,503 |
|
|
$ |
1,094,897 |
|
|
|
|
|
|
|
|
|
|
| Cost
of sales |
|
|
|
|
|
|
|
|
| Production
costs |
|
|
|
|
|
710,323 |
|
|
705,974 |
|
| Depreciation,
depletion and amortization |
|
|
|
|
|
126,132 |
|
|
124,918 |
|
| Earnings
from mine operations |
|
|
|
|
|
378,048 |
|
|
264,005 |
|
|
|
|
|
|
|
|
|
|
| Exploration
and evaluation costs |
|
|
|
|
|
70,721 |
|
|
74,816 |
|
| Corporate
administration |
|
|
|
|
|
32,685 |
|
|
35,643 |
|
| Share-based
compensation expense |
|
|
|
|
|
5,203 |
|
|
9,232 |
|
| Care
and maintenance expenses |
|
|
|
|
|
22,197 |
|
|
28,412 |
|
| Impairment
loss |
5 |
|
|
|
|
193,564 |
|
|
34,101 |
|
|
Reclamation (recovery)
expense |
13 |
|
|
|
|
(25,260) |
|
|
34,378 |
|
| Other
operating expenses |
16 |
|
|
|
|
2,421 |
|
|
29,578 |
|
| Earnings
from operations |
|
|
|
|
|
76,517 |
|
|
17,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of Greenstone
Partnership |
6 |
|
|
|
|
(63,088) |
|
|
— |
|
| Other
non-operating income |
17 |
|
|
|
|
(49,116) |
|
|
(11,134) |
|
| Finance
costs |
18 |
|
|
|
|
14,664 |
|
|
15,345 |
|
| Earnings
before income tax |
|
|
|
|
|
174,057 |
|
|
13,634 |
|
| Income
tax expense |
19 |
|
|
|
|
93,663 |
|
|
94,912 |
|
| Net
earnings (loss) |
|
|
|
|
|
80,394 |
|
|
(81,278) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other
Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items
that may be subsequently reclassified to earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Changes
in fair value of hedge derivative instruments |
24 |
|
|
|
|
(20,624) |
|
|
10,774 |
|
| Items
that will not be subsequently reclassified to earnings: |
|
|
|
|
|
|
|
|
|
Changes in fair value
of marketable securities |
24 |
|
|
|
|
1,978 |
|
|
— |
|
|
Other comprehensive (loss)
income |
|
|
|
|
|
(18,646) |
|
|
10,774 |
|
| Total
comprehensive income (loss) |
|
|
|
|
|
$ |
61,748 |
|
|
$ |
(70,504) |
|
|
|
|
|
|
|
|
|
|
| Earnings
(Loss) per share: |
|
|
|
|
|
|
|
|
| Basic |
20 |
|
|
|
|
$ |
0.38 |
|
|
$ |
(0.37) |
|
| Diluted |
20 |
|
|
|
|
$ |
0.35 |
|
|
$ |
(0.38) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes form an integral part of these consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Centerra
Gold Inc. |
|
Consolidated Statements
of Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For
the years ended December 31, |
|
|
|
2024 |
2023 |
|
| (Expressed
in thousands of United States dollars) |
|
|
|
|
|
|
|
|
|
| Operating
activities |
Notes |
|
|
|
|
|
| Net
earnings (loss) |
|
|
|
$ |
80,394 |
|
$ |
(81,278) |
|
|
|
|
|
|
|
|
|
|
| Adjustments: |
|
|
|
|
|
|
|
Depreciation,
depletion and amortization |
|
|
|
130,662 |
|
129,692 |
|
|
|
Reclamation
(recovery) expense |
13 |
|
|
(25,260) |
|
33,957 |
|
|
|
Share-based
compensation expense |
|
|
|
5,203 |
|
9,997 |
|
|
|
Finance
costs |
18 |
|
|
14,664 |
|
15,345 |
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense |
19 |
|
|
93,663 |
|
94,912 |
|
|
|
Impairment
loss |
5 |
|
|
193,564 |
|
34,101 |
|
|
|
|
|
|
|
|
|
|
|
Unrealized
foreign exchange (gain) loss |
|
|
|
(16,940) |
|
2,227 |
|
|
|
Unrealized
fair value gain on financial asset related to the Additional Royal Gold Agreement |
24a |
|
|
(23,500) |
|
— |
|
|
|
Gain
on sale of Greenstone Partnership |
6 |
|
|
(63,088) |
|
— |
|
|
|
Inventory
impairment |
|
|
— |
|
3,675 |
|
|
|
Other |
|
|
|
677 |
|
3,933 |
|
|
| Reclamation
payments |
|
|
|
(9,539) |
|
— |
|
|
| Cash
provided by operating activities prior to changes in working capital and income taxes paid |
|
|
380,500 |
|
246,561 |
|
|
|
Income
taxes paid |
|
|
|
(109,109) |
|
(44,201) |
|
|
|
Other
changes in working capital |
21 |
|
|
27,010 |
|
43,237 |
|
|
| Cash
provided by operating activities |
|
|
|
298,401 |
|
245,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investing
activities |
|
|
|
|
|
|
|
Property,
plant and equipment additions |
|
|
|
(159,791) |
|
(85,306) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from disposition of property, plant, and equipment |
|
|
|
959 |
|
1,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
settlement related to the Additional Royal Gold Agreement |
24a |
|
|
(24,500) |
|
— |
|
|
|
Payment
of transactions costs related to the Additional Royal Gold Agreement |
|
|
|
(2,521) |
|
— |
|
|
|
Purchase
of marketable securities |
|
|
|
(7,349) |
|
— |
|
|
|
Proceeds
from sale of Greenstone Partnership |
6 |
|
|
— |
|
25,000 |
|
|
|
Acquisition
of Goldfield Project |
|
|
|
— |
|
(31,500) |
|
|
| Cash
used in investing activities |
|
|
|
(193,202) |
|
(90,290) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financing
activities |
|
|
|
|
|
|
|
Dividends
paid |
20 |
|
|
(43,510) |
|
(44,907) |
|
|
|
Payment
of borrowing and financing costs |
|
|
|
(2,115) |
|
(4,210) |
|
|
|
Repayment
of lease obligations |
|
|
|
(7,675) |
|
(6,803) |
|
|
|
Proceeds
from common shares issued |
20 |
|
|
3,886 |
|
2,058 |
|
|
|
Payment
for common shares repurchased |
20 |
|
|
(44,053) |
|
(20,420) |
|
|
| Cash
used in financing activities |
|
|
|
(93,467) |
|
(74,282) |
|
|
| Increase
in cash and cash equivalents during the period |
|
|
|
11,732 |
|
81,025 |
|
|
| Cash
and cash equivalents at beginning of the period |
|
|
|
612,941 |
|
531,916 |
|
|
| Cash
and cash equivalents at end of the period |
|
|
|
$ |
624,673 |
|
$ |
612,941 |
|
|
The accompanying notes
form an integral part of these consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Centerra
Gold Inc. |
|
Consolidated Statements
of Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Expressed
in thousands of United States dollars, except share information) |
|
Number
of
Common
Shares |
|
Share
Capital |
|
Contributed
Surplus |
|
Accumulated
Other
Comprehensive
Income
(Loss) |
|
Retained
Earnings |
|
Total |
| Balance
at January 1, 2024 |
215,497,133 |
|
|
$ |
861,536 |
|
|
$ |
33,869 |
|
|
$ |
7,451 |
|
|
$ |
771,386 |
|
|
$ |
1,674,242 |
|
| Net
earnings |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
80,394 |
|
|
80,394 |
|
| Other
comprehensive loss |
— |
|
|
— |
|
|
— |
|
|
(18,646) |
|
|
— |
|
|
(18,646) |
|
| Transactions
with shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase
of shares - Normal Course Issuer Bid (“NCIB”) (note 20) |
(6,731,430) |
|
|
(44,053) |
|
|
— |
|
|
— |
|
|
— |
|
|
(44,053) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Related
to the effect of share repurchase liability (note 20) |
— |
|
|
481 |
|
|
— |
|
|
— |
|
|
— |
|
|
481 |
|
| Share-based
compensation expense |
— |
|
|
— |
|
|
2,914 |
|
|
— |
|
|
— |
|
|
2,914 |
|
| Issued
on exercise of stock options |
592,283 |
|
|
4,249 |
|
|
(1,212) |
|
|
— |
|
|
— |
|
|
3,037 |
|
| Issued
under the employee share purchase plan |
165,373 |
|
|
1,041 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,041 |
|
| Issued
on redemption of restricted share units |
507,921 |
|
|
3,440 |
|
|
(3,424) |
|
|
— |
|
|
— |
|
|
16 |
|
|
Dividends
declared and paid
(C$0.28
per share) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(43,510) |
|
|
(43,510) |
|
| Balance
at December 31, 2024 |
210,031,280 |
|
|
$ |
826,694 |
|
|
$ |
32,147 |
|
|
$ |
(11,195) |
|
|
$ |
808,270 |
|
|
$ |
1,655,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance
at January 1, 2023 |
218,428,681 |
|
|
$ |
886,479 |
|
|
$ |
29,564 |
|
|
$ |
(3,323) |
|
|
$ |
897,571 |
|
|
$ |
1,810,291 |
|
| Net
loss |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(81,278) |
|
|
(81,278) |
|
| Other
comprehensive income |
— |
|
|
— |
|
|
— |
|
|
10,774 |
|
|
— |
|
|
10,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Transaction
with shareholders: |
|
|
|
|
|
|
|
|
|
|
|
| Repurchase
and cancellation of shares - NCIB (note 20) |
(3,475,800) |
|
|
(20,420) |
|
|
— |
|
|
— |
|
|
— |
|
|
(20,420) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Related
to the effect of share repurchase liability (note 20) |
— |
|
|
(8,079) |
|
|
— |
|
|
— |
|
|
— |
|
|
(8,079) |
|
| Share-based
compensation expense |
— |
|
|
— |
|
|
5,339 |
|
|
— |
|
|
— |
|
|
5,339 |
|
| Issued
on exercise of stock options |
304,535 |
|
|
2,014 |
|
|
(593) |
|
|
— |
|
|
— |
|
|
1,421 |
|
| Issued
under the employee share purchase plan |
154,901 |
|
879 |
|
— |
|
|
— |
|
|
— |
|
|
879 |
|
| Issued
on redemption of restricted share units |
84,816 |
|
|
663 |
|
|
(441) |
|
|
— |
|
|
— |
|
|
222 |
|
|
Dividends
declared and paid
(C$0.28
per share) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(44,907) |
|
|
(44,907) |
|
| Balance
at December 31, 2023 |
215,497,133 |
|
|
$ |
861,536 |
|
|
$ |
33,869 |
|
|
$ |
7,451 |
|
|
$ |
771,386 |
|
|
$ |
1,674,242 |
|
The
accompanying notes form an integral part of these consolidated financial statements.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
1.
Nature of operations
Centerra
Gold Inc. (“Centerra” or the “Company”) was incorporated under the Canada
Business Corporations Act
on November 7, 2002. Centerra’s common shares are listed on the Toronto Stock Exchange under the symbol “CG” and on
the New York Stock Exchange under the symbol “CGAU”. The Company is domiciled in Canada and its registered office is located
at 1 University Avenue, Suite 1800, Toronto, Ontario, M5J 2P1. The Company is primarily focused on operating, developing, exploring and
acquiring gold and copper properties in North America, Türkiye, and other markets worldwide.
2.
Basis of presentation
a.Statement
of Compliance
The
consolidated financial statements of the Company and its subsidiaries are prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These financial statements
were authorized for issuance by the Board of Directors of the Company (the “Board”) on February 20, 2025.
b.Basis
of Presentation
Overview
These
consolidated financial statements have been prepared on a going concern basis under the historical cost basis, except for certain financial
assets and liabilities which are measured at fair value. The consolidated financial statements are presented in US dollars with all amounts
rounded to the nearest thousand, except where otherwise noted. References to C$ are to Canadian dollars.
Subsidiaries
These
consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and
transactions have been eliminated on consolidation.
Subsidiaries
consist of entities from which the Company is exposed, or has rights, to variable returns as well as the ability to affect those returns
through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred
to the Company and are de-consolidated from the date control ceases. The Company reassesses whether or not it controls a subsidiary if
facts and circumstances indicate that there are changes to one or more of the elements of control. If the Company loses control over a
subsidiary, it derecognizes the related assets, liabilities, non-controlling interest and other components of equity, while any resulting
gain or loss is recognized in the statements of earnings (loss). Any investment retained is recognized at fair value.
Joint
Arrangements
A
joint arrangement is defined as an arrangement in which two or more parties have joint control. Joint control is the contractually agreed
sharing of control over an arrangement between two or more parties. This exists only when the decisions about the relevant activities
that significantly affect the returns of the arrangement require the unanimous consent of the parties sharing control.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
A
joint operation is a joint arrangement whereby the parties have joint control of the arrangement and have rights to the assets and obligations
for the liabilities relating to the arrangement. These consolidated financial statements include the Company’s interests in the
assets, liabilities, revenues and expenses of the joint operations, from the date that joint control commenced. The Company’s 75%
interest in the Endako Mine is accounted for as a joint operation.
3.
Summary of material accounting policies
The
material accounting policies summarized below have been applied consistently to all periods presented in these consolidated financial
statements.
a.Business
combinations
The
Company uses the acquisition method of accounting for business combinations, whereby the purchase consideration transferred in the acquisition
is allocated to the identifiable net assets acquired on the basis of fair value. Certain fair values may be estimated at the acquisition
date pending confirmation or completion of the valuation process, within a measurement period not to exceed one year from the acquisition
date.
Acquisition-related
costs are expensed as incurred. Assets acquired and liabilities assumed in a business combination are measured initially at fair value
at the acquisition date. The excess of the consideration transferred over the fair value of the net assets acquired is recorded as goodwill.
A gain is recorded through the consolidated statements of earnings (loss) and comprehensive earnings (loss) if the cost of the acquisition
is less than the fair values of the identifiable net assets acquired.
Determination
of whether a set of assets acquired and liabilities assumed constitute the acquisition of a business or asset may require the Company
to make certain judgments as to whether or not the assets acquired and liabilities assumed include the inputs, processes and outputs necessary
to constitute a business. The Company accounts for business combinations using the acquisition method when the acquired set of activities
and assets meets the definition of a business and control is transferred to the Company. In determining whether a particular set of activities
and assets is a business, the Company assesses whether the set of assets and activities acquired includes, at a minimum, an input and
substantive process and whether the acquired set has the ability to produce outputs.
The
Company has an option to apply a “concentration test” that permits a simplified assessment of whether an acquired set of activities
and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired
is concentrated in a single identifiable asset or a group of similar identifiable assets. The consideration transferred in the acquisition
is generally measured at fair value, as are the identifiable net assets acquired. The consideration transferred does not include amounts
related to the settlement of pre-existing relationships. Such amounts are recognized in profit or loss. Any contingent or deferred consideration
is measured at fair value at the date of acquisition.
b.Foreign
currency
The
functional currency of the Company, including its subsidiaries and joint operations is the currency of the primary economic environment
in which it operates. The functional currency of the Company’s operations is the United States dollar (“USD”).
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Foreign
currency transactions are translated into the Company’s functional currency as follows:
•Non-monetary
items that are measured at historical cost are translated at the historical exchange rates prevailing at each transaction date. Non-monetary
items that are measured at fair value are translated at the exchange rate in effect at the date the fair value was measured.
•Monetary
items are translated at the closing rate in effect at the statement of financial position date.
•Revenue
and expense items are translated using the exchange rate applicable to the transaction date.
c.Cash
and cash equivalents
Cash
and cash equivalents comprise cash balances and short-term investments with original maturities of approximately three months.
Cash and cash equivalents
are classified as financial assets carried at amortized cost.
d.Inventories
Metal
inventories, including heap leach ore, stockpiled ore, in-circuit gold, gold-in-carbon, gold and copper concentrate, gold doré and
molybdenum inventory are valued at the lower of cost and net realizable value (“NRV”).
The
cost of inventories is determined primarily on a weighted-average basis and includes all costs of purchase, costs of conversion and other
costs incurred in bringing the inventories to their present location and condition. Costs of inventories include direct materials, direct
labour, transportation, shipping, freight and insurance costs, mine-site overhead expenses and depreciation, depletion and amortization
(“DDA”) of mining assets. The cost of molybdenum inventory includes amounts paid and payable for molybdenum concentrate as
well as costs associated with beneficiation and roasting.
NRV
is calculated as the estimated price in the ordinary course of business, less costs to be incurred in converting the relevant inventories
to saleable product and delivering it to a customer. Any write-down of inventories to NRV or reversals of previous write-downs are recognized
in the consolidated statements of earnings (loss) and comprehensive earnings (loss) in the period that the write-down or reversal occurs.
Supplies
inventory and spare parts are valued at weighted average cost. Provisions are recorded to reduce supplies inventory to NRV, which is generally
calculated by reference to its salvage or scrap value, when it is determined that the supplies are obsolete.
e.Property,
plant and equipment
Construction-in-progress
Assets
under construction are capitalized as construction-in-progress until the asset is available for use. The cost of construction-in-progress
comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use. Directly
attributable costs are capitalized until the asset is in a location and condition necessary for operation as intended by management. These
costs include: the purchase price, installation costs, site preparation costs, survey costs, freight charges, transportation insurance
costs, duties, testing and preparation charges and estimated costs of dismantling and removing the item and restoring the site on which
it is located.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Costs
incurred on properties in the development stage are included in the carrying amount of the development project in construction-in-progress.
A property is classified as a development property when a mine plan has been prepared and a decision is made to commercially develop the
property. Development stage expenditures are costs incurred to obtain access to proven and probable mineral reserves or mineral resources
and provide facilities for extracting, treating, gathering, transporting, and storing the minerals. All expenditures incurred from the
time the development decision is made until when the asset is ready for its intended use are capitalized. Proceeds received from mineral
sales made prior to a mine being capable of operating at levels intended by management are recognized in revenue from mining operations.
