- Centerra Gold (TSX: CG) has reported a net loss of C$132.2 million in 2019
- The loss was primarily the result of non-cash write downs, caused by asset devaluations
- The company has also announced an impending operations reduction at the Kumtor Mine in Kyrgyzstan, because of COVID-19 concerns
- Despite the reduction, Centerra Gold still expects to hit its 2020 production guidance of 740,000 to 820,000 ounces of gold
- Centerra Gold (CG) is up 3.48 per cent, with shares trading for $9.52 and a market cap of $2.07 billion
Mining giant Centerra Gold (TSX:CG) has reported a C$132.2 million net loss in 2019, despite exceeding its expected gold production.
The significant loss was the result of three main factors.
Firstly, the company lost around $323.6 million through impairment charges at the Mount Milligan Mine in British Columbia. Impairment charges generally refer to non-cash devaluations of a company’s assets, rather than actual expenses.
Secondly, Centerra recorded a further $47.8 million loss through charges from the company’s non-operating sites.
Finally, in a strategic agreement with the Kyrgyz Government, Centerra put forward around $14 million.
The company was quick to point out that, charges aside, Centerra generated an adjusted net profit of $256 million.
The company also commented on the two fatalities in December last year at the Kumtor Mine in Kyrgyzstan. The subsequent investigations caused an operational halt at Kumtor.
Operations there were subsequently halted when a further fatality was recorded on the property, two months later. The company has since received all the necessary approvals to recommence.
In his end-of-year address, Centerra’s President and CEO, Scott Perry, assured the public that the company was looking carefully at these events.
“We are fully committed to understanding the circumstances that led to the troubling safety incidents at Kumtor in December 2019 and February 2020.
We remain steadfast in our resolve to ensure that everyone who works at our operations can do so safely and will return home safely, each and every day. There is nothing more important,” he said.
However, despite last year’s closures and losses, Centerra exceeded its production forecast, producing 783,300 ounces of gold throughout the year.
Like numerous other mining companies, Centerra will be forced to reduce staff at its operations because of the ongoing COVID-19 pandemic.
Due to new regulations in Turkey, the Öksüt Project will reduce its staff and operations for two weeks, starting March 31. The company stated that it has plans in place in case the suspension needs to be extended.
In 2020, Centerra’s gold production is expected to be between 740,000 to 820,000 ounces. However, if COVID-19 continues to impact Centerra’s production and operations, the company expects to revise this outlook.
Centerra Gold (CG) is up 3.48 per cent, with shares trading for $9.52 at 10:13am EST.