|Frontier's "Invest Mongolia Tokyo 2018"||Frontier Securities||Tokyo Japan|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
Centerra Gold Achieves 2017 Consolidated Gold Production Guidance, Beats Cost Guidance, Records $210 Million Net Earnings and Generates $234 Million Free Cash FlowNG and Provides 2018 Outlook
This news release contains forward-looking information that is subject to the risk factors and assumptions set out under “Caution Regarding Forward-looking Information”.
It should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2017. The consolidated financial statements of Centerra Gold Inc. are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. All figures are in United States dollars and all production figures are on a 100% basis unless otherwise stated.
All references in this document denoted with NG, indicate a non-GAAP term which is discussed under “Non-GAAP Measures” and reconciled to the most directly comparable GAAP measure.
Centerra Gold Inc. (“Centerra”) (TSX: CG) reported net earnings of $130.0 million or $0.45 per common share (basic) on revenues of $358.2 million in the fourth quarter of 2017.
The fourth quarter 2017 result includes a tax benefit of $21.3 million as a result of a change in tax legislation enacted in the U.S. Excluding this item, adjusted earnings NG in the fourth quarter of 2017 were $108.7 million or $0.37 per common share (basic).
An impairment charge of the Company’s Mongolian assets of $41.3 million ($39.7 million net of tax), a tax benefit of $21.3 million resulting from the enactment of new tax legislation in the U.S. and a gain of $9.8 million ($6.9 million net of tax) on the sale of the ATO property in Mongolia.
During the same period in 2016, the Company reported net earnings of $63.6 million or $0.23 per common share (basic) on revenues of $305.7 million and adjusted earnings NG of $68.6 million or $0.24 per common share (basic). For the full year 2017, the Company recorded net earnings of $209.5 million or $0.72 per share (basic) on revenues of $1.2 billion compared to $151.5 million or $0.60 pershare (basic) on revenues of $757.7 million in 2016.
The increase in earnings in 2017 reflects a full-year of operations at Mount Milligan and increased production at Kumtor. In addition in 2017, the Company recorded charges for a settlement reached with the Kyrgyz Republic Government of $60 million, an impairment charge of the Company’s Mongolian assets of $41.3 million ($39.7 million net of tax), a tax benefit of $21.3 million resulting from the enactment of new tax legislation in the U.S. and a gain of $9.8 million ($6.9 million net of tax) on the sale of the ATO property in Mongolia. Excluding these items, adjusted earningsNG in 2017 were $281 million or $0.96 per share (basic) compared to adjusted earnings of $160.9 million or $0.64 per share (basic) in the comparative year.
2017 Fourth Quarter and Full Year Highlights
• Entered into a comprehensive settlement agreement in September 2017 with the Government of the Kyrgyz Republic to resolve all the outstanding matters affecting the Kumtor Project.
• Announced a friendly acquisition of AuRico Metals Inc. on November 7, 2017, which closed on January 8, 2018.
Offset 2017 mining depletion and increased global gold mineral reserves to 16.3 million contained ounces of gold (746.8 Mt at 0.7 g/t gold) at year-end, primarily as a result of the acquisition of AuRico Metals and successful brownfield exploration at Mount Milligan and Öksüt. Mineral reserves and mineral resources estimates are described in the Company’s news release of February 8, 2018.
• Achieved Company-wide 2017 gold production guidance producing 785,316 ounces; Kumtor produced 562,749 ounces exceeding the upper end of its favourably revised guidance, while Mount Milligan produced 222,567 ounces falling short of the lower end of its revised guidance.
• Mount Milligan produced 53.6 million pounds of copper during 2017, which was slightly below its guidance, but sold 59.7 million pounds of copper. The Mount Milligan mill was shutdown temporarily late December due to a shortage of water in the milling process. The mill was restarted utilizing one ball mill (approximately 30,000 tonnes per day) on February 5, 2018 once sufficient water became available.
