Greetings, and welcome to the Centerra Gold Second Quarter 2022 Results Conference Call. As a reminder, today's call is being recorded, Wednesday, August 10, 2022. I would now like to turn the conference over to Tobey Caron, Treasurer and Director of Investor Relations. Please go ahead.

Thank you, Carlos. Welcome to Centerra Gold's second quarter 2022 results conference call. Please note that presentation slides are available on Centerra Gold's website to accompany each speaker's remarks. Today's call is open to all members of the investment community and media in listen-only mode. Following the formal remarks, the operator will give instructions for asking questions, and then we will open the phone lines. Please note that all figures are in U.S. dollars unless otherwise noted. Joining me on the call today are Scott Perry, President and Chief Executive Officer; and Darren Millman, Chief Financial Officer. I would like to caution everyone that certain statements made today may be forward-looking statements and are subject to known and unknown risks, which may cause our actual results to differ from those expressed or implied. Also, certain of the measures we will discuss today are non-GAAP measures. Please refer to the description of non-GAAP measures in our news release and MD&A issued this morning. For more detailed discussion of the material assumptions, risks, and uncertainties, please refer to our news release and MD&A along with the unaudited financial statements and notes along with all of our other filings, which can be found on SEDAR, EDGAR, and the company's website at centerragold.com. Now I'll turn the call over to Scott.

Thanks, Tobey, and good day to everyone. As Tobey mentioned, I'm referencing the accompanying webcast presentation deck, starting from Slide 4. First of all, I would like to highlight our announcement on July 29 that we have officially closed the global arrangement agreement with Kyrgyzaltyn and the Government of the Kyrgyz Republic. This is a clean separation and has allowed us to significantly reduce our share count by approximately 77 million shares or 26%. With this closing, the company is positioned to move forward with a renewed focus on our core operations, the Mount Milligan mine, the Oksut mine, and our core goldfield development project, in addition to our exploration and drilling investment programs at our greenfield and brownfield exploration projects. In the second quarter, the company continued to demonstrate that safety remains one of Centerra's top priorities. Notable milestones during the quarter were achieving three years without a lost-time injury, and subsequent to the quarter end, our Oksut mine surpassed 1 million hours without a lost-time injury. Moving to Oksut, gold room operations at the Oksut mine's ADR plant remain suspended due to mercury that was detected. The retrofit in the gold room is expected to be complete in late 2022, with operations recommencing as soon as regulatory approvals are obtained. The company has completed engineering work and has ordered equipment to retrofit the ADR plant for safe operations within the gold room. The capital cost of this mercury abatement retrofit is expected to be approximately $5 million. You will note in today's release that at the Oksut mine, we had initiated suspension of stacking and leaching activities as of August 10. This is due to the company's inability to obtain approval from the regulators to use more activated carbon than currently allowed in the mine's environmental impact assessment and permitting. This change in operating practices means that the company has had to revise its consolidated 2022 outlook to reflect the suspension of stacking and leaching activities at Oksut, the continued suspension of gold room operations in the ADR plant, as well as the impact of an assumed decline in copper prices on our Mount Milligan operation. We will speak to each of these in more detail later. In terms of our development projects, the advancement of the goldfield development project continued in the second quarter. We have initiated a resource expansion and infill drilling program that targets approximately 65,000 meters of diamond drilling and reverse circulation drilling. Our plan here is to issue an updated resource estimate for the project in 2023 with the feasibility study shortly thereafter. Regarding senior leadership, we are now in the final stages of recruiting a new Chief Operating Officer and plan to provide the market with an announcement shortly. From a liquidity perspective, reflecting the strength of our balance sheet, the Board again approved a consecutive quarterly dividend of CAD0.07 per share. Lastly, in respect to our Molybdenum business unit, evaluations for surfacing value opportunities remain an ongoing work in progress. Moving to Slide 5, in terms of our environmental and social governance highlights, there's a lot of exciting updates on this slide. I do want to note that on August 4, Centerra published its 2021 ESG report. This report demonstrates the great strides we are taking to strengthen our environmental and social governance performance and is reflected in several achievements noted throughout that report. I also want to highlight the successful completion of our year two responsible gold mining principles assurance work, and the organization is on track to achieve conformance with the responsible gold mining principles before the end of 2022. Moving to Slide 6, touching on Mount Milligan operating highlights, it is important to note that our 2022 gold and copper production output from the mine has not changed. We are on track to meet our gold production guidance of 190,000 to 210,000 ounces for the year and to meet our copper production guidance of 70 million to 80 million pounds for the year. During the second quarter, Mount Milligan continued to deliver strong results, producing approximately 42,728 ounces of gold and approximately 17.4 million pounds of copper. Regarding all-in sustaining costs on a by-product basis at Mount Milligan, the result was $1,245 per ounce for the quarter, and $641 per ounce for the first half of this year. The company's second quarter all-in sustaining cost result was impacted by the meaningful decline in copper prices, which is recognized as a by-product credit. Second quarter copper credits were effectively reduced by approximately $560 per ounce due to negative mark-to-market adjustments on provisionally priced copper contracts that were open as of the end of the quarter. Darren, our Chief Financial Officer, will speak to this in more depth in the financial highlights section of this presentation. The Mount Milligan mine posted a solid cash flow result in the second quarter, generating approximately $81 million in cash provided by mine operations, and approximately $58 million in free cash flow for the quarter. Mount Milligan's stage flotation reactors were commissioned in early May during the second quarter, and we expect to see improved future gold and copper recoveries at the mine as a result. The month of June actually had the highest monthly copper recoveries seen in the mine's history. Lastly, Mount Milligan's mine planning work continues to progress with a focus on optimizing significant life of mine extension opportunities relative to our go-forward equipment fleet capacity requirements, our tailings storage facility requirements, and other identified opportunities in trade-offs. Moving to Slide 7, at Oksut, as I already mentioned, gold room operations remain suspended, and the company has initiated the suspension of stacking and leaching operations as of August 10 due to a lack of access to activated carbon. Mining and crushing activities are ongoing, and the company is evaluating whether to continue these activities while pursuing an amendment to our Environmental Impact Assessment Permit to align permitted limits with current operational plans. As of June 30, Oksut had stored golden carbon inventory totaling approximately 58,469 ounces, with a weighted average cost of approximately $444 per recoverable ounce. The ADR mercury abatement retrofit is expected to be complete by the end of this calendar year, and we assume that current inventoried gold in carbon will be processed in 2023, assuming the ADR plant resumes full operations with regulatory approvals in place. Meanwhile, we continue to consider other alternatives to monetize the gold in carbon. Oksut is in the process of preparing a new environmental impact assessment application, which will clarify the heap leach testing capacity of the mine and the amount of activated carbon required for our operations. We expect to submit this new EIA application by the end of this month and pursue its approval as quickly as possible. Moving to Slide 8, in terms of our guidance and revised outlook, as mentioned earlier, the company has revised its outlook for 2022 due to the suspension of stacking and leaching activities at Oksut, in addition to the continued suspension of gold room operations. This is also due to changes we've made to assumed spot copper prices moving forward. We have conservatively reduced the second-half forecast assumption from $4 per pound to $3.25 per pound. Should copper prices remain at current spot levels for the remainder of the year, the company's all-in sustaining costs and cash flow outlook would see a positive impact compared to this revised guidance. We have adjusted Oksut production to 55,000 ounces for the year, revised down from our original guidance of 210,000 to 240,000 ounces for 2022. Our consolidated all-in sustaining costs on a by-product basis have increased to $1,000 to $1,050 per ounce from previous guidance of $600 to $650 per ounce, mainly reflecting the lower gold output contributions from Oksut and reduced copper price assumptions at Mount Milligan. Guidance for gold and copper production at Mount Milligan remains unchanged from previous guidance. Likewise, consolidated capital expenditures, costs related to the Molybdenum business unit, and corporate administration costs remain unchanged from previous guidance. Exploration guidance has been updated to $50 million to $65 million, reflecting an additional $15 million to $20 million in spending for the goldfield development project following its addition to our portfolio in Q1 this year. Moving to Slide 9, it reflects the revised 2022 gold production guidance graphically on a quarter-by-quarter basis. The guidance is updated to include only year-to-date gold production at Oksut of 55,000 ounces in addition to Mount Milligan's full year gold production outlook. As noted previously, Mount Milligan's gold production guidance remains unchanged from the original outlook of 190,000 to 210,000 ounces. The company assumes completion of the mercury abatement retrofit at Oksut in late 2022, which will then allow the restart of the gold room in 2023, subject to the relevant regulatory approvals being in hand. On Slide 10, in terms of copper production, as previously noted, the company's copper production guidance is unchanged from the original outlook of 70 million to 80 million pounds for the full year. With that, I'm going to pass the presentation over to Darren Millman. Darren Millman, our Chief Financial Officer, will walk through some of the key financial highlights.