Costs related to those sales are recognized in production costs.
Borrowing
costs are capitalized to qualifying assets and are included in construction-in-progress. Qualifying assets are assets that take a substantial
period of time to prepare for the Company’s intended use, which includes projects that are in the exploration and evaluation, pre-development
and development stages. Borrowing costs attributable to the acquisition, construction or production of qualifying assets are added to
the cost of those assets until such time as the assets are substantially ready for their intended use. All other borrowing costs are expensed
as finance costs in the period in which they are incurred. Where the funds used to finance a qualifying asset form part of a general borrowing,
the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period.
Construction-in-progress
is not depreciated. When an asset becomes available for use, its costs are transferred from construction-in-progress into the appropriate
asset classification such as mineral properties, building, plant and equipment. Depreciation commences once the asset is complete and
available for use.
Buildings,
plant and equipment
Buildings,
plant and equipment are recorded at cost, including all expenditures incurred to prepare an asset for its intended use. An item of buildings,
plant and equipment is de-recognized upon disposal or when no further future economic benefits are expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between any proceeds received and the carrying amount
of the asset) is included in the consolidated statements of earnings (loss) and comprehensive earnings (loss) in the year the asset is
de-recognized.
Buildings,
plant and equipment are depreciated according to either the units-of-production method or on a straight-line basis over their expected
useful life, according to the pattern in which the asset’s future economic benefits are expected to be consumed. Depreciation commences
when the assets are considered available for use. Once buildings, plant and equipment are considered available for use, they are measured
at cost less accumulated depreciation and applicable impairment losses.
Where
an item of buildings, plant and equipment comprises major components with different useful lives, the components are depreciated separately
but are grouped for disclosure purposes as buildings, plant and equipment. Major overhaul expenditures and the cost of replacement of
a major component are depreciated over the average expected period between major overhauls.
Management
annually reviews the estimated useful lives, residual values and depreciation methods of the Company’s buildings, plant and equipment
and also when events and circumstances indicate that such a review should be undertaken. Changes to estimated useful lives, residual values
or depreciation methods resulting from such reviews are accounted for prospectively.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
The
following table sets out the useful lives of certain assets depreciated using the straight-line basis:
|
|
|
|
|
|
|
Useful
Life |
| Buildings,
plant and equipment |
2
to 20 years |
| Mobile
equipment |
2
to 10 years |
| Light
vehicles and other mobile equipment |
2
to 10 years |
| Furniture,
computer and office equipment |
2
to 5 years |
Mineral
properties
The
cost of mineral properties includes the fair value attributable to proven and probable mineral reserves and mineral resources acquired,
development costs, capitalized exploration and evaluation costs and capitalized borrowing costs. These costs incurred are directly attributable
to bringing a mineral property to the state where it is capable of operating in the manner intended by management (“commercial production”).
In determining whether a mine has achieved commercial production, the criteria considered include the following:
•Substantial
completion of the construction activities;
•Ability
to produce minerals in saleable form (within specifications);
•Completion
of a reasonable period of testing of mine plant and equipment; and
•Ability
to sustain ongoing production of minerals.
After
a mineral property has been brought into commercial production, costs are expensed as incurred or capitalized to inventory. Sales are
recognized as revenues and production costs as a component of cost of sales, and amortization of capitalized costs in property, plant
and equipment commences.
Mineral
properties are depreciated on a units-of-production basis over the estimated economic life of the mine to which they relate.
Deferred
stripping costs
In
open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals can be extracted
economically. The process of mining overburden and waste materials to access ore from which minerals can be extracted economically is
referred to as stripping. Stripping costs incurred in the production phase are accounted for as costs of the inventory produced during
the period that the stripping costs are incurred, unless these costs are expected to provide a future economic benefit to an identifiable
component of the ore body which will be extracted in the future. Components of the ore body are based on the distinct development phases
identified by the mine planning engineers when determining the optimal development plan for the open pit.
Stripping
costs incurred in the production phase provide a future economic benefit when:
•It
is probable that the future economic benefit associated with the stripping activity will flow to the Company;
•The
Company can identify the component of the ore body for which access has been improved; and
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
•The
costs relating to the stripping activity associated with that component can be measured reliably by the Company.
Where
a mine operates several open pits that are regarded as separate operations for the purpose of mine planning, stripping costs are accounted
for separately by reference to the ore from each separate pit. A “component” is a specific section of the ore body that is
made more accessible by the stripping activity and is typically a subset of the larger ore body that is distinguished by a separate useful
economic life.
When
the costs of the stripping activity asset and the inventory produced are not separately identifiable, the Company allocates the production
stripping costs between the inventory produced and the stripping activity asset by using an allocation basis that is based on a relevant
production measure. This production measure is calculated for the identified component of the ore body and is used as a benchmark to identify
the extent to which the additional activity of creating a future benefit has taken place. The benchmark used divides the total tonnage
mined (ore and waste) for the component or pit for the period by the quantity of minerals contained in the ore mined for the component
or pit.
Capitalized
stripping costs are depleted on a units-of-production basis over the proven and probable reserves that become more accessible as a result
of the stripping activity.
f.Leases
At
inception of a contract, the Company assesses whether a contract is, or contains, a lease by assessing if the contract conveys the right
to control the use of an identified asset for a period of time in exchange for consideration. The Company primarily uses the following
criteria to assess whether a contract conveys the right to control the use of an identified asset:
•The
contract involves the use of an explicitly or implicitly identified lease;
•The
Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and,
•The
Company has the right to direct the use of the asset.
If
a contract is assessed to contain a lease, a lease liability and right-of-use (“ROU”) asset is recognized at the commencement
date of the lease (i.e. the date the underlying asset is available for use).
ROU
assets are measured at cost less any accumulated depreciation and impairment losses and adjusted for any remeasurements of the lease liability.
Such costs include the initial amount of lease obligations recognized, initial direct costs incurred, and lease payments made at or before
the commencement date less any lease incentives received.
Unless
the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the ROU assets are depreciated
on a straight-line basis over the shorter of the estimated useful life and the lease term. ROU assets are subject to impairment.
At
the commencement date, the lease liability is measured at the present value of lease payments to settle the lease contract, discounted
using the interest rate implicit in the lease agreement or, if that rate cannot be readily determined, the Company’s incremental
borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease payments include fixed payments,
variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
guarantees
and the exercise price of a purchase option reasonably certain to be exercised by the Company.
After
the commencement date, the lease liability is increased by the interest cost on the lease liability and decreased by lease payments made.
It is remeasured if there is a modification, a change in the lease term, a change in the fixed lease payments, changes based on an index
or rate or a change in the assessment to purchase the underlying asset.
g.Impairment
and impairment reversal of long-lived assets
Long-lived
assets are reviewed for impairment indicators at each reporting period. If an indicator of impairment exists, the Company calculates the
recoverable amount of the asset to determine if any impairment loss is required. The recoverable amount is determined for an individual
asset unless the asset does not generate cash inflows that are independent of those generated from other assets or groups of assets, in
which case, the individual assets are grouped together into cash generating units (“CGUs”) for impairment testing purposes.
The recoverable amount is the greater of value-in-use (“VIU”) and fair value less costs of disposal (“FVLCD”)
of an asset or CGU. An impairment loss is recognized for any excess of the carrying amount of the CGU over its recoverable amount. Impairment
losses are recorded in the consolidated statements of earnings (loss) in the period in which they occur.
The
Company applies the impairment loss to the CGU’s long-lived assets based on their carrying amounts on a pro-rata basis. Assumptions,
such as gold price, copper price, molybdenum price, exchange rates, discount rate, expenditures underlying the estimate of recoverable
value, value per in-situ gold equivalent ounce estimates and capital equipment values are subject to risks and uncertainties.
CGUs
with previous impairment charges to long-lived assets, other than goodwill, are monitored for potential indicators of impairment reversal
each reporting period. Any impairment charge that is taken on a long-lived asset, other than goodwill, is reversed if there are subsequent
changes in the estimates or significant assumptions that were used to recognize the impairment loss, that result in an increase in the
recoverable amount of the CGU. If an indicator of impairment reversal has been identified, the recoverable amount of the long-lived asset
is calculated in order to determine if any impairment reversal is required. This reversal is recognized in earnings and is limited to
the carrying value that would have been determined, net of any depreciation, depletion and amortization, where applicable, had no impairment
charge been recognized previously. Impairment reversals are recorded in the consolidated statements of earnings (loss) in the period in
which they occur.
h.Provision
for reclamation
Provisions
for reclamation arise from the acquisition, development and construction of mining properties and plant and equipment, and are subject
to government controls and regulations that protect the environment on the closure and reclamation of mining properties. Provisions for
reclamation are recognized at the time that an environmental disturbance occurs or a new legal or constructive obligation is determined.
The major parts of the carrying amount of provisions relate to tailings facilities and heap leach pad closure and rehabilitation, demolition
of buildings and mine facilities, and ongoing water treatment and monitoring of closed mines. Costs included in the provision encompass
all closure and rehabilitation activity expected to occur progressively over the life of the operation at the time of closure and post-closure
in connection with disturbances as at the reporting date. Estimated costs included in the determination of the provision reflect the risks
of each particular operation. Provisions for reclamation are measured at the expected value of future cash flows adjusted for the impact
of short- and long-term inflation and discounted to their present value using a pre-tax risk-free discount rate.
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Each
reporting period, provisions for reclamation are remeasured to reflect any changes to significant assumptions, including changes in discount
rates, foreign exchange rates, inflation rates and the timing or amounts of the costs to be incurred. For operating sites, when the provision
for reclamation is recognized or adjusted for an operating asset, the corresponding cost is capitalized to the related item of property,
plant and equipment, except where a reduction in the obligation is greater than the amount capitalized, in which case the capitalized
costs are reduced to $nil and the remaining adjustment is included in the statements of earnings (loss). Reclamation provisions that result
from disturbance in the land to extract ore in the current period are included in the cost of inventories. When the provision for reclamation
is recognized or adjusted for closed sites, the cost is included in the consolidated statements of earnings (loss) and comprehensive earnings
(loss).
The
provisions are adjusted each period to reflect the passage of time and are recorded in finance costs in the period incurred. Upon settlement
of the provision for reclamation, the Company records a gain or loss if the actual cost differs from the carrying amount of the provision.
Settlement gains or losses are recorded in the consolidated statements of earnings (loss) and comprehensive earnings (loss).
i.Contingent
liabilities and other provisions
Provisions
are recorded when a legal or constructive obligation exists as a result of past events where it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be
made. The amount recognized as a provision is the best estimate of the amount required to settle the present obligation estimated at the
end of each reporting period, taking into account the risks and uncertainties surrounding the obligation. A provision is measured using
the present value of cash flows estimated to settle the present obligation, discounted using a pre-tax risk-free discount rate consistent
with the time period of expected cash flows. The increase in provision due to the passage of time is recognized as a finance cost in the
consolidated statements of earnings (loss) and comprehensive earnings (loss).
Contingent
liabilities may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only
be resolved when one or more future events occur or fail to occur. In assessing loss contingencies, the Company, with assistance from
its legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the
amount of relief sought or expected to be sought.
If
the assessment of a contingency suggests that a loss is probable, and the amount can be reliably estimated, then a provision is recorded.
When a contingent loss is not probable, but is reasonably possible, or is probable but the amount of loss cannot be reliably estimated,
then details of the contingent loss are disclosed. Loss contingencies considered remote are generally not disclosed. Legal fees incurred
in connection with pending legal proceedings are expensed as incurred.
j.Share-based
compensation
The
long-term incentive plan (“LTIP”) effectively replaced the Company’s legacy plans (“Legacy Plans”). Share-based
compensation awards granted under the Legacy Plans remain outstanding and governed by the respective terms of such plans, but no new awards
are to be granted under any of the Legacy Plans.
Employee
Stock Options
Stock
options are equity-settled share-based compensation awards and are administered in a similar fashion under LTIP and Legacy Plans. The
fair value of stock options at the grant date is estimated using the Black-Scholes option pricing model. Stock options vest over three
years whereby 33% vest on each
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
anniversary
of the grant date. Compensation expense is recognized over the stock option vesting period based on the number of units estimated to vest.
This expense is recognized as share-based compensation expense with a corresponding increase in contributed surplus. When options are
exercised, the proceeds received by the Company, together with the amount in contributed surplus, are credited to common shares.
Performance
Share Units
A
Performance Share Unit (“PSU”) represents the right to receive the cash equivalent of a common share or, at the Company’s
option, a common share purchased on the open market. PSUs are accounted for under the liability method using the Monte Carlo simulation
option pricing model. Under LTIP, 100% of awards vest after three years following the grant year. Under the Legacy Plans, awards vest
over three years whereby 50% vest on December 31 of the year following the grant year (“end of year 2”) and the remaining
50% vest on December 31 of the subsequent year (“end of year 3”). Under this method, the fair value of the PSUs is recognized
over the vesting period. The liability is adjusted to fair value at each reporting period and any resulting adjustment to the accrued
obligation is recognized as an expense or, if negative, a recovery. The cash paid on exercise of these PSUs is recorded as a reduction
of the accrued obligation. The number of units that vest is determined by multiplying the number of units granted to the participant by
the adjustment factor based on Centerra’s total return performance relative to the total return index value (“TRIV”)
from the S&P/TSX Global Gold CAD$ Index during the applicable period.
Deferred
Share Units
Deferred
Share Units (“DSUs”) are administered in a similar fashion under LTIP and Legacy Plans. Directors of the Company elect to
receive all or a portion of their annual director fees, as deferred share units. DSUs are settled in cash and are accounted for under
the liability method. DSUs cannot be converted to shares by the unit holder or by the Company. DSUs cannot be redeemed until a director
no longer holds any position with the Company, and can be redeemed no later than December 15 of the following year in which the director
ceased to hold all positions in the Company, unless otherwise stated in a grant agreement. A liability is recorded at grant date equal
to the fair value of the DSUs. The liability is adjusted to fair value at each reporting period and any resulting adjustment to the accrued
obligation is recognized as an expense or, if negative, a recovery. The cash paid on exercise of these deferred share units is recorded
as a reduction of the accrued obligation.
Restricted
Share Units
Executive
RSUs granted under the LTIP are equity-settled share-based compensation awards. The Executive RSUs vest over three years whereby 33% vest
on each of the annual vesting dates. Compensation expense is recognized over the vesting period based on the number of units to vest.
The expense is recognized as share-based compensation expense with a corresponding increase in contributed surplus.
Employee
RSUs granted under the Legacy Plans are equity-settled share-based compensation awards. Employee RSU holders had an option to elect to
receive a portion of their annual incentive payments for that year as Employee RSUs and the Company matched 50% of the Employee RSUs granted
to Employee RSU holders. Employee RSUs vest 50% as of the first anniversary of their grant dates and the remaining 50% vest as of the
second anniversary of their grant dates. Compensation expense is recognized over the vesting period based on the number of units to vest.
The expense is recognized as share-based compensation expense with a corresponding increase in contributed surplus.
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Employee
RSUs granted under the LTIP are cash-settled share-based compensation awards. The Employee RSUs vest over three years whereby 33% vest
on each of the annual vesting dates. The Employee RSUs are accounted for under the liability method whereby a liability is recorded at
grant date equal to the fair value of the Employee RSU. Under this method, the fair value of the Employee RSUs are recognized over the
vesting period. The liability is adjusted to fair value at each reporting period and any resulting adjustment to the accrued obligation
is recognized as an expense or, if negative, a recovery.
Directors
of the Company elect to receive all or a portion of their annual retainer, as restricted share units. Director RSUs can be settled in
cash or equity at the option of the holders. The Director RSUs vest immediately upon grant and are redeemed on a date chosen by the participant
(subject to certain restrictions as set out in the plan). The Director RSUs granted are accounted for under the liability method whereby
a liability is recorded at grant date equal to the fair value of the Director RSU.
Discretionary
RSUs are granted to certain employees of the Company and can be settled in cash or equity at the option of the Board of Directors, determined
at the time of the grant. Discretionary RSUs vesting dates are defined by the Board of Directors at the time of the grant. The Discretionary
RSUs are accounted for under the liability method whereby a liability is recorded at grant date equal to the fair value of the Discretionary
RSU. Under this method, the fair value of the Discretionary RSUs are recognized over the vesting period. The liability is adjusted to
fair value at each reporting period and any resulting adjustment to the accrued obligation is recognized as an expense or, if negative,
a recovery.
Employee
Share Purchase Plan
Centerra
has an Employee Share Purchase Plan (“ESPP”) for employees of the Company. Under the ESPP, employees may elect to purchase
the Company’s shares through a payroll deduction. Each year, employees may elect to contribute up to 10% of their base salary and
the Company will match 25% of the contribution. Such contributions are then used to acquire Centerra shares on a quarterly basis. Shares
purchased have no vesting requirement and may be issued from treasury or acquired on the open market. The Company records an expense equal
to value of the match provided.
Dividends
When
cash dividends are paid, participants under the PSU, DSU and RSU plans are allocated additional units equal in value to the dividend paid
per common share based on the number of units held by the participant on the record date. Under the ESPP, cash dividends paid with respect
to shares held in the ESPP accounts are automatically reinvested in shares. Such dividend shares and dividend equivalents will be subject
to the same vesting and other conditions applicable to the underlying RSUs, PSUs, DSUs, and ESPP shares as the case may be.
k.Revenue
recognition from contracts with customers
The
Company sells its products pursuant to sales contracts entered into with its customers. Revenue associated with the sale of finished gold,
gold-copper concentrates and molybdenum products is recognized when control is transferred to the customer. For finished gold and molybdenum
products sales, typically, the transfer of control occurs when the customer has taken delivery and the consideration is received, or to
be received. For concentrate sales, the transfer of control is based on terms of the sales contracts, generally upon the loading of the
ocean vessel or based on negotiated terms which allows for the transfer of control to happen earlier in the sale process.