• Exceeded Company-wide 2017 guidance for all-in sustaining costs on a by-product basis per ounce soldNG at $688, excluding revenue-based tax in the Kyrgyz Republic and income tax ($572 per ounce sold in the fourth quarter 2017).
• Cash generated from operations totaled $500.9 million for the year (including $416.1 million from Kumtor and $150.6 million from Mount Milligan). In the fourth quarter 2017 cash generated from operations was $170.4 million (including $160 million from Kumtor and $29.2 million from Mount Milligan).
• Cash, cash equivalents, restricted cash and short-term investments at December 31, 2017 were $416.6 million.
• Received all of the necessary permits and approvals for Kumtor’s 2018 mine plan. The approvals and permits are valid through December 31, 2018.
Subsequent to December 31, 2017
• Received approval of the pastureland permit for the Öksüt Gold Project in Turkey, the last remaining outstanding permit needed for the project’s future development. In addition, received from the Turkish Ministry of Economy an investment incentive certificate which provides Öksüt with certain tax incentives.
• Received Board approval for the construction of the Öksüt Project, subject to continued availability of the OMAS Facility (defined below). Construction is expected to commence in April 2018.
• Received an amendment to the Mount Milligan Environmental Assessment Certificate that allows for limited withdrawal of water from Philip Lake until October 2018. The Company expects to commence drawing water by the end of February and to carry out the necessary studies, and to consult with affected First Nations groups to work toward a further, longer-term amendment to the Environmental Assessment Certificate.
• On February 1, 2018, entered into a $500 million, four-year senior secured revolving credit facility with a lending syndicate of eight financial institutions as lenders, led by The Bank of Nova Scotia and National Bank of Canada. This facility amended and restated the Centerra B.C. Facility which had an outstanding amount of $190 million and replaced the $125 million AuRico Acquisition Facility which was fully drawn. See “Liquidity – Credit Facilities”.
Kumtor had another strong year exceeding its revised production guidance and beating its all-insustaining cost guidance, delivering 562,749 ounces of gold production at all-in-sustaining cost on a by product basis of $698 per ounce sold in 2017. In 2017, Mount Milligan met its all-in-sustaining cost guidance at all-in-sustaining cost on a by-product basis of $505 per ounce sold but fell short of its gold and copper production producing 222,567 ounces of gold and 53.6 million pounds of copper.”
“Financially, both operations generated a significant amount of cash provided by operations before changes in working capitalNG during the year, Mount Milligan generated $138.6 million and Kumtor generated $424.3 million. The lifting of the restrictions on Kumtor’s cash along with the positive cash flow generated from both our operations during the year enabled the Company to aggressively pay down its debt by approximately $209 million.
In 2017, we generated $188 million of free cash flowNG from Kumtor and $127.4 million from Mount Milligan.” “For 2018, we are estimating consolidated gold production to be in the range of 645,000 to 715,000 ounces. Additionally, we are expecting 47 million to 52 million pounds of payable copper production from Mount Milligan for the year. At Kumtor, we are expecting gold production to be weighted more towards the backhalf of the year with approximately 45% of the production expected in the fourth quarter of 2018. At Mount Milligan we expect 60% of the production to be in the second half of the year.
Centerra’s projected consolidated all-in sustaining cost per ounce soldNG on a by-product basis for 2018 is expected to be in the range of $799 to $885 per ounce.” “Our projected capital expenditures for 2018, excluding capitalized stripping, is estimated to be $242 million which includes $100 million of sustaining capitalNG and $142 million of growth capitalNG spending.
Growth capital spending includes $82 million for the Öksüt Project in Turkey where we expect to commence construction activity in April and $36 million to advance the Kemess Underground Project with pre-construction activities. Öksüt represents the new generation of low-cost production and an important third source of cash flow for the Company.”...
ULAN BATOR, Feb. 27 (Xinhua) -- Mongolia has become the second country to meet all the requirements of the Extractive Industries Transparency Initiative (EITI) standard among the 51 implementing countries, the Mongolian authorities said Tuesday.
Mongolia was assessed as meeting all the requirements of the EITI standard by the EITI Board, second to the Philippines, which passed the assessment last October.
