Mineral Reserves Of 125.4 Million Tons At Mount Milligan
TORONTO - Centerra Gold Inc. reported that it has released the technical report for the Mount Milligan Mine (2020 Mount Milligan Technical Report) which includes revisions to the resource model, metallurgical recoveries, operating cost estimates, net smelter return (NSR) cut-off value, and the life-of-mine (LOM) open pit design. The 2020 Mount Milligan Technical Report shows that, at December 31, 2019, the Mount Milligan copper-gold porphyry deposit contains a combined Measured and Indicated Mineral Resource (exclusive of Mineral Reserves) of 125.4 million tonnes (Mt) at 0.19% copper (Cu) and 0.35g/t gold (Au) containing 518 million pounds (lbs) of copper and 1.4 million ounces (oz) of gold and an Inferred Mineral Resource of 4 Mt at 0.13% Cu and 0.46g/t Au. The mineral resource within the 2019 resource pit shell was based on a cut-off grade of 0.2% copper-equivalent (CuEq).
The Proven and Probable Mineral Reserve totals 191.0Mt at 0.23% Cu and 0.39g/t Au containing 959 million pounds of copper and 2.41 million ounces of gold and has been classified as 60% Proven and 40% Probable on a tonnage basis.
Total operating and capital costs over Mount Milligan’s 9-year life of mine (LOM) are estimated at $2,839 million, including $828 million for mining costs, $1,029 million for processing costs, $333 million for G&A costs, $140 million for transportation costs, total selling and marketing costs of $88 million, total treatment and refining charges of $199 million and total capital expenditures of $222 million.
The $222 million total LOM capital expenditures required to exploit the Mineral Reserves in the LOM plan includes capital equipment and component replacements, planned improvements to crushing equipment, the tailings pumping system and site facilities, as well as water management, but excludes $125 million in tailings storage facility (TSF) construction costs (included with mining opex). Waste mined at Mount Milligan is used for routine TSF raises, the cost of which is capitalized to the TSF rather than as capitalized stripping. The current mine plan does not contemplate any growth capital.
The LOM all-in sustaining cost per ounce sold, on a by-product basis, which includes sustaining capital and copper revenue credits, averages $704/oz Au for the period from 2020 to the end of the LOM. All-in sustaining cost per ounce sold, on a by-product basis, is a non-GAAP measure.
At December 31, 2019, proven and probable gold mineral reserves total an estimated 11.1 million contained ounces (441.9 Mt at 0.78 g/t Au), compared to 14.2 million contained ounces (706.3 Mt at 0.63 g/t Au) in the prior year. During 2019, proven and probable gold mineral reserves decreased by 3.1 million contained ounces, after processing of 986,000 contained ounces and a net deletion of 2.2 million contained ounces.
The decrease in gold mineral reserve contained ounces is primarily attributable to the Company’s revised reserve estimate for the Mount Milligan Mine that represented a net deletion of 2.1 million contained ounces from mineral reserves.
Mount Milligan Mine’s proven and probable gold mineral reserves total an estimated 2.4 million ounces of contained gold (191.0 Mt at 0.39 g/t gold) as at December 31, 2019, compared to 4.7 million contained ounces gold (447.6 Mt at 0.33 g/t gold) at December 31, 2018. For 2019, proven and probable gold mineral reserves decreased by 2.3 million contained ounces of gold, including the processing of 279 thousand contained ounces of gold.
The decrease in reserves was driven by two main factors. First, during 2019, the Company identified cost escalation relating to water sourcing, increased maintenance, increased labor complements, decreased productivities and lower process plant throughput, among other things, compared to the previous 2017 Technical Report for the Mount Milligan Mine. These factors have resulted in the estimated NSR cut-off increasing from C$8.12/t to C$9.55/t. Second, the resource model has been updated and metallurgical recoveries re-estimated, resulting in a revised ultimate open pit design with the associated reserve decrease.