Revenues
from finished gold sales from the Öksüt Mine are based on the London Bullion Market Association morning spot price (“LBMA
AM fix price”) stipulated in the agreement with the Central Bank of
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
the
Republic of Türkiye (“Central Bank”). Gold doré is sent to a refinery and the Central Bank has the right of first
refusal on the purchase of the gold produced. If the Central Bank exercises this right, the finished gold is delivered. If the gold doré
is not purchased by the Central Bank, it is sold to a buyer via the refining facility on the Borsa Istanbul at spot prices. Payment is
received on the same day of the sale, when control of the finished gold is transferred to the Central Bank.
Revenues
from the Company’s concentrate sales and molybdenum product sales are based on a provisional forward sales price, which is subject
to adjustments at the time of final pricing. Revenues from concentrate sales are recorded net of treatment and refining charges and the
impact of derivative contracts accounted for as hedges of the contained metal.
In
2016, in connection with the acquisition of Thompson Creek Metals Inc., the Company assumed the streaming agreement (“Mount Milligan
Mine Streaming Agreement”) with RGLD Gold AG and Royal Gold Inc. (“Royal Gold”) associated with the Mount Milligan Mine.
Under the terms of the Mount Milligan Mine Streaming Agreement, the Company delivers to Royal Gold 35% of gold ounces produced and 18.75%
of copper produced. Royal Gold paid US$435 per ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered
in the periods presented, which is recorded to revenue. On February 13, 2024, the Company and its subsidiary, Thompson Creek Metals Company
Inc. (“TCM”) entered into an additional agreement with Royal Gold (note 24), revising some of the above described terms.
Gains
and losses related to the Company's forward commodity contracts to economically hedge the Company's commodity price exposure under the
Gold and Copper Stream Arrangement, are recorded at fair value each period. To satisfy its obligations under the Gold and Copper Stream
Arrangement the Company purchases refined gold and London Metal Exchange (“LME”) copper warrants and arranges for delivery
to Royal Gold. Revenue from and costs for refined physical gold and LME copper warrants delivered under the Gold and Copper Stream Arrangement
and gains and losses related to the Company's forward commodity contracts to economically hedge the Company's exposure under the Gold
and Copper Stream Arrangement are netted and recorded to revenue.
Provisional
prices are finalized in a specified future month (generally one to four months after delivery to the customer) based on spot copper prices
on the LME, spot gold prices on the LBMA or spot molybdenum prices on the LME (Platts). The Company receives market prices based on prices
in the specified future month, which results in mark-to-market price fluctuations on the related receivable. To the extent final prices
are higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues is recorded each reporting period
reflecting the estimated forward prices at the date of final pricing. Changes in metal quantities upon receipt of final assay are also
adjusted for. Any such adjustments are generally not material to the transaction price.
When
sales transactions give rise to potential variable or contingent consideration, the variable consideration is recognized to the extent
it can be estimated reliably and it is highly probable that a significant reversal of the amount will not occur in the future. The Company
computes the transaction price to a given sales transaction using one of the following methods:
•the
expected value method: identifies a range of possible consideration amounts, weights the possible consideration amounts by their respective
probabilities, and then sums probability-weighted amounts to generate the expected value of consideration to be received from the customer;
•the
most likely value method: the amount determined most likely to be received.
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
The
Company then applies a constraint to recognize income for variable consideration only to the extent that it is deemed highly probable
that a significant reversal of the income will not occur. The Company applies judgment in assessing the probability of occurrence, which
is subject to risks and uncertainties.
l.Exploration
and evaluation expenditures
Exploration
and evaluation expenditures are the costs incurred on the initial search for mineral deposits with economic potential or in the process
of obtaining more information about existing mineral deposits. Evaluation expenditures are the costs incurred to establish the technical
and commercial viability of developing mineral deposits identified through exploration activities or by acquisition.
Exploration
and evaluation expenditures are expensed as incurred unless it can be demonstrated that it is probable that the project will generate
a future economic benefit. The exploration and evaluation phase ends when the technical feasibility and commercial viability of extracting
the mineral is demonstrable.
The
Company also recognizes exploration and evaluation costs as assets when acquired as part of a business combination, or asset purchase.
These assets are recognized at fair value.
m.Earnings
per share
Basic
earnings per share is computed by dividing the net earnings for a given period by the weighted average number of common shares outstanding
during that same period. Diluted earnings per share reflects the potential dilution that could occur if holders with rights to convert
instruments to common shares exercise these rights.
The
weighted average number of common shares used to determine diluted earnings per share includes an adjustment, using the treasury stock
method, for stock options and RSUs outstanding. Under the treasury stock method:
•The
exercise of stock options and RSUs is assumed to occur at the beginning of the period;
•The
proceeds from the exercise of stock options and RSUs plus the future period compensation expense on units granted are assumed to be used
to purchase common shares of the Company at the average market price during the period; and,
•The
incremental number of common shares (the difference between the number of shares assumed issued and the number of shares assumed purchased)
is included in the denominator of the diluted earnings per share computation.
Equity
instruments that could potentially be dilutive in the future, but do not currently have a dilutive effect are excluded from the calculation
of diluted earnings per share.
n.Income
taxes
Tax
expense comprises current and deferred tax. Current tax and deferred tax are recognized in the consolidated statements of earnings (loss)
and comprehensive earnings (loss) except to the extent that they relate to a business combination, or to items recognized directly in
equity or in other comprehensive earnings (loss).
Current
tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Deferred
tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the tax bases of such assets and liabilities measured using tax rates and laws that are substantively enacted at the reporting date
and effective for the reporting period when the temporary differences are expected to reverse. The measurement of deferred tax reflects
the tax consequences that would result from the way the Company, at the end of the reporting period, intends to recover or settle the
carrying amount of its assets and liabilities.
Deferred
tax is not recognized for:
•Temporary
differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss;
•Temporary
differences related to investments in subsidiaries, associates and jointly controlled entities to the extent that the group is able to
control the timing of the reversal of the temporary differences and it is probable that such temporary differences will not reverse in
the foreseeable future; and,
•Taxable
temporary differences arising on the initial recognition of goodwill.
Deferred
tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate
to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A
deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that it is more
likely than not that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer more likely than not that the related tax benefit will be realized.
o.Derivative
instruments and hedge accounting
The
Company may hold derivative instruments to manage its risk exposure to fluctuations of commodity prices, including the Company’s
products (for example, gold or copper) and consumables (for example, diesel fuel) and fluctuations in other currencies compared to the
US dollar.
Non-derivative
financial assets
Non-derivative
financial instruments are recognized initially at fair value plus attributable transaction costs, where applicable for financial instruments
not classified as fair value through profit or loss. Subsequent to initial recognition, non-derivative financial instruments are classified
and measured as described below.
Marketable
securities are classified as financial assets at fair value through profit or loss and are measured at fair value. The unrealized gains
or losses related to changes in fair value of marketable securities are reported in the consolidated statements of earnings (loss).
Non-derivative
financial liabilities
Accounts
payable and accrued liabilities are accounted for at amortized cost, using the effective interest rate method.
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Hedge
derivatives
The
Company applies hedge accounting to the following derivative instruments:
•Copper
contracts, which hedge a portion of the copper components of its future concentrate sales, that are not subject to the streaming agreement
with Royal Gold at the Mount Milligan Mine (“copper contracts”);
•Fuel
hedge contracts to hedge a portion of its estimated future diesel fuel purchases at its operations (“fuel hedge contracts”);
•Foreign
exchange contracts to hedge a portion of its future Canadian-denominated expenditures (“foreign exchange contracts”);
and,
•Gold
contracts, to hedge a portion of its future gold sales.
The
Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and
strategies for undertaking hedge transactions. This process includes linking all derivative hedging instruments to forecasted transactions.
The Company calculates and monitors the hedge ratio, which is resulting from the quantity of the hedged item that the entity hedges and
the quantity of the hedging instrument that the entity uses to hedge that quantity of hedged item. Hedge effectiveness is assessed based
on the degree to which the cash flows from the derivative contracts are expected to offset the cash flows of the underlying transaction
being hedged.
The
Company’s copper and gold contracts, fuel hedge contracts and foreign exchange contracts are designated as a cash flow hedging instrument,
where the effective portion of changes in fair value are recognized in other comprehensive earnings (loss). The amounts accumulated in
other comprehensive earnings (loss) are reclassified to the consolidated statements of income and comprehensive income, consistent with
the classification of the underlying hedged transaction, when the underlying hedged transaction, identified at contract inception, is
recognized. Fair value changes for copper and gold contracts are reclassified to revenue, fuel contracts to production costs, and foreign
exchange contracts to production costs, corporate administration or care and maintenance costs.
Any
ineffective portion of a hedge relationship is recognized immediately in the consolidated statements of income and comprehensive income.
When derivative contracts designated as cash flow hedges are terminated, expired, settled or no longer qualify for hedge accounting, hedge
accounting is discontinued prospectively. Amounts historically recorded in other comprehensive earnings (loss) remain in other comprehensive
earnings (loss) until the underlying hedged transaction is recognized. If the forecasted transaction is no longer expected to occur, then
the amounts accumulated in other comprehensive income are reclassified to the consolidated statements of earnings (loss) and comprehensive
earnings (loss) as other income or expense immediately.
Gains
or losses arising subsequent to the derivative contracts not qualifying for hedge accounting are recognized in the period in which they
arise in the consolidated statements of earnings (loss).
Non-hedge
derivatives
All
derivative instruments not designated in a hedge relationship are classified as financial instruments at fair value through profit or
loss. Changes in fair value of non-hedge derivatives at each reporting date are included in consolidated statements of earnings (loss)
as other non-operating expenses, while changes in the fair value of spot and forward contracts associated with the Royal Gold deliverables
are included in revenue.
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Recently
Issued and Accounting Pronouncements
IAS 1, Presentation of Financial Statements
In
January 2020, the IASB issued an amendment to IAS 1, Presentation
of Financial Statements,
to clarify one of the requirements under the standard for classifying a liability as non-current in nature. The amendment includes:
–Specifying
that an entity’s right to defer settlement must exist at the end of the reporting period;
–Clarifying
that classification is unaffected by management’s intentions or expectations about whether the entity will exercise its right to
defer settlement;
–Clarifying
how lending conditions affect classification; and
–Clarifying
if the settlement of a liability refers to the transfer of cash, equity instruments, other assets, or services.
The
Company adopted the amendments to the standard on January 1, 2024 and concluded that there is no material impact on the financial statements.
IFRS
18, Presentation and Disclosure in Financial Statements
In
April 2024, the IASB issued IFRS 18, the new standard on presentation and disclosure in financial statements, with a focus on updates
to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:
–the
structure of the statement of profit or loss;
–required
disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial
statements (that is, management-defined performance measures);
–enhanced
principles on aggregation and disaggregation of totals and disclosures which apply to the primary financial statements and notes in general.
IFRS
18 will replace IAS 1 while many of the other existing principles in IAS 1 are retained, with limited changes. IFRS 18 will not impact
the recognition or measurement of items in the financial statements, but it might change what an entity reports as its ‘operating
profit or loss’.
IFRS
18 will apply for reporting periods beginning on or after January 1, 2027 and also applies to comparative information. The Company will
perform an assessment of the impact of this new standard on its financial statements prior to the effective date of January 1, 2027.
4.
Critical accounting estimates and judgments
The
preparation of consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions
that affect the amounts reported in the consolidated financial statements and the application of the Company’s accounting policies,
which are described in note 3. Management believes that the estimates used in the preparation of the consolidated financial statements
are reasonable; however, actual results could differ from those estimates. The key areas of significant judgments, estimates and assumptions
are discussed below.
i.Impairment
and impairment reversal of long-lived assets
Significant
judgment is required in assessing indicators of impairment or impairment reversal of long-lived assets. For each asset or CGU, the Company
completes an evaluation at each reporting period of potential indicators of impairment or impairment reversal. The Company considers both
external and
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Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
internal
sources of information in assessing whether there are any indications that assets or CGUs may be impaired. Judgment is required around
significant adverse changes in the business climate which may be indicators of impairment such as a significant decline in the Company’s
market capitalization relative to its net asset carrying value, prolonged significant changes in commodity prices, discount rates and
significant changes to life-of-mine plans. When completing an impairment test, the Company calculates the estimated recoverable amount
of CGUs, which requires management to make estimates and assumptions related to items such as future production levels, operating and
capital costs, long-term commodity prices, foreign exchange rates, discount rates, proven and probable reserves and resources, closure
and environmental remediation costs, value per in-situ gold equivalent ounce estimates and capital equipment values. These estimates and
assumptions are subject to risk and uncertainty, particularly in circumstances where there is limited operating history of the asset or
CGU. Judgment is also required in determining the appropriate valuation method for mineralization and ascribing anticipated economics
to mineralization in cases where limited, dated or no comprehensive economic study has been completed. Therefore, there is a possibility
that changes in circumstances will have an impact on these projections, which may impact the recoverable amount of assets or CGUs. Changes
in these estimates which decrease or increase the estimated recoverable amount of a CGU could affect the carrying amounts of assets and
result in an impairment loss or reversal. While management believes that estimates of future cash flows are reasonable, different assumptions
regarding such cash flows could materially affect the recoverable amount of a CGU.
ii.Provision
for reclamation
Provisions
for reclamation require the use of estimates of the future costs the Company will incur to complete the reclamation and remediation work
required to comply with existing laws and regulations at each mine site, as well as the timing of the reclamation activities and estimated
discount rate. The Company assesses and revises its reclamation provision on a periodic basis or when new material information becomes
available. Adjustments to the estimated amount and timing of future reclamation cash flows are a normal occurrence in light of the significant
judgments and estimates involved. The principal factors that can cause expected cash flows to change are the construction of new processing
facilities, changes in the quantities of material in reserves and resources with a corresponding change in the life of mine plan, changing
ore characteristics that impact required environmental protection measures and related costs, changes in water quality that impact the
extent of water treatment required and changes in laws and regulations governing the protection of the environment.
Actual
costs incurred may differ from those amounts estimated. Changes in future costs could materially impact the estimate of reclamation provision.
The provision represents management’s best estimate of the present value of the future reclamation and remediation costs based on
environmental disturbances as at the reporting date. A change in any, or a combination of, the key assumptions used to determine the provisions,
could have a material impact on the carrying value of the provisions.
iii.Deferred
income taxes
The
Company operates in a number of tax jurisdictions and is therefore required to estimate its income taxes in each of these tax jurisdictions
in preparing its financial statements. In calculating the income taxes, the Company considers factors such as tax rates in the different
jurisdictions, non-deductible expenses, changes in tax law and management’s expectations of future results. The Company estimates
deferred income taxes based on temporary differences between the income and losses reported in its financial statements and its taxable
income and losses as determined under the applicable tax laws. The tax effects of these temporary differences are recorded as deferred
tax assets or liabilities in the consolidated statements of financial position. If actual results differ from these estimates, adjustments
are made in subsequent periods.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
The
Company recognizes deferred income tax benefits related to deferred income tax assets to the extent recovery is more likely than not.
Assessing the recoverability of deferred income tax assets requires management to make estimates of future taxable profits. Management
generally uses estimates of future taxable profit over the range of next three years and life of mine of a given asset to carry out its
assessment. To the extent that future cash flows and taxable profit differ significantly from estimates, the ability of the Company to
utilize the net deferred tax assets recorded at the balance sheet date could be impacted. In addition, future changes in tax laws could
limit the ability of the Company to obtain tax deductions in future periods from such deferred income tax assets.
iv.Mineral
reserves and resources estimation
The
Company estimates its mineral reserves and resources based on information compiled by qualified persons as defined in accordance with
the National Instrument 43-101, Standards
of Disclosure for Mineral Projects (“NI
43-101”). The estimation of mineral reserves requires judgment to interpret available geological data, select an appropriate mining
method and establish an extraction schedule. It also requires assumptions on future commodity prices, foreign exchange rates, production
costs, capital expenditures, recovery rates, and in some instances, the renewal of mining licenses. There are numerous uncertainties inherent
in estimating mineral reserves and resources and assumptions that are valid at the time of estimation which may change significantly when
new information becomes available. Changes in such assumptions and estimates may result in the mineral reserves and resources being revised.
Estimates
of mineral reserves and resources impact the following items in the consolidated financial statements:
•The
carrying value of the Company’s property, plant and equipment may be affected due to changes in estimated future cash flows;
•Depreciation,
depletion and amortization charge of assets using the units-of-production method;
•Estimate
of recoverable value of CGUs used for the purpose of impairment or impairment reversal tests of long-lived assets;
•Estimated
timing and costs of reclamation activities;
•Deferred
income and mining taxes, in particular, the evaluation of unrecognized deferred income and mining tax assets; and,
•Expected
future economic benefit of expenditures, including stripping and development activities recognized in the statements of financial position
as either part of mine properties or inventories.
v.Additional
Royal Gold Agreement
On February 13, 2024, the Company and its subsidiary TCM entered into an additional agreement with Royal Gold (the “Additional Royal
Gold Agreement”) relating to the Mount Milligan Mine (refer to note 24a). Significant judgment was required to determine accounting
for the contract, including the conclusion that it is a modification of a contract with a customer, under IFRS 15, Revenue
recognition from contracts with customers,
whereby the Company received consideration in the form of a financial asset. Significant judgment was also required to determine whether
all the cash flows in the Additional Royal Gold Agreement should be accounted for as a single financial asset under IFRS 9, Financial
Instruments. In addition,
significant judgment was required to determine the basis for the initial valuation of the financial asset, including, among other things,
Mount Milligan Mine’s life of mine viewed from the perspective of the specific market participant deemed most relevant for this
transaction. Measurement of the financial asset includes various material assumptions that are subject to significant estimation. Actual
results may differ from those amounts estimated. A change in any, or a combination of, the key assumptions used to determine the measurement
of the financial asset, could have a material impact on the fair value of the
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
financial
asset. Refer to note 24a for key assumptions and estimation used in determining the fair value of the financial asset.
vi.Sale
of Greenstone Partnership
On
November 6, 2024, the Company recognized an additional gain on the sale of Greenstone Partnership and an associated contract asset, representing
the amount due from Equinox Gold Corp (“Equinox”) based on payments contingent on achieving certain production milestones.