"Mongolia has made remarkable progress since their first validation eighteen months ago, in particular bringing transparency on state participation in the extractive sector," said the EITI board chair Fredrik Reinfeldt, describing the Mongolian achievement as "a significant milestone."
The EITI, launched in September 2002, is a global standard to promote the open and accountable management of oil, gas and mineral resources, seeking to address the key governance issues. The EITI international secretariat is based in Oslo, Norway.
ULAN BATOR, Feb. 27 (Xinhua) -- U.S. Assistant Secretary of Defense for Asian and Pacific Security Affairs Randall Schriver will pay an official visit to Mongolia from Wednesday to Friday for talks with Mongolian officials on bilateral defense cooperation.
Schriver will hold an official meeting with Mongolian Defense Minister Nyamaa Enkhbold on defense cooperation between the two countries, the U.S. embassy in Mongolia said Tuesday.
It is expected that an agreement on providing health service to military personnel and their families of both countries will be introduced.
Schriver previously served as Deputy Assistant Secretary of State for East Asian and Pacific Affairs, covering Mongolia.
German cities will be allowed to ban older diesel vehicles from some areas following a landmark court ruling.
The Federal Administrative Court in Leipzig said the cities of Stuttgart and Duesseldorf could legally ban older, more polluting diesel cars from zones worst affected by pollution.
The ruling sets a precedent for other cities and analysts said it could lead to similar action across Europe.
The government, which had opposed the bans, said they could still be avoided.
The ruling by a top federal court came after German states had appealed against bans imposed by local courts in Stuttgart and Duesseldorf.
The environmental group DUH brought the cases after about 70 German cities exceeded European Union limits for nitrogen oxides (NOx) last year.
Diesel emissions containing nitrogen oxides can cause respiratory disease.
The likelihood now is that the German government will rush to introduce some sort of national policy, to ensure at least some level of consistency across the country.
It's not just about Germany either - cities across Europe are struggling to meet EU air quality standards, and may well see the German ruling as setting a precedent.
New diesel cars won't be affected, but that's not really the point. Consumers are already moving away from the technology - and the prospect of city bans will only accelerate that process.
So diesel's decline is likely to gather momentum.
That's a problem for the industry, because while diesels produce high levels of nitrogen oxide - a major urban pollutant - they emit relatively low levels of carbon dioxide, a greenhouse gas.
So moves to control one environmental problem may end up undermining efforts to combat another - unless we all start driving electric cars very soon.
Diesel vehicles have faced greater scrutiny since VW's "dieselgate" scandal.
In September 2015, the car maker admitted it had used illegal software to cheat US emissions tests. Some 11 million cars worldwide ended up being affected by the scandal.
DUH said it hoped the bans in German cities would end the industry's "resistance" to refitting older, more-polluting cars to meet the latest EU standards.
ClientEarth, an environmental law firm that worked on the case, said the win was "a tremendous result for people's health in Germany and may have an impact even further afield".
Lead clean air lawyer Ugo Taddei said: "This ruling gives long-awaited legal clarity that diesel restrictions are legally permissible and will unavoidably start a domino effect across the country, with implications for our other legal cases."
The impact on German drivers could be marked, with millions being forced to leave their cars at home on days when harmful emissions are particularly high.
It could also depress the value of diesel cars affected by the ban.
Of the 15 million diesel cars on Germany's roads, only 2.7 million meet the latest Euro-6 standards, according to data from Germany's automotive watchdog.
Car companies could also incur huge costs to refit vehicles at a time when consumer interest in diesel is falling.
The market share for diesel vehicles in Germany fell from 48% in 2015 to around 39% last year.
"The court has not issued any driving bans but created clarity about the law," said Environment Minister Barbara Hendricks. "Driving bans can be avoided, and my goal is and will remain that they do not come into force," she added.
Chancelor Angela Merkel also weighed in, saying the ruling concerned only "individual cities".
"It's really not about the entire country and all car owners," she said.
