By Max Clarke
Centerra Gold Inc. (TSX:CG) today reported fourth quarter 2010 net earnings of $153.1 million or $0.65 per common share based on revenues of $323.3 million, compared to net earnings of $140.0 million or $0.60 per common share on revenues of $323.9 million in the same quarter of 2009.
Centerra's consolidated gold production for the fourth quarter of 2010 totalled 249,866 ounces at a total cash cost of $311 per ounce compared to 296,048 ounces at a total cash cost of $276 per ounce in the corresponding quarter of 2009. During the fourth quarter 2010, production was lower at both Boroo and Kumtor compared to the fourth quarter of 2009.
2010 Fourth Quarter Highlights:
Proven and probable mineral reserves increased to 8.2 million contained ounces of gold as a result of reserve increases at Kumtor and Gatsuurt.
Kumtor's open pit mine life extended to 2021.
Fourth quarter revenue increased 180% over the third quarter to $323 million.
Cash provided by operations of $137 million or $0.58 per share in the fourth quarter.
Entered into a $150 million three-year revolving credit facility with the European Bank for Reconstruction and Development.
Cash provided by operations in the fourth quarter of 2010, net of working capital changes and other operating items was $137.1 million compared to $188.6 million in the fourth quarter of 2009 as a result of lower gold sales, higher working capital levels, partially offset by the higher average realized price of gold ($1,375 per ounce vs. $1,129 per ounce in the fourth quarter of 2009).
For 2010, the Company recorded net earnings of $322.6 million or $1.37 per common share on revenues of $846.5 million reflecting a 22% increase in realized gold price in the year and the gain from the sale of the REN property of $34.9 million. Net earnings for 2009 were $60.3 million or $0.27 per share on revenues of $685.5 million, after reflecting a charge for unusual items of $49.3 million relating to the Kyrgyz settlement. Consolidated 2010 gold production was 678,941 ounces at a total cash cost of $444 per ounce, compared with consolidated gold production of 675,592 ounces at a total cash cost of $459 per ounce for the prior year.
During 2010, cash provided by operations was $271.4 million or $1.15 per share up from $245.6 million or $1.08 per share in 2009, reflecting the higher net earnings, primarily as a result of the higher average gold price realized.
Stephen Lang, President and CEO of Centerra Gold commented: "Our operations generated strong cash flow during the quarter of $137 million and Centerra ended the year with a balance sheet that includes $413 million in cash and short-term investments and no debt outstanding."
"For 2011, consolidated gold production is expected to be in the 600,000 to 650,000 ounce range and total cash costs are expected in the $460 to $495 per ounce range. The production profile at Kumtor differs significantly from recent years in that Kumtor is expected to have consistent quarterly production throughout the year."
"The Mongolian Parliament continues to assess the water and forest legislation enacted in 2009 and we remain optimistic that this issue will ultimately be resolved and Gatsuurt will move forward. However, as we are uncertain regarding the timing we have not included Gatsuurt in our 2011 outlook," he concluded.