Significant judgment was required to determine the removal of the significant uncertainty constraining the cumulative production milestones
to be met by the Greenstone Mine. Measurement of the contract asset includes various material assumptions that are subject to significant
estimation. Actual results may differ from those amounts estimated. A change in any, or a combination of, the key assumptions used to
determine the measurement of the contract asset, could have a material impact on the expected value of the contract asset. Refer to note
6 for summary of the sale, key assumptions and estimation used in determining the expected value of the contract asset.
5.
Impairment loss
Goldfield
Project
The
Company owns 100% interest in the Goldfield Project. In early 2022, the Company acquired Gemfield Resources LLC (“Gemfield”),
owner of the Goldfield Project in Nevada, USA, from Waterton Nevada Splitter, LLC (“Waterton”). Since the acquisition, the
Company conducted exploration activities and evaluation activities on the land package. In conjunction with the Company’s 2024 mineral
reserves and mineral resources update, the Company prepared a resource estimate for the Goldfield project. Based on the size and quality
of the resource estimate, the Company has decided not to proceed with the development of the project on a stand-alone basis at this time.
The Company identified this as an indicator of impairment that suggested that the carrying amount of the Goldfield Project may exceed
its recoverable amount and an impairment test was performed as at December 31, 2024.
The
estimated recoverable amount of the Goldfield Project as at December 31, 2024 was determined on the basis of FVLCD using a market approach
and a value per in-situ gold ounce metric by reference to comparable public companies applied to existing resources. The Company applied
a value per ounce of $50 per in-situ gold ounce to determine the fair value of the mineral resources of $21.5 million.
As
the Goldfield Project’s carrying amount exceeded its estimated FVLCD, an impairment loss of $### million was recognized in the impairment
loss line item in the consolidated statements of earnings (loss) and reflected in the "Corporate and other” category in the
Company’s segment disclosure (note 26). The approach to determine FVLCD uses significant unobservable inputs and is therefore considered
Level 3 fair value measurement under the fair value hierarchy.
Kemess
Project
The
Company owns 100% interest in the Kemess Project. In 2023, the Company incurred only care and maintenance expenses at the Kemess Project
and very limited exploration or evaluation activities took place. As a result of a detailed cost review in conjunction with the re-evaluation
of new technical concepts for the project in the fourth quarter of 2023, the Company made a decision to reclassify reserves to resources
and reduce the total quantity of mineral resources attributed to the Kemess Project. The Company identified this as an indicator of impairment
that suggested that the carrying amount of the
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Kemess
Project may exceed its recoverable amount and an impairment test was performed as at December 31, 2023.
The
estimated recoverable amount of the Kemess Project CGU as at December 31, 2023 was determined on the basis of FVLCD and calculated using
a combination of (1) market approach and a value per in-situ gold equivalent ounce metric by reference to comparable public companies
applied to existing reserves and resources and (2) valuation of the capital equipment at site. The Company applied a range of $19.30 to
$32.50 per in-situ gold equivalent ounce to determine the value of gold and silver mineral reserves and resources and a range of $6.00
to $6.20 per in-situ gold equivalent ounce to determine the value of copper mineral reserves and resources. The valuation of the capital
equipment on site estimated the value of the equipment on site based on its age, condition, and other factors.
As
the Kemess Project’s carrying amount exceeded its estimated FVLCD, an impairment loss of $30.0 million was recognized in the
impairment loss line item in the consolidated statements of earnings (loss) for the year ended December 31, 2023 and reflected in the
"Corporate and other” category in the Company’s segment disclosure (note 26). The approach to determine FVLCD uses significant
unobservable inputs and is therefore considered Level 3 fair value measurement under the fair value hierarchy.
Berg
Property
On
December 22, 2023, the Company entered into a Purchase Agreement with Surge Copper Corp to sell the Company’s 100% interest in the
non-core Berg Property for share consideration of $1.5 million.
The
Company completed the sale on January 19, 2024. As a result of this transaction, the Company re-measured the Berg Property at the lower
of its carrying amount and fair value less costs to sell and recognized an impairment loss of $4.1 million in the consolidated statements
of earnings (loss) and comprehensive income (loss) for the year ended December 31, 2023.
Key
assumptions
The
determination of the recoverable amount with Level 3 input of the fair value hierarchy, includes the following key applicable assumptions:
•Value
per gold equivalent ounce estimates were determined based on comparable gold and copper public companies;
•Gold
and copper price estimates were determined using forecasts of future prices prepared by industry analysts, which were available as at
or close to the valuation date;
•Estimates
of the fair value attributable to mineralization are based on various assumptions, including determination of the appropriate valuation
method for mineralization, ascribing anticipated economics to mineralization in cases where only limited or no comprehensive economic
study has been completed and a value per ounce applied to such mineralization. The resources used were consistent with the resource volumes
approved as part of the Company’s process for the estimation of mineral reserves and resources;
•Value
attributed to categories of capital equipment was determined based on its physical condition and certain characteristics, prevailing secondary
market prices and estimated selling and transportation costs.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
6.
Sale of Greenstone Partnership
On
January 19, 2021, the Company completed the sale of its 50% interest in the Greenstone Partnership to an affiliate of Orion Resource Partners
(USA) LP (“Orion”). Pursuant to an agreement dated December 15, 2020, with Orion Resource Partners (USA) LP and Premier Gold
Mines Limited, the Company was entitled to receive further contingent consideration, payable no later than 24 months after the construction
decision on the Greenstone Mine and upon the mine achieving certain production milestones. In the fourth quarter of 2021, the Greenstone
Mine was approved for construction. As a result, the initial contingent payment of $25.0 million became owing to the Company and
was paid in December 2023.
The
remaining contingent payments are payable no later than 30 days following the date on which a cumulative production milestone of (i) 250,000
ounces; (ii) 500,000 ounces; and, (iii) 700,000 ounces have been achieved. The amounts are payable in US dollars, equal to the
product of 11,111, representing the ounces deliverable per each cumulative production milestone, and the 20-day average gold market price
on the business day immediately prior to the date of the payment.
On
May 13, 2024, Equinox acquired Orion’s 40% interest to consolidate 100% ownership of the Greenstone Mine. On November 6, 2024,
Equinox, the operator of the Greenstone Mine, announced that the mine had achieved commercial production which removed significant uncertainty
constraining the cumulative production milestones. As a result, the Company recognized an additional gain on the sale of Greenstone Partnership
of $62.3 million and a contract asset, representing the amount due from Equinox under these payments contingent on achieving these
production milestones. Subsequent
to the initial recognition, the most likely value of the contract asset will be re-measured at each reporting date with changes in expected
value recorded as a gain or loss on the sale of Greenstone Partnership. The most likely value of
the financial asset December 31, 2024 was $63.1 million.
The
table below summarizes changes in the contract asset included in other current assets and other non-current assets in the Company’s
consolidated statements of financial position. The determination of other current and other non-current assets was based on the expected
timing of receipt of contingent payments due from Equinox.
|
|
|
|
|
|
|
|
|
Balance, November 6, 2024 |
$ |
62,280 |
|
|
|
|
Remeasurement
gain |
808 |
|
|
Balance, December 31,
2024 |
$ |
63,088 |
|
|
Current portion of amount
due from Equinox (note 9) |
$ |
42,638 |
|
|
Non-current portion of
amount due from Equinox (note 11) |
$ |
20,450 |
|
The
most likely value of the contract asset was determined using a discounted cash flow method.
The
key assumptions used in the measurement of the contract asset are summarized in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2024 |
|
November
6, 2024 |
|
Gold
price per oz |
$ |
2,000 |
|
|
$ |
2,000 |
|
|
Timing
of receipt of contingent payments |
2025
to 2026 |
|
2025
to 2026 |
| Discount
rate |
5.56 |
% |
|
5.56 |
% |
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Key
assumptions
The
determination of the most likely value of the contract asset was performed utilizing Level 3 inputs of the fair value hierarchy, and including
the following key assumptions:
•Future
commodity price estimates were determined using forecasts of future prices prepared by industry analysts, which were available as at or
close to the valuation date. The Company established a range of conservative data points between minimum and 10th percentile of available
future price estimates to reduce the likelihood of future reversal of the gain recognized on the sale of Greenstone Partnership.
•Expected
timing of receipt of contingent payments were determined using the most recent production data for the Greenstone Mine and recently issued
technical reports to estimate when the timing of the contingent payment thresholds would be met.
•Discount
rate was based on a credit-risk adjusted rate representing the broader mining industry.
Future
commodity prices and discount rate were assumptions applicable to all components of the measurement of the contract asset while production
levels were a key assumption in the timing of the receipt of the milestone payments.
7.
Amounts Receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
|
Gold and copper concentrate
sales receivable(1) |
$ |
23,395 |
|
|
$ |
28,103 |
|
|
Molybdenum sales receivable(1) |
47,302 |
|
|
36,793 |
|
| Consumption
and income tax receivables |
2,274 |
|
|
3,326 |
|
|
|
|
|
| Other
receivables |
2,070 |
|
|
2,541 |
|
| Total
amounts receivable |
$ |
75,041 |
|
|
$ |
70,763 |
|
(1)Includes
provisionally-priced receivables subject to mark-to-market adjustment (note 24b)
8. Inventories
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
Stockpiles of ore(1) |
$ |
34,709 |
|
|
$ |
32,610 |
|
|
Gold in-circuit |
4,321 |
|
|
8,099 |
|
| Ore
on leach pads |
30,563 |
|
|
45,368 |
|
| Gold
doré |
2,823 |
|
|
13 |
|
| Copper
and gold concentrate |
9,016 |
|
|
23,720 |
|
|
Molybdenum inventory(2) |
69,823 |
|
|
74,897 |
|
| Total
product inventories |
151,255 |
|
|
184,707 |
|
|
Supplies (net of provision)(3) |
82,994 |
|
|
72,595 |
|
| Total
inventories |
$ |
234,249 |
|
|
$ |
257,302 |
|
(1)Includes
ore in stockpiles that might or might not be scheduled for processing within the next 12 months, but is available on-demand
(2)Includes
a positive fair value adjustment of
$0.2 million (2023 - positive $0.5 million). During the year ended December 31, 2024, impairment losses of nil (2023 - $3.7 million)
were recorded within production costs to reduce the carrying value of molybdenum inventories to their net realizable value.
(3)Net
of a provision for supplies inventory obsolescence of
$2.3 million as at December 31, 2024 (December 31, 2023 - $9.3 million ). The non-current portion of supplies inventory is included
in other non-current assets.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
9.
Other current assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Other
current assets |
|
|
|
|
Due
from Equinox (note 6) |
$ |
42,638 |
|
|
$ |
— |
|
|
|
|
|
| Prepaid
insurance expenses |
8,496 |
|
|
5,999 |
|
| Deposits
for consumable supplies |
2,655 |
|
|
3,629 |
|
| Marketable
securities |
3,130 |
|
|
2,834 |
|
| Prepaid
assets |
1,001 |
|
|
560 |
|
| Asset
held-for-sale |
— |
|
|
1,510 |
|
| Other |
554 |
|
|
185 |
|
| Total
other current assets |
$ |
58,474 |
|
|
$ |
14,717 |
|
| Other
current liabilities |
|
|
|
| Current
portion of lease obligations (note 14) |
$ |
6,393 |
|
|
$ |
6,106 |
|
| Current
portion of provision for reclamation (note 13) |
5,113 |
|
|
28,087 |
|
|
|
|
|
|
|
|
|
| Share
repurchase liability (note 20) |
7,597 |
|
|
8,084 |
|
|
|
|
|
|
Deferred
revenue (1) |
— |
|
|
9,536 |
|
| Other |
245 |
|
|
— |
|
|
|
|
|
| Total
other current liabilities |
$ |
19,348 |
|
|
$ |
51,813 |
|
(1)Relates
to an advance payment received on the gold and copper concentrate for which the control transferred in the subsequent period.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
10.
Property, plant and equipment
The
following is a summary of the carrying value of property, plant and equipment (“PP&E”):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings,
Plant
and
Equipment |
|
Mineral
Properties(1) |
|
Capitalized
Stripping
Costs |
|
Construction
in
Progress |
|
Total |
|
|
|
|
|
|
| Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| January
1, 2023 |
$ |
1,136,143 |
|
|
$ |
591,447 |
|
|
$ |
59,062 |
|
|
$ |
47,638 |
|
|
$ |
1,834,290 |
|
|
|
|
|
|
|
| Additions |
17,961 |
|
|
16,661 |
|
|
20,780 |
|
|
66,254 |
|
|
121,656 |
|
|
|
|
|
|
|
| Disposal |
(6,609) |
|
|
(4,723) |
|
|
— |
|
|
— |
|
|
(11,332) |
|
|
|
|
|
|
|
| Transfers |
39,106 |
|
|
4,330 |
|
|
— |
|
|
(43,436) |
|
|
— |
|
|
|
|
|
|
|
|
Reclassified to assets
held-for-sale(2) |
— |
|
|
(5,611) |
|
|
— |
|
|
— |
|
|
(5,611) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance
December 31, 2023 |
$ |
1,186,601 |
|
|
$ |
602,104 |
|
|
$ |
79,842 |
|
|
$ |
70,456 |
|
|
$ |
1,939,003 |
|
|
|
|
|
|
|
|
Additions |
5,451 |
|
|
5,433 |
|
|
23,115 |
|
|
140,787 |
|
|
174,786 |
|
|
|
|
|
|
|
| Disposal |
(3,490) |
|
|
— |
|
|
— |
|
|
— |
|
|
(3,490) |
|
|
|
|
|
|
|
| Transfers |
102,933 |
|
|
— |
|
|
— |
|
|
(102,933) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance
December 31, 2024 |
$ |
1,291,495 |
|
|
$ |
607,537 |
|
|
$ |
102,957 |
|
|
$ |
108,310 |
|
|
$ |
2,110,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated
depreciation and other charges |
|
|
|
|
|
|
| January
1, 2023 |
$ |
403,295 |
|
|
$ |
96,876 |
|
|
$ |
44,624 |
|
|
$ |
16,703 |
|
|
$ |
561,498 |
|
|
|
|
|
|
|
| Charge
for the year |
95,703 |
|
|
19,160 |
|
|
125 |
|
|
— |
|
|
114,988 |
|
|
|
|
|
|
|
| Disposals |
(4,989) |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,989) |
|
|
|
|
|
|
|
|
Impairment
(3) |
— |
|
|
34,101 |
|
|
— |
|
|
— |
|
|
34,101 |
|
|
|
|
|
|
|
|
Reclassified to assets
held-for-sale(2) |
— |
|
|
(4,101) |
|
|
— |
|
|
— |
|
|
(4,101) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance
December 31, 2023 |
$ |
494,009 |
|
|
$ |
146,036 |
|
|
$ |
44,749 |
|
|
$ |
16,703 |
|
|
$ |
701,497 |
|
|
|
|
|
|
|
| Charge
for the year |
93,215 |
|
|
18,948 |
|
|
5,932 |
|
|
— |
|
|
118,095 |
|
|
|
|
|
|
|
| Disposals |
(3,152) |
|
|
— |
|
|
— |
|
|
— |
|
|
(3,152) |
|
|
|
|
|
|
|
|
Impairment
(4) |
54 |
|
|
187,852 |
|
|
— |
|
|
4,417 |
|
|
192,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance
December 31, 2024 |
$ |
584,126 |
|
|
$ |
352,836 |
|
|
$ |
50,681 |
|
|
$ |
21,120 |
|
|
$ |
1,008,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
book value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance
January 1, 2024 |
$ |
692,592 |
|
|
$ |
456,068 |
|
|
$ |
35,093 |
|
|
$ |
53,753 |
|
|
$ |
1,237,506 |
|
|
|
|
|
|
|
| Balance
December 31, 2024 |
$ |
707,369 |
|
|
$ |
254,701 |
|
|
$ |
52,276 |
|
|
$ |
87,190 |
|
|
$ |
1,101,536 |
|
|
|
|
|
|
|
(1)Includes
exploration and evaluation assets related to the Goldfield Project and Kemess Project.
(2)Relates
to the non-core Berg Property classified as an asset held-for-sale as at December 31, 2023 (note 5).
(3)Relates
to impairment of the Kemess Project and impairment of the Berg Property classified as an asset held-for-sale as at December 31, 2023 (note
5).
(4)Relates
to impairment of the Goldfield Project (note 5)
For
the year ended December 31, 2024, $174.8 million (2023 - $121.7 million) of additions were capitalized to PP&E. For the year
ended December 31, 2024, the Company entered into lease arrangements resulting in right-of-use asset additions of $4.8 million (2023 -
$16.5 million) and disposed of PP&E with a carrying value of $0.3 million (2023 – $6.3 million). The net gain on disposal
of $0.6
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
million
(2023 – net loss of $1.5 million) was recorded in the other non-operating income line item in the consolidated statements of earnings
(loss).
11.
Other non-current assets and liabilities
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
| Other
non-current assets |
|
|
|
VAT
and other tax receivables(1) |
$ |
10,469 |
|
$ |
8,688 |
|
| Non-current
supplies inventory |
1,732 |
|
1,732 |
|
| Due
from Equinox (note 6) |
20,450 |
|
— |
|
|
Marketable
securities (2) |
9,785 |
|
— |
|
| Other |
749 |
|
3,581 |
|
| Total
other non-current assets |
$ |
43,185 |
|
$ |
14,001 |
|
|
|
|
| Other
non-current liabilities |
|
|
| Non-current
portion of lease obligations |
$ |
13,713 |
|
$ |
18,102 |
|
|
Non-current
portion of deferred revenue(3) |
20,187 |
|
— |
|
| Post-retirement
benefits |
1,634 |
|
1,244 |
|
| Total
other non-current liabilities |
$ |
35,534 |
|
$ |
19,346 |
|
(1)Includes
amounts related to the Öksüt Mine value-added tax.
