Strong Performance From Kumtor And Mout Milligan; Oksut Achieves Commercial Production
TORONTO- Scott Perry, President and Chief Executive Officer of Centerra Gold Inc., said, “We continue to stay vigilant at all of our operations to prevent an outbreak and avoid the spread of the COVID-19 virus and to ensure the health, safety and well-being of our employees, contractors and communities. At our Oksut operation, we have celebrated a recent safety milestone, when on July 19, 2020, Oksut achieved 3 million work hours without a lost time injury. Our continued commitment to Work Safe Home Safe is a driving force behind achieving such milestones.
The strong operating performance at Kumtor and Mount Milligan continued into this quarter and our Oksut Mine achieved commercial production during the quarter. Our operations in the quarter delivered consolidated gold production of 219,692 ounces at all-in sustaining costsNG on a by-product basis of $804 per ounce sold in the quarter. Kumtor had another strong quarter producing 173,245 ounces of gold at all-in sustaining costsNG on a by-product basis of $696 per ounce sold. Mount Milligan produced 35,656 ounces of gold and 19.1 million pounds of copper at all-in sustaining costsNG on a by-product basis of $679 per ounce sold and Oksut produced 10,791 ounces of gold, 5,619 ounces were commercial production. During the quarter, Oksut’s all-in sustaining costsNG on a by-product basis was $537 per ounce, being our lowest cost mine in the quarter.
While the majority of Centerra’s operating sites are currently operating without significant interruption, there has been an increase in the infection rates of COVID-19 and other illnesses in the Kyrgyz Republic which is beginning to have an impact on the available workforce for the Kumtor Mine. While Kumtor’s performance during the second quarter was unaffected, the Company is putting in place measures to manage the reduced workforce at Kumtor by mining waste below capacity while maintaining gold production levels by processing stockpiles as planned for the year.
The Company notes that the effects of COVID-19 on its business continue to change rapidly. The measures enacted to date reflect the Company’s best assessment at this time but will remain flexible and be revised as necessary or advisable and/or as recommended by the public health and governmental authorities.
Exploration activities in the second quarter of 2020 included drilling, surface sampling, geological mapping and geophysical surveying at the Company’s various projects (including earn-in properties); targeting gold and copper mineralization in Canada, Mexico, Turkey, Finland, USA and the Kyrgyz Republic. The Company has expanded its 2020 exploration program when compared to 2019 and is primarily focused on brownfield exploration at Kumtor, Mount Milligan and Oksut. Exploration expenditures totaled $6.6 million in the second quarter of 2020, which included the impact of delays associated with COVID-19, compared to $6.3 million in the same quarter of 2019.
The 2020 planned drilling program at Kumtor includes 55,000 meters of exploration and 15,000 metres of infill drilling, which are focused on priority primary and potential targets. Primary targets include various zones of the Central, Southwest and Sarytor deposits (areas) based on enhanced geological modeling from the recently updated Kumtor resource block model, and positive drilling results from 2018 and 2019. In addition, the 2020 planned drilling program at Kumtor includes the under-explored segments of the Kumtor Gold Trend – the Northeast targets, Bordoo, Akbel and conceptual targets (Hope Zone and others). An exploration potential update will be included in an updated Kumtor 43-101 technical report expected to be released in the fall of 2020.
In April, due to COVID-19 preventive measures, exploration drilling at Kumtor was temporarily suspended, resuming in June 2020. Due to the delay, a certain portion of the planned drilling program could be deferred to 2021.
During the second quarter of 2020, exploration drilling programs continued with the completion of fifteen diamond drill holes for 4,663 meters. Exploration drilling focused on testing zones of sulfide and oxide mineralization along the corridor between the Central and Southwest pits (Kosholuu, Hope and Southwest Oxide Deep zones), on the periphery of the Sarytor Pit, Northeast targets and Muzdusuu area.
In the second quarter of 2020, a total of eleven diamond drill holes were completed in the Southwest area for a total of 2,902 meters. Three drill holes have been completed between Southwest and Central pits in the Hope Zone for a total of 508 meters. Results from recent drilling have delineated a lens-shaped oxide gold mineralization. This mineralization extends along the hanging wall of the Kumtor Lower Thrust for more than 400 meters and is opened in both directions along the main NE strike.
The 2020 planned drilling program at Mount Milligan includes 17,500 meters (at approximately 40 drill sites) in five target zones of the in-pit exploration, 10,000 meters of brownfield exploration and 3,000 meters of greenfield exploration. In March, due to COVID-19 preventive measures, exploration drilling at Mount Milligan was temporarily suspended and resumed in June 2020, with no impact to the planned drilling programs anticipated for the remainder of 2020. In the second quarter, two drill holes were completed in the Great Eastern Fault target area (20-1240, 20-2141), and one was in progress, totaling 1,274 meters drilled. Assay results were returned for two drill holes during the quarter and best weighted average intersections.
The 2020 greenfield Phase-1 drilling program was completed in the second quarter of 2020 at the Max project. The Max project consists of a block of 12 mineral claims (4,869 ha) under option from Jama Holdings Inc., 21 kilometers south of the Mount Milligan mine processing facilities and adjoins the Mount Milligan property on the south. The program was supported by helicopter in June 2020, completing seven drill holes (3,573 meters) from five pads in two target areas. The prospect has similar geology, structure, geophysical and geochemical signature as the Mount Milligan MBX deposit. Assay results are pending.
At the Oksut Mine planned drilling program includes 20,000 meters of diamond drilling, focused on near pit resource expansion and other oxide gold targets. Drilling, which commenced towards the end of the second quarter of 2020 with one exploration hole being completed for 246 meters at the periphery of Guneytepe, will continue into the third quarter of 2020.
The 2020 Kemess brownfield drilling program is focused on the Kemess North Trend and comprises three drill holes (2,700 meters) at the Nugget historic resource to test for mineralization up-dip of the 2019 drilling and up to three drill holes (2,000 meters) at the Kemess East resource to test for an extension of known mineralization. Drilling at Kemess East will attempt to reuse and extend 2017 drill holes, or alternatively, a single drill hole (2,000 meters) may be drilled from surface. In late June, crews mobilized to site and began preparations, but no drill core was produced. The program is expected to run until late this month.
During the second quarter of 2020, greenfield exploration programs targeting gold and copper were ongoing in Canada, Turkey, Mexico, USA and Finland.