2013 Year-End Reserve and Resource Update

2013 Year-End Reserve and Resource Update

published: 10 February 2014

Centerra Gold Inc. (TSX: CG) and Kumtor Operating Company updated the Kumtor reserves and resources as of December 31, 2013.
In 2013, gold production at the Kumtor mine was

– 600,402 ounces or 18,674.6 kg for the full year 2013.

The 2013 production guidance was achieved due to mining carried out in the high-grade SB Zone of the Central Pit.

Reserves and Resources
Kumtor’s proven and probable mineral reserves total 8.51 million ounces of contained gold as of December 31, 2013 after processing 766,000 contained ounces in 2013. Kumtor’s life-of-mine plan is based only on the open pit reserves, and no provision has been made for production from the underground resources.

Measured and indicated resources at Kumtor were unchanged at 2.65 million contained ounces and inferred resources were unchanged at 2.64 million contained ounces.

All 2013 year-end reserves and resources were estimated using a gold price of $1,300 per ounce compared to $1,350 per ounce at December 31, 2012. The change in gold price had no impact on the reserves and resources.

Reserves and
resources at Kumtor as of December 31, 20131

Thousands of tonnes

Grade(g/t)

Contained gold

Thousands of oz

Tonnes
Gold reserves:
– proven 4 841 1,9 296 9,20
– probable 80 345 3,2 8 220 255,68
Total Reserves 85 186 3,1 8 516 264,88
Resources:
– measured 21 975 2,3 1 631 50,73
– indicated open pit 12 113 2,3 898 27,93
– indicated Stockwork
UG2		 351 10,7 121 3,76
Total Measured and
Indicated Resources		 34 439 2,4 2 650 82,42
Inferred Resources
– Central Pit,
Southwest and Sarytor deposits		 9 339 2,4 712 22,14
– Underground Stockwork
Zone		 2 002 11,0 705 21,93
– Underground SB Zone 3 413 11,2 1 229 38,23
Total Inferred
Resources		 14 754 5,6 2 646 82,30

1 – The reserves and resources include those of the open-pit area as well as of the Southwest and Sarytor deposits and have been estimated based on a gold price of US$1,300 per ounce.
2 – “OP” means open pit and “UG” means underground.

The reserves and resources estimated by Centerra are determined in accordance with National Instrument 43-101 which is the same standard used by many international mining companies. Such reserve and resource estimates are based on mining operations continuing until the end of the current life of mine plan in 2026 and do not consider potential mining activities after that time. These estimates also formed the basis of Centerra’s discussions with the Government of the Kyrgyz Republic when they entered into the non-binding Heads of Agreement on the Kumtor Restructuring. The Company will file updated reserve and resource estimates with the appropriate Kyrgyz authorities for their review and approval to facilitate the updating of the Kyrgyz state reserve registry.

2014 Outlook

The Kumtor mine estimates it will produce between 550,000 and 600,000 ounces1 or 17.1 to 18.7 tonnes of gold in 2014 and similar to 2013, over 50% of this gold production is expected during the fourth quarter when mining will reach the high-grade section of the SB Zone.

The projected capital expenditures for 2014, excluding capitalized stripping, are estimated to be $85 million of which $42 million will be spending on sustaining capital2, including the major overhaul maintenance of the mine equipment, purchase of ball mill girth gear, tailings dam construction raise and other items. Growth capital2 investment at Kumtor is forecast at $43 million and includes the relocation of certain infrastructure at Kumtor related to the KS-13 life-of-mine expansion plan, dewatering projects and purchase of new mining equipment.

Capitalized stripping costs (cash) are expected to be $191 million in 2014.

Kumtor’s all-in costs2 including all capital expenditures and taxes are forecast between $1,008 and $1,100 per ounce sold.