(2)Relates
to the shares of publicly traded entities, recorded at fair value.
(3)Relates
to the Additional Royal Gold Agreement (note 24a)
12.
Accounts payable and accrued liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
2023 |
|
|
Trade payables and accruals(1) |
$ |
79,581 |
|
|
$ |
77,886 |
|
|
Royalties payable (2) |
63,192 |
|
|
48,697 |
|
| Wages,
salaries and benefits payable |
13,594 |
|
|
9,561 |
|
| Amount
due on the settlement of derivatives |
84 |
|
|
5,209 |
|
|
Amount due to Royal Gold(3) |
69,885 |
|
|
53,828 |
|
| Liability
for share-based compensation (note 20) |
6,758 |
|
|
6,526 |
|
| Total
accounts payable and accrued liabilities |
$ |
233,094 |
|
|
$ |
201,707 |
|
(1)Includes
$10.5 million of provisionally-priced payables at the Molybdenum BU, subject to fair value adjustment as at December 31, 2024 (2023 -
$12.5 million) (note 24c).
(2)Includes
amounts related to the Öksüt Mine, payable to the Turkish government authorities and amounts related to the Mount Milligan Mine,
payable to H.R.S. Resources Corp.
(3)Royal
Gold holds a streaming interest in the production at the Mount Milligan Mine. As a result, when a trade receivable is recorded in relation
to a third-party customer gold and copper concentrate delivery, a corresponding liability to Royal Gold is recorded.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
13.
Reclamation
a.Reclamation
provision
The
following table reconciles the beginning and ending carrying amounts of the Company’s provision for reclamation.
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
Development, exploration
and care and maintenance sites (1) |
|
|
|
| Balance,
beginning of year |
$ |
218,330 |
|
|
$ |
175,121 |
|
| Changes
in cost estimates |
(3,905) |
|
|
32,956 |
|
| Changes
in discount rate |
(26,755) |
|
|
1,407 |
|
| Accretion |
7,240 |
|
|
6,554 |
|
| Liabilities
settled |
(9,539) |
|
|
(222) |
|
| Foreign
exchange revaluation |
(8,792) |
|
|
2,514 |
|
| Balance,
end of period |
$ |
176,579 |
|
|
$ |
218,330 |
|
|
|
|
|
|
Operating sites (1) |
|
|
| Balance,
beginning of year |
$ |
82,323 |
|
|
$ |
63,688 |
|
| Changes
in cost estimates |
15,185 |
|
|
14,664 |
|
| Changes
in discount rate |
(2,700) |
|
|
756 |
|
| Accretion |
3,052 |
|
|
2,413 |
|
|
|
|
|
| Foreign
exchange revaluation |
(3,131) |
|
|
802 |
|
| Balance,
end of period |
$ |
94,729 |
|
|
$ |
82,323 |
|
|
|
|
|
|
Current portion of reclamation
provision (2) |
5,113 |
|
|
28,087 |
|
| Non-current
portion of reclamation provision |
266,195 |
|
|
272,566 |
|
| Total
provision for reclamation |
$ |
271,308 |
|
|
$ |
300,653 |
|
(1)Development,
exploration and care and maintenance sites include the Endako Mine, Thompson Creek Mine, Kemess project and Goldfield project. Operating
sites include the Mount Milligan Mine and Öksüt Mine.
(2)Relates
primarily to the Endako Mine and the Thompson Creek Mine.
The range of the nominal
risk-free interest rate used in discounting the reclamation provision at the Endako Mine, Thompson Creek Mine and the Kemess Project are
presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
at December 31, 2024 |
|
As
at December 31, 2023 |
Range
of nominal risk-free
interest rate applied |
3.34% |
to |
4.78% |
|
3.02% |
to |
4.03% |
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
b.
Reclamation (recovery) expense
Reclamation
recovery recognized in the consolidated statements of earnings (loss) and comprehensive income (loss) for the year ended December 31,
2024 was $25.3 million (2023 - reclamation expense of $34.4 million), and was due to the following factors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
| Changes
in cost estimates |
|
|
|
$ |
(6,184) |
|
$ |
32,550 |
|
| Changes
in discount rate |
|
|
|
(20,555) |
|
1,407 |
|
| Other |
|
|
|
1,479 |
|
421 |
|
|
Total reclamation (recovery)
expense |
|
|
|
$ |
(25,260) |
|
$ |
34,378 |
|
Regulatory
authorities in certain jurisdictions require that security be provided to cover the estimated reclamation and remediation obligations.
As at December 31, 2024, the Company has provided the regulatory authorities with $249.6 million (December 31, 2023 - $259.2 million)
in reclamation bonds and letters of credit for mine closure obligations.
14.
Leases
The
following table is a maturity analysis of the Company’s contractual undiscounted payments required to meet obligations that have
initial or remaining non-cancellable lease terms.
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
| Less
than one year |
$ |
7,647 |
|
|
$ |
7,014 |
|
| One
to three years |
10,468 |
|
|
10,736 |
|
| More
than three years |
5,005 |
|
|
9,884 |
|
| Total
undiscounted lease obligations |
$ |
23,120 |
|
|
$ |
27,634 |
|
The
following table sets out the carrying amounts of ROU assets included in PP&E in the consolidated statements of financial position
and the movements during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
| Beginning
balance |
$ |
23,877 |
|
|
$ |
14,132 |
|
| Additions |
4,656 |
|
|
16,528 |
|
| Amortization |
(7,648) |
|
|
(6,783) |
|
| Ending
balance |
$ |
20,885 |
|
|
$ |
23,877 |
|
The following table sets
out the lease obligations included in the consolidated statements of financial position:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
|
Current (note 9) |
$ |
6,393 |
|
|
$ |
6,106 |
|
|
Non-current (note 11) |
13,713 |
|
|
18,102 |
|
| Total
lease obligations |
$ |
20,106 |
|
|
$ |
24,208 |
|
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
The
amounts recognized in the consolidated statements of earnings (loss) related to lease obligations are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
| Interest
expense on lease liabilities |
$ |
1,090 |
|
|
$ |
657 |
|
| Amortization
of ROU assets |
7,648 |
|
|
6,783 |
|
|
Variable
lease payments not included in the measurement of lease liabilities |
39,680 |
|
|
37,046 |
|
| Expenses
relating to leases of low-value assets and short-term leases |
5,130 |
|
|
4,231 |
|
|
Total recognized in the
consolidated statements of earnings (loss) |
$ |
53,548 |
|
|
$ |
48,717 |
|
15.
Revenue
Total
revenue consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
| Gold
revenue |
|
|
|
$ |
748,874 |
|
$ |
598,632 |
|
| Copper
revenue |
|
|
|
186,856 |
|
186,791 |
|
| Molybdenum
revenue |
|
|
|
242,596 |
|
297,917 |
|
|
Other by-product revenue(1) |
|
|
|
18,824 |
|
19,219 |
|
| Revenue
from contracts with customers |
|
|
|
$ |
1,197,150 |
|
$ |
1,102,559 |
|
|
Provisional pricing adjustment
on concentrate sales(2) |
|
|
|
20,932 |
|
409 |
|
| Metal
content adjustments on concentrate sales |
|
|
|
(3,579) |
|
(8,071) |
|
| Total
revenue |
|
|
|
$ |
1,214,503 |
|
$ |
1,094,897 |
|
(1)Includes
silver, rhenium, toll and sulfuric acid sales.
(2)Includes
mark-to-market adjustment related to 20.1
million pounds of copper,
48,541 ounces of gold, and 49,572 pounds of molybdenum (December 31, 2023 - 11.9 million pounds of copper, 26,889 ounces of gold, and
102,599 pounds of molybdenum) in the gold and copper concentrate and molybdenum product shipments subject to final pricing as at the period-end.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Total
revenue by metals, including metal content and provisional pricing adjustments on concentrate sales, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Gold
revenue |
$ |
764,925 |
|
|
$ |
598,676 |
|
| Copper
revenue |
187,944 |
|
|
180,993 |
|
| Molybdenum
revenue |
242,382 |
|
|
296,121 |
|
| Other
by-product revenue |
19,252 |
|
|
19,107 |
|
| Total
revenue |
$ |
1,214,503 |
|
|
$ |
1,094,897 |
|
Customer
Information
The
following table presents sales to the individual customers that exceed 10% of total revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Region |
|
2024 |
|
2023 |
| Customer
1 |
Türkiye |
$ |
466,032 |
$ |
380,488 |
| Customer
2 |
Canada |
|
246,311 |
|
89,515 |
| Customer
3 |
Canada |
|
117,364 |
|
159,068 |
| Total
sales to customers exceeding 10.0% of total revenue |
$ |
829,707 |
$ |
629,071 |
| Percentage
of total revenue |
|
|
68.3 |
% |
|
57.5 |
% |
16.
Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
|
Selling and marketing(1) |
|
|
$ |
10,683 |
|
$ |
12,219 |
|
|
Transaction costs related
to the Additional Royal Gold Agreement (note 24a) |
|
|
2,521 |
— |
|
Unrealized gain on financial
asset related to the Additional Royal Gold Agreement (note 24a) |
|
|
(23,500) |
— |
|
Study
costs(3) |
|
|
12,112 |
— |
|
Öksüt
Mine standby costs(2) |
|
|
— |
15,380 |
| Other,
net |
|
|
605 |
1,979 |
|
| Other
operating expenses |
|
|
$ |
2,421 |
|
$ |
29,578 |
|
(1)Primarily
includes freight charges associated with the Mount Milligan Mine and the Langeloth Facility.
(2)Includes
costs incurred at the Öksüt Mine that could not be capitalized to production inventory during the period of suspension of operations,
which ended in early June 2023.
(3)Relates
mostly to the site-wide optimization program at the Mount Milligan Mine.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
17.
Other non-operating income
|
|
|
|
|
|
|
|
|
|
|
|
|
Years
ended December 31, |
|
|
|
2024 |
2023 |
|
Interest income(1) |
|
|
$ |
(30,054) |
|
$ |
(19,530) |
|
|
|
|
|
|
|
Foreign exchange (gain)
loss (2) |
|
|
(21,812) |
|
1,819 |
|
| Unrealized
loss on marketable securities |
|
|
1,105 |
|
1,085 |
|
|
|
|
|
|
| (Gain)
loss on sale of PP&E |
|
|
(603) |
|
1,506 |
|
| Loss
on non-hedge derivatives |
|
|
250 |
|
2,922 |
|
|
|
|
|
|
| Other
expenses |
|
|
1,998 |
|
1,064 |
|
| Other
non-operating income |
|
|
$ |
(49,116) |
|
$ |
(11,134) |
|
(1)Primarily
includes interest on bank term deposits.
(2)Primarily
includes foreign exchange impact of the Turkish lira on the Company’s income tax and royalties and impact of the Canadian dollar
on the reclamation provision at the Endako Mine and Kemess Project, leases, income tax payable and accrued liabilities.
18.
Finance costs
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
Standby and transaction
fees(1) |
$ |
2,028 |
|
|
$ |
4,512 |
|
| Accretion
expense on the provision for reclamation |
10,292 |
|
8,967 |
| Interest
expense on lease liabilities |
1,090 |
|
657 |
| Other
financing fees |
1,254 |
|
1,209 |
| Total
finance costs |
$ |
14,664 |
|
|
$ |
15,345 |
|
(1)The
2023 standby and transaction fees amount includes transactions costs related to the renewal of the revolving credit facility (the “Corporate
Facility”) (note 25f).
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
19.
Income taxes
a.Income
tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Current
income tax expense |
$ |
87,456 |
|
|
$ |
85,672 |
|
| Deferred
income tax expense |
6,207 |
|
|
9,240 |
| Total
income tax expense |
$ |
93,663 |
|
|
$ |
94,912 |
|
Income
tax expense attributable to each geographical jurisdiction for the Company is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Türkiye |
$ |
79,769 |
|
|
$ |
91,744 |
|
| Canada
|
13,894 |
|
3,168 |
|
|
|
|
|
$ |
93,663 |
|
|
$ |
94,912 |
|
Income
tax expense differs from the amount that would arise from applying the Canadian federal and provincial statutory income tax rates to earnings
before income tax as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Earnings
before income tax |
$ |
174,057 |
|
|
$ |
13,634 |
|
|
|
|
|
| Income
tax at statutory tax rate of 26.5% |
46,125 |
|
3,613 |
| Increase
(decrease) due to: |
|
|
|
|
Difference
between Canadian and foreign tax rates(1) |
12,789 |
|
10,814 |
|
Change in
unrecognized deductible temporary differences(2) |
31,673 |
|
63,483 |
| Impact
of foreign currency on deferred tax balances |
(4,310) |
|
6,323 |
| Non-deductible
costs |
3,298 |
|
3,298 |
| Local
mining taxes |
4,104 |
|
1,427 |
| Impact
of tax legislation/rate change |
— |
|
5,933 |
| Other |
(16) |
|
21 |
| Income
tax expense |
$ |
93,663 |
|
|
$ |
94,912 |
|
(1)Income
tax expense in 2024 included $15.0 million withholding tax expense (2023 - $11.5 million withholding tax expense) related to the
Öksüt Mine.
(2)The
change in unrecognized deductible temporary differences consists of $(24.3) million for Canada (December 31, 2023 - $33.3 million),
$52.4 million for the United States (December 31, 2023 - $19.9 million) and $3.6 million for Türkiye (December 31,
2023 - $10.3 million).
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
b.Deferred
income tax assets and liabilities
The
following are significant components of deferred income tax assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
Deferred
income tax assets |
|
|
|
| Provisions
and Tax Credits |
$ |
64,456 |
|
|
$ |
49,122 |
|
| Tax
losses |
63,956 |
|
|
58,381 |
|
|
Total deferred income
tax assets |
$ |
128,412 |
|
|
$ |
107,503 |
|
| Deferred
income tax liabilities |
|
|
|
| Inventory |
$ |
— |
|
|
$ |
(2,232) |
|
| Property,
plant and equipment |
(71,679) |
|
|
(52,680) |
|
| Investments
in subsidiaries |
(15,000) |
|
|
(11,500) |
|
|
Total deferred income
tax liabilities |
$ |
(86,679) |
|
|
$ |
(66,412) |
|
|
Net deferred income tax
assets |
$ |
41,733 |
|
|
$ |
41,091 |
|
The
deferred income tax asset of $128.4 million is expected to be realized in more than one year. The deferred income tax liability of
$86.7 million is expected to be realized in more than one year.
After
offsetting deferred income tax assets against deferred income tax liabilities in the same taxable entity, the resulting balances are as
follows:
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
| Deferred
income tax assets |
$ |
60,133 |
|
$ |
57,900 |
|
| Deferred
income tax liabilities |
(18,400) |
|
(16,809) |
|
| Net
deferred income tax assets |
$ |
41,733 |
|
$ |
41,091 |
|
A
reconciliation of the movements of the net deferred income tax assets is provided below:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Balance
at the beginning of year |
$ |
41,091 |
|
|
$ |
53,181 |
|
| Deferred
income tax expense recognized in the statements of earnings (loss) |
(6,208) |
|
|
(9,240) |
|
| Deferred
income tax recovery (expense) recognized in other comprehensive earnings (loss) |
6,850 |
|
|
(2,850) |
|
| Balance
at the end of the year |
$ |
41,733 |
|
|
$ |
41,091 |
|
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
The
Company has not recognized deferred income tax assets with respect to the following deductible temporary differences:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
Deductible temporary differences(1) |
$ |
600,300 |
|
|
$ |
465,700 |
|
| British
Columbia mining tax deductible temporary differences |
726,200 |
|
|
776,600 |
|
| British
Columbia mining tax credits |
1,300 |
|
|
1,700 |
|
| Capital
losses |
10,700 |
|
|
7,000 |
|
| Total
deductible temporary differences |
$ |
1,338,500 |
|
|
$ |
1,251,000 |
|
(1)The
deductible temporary differences consist of $245.6 million for Canada (December 31, 2023 - $306.9 million), $299.0 million
for the United States (December 31, 2023 - $116.0 million) and $ $55.7 million for Türkiye (December 31, 2023 - $42.8 million).
The
capital loss carry forwards and deductible temporary differences have no expiry date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expiry
dates of tax losses |
2030 |
|
Thereafter |
|
Total |
|
Non-capital tax losses(1) |
|
|
|
|
|
| Canada |
$ |
9,600 |
|
|
$ |
732,700 |
|
|
$ |
742,300 |
|
| United
States |
900 |
|
|
342,400 |
|
|
343,300 |
|
|
$ |
10,500 |
|
|
$ |
1,075,100 |
|
|
$ |
1,085,600 |
|
(1)Represents
the gross amount of tax loss carry forwards translated at the closing exchange rate as at December 31, 2024.
The
non-capital tax losses include $729.8 million of losses which are not recognized as deferred income tax assets. In addition, the
non-capital tax losses for the United States include $75.6 million that are restricted due to the change in ownership.
20.
Shareholders' equity
a.Repurchases
and cancellation of shares
NCIB
On
November 5, 2024, the Company announced that it had received approval from the Toronto Stock Exchange (“TSX”) to renew its
NCIB program. Under the renewed NCIB, Centerra may purchase for cancellation up to an aggregate of 18,800,929 common shares in the capital
of the Company during the twelve-month period commencing on November 7, 2024 and ending on November 6, 2025, representing approximately
10% of the public float.
During
the year ended December 31, 2024, the Company repurchased and cancelled 6,731,430 common shares (2023 - 3,475,800 common shares) for a
total consideration of $44.1 million (2023 - $20.4 million) at an average price of $6.44 (C$8.81)
(2023 - $5.87) per share
as part of its authorized NCIB program. The total consideration received for the cancelled shares, including transaction costs, was treated
as a reduction to common share capital.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Automatic
Share Purchase Plan
On
December 23, 2024, the Company initiated an Automatic
Share Purchase Plan (“ASPP”) under its NCIB
to facilitate the purchase of Centerra common shares during times when the Company would ordinarily not be permitted to purchase Centerra
common shares due to regulatory restrictions or self-imposed black-out periods by authorizing its independent broker to repurchase a fixed
total value of Centerra common shares up to $7.6 million (2023 - $10.2 million) during the period ending February 25, 2025.