Seeking to avert bans, German car makers have pledged software improvements for millions of diesel cars and offered trade-in incentives for older models.
The German government meanwhile has floated alternatives, such as making public transport free in cities suffering from poor air quality.
Paris, Madrid, Mexico City and Athens have all pledged to ban diesel vehicles from city centres by 2025, while the mayor of Copenhagen wants to ban new diesel cars from entering the city as soon as next year.
Carmakers including VW-owned Porsche and Toyota have also signalled they will move away from diesel technology.
Analysts at Evercore ISI said the latest German ruling had "set a strong precedent for similar action across Europe".
"Note, the judge previously commented that the EU has clear rules on emissions and cities have a 'duty' to meet pollution targets."...
Ulaanbaatar /MONTSAME/ Mongolia is one of the eight countries that are at the ‘established’ stage of sustainable finance, according to the Global Progress Report of the Sustainable Banking Network, an International Finance Corporation-supported (IFC) organization of banking regulators and associations.
Emerging markets have become a major force in driving development and fighting climate change as 34 countries have initiated banking reforms to expand sustainable lending, says the report, issued on February 26.
“Eight countries—Bangladesh, Brazil, China, Colombia, Indonesia, Mongolia, Nigeria, and Vietnam—have reached an advanced stage, having implemented large-scale reforms and put in place systems for results measurement. These reforms require banks to assess and report on environmental and social risks in their lending operations and put market incentives in place for banks to lend to green projects,” it said.
The report was introduced on February 27 at a press conference in Ulaanbaatar, where IFC Resident Representative to Mongolia Tuyen D. Nguyen appreciated Mongolia’s efforts and progress in sustainable banking.
The Sustainable Banking Network was formally launched in 2012, since when Mongolia has been an active member. The Mongolian Bankers’ Association introduced the Mongolian Sustainable Finance Principles in 2014.
Mongolia was ranked 70th among 91 countries assessed for Fraser Institute's 2017 Investment Attractiveness Index.
The index is conducted by Fraser Institute each year with the inclusion of an annual survey of mining companies. Mongolia was ranked 101st out of 104 countries in 2016.
Fraser noted that Mongolia's higher ranking on the index was influenced by the enhancement of the nation's professional workforce and other factors.
The institute also pointed out that the status of some regulations, the legislative environment, and political instability have had a negative impact on foreign investment.
During February, the Central Bank of Mongolia purchased 390 kg gold; a decrease of 47.4 percent on the same period in 2017. Last February, 741 kg gold was sold to the bank.
In February, gold price stood at MNT 102,833.87 on average per gram, this is considered a low rate on the London Metal Exchange. The decrease in gold purchase is linked to the low prices and gold mining output.
As of 30 January 2018, the level of PM2.5 pollution in Ulaanbaatar reached 3,320 micrograms per cubic meter or 133 times the level WHO recommends as safe, Gogo news agency reported.
The most important source of air pollution comes from coal-burning stoves in the “ger” districts (informal settlements) during the cold season. Rapid urbanization continues to cause a problem of unplanned settlements and increased air, water and soil pollution.
Unless concrete efforts are made address this situation, exposures will increase in the coming years with significant health consequences for the city`s population, especially for children.
Children are the most vulnerable to adverse health effects of air pollution from the day they are conceived.
Pregnant women`s exposure to air pollution can affect growing baby`s lungs and respiratory system causing pre-term birth and spontaneous abortion.
In Mongolia, a 3.5-fold increase in fetal deaths have been documented between winter and summer. Air pollution is also inked with diseases that can be highly damaging for children, such as bronchitis and asthma, causing children to miss school and other important learning and development opportunities.
Toxic chemicals in the air harm unborn baby`s brain development and contribute to behavioral and cognitive problems later in childhood, evidence suggests.
According to UNICEF in last 10 years, incidents of respiratory diseases in Ulaanbaatar alarmingly increased including a 2.7-fold increase in a respiratory infections per 10,000 population.
