Toronto, Canada, February 4,
2016: Centerra Gold Inc. (TSX: CG)
announced that the Mongolian Parliament has passed a resolution setting the
state ownership interest in the Gatsuurt Project at 34% and authorizing the
government to complete negotiations with Centerra on the terms of such
ownership. In October 2015, the Company and the Government agreed to a 3%
special royalty in place of the state 34% ownership interest in the project
(such royalty being in addition to the existing Mongolian mineral royalty and
tax regime). Based on our discussions with the Government, Centerra understands
that the resolution is a mandate to the Government to implement such agreement
between Centerra and the Government.
Scott Perry, Centerra’s Chief
Executive Officer stated, “The parliamentary resolution is a very important
next step in advancing the Gatsuurt Project. The Gatsuurt Project represents an
exciting opportunity to use Centerra’s existing Boroo mill and other
infrastructure to develop the 1.6 million ounce Gatsuurt deposit with very
modest initial capital investment. The Company will now focus on finalizing the
investment agreements with the Government of Mongolia. We look forward to
developing Gatsuurt so we can continue to operate in Mongolia for many more
years to come.”
The Company expects to proceed
with negotiating definitive agreements (including a deposit development
agreement and an investment agreement) with the Mongolian Government. Following
the successful completion of such agreements, the Company will undertake
economic and technical studies to update the existing studies on the project,
which were completed and published in May 2006. As part of such work, the
Company will undertake a program of exploration drilling, aimed at
substantially expanding the Gatsuurt oxide resource, and additional
hydrogeological drilling. Following completion of definitive agreements the
Company expects to provide an update on the timeline for completion of such
studies and drilling and for the start of project development.
The Gatsuurt Project is located
approximately 55 kilometres by road from the Company’s Boroo mine and is
expected to be developed in accordance with applicable Mongolian environmental
regulations and international standards, consistent with the standards adopted
by the Boroo mine. The Gatsuurt Project’s estimated mineral reserves as at
December 31, 2014 were 17.1 million tonnes at an average grade of 2.9 grams of
gold per tonne containing 1.6 million ounces of gold using a cut-off grade of
1.4 grams per tonne. Mineral reserves have been estimated based on a gold price
of US$1,300 per ounce. For further information, please refer to Centerra’s 2014
Annual Information Form dated March 31, 2015.
The Company plans to mine the ore at Gatsuurt and truck it
approximately 55 kilometres to the existing Boroo mill to be processed. The
current Gatsuurt plan is to process approximately 3.6 million tonnes of CIP ore
(oxides) with an average grade of 2.86 grams of gold per tonne through the
existing Boroo facility in the first two and a half operating years of the
Gatsuurt Project. During this time, a BIOX® facility is planned to be added to
the existing Boroo facility to be used for processing the remaining sulfide
ores totaling approximately 13.5 million tonnes with an average grade of 2.92
grams of gold per tonne.
Qualified Person
The reserve and resource
information and related scientific and technical information in this news
release were prepared in accordance with the standards of the Canadian
Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101
and were prepared, reviewed, verified and compiled by Centerra’s geological and
mining staff under the supervision of Gordon Reid, Professional Engineer and
Centerra’s Vice-President and Chief Operating Officer, who is the qualified
person for the purpose of NI 43-101.
Further information concerning
the Gatsuurt deposit, including key assumptions, parameters and methods used to
estimate mineral resources and reserves, as well as legal, political,
environmental and others risks are described in Centerra’s 2014 Annual
Information Form dated March 31, 2015 and the Technical Report on the Gatsuurt
Gold Project, Northern Mongolia prepared for Centerra Gold Inc. dated May 9,
2006, each of which have been filed on SEDAR at www.sedar.com.
Cautionary Note Regarding
Forward-looking Information
Information contained in this
news release which is not a statement of historical facts, may be “forward
looking information” for the purposes of Canadian securities laws. Such
forward-looking information involves risks, uncertainties and other factors
that could cause actual results, performance, prospects and opportunities to
differ materially from those expressed or implied by such forward looking
information. The words “intends”, “continue”, “may”, “will”, and similar
expressions identify forward-looking information. These forward looking
statements relate to, among other things, negotiation of agreements and receipt
of required permits, regulatory approvals and regulatory commissioning; reserve
and resource estimates; plans for the future development of the Gatsuurt
Project; estimates of future production, mining haulage and processing; and the
Company’s future operations in Mongolia.
Forward-looking information is
necessarily based upon a number of estimates and assumptions that, while
considered reasonable by Centerra, are inherently subject to significant
political, business, economic and competitive uncertainties and contingencies.
Such factors include, among other things: political and regulatory risks in
Mongolia; resource nationalism; the impact of changes in, or more aggressive
enforcement of; laws, regulations and government practices in Mongolia; the
sensitivity of the Centerra’s business to global financial conditions,
including the future price of gold; the potential for imprecision in the
estimation of mineral reserves and resources; the Company’s ability to obtain
all the required approvals, permits and regulatory commissioning for the
Gatsuurt Project from the Mongolian Government; the ability of the Company to
negotiate a deposit development agreement and an investment agreement, ore
haulage and BIOX® agreements and other agreements necessary for the Gatsuurt
Project; the ability of the Company to complete and obtain positive results
from exploration drilling, hydrogeological drilling and other works at the
Gatsuurt site, the Company’s ability to carry out economic and technical
studies in a timely manner and that the results of such studies are positive;
the impact of continued scrutiny of Mongolian regulatory authorities on the
Company’s operations in Mongolia; risks related to operational matters,
including the ability of the Company to construct the necessary mining and
processing infrastructure for the Gatsuurt Project; and such other factors as
described under the heading “Risk Factors” in Centerra’s most recently filed
annual information form available on SEDAR at www.sedar.com.
There can be no assurances that
forward-looking information and statements will prove to be accurate, as many
factors and future events, both known and unknown could cause actual results,
performance or achievements to vary or differ materially, from the results,
performance or achievements that are or may be expressed or implied by such
forward-looking statements contained herein or incorporated by reference.
Accordingly, all such factors should be considered carefully when making
decisions with respect to Centerra, and prospective investors should not place
undue reliance on forward-looking information. Forward-looking information is
as of February 4, 2016. Centerra assumes no obligation to update or revise
forward-looking information to reflect
changes in assumptions, changes in circumstances or any other events affecting
such forward-looking information, except as required by applicable law.
About Centerra
Centerra is a Canadian-based
gold mining company focused on operating, developing, exploring and acquiring
gold properties in Asia, North America and other markets worldwide. Centerra is
the largest Western-based gold producer in Central Asia. Centerra’s shares
trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is
headquartered in Toronto, Ontario, Canada.
For more information:
John W. Pearson
Vice President, Investor
Relations
(416) 204-1953(416) 204-1953
john.pearson@centerragold.com
Renmark Financial
Communications Inc.
Henri Perron: hperron@renmarkfinancial.com
Media – D. Elizabeth Culley: dculley@renmarkfinancial.com
Tel.: (416) 644-2020(416) 644-2020 or (514)
939-3989
www.renmarkfinancial.com
Additional information on Centerra is available on the
Company’s web site at www.centerragold.com and
at SEDAR at www.sedar.com.