The
Company recognized a financial liability associated with the total maximum amount that may be repurchased during that period by the broker,
with an offsetting entry in the share capital line.
b.Earnings
(loss) per share
Computation
for basic and diluted loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Net
earnings (loss) |
$ |
80,394 |
|
|
$ |
(81,278) |
|
|
Dilutive
impact related to the RSUs (1) |
(2,588) |
|
|
— |
|
|
Dilutive
impact related to the PSUs (2) |
(1,435) |
|
|
(2,717) |
|
| Diluted
earnings (loss) |
$ |
76,371 |
|
|
$ |
(83,995) |
|
|
|
|
|
| Basic
weighted average common shares (in thousands) |
213,494 |
|
|
217,245 |
|
| Dilutive
impact of stock options (in thousands) |
32 |
|
|
— |
|
|
Dilutive
impact related to the RSUs (in thousands)(1) |
1,661 |
|
|
— |
|
|
Dilutive
impact related to the PSUs (in thousands)(2) |
1,088 |
|
|
1,164 |
|
| Diluted
weighted average common shares (in thousands) |
216,275 |
|
|
218,409 |
|
|
|
|
|
| Earnings
(Loss) per share: |
|
|
|
| Basic |
$ |
0.38 |
|
|
$ |
(0.37) |
|
| Diluted |
$ |
0.35 |
|
|
$ |
(0.38) |
|
(1)Relates
to the Company’s Restricted Share Unit (“RSU”) Plan.
(2)Relates
to the Company’s Performance Share Unit (“PSU”) Plan.
For
the years ended December 31, 2024 and 2023, certain potentially anti-dilutive securities, including stock options were excluded from the
calculation of diluted loss per share due to the exercise prices being greater than the average market price of the Company’s common
shares for the respective periods.
Anti-dilutive
securities, excluded from the calculation, are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| RSUs
and stock options excluded from earnings (loss) per share (in thousands) |
— |
|
1,736 |
|
ASPP impact
excluded from earnings (loss) per share (in thousands)(1) |
1,336 |
|
1,021 |
(1)
ASPP has an anti-dilutive
impact on earnings per share by reducing the number of shares outstanding from the calculation.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
c.Share-based
compensation
The
impact of share-based compensation as of and for the years ended December 31, 2024 and 2023 is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
|
Expense |
Liability |
Expense |
Liability |
| Stock
options |
$ |
1,946 |
|
$ |
— |
|
$ |
2,407 |
|
$ |
— |
|
| Performance
share units |
126 |
|
2,425 |
|
1,564 |
|
2,449 |
|
| Deferred
share units |
(259) |
|
733 |
|
793 |
|
1,366 |
|
| Restricted
share units |
3,734 |
|
3,600 |
|
5,234 |
|
2,711 |
|
|
$ |
5,547 |
|
$ |
6,758 |
|
$ |
9,998 |
|
$ |
6,526 |
|
Employee
Stock Options
Under
the Company’s Stock Option plan, options to purchase common shares of the Company may be granted to officers and employees. The
exercise price of options granted under this plan is not less than the weighted average common share price for the five trading days prior
to the date of grant. Options granted vest over three years and expire after eight years from the date granted. The Black-Scholes model
is used to estimate the fair value of stock options granted.
Centerra’s
stock options transactions during the year ended December 31, 2024 and 2023 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
|
|
Number
of Options |
|
Weighted
Average Exercise Price |
|
Number
of Options |
|
Weighted
Average Exercise Price |
|
| Balance,
January 1 |
2,930,958 |
|
|
C$ |
8.60 |
|
|
3,770,072 |
|
|
C$ |
8.37 |
|
|
| Granted |
737,202 |
|
|
7.01 |
|
|
564,499 |
|
|
8.30 |
|
| Forfeited |
(533,426) |
|
|
(13.56) |
|
|
(1,099,078) |
|
|
(8.48) |
|
|
| Exercised |
(592,283) |
|
|
(6.96) |
|
|
(304,535) |
|
|
(6.37) |
|
|
| Outstanding,
end of year |
2,542,451 |
|
|
C$ |
8.25 |
|
|
2,930,958 |
|
|
C$ |
8.60 |
|
|
| Options
exercisable, end of year |
1,286,615 |
|
|
C$ |
9.23 |
|
|
1,567,231 |
|
|
C$ |
9.17 |
|
|
The
weighted average market price of shares issued for options exercised in the year ended December 31, 2024 was C$8.57 (December 31, 2023
- C$7.74).
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
The
following table summarizes information related to share options outstanding at December 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
options outstanding |
Share
options exercisable |
| Range |
Number
of options outstanding |
Weighted
Average remaining contractual life
(years) |
Weighted
average exercise price (C$/share) |
Number
of options outstanding |
Weighted
Average remaining contractual life
(years) |
Weighted
average exercise price (C$/share) |
|
C$6.71
- C$6.86 |
153,443 |
|
1.74 |
$6.74 |
153,443 |
|
1.74 |
$6.74 |
|
C$6.87
- C$6.95 |
734,568 |
|
5.61 |
6.94 |
476,123 |
|
5.50 |
6.94 |
|
C$6.96
- C$7.00 |
677,517 |
|
7.18 |
6.96 |
— |
|
— |
|
— |
|
|
C$7.01
- C$12.04 |
457,364 |
|
6.37 |
8.12 |
137,490 |
|
6.22 |
8.17 |
|
C$12.05
- C$12.52 |
519,559 |
|
3.56 |
12.34 |
519,559 |
|
3.56 |
12.34 |
|
|
|
|
|
|
|
| Total |
2,542,451 |
|
5.51 |
$8.25 |
1,286,615 |
|
4.34 |
$9.23 |
The
Company used the Black-Scholes Option Pricing Model to estimate fair value of stock options using the following assumptions:
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
| Expected
stock price volatility |
58.42%
- 65.53% |
47.61%
- 63.81% |
| Risk-free
interest rate |
2.62%
- 3.90% |
3.83%
- 4.15% |
| Expected
life (in years) |
3.8
- 4.8 |
4.0
- 5.0 |
| Expected
dividend yield |
3.46%
- 4.89% |
3.85%
- 4.45% |
|
Exercise price (C$/share) |
$8.06
- $9.48 |
$7.04
- $8.78 |
Performance
Share Units
Centerra’s
PSUs transactions during the years ended December 31, 2024 and 2023 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
| Number
of units |
2024 |
|
2023 |
| Balance,
January 1 |
1,164,075 |
|
|
1,206,617 |
|
| Granted
|
647,758 |
|
|
613,929 |
|
| Exercised |
(382,518) |
|
|
(358,585) |
|
| Forfeited |
(117,892) |
|
|
(297,886) |
|
| Balance,
December 31 |
1,311,423 |
|
|
1,164,075 |
|
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Deferred
Share Units
Centerra’s
DSUs transactions during the years ended December 31, 2024 and 2023 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
| Number
of units |
2024 |
|
2023 |
| Balance,
January 1 |
274,061 |
|
|
453,694 |
|
| Granted |
47,975 |
|
|
80,780 |
|
| Exercised |
(65,692) |
|
|
(260,413) |
|
| Balance,
December 31 |
256,344 |
|
|
274,061 |
|
Restricted
Share Units
Centerra’s
RSUs transactions during the years ended December 31, 2024 and 2023 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
| Number
of units |
2024 |
|
2023 |
| Balance,
January 1 |
1,923,358 |
|
|
996,655 |
|
| Granted |
1,365,280 |
|
|
1,211,286 |
|
| Redeemed |
(1,071,810) |
|
|
(153,857) |
|
| Forfeited |
(197,736) |
|
|
(130,726) |
|
| Balance,
December 31 |
2,019,092 |
|
|
1,923,358 |
|
d.ESPP
In
2024, 165,373 common shares were subscribed for under the ESPP (2023 – 154,901 common shares) for a value of $1.0 million (2023
– $0.9 million).
e.Dividends
On
February 20, 2025, the Board approved a quarterly dividend of C$0.07 per share to shareholders of record on March 13, 2025.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
21.
Supplemental cash flow disclosures
a.Bank
interest received
During
the year ended December 31, 2024, the Company received bank interest included in interest income (note 17) in the amount of $29.3 million
(2023 - $18.4 million).
b.Changes
in working capital
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Decrease
in amounts receivable |
$ |
739 |
|
|
$ |
6,766 |
|
| Decrease
in inventories |
7,335 |
|
|
40,229 |
|
| (Increase)
decrease in other current assets |
(8,019) |
|
|
7,173 |
|
| Increase
(decrease) in accounts payable and accrued liabilities |
26,955 |
|
|
(8,578) |
|
| Increase
(decrease) in income taxes payable |
— |
|
|
(2,353) |
|
| Changes
in working capital |
$ |
27,010 |
|
|
$ |
43,237 |
|
c.Changes
in liabilities arising from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
at December 31, 2023 |
Changes
from financing cash flows |
Lease
obligation additions |
Impact
of foreign exchange |
Other |
As
at December 31, 2024 |
|
Lease obligations(1) |
$ |
24,208 |
|
$ |
(7,675) |
|
$ |
4,530 |
|
$ |
(2,046) |
|
$ |
1,090 |
|
$ |
20,107 |
|
| Total
liabilities from financing activities |
$ |
24,208 |
|
$ |
(7,675) |
|
$ |
4,530 |
|
$ |
(2,046) |
|
$ |
1,090 |
|
$ |
20,107 |
|
(1)Current
portion of lease obligations included in other current liabilities (note 9). Non-current portion of lease obligations included in other
liabilities (note 11).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
at December 31, 2022 |
Changes
from financing cash flows |
Lease
obligation additions |
Impact
of foreign exchange |
|
Other |
As
at December 31, 2023 |
| Lease
obligations |
$ |
13,975 |
|
$ |
(6,803) |
|
$ |
16,442 |
|
$ |
(63) |
|
|
$ |
657 |
|
$ |
24,208 |
|
|
|
|
|
|
|
|
|
| Total
liabilities from financing activities |
$ |
13,975 |
|
$ |
(6,803) |
|
$ |
16,442 |
|
$ |
(63) |
|
|
$ |
657 |
|
$ |
24,208 |
|
22.
Commitments and contingencies
Commitments
The
Company had the following purchase commitments as of
December 31, 2024, of
which $11.9 million related to capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2025 |
2026 |
2027 |
2028 |
Thereafter
|
Total |
|
Purchase and capital commitments(1) |
$ |
372,717 |
|
$ |
131,713 |
|
$ |
110,433 |
|
$ |
— |
|
$ |
— |
|
$ |
614,863 |
|
(1)Includes
amounts contracted for molybdenum concentrate purchases at the Langeloth
Facility of $489.2 million.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Contingencies
On
an ongoing basis, the Company is subject to various claims, tax audits and other legal disputes, the outcomes of which cannot be assessed
with a high degree of certainty.
Mount
Milligan Mine Royalty
The
Company is subject of a claim made by H.R.S. Resources Corp. (“H.R.S.”), the holder of a 2% production royalty at Mount Milligan,
in the first quarter of 2020. H.R.S. claimed that since November 2016 (when the royalty became payable) the Company has incorrectly calculated
amounts payable under the production royalty agreement and has therefore underpaid amounts owing to H.R.S. The B.C. Supreme Court rendered
a written decision on October 8, 2024, which determined that the Company was correct to include the effect of the Royal Gold Streaming
Agreement in its calculation of revenue subject to the production royalty but that such revenue (for purposes of the royalty agreement)
should have included amortized amounts relating to advance payments made by Royal Gold to TCM. The plaintiff has appealed this decision.
TCM has cross-appealed this aspect of the decision. The appeal is in the preliminary stages with the parties having not exchanged materials.
TCM is currently assessing how to recalculate the royalty payments owed to H.R.S. historically and going forward but believes the potential
exposure in relation to this claim from what TCM has accrued is not materially different.
23.
Related party transactions
Transactions
with key management personnel
The
Company transacts with key management personnel, who have authority and responsibility to plan, direct and control the activities of the
Company and receive compensation for services rendered in that capacity. Key management personnel include members of the Board of Directors
and members of the senior leadership team.
During
the years ended December 31, 2024 and 2023, remuneration to key management personnel was as follows:
Compensation
of key management personnel
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
| Director
fees earned |
$ |
552 |
|
|
$ |
539 |
|
| Salaries
and benefits, including severance |
6,393 |
|
|
7,832 |
|
| Share-based
compensation |
1,098 |
|
|
3,574 |
|
| Total
compensation |
$ |
8,043 |
|
|
$ |
11,945 |
|
24.
Financial instruments
The
Company’s financial instruments include the Mount Milligan Mine’s financial asset related to the Additional Royal Gold Agreement,
marketable securities, amounts receivable (including embedded derivatives), derivative financial instruments and accounts payable, other
current and non-current assets and other current liabilities.
a.Mount
Milligan Mine financial asset related to the Additional Royal Gold Agreement
The
Mount Milligan Mine is subject to an arrangement with Royal Gold and Royal Gold, Inc. which entitles
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Royal
Gold to purchase 35% and 18.75% of gold and copper produced, respectively, and requires Royal Gold to pay $435 per ounce of gold and 15%
of the spot price per pound of copper delivered.
On
February 13, 2024, the Company and its subsidiary, TCM, entered into an additional agreement with Royal Gold (the “Additional Royal
Gold Agreement”) relating to the Mount Milligan Mine. As part of the Additional Royal Gold Agreement, Royal Gold has agreed, among
other things, to increase cash payments for Mount Milligan Mine’s gold ounces and copper pounds delivered to Royal Gold, starting
after the first threshold date (“First Threshold Date”) and further increase these cash payments after the second threshold
(gold) date (“Second Threshold (Gold) Date”) and the second threshold (copper) date (“Second Threshold (Copper) Date”).
The
First Threshold Date will occur when TCM has delivered to Royal Gold either an aggregate of 375,000 ounces of gold or an aggregate of
30,000 tonnes of copper from shipments occurring after January 1, 2024. The Second Threshold (Gold) Date will occur once TCM has delivered
to Royal Gold an aggregate of 665,000 ounces of gold and the Second Threshold (Copper) Date will occur once TCM has delivered to Royal
Gold the aggregate of 60,000 tonnes of copper, in each case from shipments occurring after January 1, 2024. The Additional Royal Gold
Agreement effectively entitles the Company to additional cash payments for gold and copper sold (“Threshold Payments”) as
set out below. The value of the additional gold and copper payments to be received by the Company will depend on the Mount Milligan Mine’s
production and the ability to sustain current life of mine (i.e. additional gold and copper payments can be suspended if (and for as long
as) the Company discloses proven and probable reserves which, when combined with mining depletion from the transaction date, are lower
than those disclosed in the mineral reserves and mineral resources update on February 14, 2024). These Threshold Payments are incremental
to those received under the Mount Milligan Streaming Agreement. The incremental payments are as follows:
For
gold:
•the
lower of (a) $415 per ounce and (b) 50% of the gold spot price less $435 per ounce required under the Mount Milligan Streaming Agreement,
for the period between the First Threshold Date and the Second Threshold (Gold) Date whereby (b) cannot be less than $nil; and
•the
lower of (a) $615 per ounce and (b) 66% of the gold spot price less $435 per ounce required under the Mount Milligan Streaming Agreement,
from and after the Second Threshold (Gold) Date whereby (b) cannot be less than $nil.
For
copper:
•35%
of the copper spot price for the period between the First Threshold Date and the Second Threshold (Copper) Date; and
•51%
of the copper spot price from and after the Second Threshold (Copper) Date.
The
Additional Royal Gold Agreement also provides the Mount Milligan Mine a right to elect to receive payments (“Pre-Threshold Payments”)
from Royal Gold prior to the First Threshold Date but only if both the gold spot price is at or falls below $1,600 per ounce and the copper
spot price is at or falls below $3.50 per pound. Any Pre-Threshold Payments previously received would be offset against Threshold Payments
if the prices of gold and copper each increase above the aforementioned prices.
The
Additional Royal Gold Agreement requires the Company and TCM to make certain payments and deliveries to Royal Gold, including:
i.An
initial cash payment of $24.5 million;
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
ii.A
requirement to deliver an aggregate of 50,000 ounces of gold. The obligation to deliver the 50,000 ounces to Royal Gold exists regardless
of the operating performance of the Mount Milligan Mine. The first 33,333 ounces are expected to be delivered in tranches of 11,111 ounces
after an equivalent number of gold ounces are received by Centerra in relation to the sale of Centerra’s 50% interest in the Greenstone
project. Any remaining ounces are to be delivered to Royal Gold in quarterly installments equally over a 5-year period, with first delivery
to occur by June 30, 2030 (“Deferred Gold Consideration”); and
iii.Commencing
on January 1 of the fiscal year following the later of delivering to Royal Gold an aggregate of 375,000 ounces of gold and an aggregate
of 30,000 tonnes of copper, in each case from shipments occurring after January 1, 2024, but no later than January 1, 2036, payments equal
to 5% of the Mount Milligan Mine’s annual free cash flow, which increase by an additional 5% of annual free cash flow (for a total
of 10% per year) commencing after the latter of the Second Threshold (Gold) Date and Second Threshold (Copper) Date, but no later than
January 1, 2036. No payments will be made for a calendar year in which free cash flow is negative, and Centerra is allowed to recoup any
negative free cash flow before any such payments to Royal Gold resume. Free cash flow has a meaning specifically defined in Additional
Royal Gold Agreement (“Free Cash Flow Interest Payments”).
Potential
suspension of Threshold Payments mentioned above would not impact the Company’s and TCM’s obligation to make these payments
and deliveries to Royal Gold.