TOKYO (Reuters) - The United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest, the International Energy Agency (IEA) said on Tuesday, as the country’s shale oil boom continues to upend global markets.
IEA Executive Director Fatih Birol said at an event in Tokyo the United States would overtake Russia as the biggest crude oil producer “definitely next year”, if not this year.
“U.S. shale growth is very strong, the pace is very strong ... The United States will become the No.1 oil producer sometime very soon,” he told Reuters separately.
U.S. crude oil output C-OUT-T-EIA rose above 10 million barrels per day (bpd) late last year for the first time since the 1970s, overtaking top oil exporter Saudi Arabia PRODN-SA.
The U.S. Energy Information Administration said early this month that U.S. output would exceed 11 million bpd by late 2018. That would take it past top producer Russia, which pumps just below that mark C-RU-OUT.
Birol said he did not see U.S. oil production peaking before 2020, and that he did not expect a decline in the next four to five years.
The soaring U.S. production is upending global oil markets, coming at a time when other major producers - including Russia and members of the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) - have been withholding output to prop up prices LCOc1.
U.S. oil is also increasingly being exported, including to the world’s biggest and fastest growing markets in Asia, eating away at OPEC and Russian market share.
Meanwhile, U.S. net imports of crude oil USOICI=ECI fell last week by 1.6 million bpd to 4.98 million bpd, the lowest level since the EIA started recording the data in 2001, reflecting further erosion in a market OPEC has been relying on for decades.
Birol said production growth was not just strong in the United States.
“Canada, especially the oil sands, and Brazilian offshore projects. These are the two major (non-U.S.) drivers,” he said.
On the demand side, Birol said the IEA expected growth of around 1.4 million bpd in 2018.
During his four-day visit to Japan, Tsogtbaatar Damdin, Foreign Minister of Mongolia, held an official talks with his counterpart Taro Kono and met with Chairman of Japan-Mongolia Parliamentary Friendship League Motoo Hayashi, Minister of Economy, Trade and Industry Hiroshige Seko, Minister of Health, Labour and Welfare Katzunobu Kato and Minister in charge of the Tokyo Olympic and Paralympic Games Shunichi Suzuki, respectively. He then held audience with the heads of the Japan International Cooperation Agency (JICA), Japan Bank for International Cooperation (JBIC) and Japan External Trade Organization (JETRO), Japan Chamber of Commerce and Industry (JCCI), and exchanged views on bilateral ties and cooperation.
During the official talks, the Foreign Minister of Mongolia confirmed that Mongolia prioritize the development of relations with Japan as a third neighbor and close strategic partner that shares values in respecting democracy, human rights and freedom. Sides then held discussions on implementing Mid-term Strategic Partnership Program (2017-2021) and Economic Partnership Agreement, and deepening Mongolia-Japan relations in wide range of sectors such as politics, defense, economy, trade, culture, education and etc.
Mongolian side expressed gratitude towards the Japanese Government and people for rendering generous support and assistance to the country in strengthening democracy and structuring market economy system. In the framework of International Monetary Fund’s program and Japan’s Official Development Assistance (ODA), the Japanese Government has been providing several important aids.
Starting from the coming spring, Mr Tara Kono has informed that Japan will workout a Masterplan on developing VAT included productions in Mongolia’s agricultural sector. Mr Tsogtbaatar Damdin made a request on implementing the third step of the Two-Step Loan Project for SMEs and Environmental Protection that was implemented with the soft loan of the Japanese Government.
The sides confirmed that they will implement the Memorandum of Interministerial Program on Apprentices that was signed between the labour ministers.
The memorandum is considered vital for Mongolia’s sustainable socio-economic developments.
Mr Tsogtbaatar also noted that it is important to create conditions for visa-free travel between the two countries. The sides agreed to create consultative mechanisms between the consulates of the foreign ministries on easing citizens’ travel conditions and protecting their interests.
The Minister noted that Mongolia-Japan relations had been strengthening not only in the bilateral frames, but also in the regional and international levels, and agreed to strengthen firmly in this aspect as a strategic partner.