The
Company determined that the Additional Royal Gold Agreement modifies an existing contract with a customer under IFRS 15 whereby the Company
received a financial asset. The financial asset is comprised of Threshold Payments that the Company is entitled to in the future and payments
to Royal Gold, including the initial cash payment, Deferred Gold Consideration, Free Cash Flow Interest Payments and a potential tax indemnity.
The Company accounted for the component pieces of the financial asset at fair value on the transaction date in accordance with IFRS 9.
The consideration received in the form of the financial asset was recognized as deferred revenue, which is to be recognized as revenue
upon the satisfaction of the Company’s performance obligations over the life of the Mount Milligan Mine. Transaction costs directly
attributable to the Additional Royal Gold Agreement of $2.5 million were charged to other operating expenses in the consolidated
statements of earnings (loss) and were presented in the investing activities in the consolidated statements of cash flows. Subsequent
to the initial recognition, payments and receipts related to the Additional Royal Gold Agreement will be settled against the financial
asset and the fair value of the financial asset will be re-measured at each reporting date with changes in fair value recorded as a gain
or loss in other operating expenses.
The
following is a summary of the changes in the financial asset included in other assets in the Company’s consolidated statements of
financial position:
|
|
|
|
|
|
|
|
| Balance,
February 13, 2024 |
$ |
19,200 |
|
|
|
|
Settlements
during the period(1) |
24,500 |
|
| Fair
value adjustments |
23,500 |
|
|
Balance, December 31,
2024 |
$ |
67,200 |
|
(1)Represents
the initial $24.5 million cash payment made during the period.
The
Company has also indemnified Royal Gold and its affiliates for up to $25 million of specified incremental taxes that may be assessed
as a result of the Additional Royal Gold Agreement for a period of seven years. The Company considered the value associated with the indemnification
to be nominal in
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
its
valuation of the financial asset based on remote probability of the cash outflow. The Company will continue to re-evaluate this assessment
each period.
The
fair value of the financial asset was determined using a combination of a Monte Carlo simulation method and discounted cash flow method.
The fair value measurement requires management to make estimates and assumptions with respect to metal prices, expected production, operating
and capital costs of the Mount Milligan Mine’s life of mine projections, expected timing of delivery of Deferred Gold Consideration,
gold price volatility used in the Monte Carlo simulation, probability of tax indemnity payments and a discount rate. Changes in any of
these assumptions or estimates could have resulted in a significantly higher or lower fair value of the financial asset, higher or lower
value of deferred revenue and higher or lower net earnings.
The
key assumptions used in the measurement of the financial asset are summarized in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2024 |
|
February
13, 2024 |
| Gold
price per oz - short-term |
$2,400
- $2,625 |
|
$1,850
- $2,000 |
| Gold
price per oz - long-term |
$2,100 |
|
$1,750 |
| Copper
price per lb - long term |
$4.25 |
|
$4.00 |
| Timing
of delivery of Deferred Gold Consideration (range of years) |
2025
to 2034 |
|
2025
to 2034 |
| Gold
price volatility used in the Monte Carlo simulation |
12.0 |
% |
|
16.1 |
% |
| Discount
rate |
6.75 |
% |
|
6.50 |
% |
The
fair value of the financial asset is most sensitive to the key assumptions summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Hypothetical
Change |
|
Impact
on Value |
|
Copper
price per lb |
+/-
$0.50/lb |
|
+/-
$12,407 |
|
Discount
rate |
+/-
1% |
|
+/-
$11,043 |
Key
assumptions
The determination of the
fair value of the financial asset was performed utilizing Level 3 inputs of the fair value hierarchy, and including the following key
assumptions:
•Future
commodity price estimates were determined using forecasts of future prices prepared by industry analysts, which were available as at or
close to the valuation date and applying the Monte Carlo method to determine the applicable price for the additional cash payments for
gold;
•Discount
rate was based on the Company’s estimated weighted-average cost of capital, of which the two main components are the cost of equity
and the after-tax cost of debt;
•Timing
of Deferred Gold Consideration was determined based on the Company’s best estimate of the timing to receive the gold ounces in relation
to the sale of Centerra’s 50% interest in the Greenstone Partnership;
•Gold
price volatility used in the Monte Carlo simulation was determined by applying statistical methods to daily historical gold prices over
the period equal to the life of Mount Milligan Mine; and
•Estimated
future production profile, including production levels and operating and capital costs of the Mount Milligan Mine were determined with
reference to the life of mine plan. The production levels used were consistent with the volume of reserves developed as part of the Company’s
process for the estimation of mineral reserves and resources.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Future
commodity prices and discount rate were assumptions applicable to all components of the measurement of the financial asset while production
levels were a key assumption in the valuation of Threshold Payments and Free Cash Flows Interest Payments components of financial asset.
Gold price volatility was an assumption used specifically in the Monte Carlo method applied in the valuation of additional cash payments
for gold.
b.Derivative
financial instruments
The
Company uses derivative financial instruments as part of its risk management program to mitigate exposures to various market risks including
commodity prices, foreign exchange rates and diesel fuel prices. The Company’s derivative counterparties are syndicate members of
the Company’s corporate credit facility. The Company monitors its derivative position exposures on an ongoing basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2024 |
|
December
31, 2023 |
| Derivative
instrument assets |
|
|
|
| Current |
|
|
|
| Foreign
exchange contracts |
$ |
— |
|
|
$ |
5,621 |
|
| Fuel
contracts |
28 |
|
534 |
| Gold
contracts |
— |
|
495 |
|
Royal
Gold deliverables(1) |
597 |
|
1,275 |
| Copper
contracts |
— |
|
2,379 |
|
625 |
|
|
10,304 |
|
| Non-current |
|
|
|
| Foreign
exchange contracts |
— |
|
5,240 |
| Fuel
contracts |
17 |
|
92 |
|
|
|
|
|
17 |
|
5,332 |
| Total
derivative instrument assets |
$ |
642 |
|
|
$ |
15,636 |
|
|
|
|
|
| Derivative
instrument liabilities |
|
|
|
| Current |
|
|
|
| Foreign
exchange contracts |
$ |
11,948 |
|
|
$ |
2,272 |
|
| Fuel
contracts |
583 |
|
624 |
|
Royal
Gold deliverables(1) |
176 |
|
69 |
|
|
|
|
|
12,707 |
|
|
2,965 |
|
| Non-current |
|
|
|
| Foreign
exchange contracts |
4,896 |
|
— |
| Fuel
contracts |
312 |
|
366 |
|
|
|
|
|
5,208 |
|
366 |
| Total
derivative instrument liabilities |
$ |
17,915 |
|
|
$ |
3,331 |
|
(1)Relates
to Royal Gold deliverables, which are gold and copper forward contracts for gold ounces and copper pounds, respectively, payable to Royal
Gold.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Hedge
derivatives
The
derivative instruments outstanding as at December 31, 2024 that are accounted for as cash flow hedges are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Strike Price |
|
|
|
Total
Position(2) |
| Instrument |
|
Unit |
|
2025 |
2026 |
2027 |
|
Type |
|
| Fuel
(diesel) hedge contracts |
|
|
|
|
|
|
|
|
|
|
|
ULSD
zero-cost collars(1) |
|
Litres |
|
$0.59/$0.66 |
$0.60/$0.67 |
N/A |
|
Fixed |
|
7,870,600 |
|
ULSD
swap contracts(1) |
|
Litres |
|
$0.65 |
$0.60 |
$0.60 |
|
Fixed |
|
15,216,200 |
| Foreign
exchange contracts |
|
|
|
|
|
|
|
|
|
|
| US$/C$
zero-cost collars |
|
CAD |
|
$1.33/$1.38 |
$1.34/$1.39 |
N/A |
|
Fixed |
|
264,000,000 |
| US$/C$
forward contracts |
|
CAD |
|
$1.36 |
$1.37 |
$1.36 |
|
Fixed |
|
383,250,000 |
| Gold
Hedge Contracts |
|
|
|
|
|
|
|
|
|
|
| Gold
zero-cost collars |
|
Ounces |
|
$2,400/$3,400 |
$2,400/$3,696 |
N/A |
|
Fixed |
|
60,000 |
(1)Ultra-low
sulfur diesel (“ULSD”).
(2)Total
amounts expressed in the units identified.
Fuel
contracts
The
Company applies hedge accounting to derivative instruments it enters into to hedge a portion of its estimated future diesel fuel purchases
at its Mount Milligan Mine operations to manage the risk associated with changes in diesel fuel prices on the cost of operations. The
fuel hedge contracts are expected to settle over time by the end of 2027.
Foreign
exchange contracts
The
Company applies hedge accounting to the foreign exchange contracts it enters into to hedge a portion of its future Canadian dollar denominated
expenditures. The foreign exchange contracts are expected to settle over time by the end of 2027.
Gold
contracts
In
the fourth quarter of 2024, the Company entered into zero-cost collar contracts for 40,000 ounces in 2025 and 20,000 ounces in 2026. The
derivatives will expire evenly through each year. The Company applies hedge accounting to gold contracts it enters to hedge a portion
of the expected gold ounces sold to manage the risk associated with changes to the London Bullion Market Association (“LBMA”)
gold price. The option collar contracts utilize a price floor, allowing for significant participation in upward price movements. These
hedges result in cash inflows or outflows only when the underlying LBMA gold price is below the collar floor, or above the collar ceiling,
respectively, at the time of settlement. These contract are expected to settle over time by the end of 2026.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
The
table below provides a breakdown of the changes in the fair value of these derivative contracts recognized in other comprehensive income
(“OCI”) and the portion of the fair value changes reclassified to the statements of earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
2023 |
|
(Decrease) increase in
the fair value of derivative financial instruments |
|
|
$ |
(13,836) |
|
$ |
18,038 |
|
| Reclassified
to net earnings |
|
|
(6,788) |
|
(7,264) |
|
| Increase
in fair value of equity securities |
|
|
1,978 |
|
— |
|
|
(Decrease) increase in
the fair value of derivative instruments included in OCI(1) |
|
|
$ |
(18,646) |
|
$ |
10,774 |
|
(1)Includes
tax recovery of $6.9 million for the year ended December 31, 2024 (2023 - $2.8 million tax expense).
Non-hedge
derivatives
The
non-hedge derivative instruments outstanding as at December 31, 2024 are expected to settle by the end of the fourth quarter of 2024,
and are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
| Instrument |
Unit |
Type |
Total
Position(1) |
| Royal
Gold deliverables |
|
|
|
| Gold
forward contracts |
Ounces |
Float |
11,960 |
|
| Copper
forward contracts |
Pounds |
Float |
2,150,000 |
|
(1)Total
amounts expressed in the units identified.
Royal
Gold deliverables
For
deliveries under the Mount Milligan Streaming Agreement, the Company delivers physical gold and copper warrants to Royal Gold based on
a percentage of the gold ounces and copper pounds included in each final sale of concentrate to third party customers, including off-takers
and traders (collectively, “MTM Customers”), within two days of receiving or making a final payment. If a final payment from
the MTM Customers is not received or paid within five months of the bill of lading date, then the Company will deliver an estimated amount
of gold ounces and copper warrants, based on the quantities from the provisional invoice, for an estimated 90% of the material they are
due to pay, based on the provisional invoice quantities.
The
Company receives payment from the MTM Customers in cash, thus requiring the purchase of physical gold and copper warrants in order to
satisfy the obligation to pay Royal Gold. In order to hedge its gold and copper price risk, which arises from timing differences, when
physical purchase and concentrate sales pricing periods do not match, the Company has entered into certain forward gold and copper purchase
and sales contracts, pursuant to which it purchases gold and copper at an average price during a quotation period, and sells gold and
copper at a spot price. These contracts are treated as derivatives and are not designated as hedging instruments. The Company records
its forward commodity contracts at fair value using a market approach based on observable quoted market prices.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
The
following table is a sensitivity analysis of what the fair value would be due to an increase or a decrease of 10% in the price of all
derivative instruments outstanding as at December 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value
December 31, 2024 |
|
Fair
value after increase of 10% |
|
Fair
value after decrease of 10% |
| Royal
Gold deliverables |
$ |
(134) |
|
|
$ |
3,964 |
|
|
$ |
(4,232) |
|
| Gold
contracts |
$ |
(555) |
|
|
$ |
(1,655) |
|
|
$ |
5,586 |
|
| Fuel
contracts |
$ |
(851) |
|
|
$ |
448 |
|
|
$ |
(2,178) |
|
| Foreign
exchange contracts |
$ |
(16,839) |
|
|
$ |
27,313 |
|
|
$ |
(56,740) |
|
c.
Provisionally-priced contracts
Amounts
receivable
Upon
the shipment and sale of gold and copper concentrate to various off-takers, the Company typically receives a payment equal to an amount
ranging from 90% to 95% of the contracted value of the contained metals, net of applicable treatment and refining charges, while the final
settlement payment is not due for several months. The majority of molybdenum sales is not subject to provisional pricing; however,
for a small number of shipments and sales of molybdenum products to customers, the Company receives a payment typically equal to an amount
ranging from 90% to 100% of the contracted value of contained metal, net of applicable deductions, while the remaining payment, if any,
is not due for several months.
Under
the terms of these sales contracts, prices are subject to final adjustment, at the end of a future period, after control passes to the
customer, based on quoted market prices during a quotation period specified in the contract. At the end of each reporting period, provisionally-priced
receivables are marked to market based on the forward market price for the quotational period stipulated in the contract, with changes
in fair value recognized in gold, copper and molybdenum revenue.
The
amount of trade receivables related to the sales of gold and copper concentrate and molybdenum products prior to mark-to-market adjustment,
the mark-to-market adjustment made during the period, and the fair value of provisionally-priced receivables as at December 31, 2024 and
December 31, 2023, are summarized as follows:
|
|
|
|
|
|
|
|
|
|
December
31, 2024 |
December
31, 2023 |
| Trade
receivables prior to mark-to-market adjustment |
$ |
27,199 |
|
$ |
27,313 |
|
| Mark-to-market
adjustment related to gold and copper concentrate sold |
(2,727) |
|
2,677 |
|
| Mark-to-market
adjustment related to molybdenum products sold |
(31) |
|
174 |
|
| Provisionally-priced
trade receivables |
$ |
24,441 |
|
$ |
30,164 |
|
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
As
at December 31, 2024 and December 31, 2023, the Company’s net receivable position consists of copper, gold, and molybdenum sales
contracts awaiting final pricing and is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
awaiting final pricing |
Mark-to-market
average price
($/unit) |
|
Unit |
December
31, 2024 |
December
31, 2023 |
December
31, 2024 |
December
31, 2023 |
| Copper |
Pounds |
20,099,765 |
|
11,850,994 |
|
4.00 |
|
3.89 |
|
| Gold |
Ounces |
48,541 |
|
26,889 |
|
2,641 |
|
2,074 |
|
| Molybdenum |
Pounds |
49,572 |
|
102,599 |
|
21.39 |
|
20.09 |
|
Trade
payables
Upon
the purchase of molybdenum concentrate from various vendors, the Company typically pays an amount ranging from 95% to 100% of the contracted
value of contained metal, net of applicable deductions while the final settlement payment is not due for several months. Under the terms
of these concentrate purchase contracts, prices are subject to final adjustment at the end of a future period, after control passes to
the Company based on quoted market prices during the quotation period specified in the contract. At the end of each reporting period,
provisionally-priced purchases are fair valued based on the forward market price for the quotation period stipulated in the contract,
with changes in fair value recognized in inventory or production costs, as applicable.
Accounts
payable related to the purchase of molybdenum concentrate prior to fair value adjustment, the fair value adjustments made during the period,
and the fair value of provisionally-priced payables as at December 31, 2024 and December 31, 2023, are summarized as follows:
|
|
|
|
|
|
|
|
|
|
December
31, 2024 |
December
31, 2023 |
| Accounts
payable prior to fair value adjustment |
$ |
10,298 |
|
$ |
11,619 |
|
| Fair
value adjustment to molybdenum concentrate |
202 |
|
859 |
|
| Provisionally-priced
accounts payable |
$ |
10,500 |
|
$ |
12,478 |
|
As
at December 31, 2024 and December 31, 2023, the Company’s net position of molybdenum purchase contracts awaiting final pricing can
be summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
awaiting final pricing |
Fair
value price
($/unit) |
|
Unit |
December
31, 2024 |
December
31, 2023 |
December
31, 2024 |
December
31, 2023 |
| Molybdenum |
Pounds |
1,275,577 |
|
1,404,923 |
|
$ |
20.09 |
|
$ |
18.88 |
|
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
d.
Fair value measurement
Classification
and the fair value measurement by the level of financial assets and liabilities in the consolidated statements of financial position were
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December
31, 2024 |
|
|
|
|
|
|
|
|
Level
1 |
|
Level
2 |
|
Level
3 |
|
Total |
| Financial
assets |
|
|
|
|
|
|
|
|
Financial
asset related to the Additional Royal Gold Agreement |
$ |
— |
|
|
$ |
— |
|
|
$ |
67,200 |
|
|
$ |
67,200 |
|
| Provisionally-priced
trade receivables |
— |
|
|
24,441 |
|
|
— |
|
|
24,441 |
|
| Marketable
securities |
12,915 |
|
|
— |
|
|
— |
|
|
12,915 |
|
| Derivative
financial instruments |
— |
|
|
642 |
|
|
— |
|
|
642 |
|
|
$ |
12,915 |
|
|
$ |
25,083 |
|
|
$ |
67,200 |
|
|
$ |
105,198 |
|
|
|
|
|
|
|
|
|
| Financial
liabilities |
|
|
|
|
|
|
|
| Provisionally-priced
accounts payable |
$ |
— |
|
|
$ |
10,500 |
|
|
$ |
— |
|
|
$ |
10,500 |
|
|
|
|
|
|
|
|
|
| Derivative
financial instruments |
— |
|
|
17,915 |
|
|
— |
|
|
17,915 |
|
|
$ |
— |
|
|
$ |
28,415 |
|
|
$ |
— |
|
|
$ |
28,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December
31, 2023 |
|
|
|
|
|
|
|
|
Level
1 |
|
Level
2 |
|
Level
3 |
|
Total |
| Financial
assets |
|
|
|
|
|
|
|
| Provisionally-priced
trade receivables |
$ |
— |
|
|
$ |
30,164 |
|
|
$ |
— |
|
|
$ |
30,164 |
|
| Marketable
securities |
2,834 |
|
|
— |
|
|
— |
|
|
2,834 |
|
| Derivative
financial instruments |
— |
|
|
15,636 |
|
|
— |
|
|
15,636 |
|
|
$ |
2,834 |
|
|
$ |
45,800 |
|
|
$ |
— |
|
|
$ |
48,634 |
|
|
|
|
|
|
|
|
|
| Financial
liabilities |
|
|
|
|
|
|
|
| Provisionally-priced
accounts payable |
$ |
— |
|
|
$ |
12,478 |
|
|
$ |
— |
|
|
$ |
12,478 |
|
|
|
|
|
|
|
|
|
| Derivative
financial instruments |
— |
|
|
3,331 |
|
|
— |
|
|
3,331 |
|
|
$ |
— |
|
|
$ |
15,809 |
|
|
$ |
— |
|
|
$ |
15,809 |
|
During
the year ended December 31, 2024, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or
out of Level 3 fair value measurements.
Valuation
Techniques
Mount
Milligan Mine financial asset related to the Additional Royal Gold Agreement
The
fair value of the Mount Milligan Mine financial asset related to the Additional Royal Gold Agreement utilizes a combination of a Monte
Carlo simulation method and discounted cash flow method. The fair value measurement requires management to make estimates and assumptions
with respect to the metal prices, expected production, operating and capital costs from the Mount Milligan Mine’s life of mine projections,
expected timing of delivery of Deferred Gold Consideration, gold price volatility used in the
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
Monte
Carlo simulation, probability of tax indemnity payments and a discount rate. As such, this financial asset is classified within Level
3 of the fair value hierarchy.
Marketable
securities
Marketable
securities representing shares of publicly traded entities are recorded at fair value using quoted market prices (classified within Level
1 of the fair value hierarchy).
Provisionally-priced
receivables
The
fair value of receivables arising from copper, gold and molybdenum sales contracts that contain provisional pricing mechanisms are determined
using the appropriate quoted forward price from the exchange that is the principal active market for the particular metal. As such, these
receivables, which meet the definition of an embedded derivative, are classified within Level 2 of the fair value hierarchy.
Provisionally-priced
payables
The
fair value of payables arising from molybdenum purchase contracts that contain provisional pricing mechanisms are determined using the
appropriate quoted forward price from the exchange that is the principal active market for the particular metal. As such, these payables
are classified within Level 2 of the fair value hierarchy.
Derivative
financial instruments
The
fair value of gold, copper, diesel and currency derivative financial instruments, classified within Level 2, are determined using derivative
pricing models that utilize a variety of inputs that are a combination of quoted prices and market-corroborated inputs. The fair value
of the Company’s derivative contracts includes an adjustment for credit risk.
25.
Capital and financial risk management
The
Company is exposed in varying degrees to certain financial risks by virtue of its activities. The overall financial risk management program
focuses on preservation of capital and protecting current and future Company assets and cash flows by reducing exposure to risks posed
by market uncertainty in inputs costs and revenue products within financial and commodity markets. The Company monitors and manages its
financial and commodity risks in accordance with the financial risk management policy approved by the Company’s Audit Committee.
The
Company is exposed to the following types of risk and manages them as follows:
a.Capital
risk
The
Company’s primary objective with respect to its capital management is to provide returns for shareholders by ensuring that it has
sufficient cash resources to maintain its ongoing operations, pursue and support growth opportunities, continue the development and exploration
of its mineral properties and satisfy debt repayment requirements and other obligations. The Company’s capital structure consists
of lease obligations, letters of credit and equity. The Company has a $400 million revolving credit facility (the “Corporate Facility”).
The
Company manages its capital structure and makes adjustments in light of changes in its economic and operating environment and the risk
characteristics of the Company’s assets. For effective capital
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
management,
the Company implemented planning, budgeting and forecasting processes to help determine the funds required to ensure the Company has the
appropriate liquidity to meet its operating and growth objectives. The Company ensures that there is access to sufficient funds to meet
its short-term business, operating and financing requirements, taking into account its anticipated cash flows from operations and its
holdings of cash and cash equivalents.
b.Foreign
currency risk
The
Company’s operations are located in various geographic locations, exposing the Company to potential foreign exchange risk in its
financial position and cash flows. As the Company operates in an international environment, some of the Company’s financial instruments
and transactions are denominated in currencies other than the US dollar, primarily the Canadian dollar and Turkish lira. The operating
results and financial position of the Company are reported in US dollar in the Company’s consolidated financial statements. The
fluctuation of the US dollar in relation to other currencies will consequently have an impact on the results of the Company and may also
affect the value of the Company’s assets and liabilities.
The
Company utilizes hedging strategies to minimize exposure to the Canadian dollar which includes (but is not limited to) collars and forward
instruments. The Company does not currently hedge the exposure to the Turkish lira. Based on Canadian dollar denominated assets and liabilities
as at December 31, 2024, 10% strengthening of the US dollar against the Canadian dollar and 10% weakening of the US dollar against the
Canadian dollar would result in a before-tax impact a +/- $1.9 million gain/loss, inclusive of the impact of hedging strategies.
Based on the Turkish lira denominated assets and liabilities as at December 31, 2024, 10% strengthening of the US dollar against the Turkish
lira and 10% weakening of the US dollar against the Turkish lira would result in a before-tax impact of a +/- $0.3 million gain/loss
on the unhedged currency. Based on the Euro denominated assets and liabilities as at December 31, 2024, 10% strengthening of the US dollar
against the Euro and 10% weakening of the US dollar against the Euro would result in a before-tax impact of a +/- $0.2 million gain/loss
on the unhedged currency.
c.Interest
rate risk
Interest
rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets
and financial liabilities with variable interest rates expose the Company to risk of changes in cash flows. The Company’s cash and
cash equivalents include highly liquid investments that earn interest at market rates. The amount of interest generated from these investments
is proportional to the current interest rate. As at December 31, 2024, the majority of the cash and cash equivalents were comprised of
interest-bearing assets. Based on amounts as at December 31, 2024, a 1% change in interest rates would result in a $6.2 million change
to interest income.
No
amounts were drawn from the Company’s Corporate Facility as at December 31, 2024.
d.Commodity
price risk
The
profitability of the Company’s operations and value of its mineral resource properties is affected by changes in the current and
expected future prices of gold, copper and molybdenum. Changes in the price of certain raw materials can also significantly affect the
Company’s cash flows.
Gold,
copper and molybdenum prices historically have fluctuated widely and are affected by numerous factors outside of the Company's control,
including but not limited to, industrial, residential and retail demand, forward sales by producers and speculators, levels of worldwide
production, short-term changes
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
in
supply and demand due to speculative or hedging activities, macro-economic variables, geopolitical events and certain other factors related
specifically to gold, including central bank reserves management.
To
the extent that the price of gold, copper and molybdenum change over time, the fair value of the Company’s mineral assets and cash
flows improve or decline. A protracted period of depressed prices could impair the Company’s operations and development opportunities,
and significantly erode shareholder value. To the extent there are adverse changes to the price of certain raw materials (e.g., diesel
fuel), the Company’s profitability and cash flows may be impacted. The Company enters into derivative contracts to mitigate price
risk for both gold and copper price movements on the Royal Gold stream and fuel hedge contracts to mitigate commodity price risk. The
Company will also at times utilize gold and copper contracts to secure the prices for a portion of sales from the Öksüt Mine
or Mount Milligan Mine concentrate sales not subject to the Royal Gold stream.
e.Credit
risk
Credit
risk is the risk of a financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligation. Credit risk arises principally from the Company’s cash and cash equivalents, receivables from customers, and certain
derivative instruments.
The
Company holds its cash and cash equivalents in highly-rated financial institutions resulting in a low level of credit risk. The Company
manages its cash holdings amongst these eligible counterparties based on assigned counterparty limits and evaluates the cash balances
on a monthly basis to ensure compliance within these limits. For trade receivables and derivative financial instruments, historical levels
of default have been negligible, resulting in a low level of credit risk. The Company mitigates credit risk by dealing with recognized
creditworthy counterparties and limiting concentration risk. For derivative financial instrument liabilities, the Company assumes no credit
risk when the fair value of an instrument is negative. The Company also manages counterparty risk through maintaining diversification
limits for its eligible counterparties.
f.Liquidity
risk
Liquidity
risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company finances its operations
through a combination of operating cash flows, debt and, from time to time, through the issuance of equity. The Company primarily uses
funds generated from operating activities to fund operational expenses, sustaining and development capital spending, and interest and
principal payments on its portfolio of leases and dividend distributions. The Company continuously monitors and reviews its actual and
forecasted cash flows and manages liquidity risk by maintaining adequate cash and cash equivalents, by utilizing debt, if necessary, and
by monitoring developments in the capital markets. Contractual maturities relating to lease obligations are set out in note 14 and contractual
maturities relating to derivative instruments are set out in note 24. Other financial liabilities have maturities within one year of December
31, 2024.
As
at December 31, 2024, the Company has available total liquidity of $1,024.7 million (December 31, 2023 - $1,011.0 million), comprising
cash of $624.7 million (2023 - $612.9 million) and the Corporate Facility balance available to be drawn of $400.0 million (2023 -
$398.1 million). Corporate Facility availability is reduced by outstanding letters of credit.
The
Company believes its cash on hand, available cash from the Company’s Corporate Facility, and cash flow from the Company’s
operations will be sufficient to fund its anticipated operating cash requirements and development expenditures through at least the end
of 2024.
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
26.
Segmented information
The
Company bases its operating segments on the way information is reported and used by the Company's chief operating decision-maker (“CODM”).
The results of operating segments are reviewed by the CODM in order to make decisions about resources to be allocated to the segments
and to assess their respective performances.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Years
ended December 31, 2024 |
|
|
|
|
|
|
|
|
|
Öksüt |
|
Mount
Milligan |
|
Molybdenum |
|
Total
Segments |
|
Corporate
and
other |
|
Total |
| Revenue |
$ |
465,693 |
|
|
$ |
495,802 |
|
|
$ |
253,008 |
|
|
$ |
1,214,503 |
|
|
$ |
— |
|
|
$ |
1,214,503 |
|
| Cost
of sales |
|
|
|
|
|
|
|
|
|
|
|
| Production
costs |
148,023 |
|
|
306,315 |
|
|
255,985 |
|
|
710,323 |
|
|
— |
|
|
710,323 |
|
| Depreciation,
depletion and amortization |
49,959 |
|
|
72,799 |
|
|
3,374 |
|
|
126,132 |
|
|
— |
|
|
126,132 |
|
| Earnings
(loss) from mine operations |
$ |
267,711 |
|
|
$ |
116,688 |
|
|
$ |
(6,351) |
|
|
$ |
378,048 |
|
|
$ |
— |
|
|
$ |
378,048 |
|
| Exploration
and evaluation costs |
1,110 |
|
|
6,383 |
|
|
21,055 |
|
|
28,548 |
|
|
42,173 |
|
|
70,721 |
|
| Corporate
administration |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
32,685 |
|
|
32,685 |
|
| Share-based
compensation expense |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,203 |
|
|
5,203 |
|
| Care
and maintenance |
— |
|
|
— |
|
|
9,306 |
|
|
9,306 |
|
|
12,891 |
|
|
22,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impairment
loss |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
193,564 |
|
|
193,564 |
|
| Reclamation
recovery |
— |
|
|
— |
|
|
(17,853) |
|
|
(17,853) |
|
|
(7,407) |
|
|
(25,260) |
|
|
Other
operating expenses (income) |
1,125 |
|
|
(7,203) |
|
|
1,495 |
|
|
(4,583) |
|
|
7,004 |
|
|
2,421 |
|
| Earnings
(loss) from operations |
$ |
265,476 |
|
|
$ |
117,508 |
|
|
$ |
(20,354) |
|
|
$ |
362,630 |
|
|
|
|
$ |
76,517 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on sale of Greenstone Partnership |
|
|
|
|
|
|
|
|
(63,088) |
|
|
(63,088) |
|
| Other
non-operating income |
|
|
|
|
|
|
|
|
(49,116) |
|
|
(49,116) |
|
| Finance
costs |
|
|
|
|
|
|
|
|
14,664 |
|
|
14,664 |
|
| Earnings
before income tax |
|
|
|
|
|
|
|
|
|
|
$ |
174,057 |
|
| Income
tax expense |
|
|
|
|
|
|
|
|
93,663 |
|
|
93,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
earnings |
|
|
|
|
|
|
|
|
|
|
$ |
80,394 |
|
| Additions
to PP&E |
$ |
54,679 |
|
|
$ |
55,753 |
|
|
$ |
62,304 |
|
|
$ |
172,736 |
|
|
$ |
2,050 |
|
|
$ |
174,786 |
|
|
|
|
|
Centerra
Gold Inc.
Notes
to the Consolidated Financial Statements
December
31, 2024
(Expressed
in thousands of United States dollars, except share and per share amounts, unless otherwise indicated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Years
ended December 31, 2023 |
|
|
|
|
|
|
|
|
|
Öksüt |
|
Mount
Milligan |
|
Molybdenum |
|
Total
Segments |
|
Corporate
and
other |
|
Total |
| Revenue |
$ |
380,880 |
|
|
$ |
407,273 |
|
|
$ |
306,744 |
|
|
$ |
1,094,897 |
|
|
$ |
— |
|
|
$ |
1,094,897 |
|
| Cost
of sales |
|
|
|
|
|
|
|
|
|
|
|
| Production
costs |
89,613 |
|
|
303,444 |
|
|
312,917 |
|
|
705,974 |
|
|
— |
|
|
705,974 |
|
| Depreciation,
depletion and amortization |
44,098 |
|
|
76,474 |
|
|
4,346 |
|
|
124,918 |
|
|
— |
|
|
124,918 |
|
| Earnings
(loss) from mine operations |
$ |
247,169 |
|
|
$ |
27,355 |
|
|
$ |
(10,519) |
|
|
$ |
264,005 |
|
|
$ |
— |
|
|
$ |
264,005 |
|
| Exploration
and evaluation costs |
2,091 |
|
|
6,501 |
|
|
13,005 |
|
|
21,597 |
|
|
53,219 |
|
|
74,816 |
|
| Corporate
administration |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
35,643 |
|
|
35,643 |
|
| Share-based
compensation expense |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
9,232 |
|
|
9,232 |
|
| Care
and maintenance |
— |
|
|
— |
|
|
16,685 |
|
|
16,685 |
|
|
11,727 |
|
|
28,412 |
|
| Impairment
loss |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
34,101 |
|
|
34,101 |
|
| Reclamation
expense |
— |
|
|
169 |
|
|
21,997 |
|
|
22,166 |
|
|
12,212 |
|
|
34,378 |
|
| Other
operating expenses |
15,406 |
|
|
9,626 |
|
|
2,808 |
|
|
27,840 |
|
|
1,738 |
|
|
29,578 |
|
| Earnings
(loss) from operations |
$ |
229,672 |
|
|
$ |
11,059 |
|
|
$ |
(65,014) |
|
|
$ |
175,717 |
|
|
|
|
$ |
17,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other
non-operating income |
|
|
|
|
|
|
|
|
(11,134) |
|
|
(11,134) |
|
| Finance
costs |
|
|
|
|
|
|
|
|
15,345 |
|
|
15,345 |
|
| Earnings
before income tax |
|
|
|
|
|
|
|
|
|
|
$ |
13,634 |
|
| Income
tax expense |
|
|
|
|
|
|
|
|
94,912 |
|
|
94,912 |
|
| Net
loss |
|
|
|
|
|
|
|
|
|
$ |
(81,278) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Additions
to PP&E |
$ |
50,491 |
|
|
$ |
61,964 |
|
|
$ |
1,976 |
|
|
$ |
114,431 |
|
|
$ |
7,225 |
|
|
$ |
121,656 |
|
Geographical
Information
The
following table details the Company’s revenue by geographic area(1)
and information about the Company’s non-current assets by location of the assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
Non-current
assets |
|
Year
ended December 31, |
|
As
at December 31, |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
Türkiye |
$ |
465,693 |
|
|
$ |
380,880 |
|
|
$ |
220,681 |
|
|
$ |
204,613 |
|
| United
States |
253,008 |
|
306,744 |
|
|
138,931 |
|
|
277,052 |
|
| Langeloth
Facility |
253,008 |
|
306,744 |
|
|
31,299 |
|
|
29,458 |
|
| Thompson
Creek Mine |
— |
|
— |
|
|
85,073 |
|
|
32,788 |
|
| Goldfield
Project |
— |
|
— |
|
|
21,457 |
|
|
213,694 |
|
| Other |
— |
|
— |
|
|
1,102 |
|
|
1,112 |
|
| Canada |
495,802 |
|
407,273 |
|
|
904,288 |
|
|
824,910 |
|
|
Mount
Milligan Mine |
495,802 |
|
407,273 |
|
|
754,483 |
|
|
703,472 |
|
|
Endako
Mine |
— |
|
— |
|
|
27,427 |
|
|
27,937 |
|
|
Kemess
Project |
— |
|
— |
|
|
87,980 |
|
|
88,090 |
|
|
Corporate
and other |
— |
|
— |
|
34,398 |
|
|
5,411 |
|
| Other |
— |
|
|
— |
|
|
8,171 |
|
|
8,164 |
|
| Total |
$ |
1,214,503 |
|
|
$ |
1,094,897 |
|
|
$ |
1,272,071 |
|
|
$ |
1,314,739 |
|
(1)Presented
based on the location from which the product originated.