Thanks Scott and good morning everyone. For those following on the slide deck, I'll begin with Slide 12. Centerra recorded $167 million in net revenue during the quarter, consisting of revenue from the Mount Milligan mine and the Molybdenum business unit. No revenue was recorded at the Oksut mine. At the Mount Milligan mine, gross gold sales and copper sales were $58 million and $71 million prior to the provisioning adjustment on concentrate sales of a negative $32 million, which were made during the quarter. I will provide more detail on this later in the presentation. During the quarter, Mount Milligan sold 41,597 ounces of gold and 18.9 million ounces of copper. Due to the suspension of the ADR plant, as noted earlier by Scott, the Oksut mine had no recorded sales or production in the quarter, however, the stored gold-in-carbon inventory balance recognized 58,460 non-recoverable ounces as of June 30. The costs associated with the Oksut stored gold-in-carbon inventory are approximately $444 per ounce and have been capitalized as a current asset, with no costs flowing through the earnings statement in the quarter. The total recordable costs as at June 30, 2022, amounted to $26 million. These recorded costs will flow through the earnings statement upon processing at the ADR plant or monetization through a third-party facility. At the Molybdenum business unit, 3.2 million pounds of Molybdenum was sold, generating revenues of $68.6 million. During the quarter, the Mount Milligan mine operations average gold price realized was $1,335 per ounce and $2.19 per pound of copper, reflecting existing streaming arrangements over the mine. Notably, there was a 25% decrease in realized price when comparing Q2 2022 to Q2 2021. Cash used in operating activities was $3.5 million for the quarter. As noted in the MD&A, the Mount Milligan mine generated $81 million in positive operating cash flow. This favorable variance compared to prior years resulted from one sales shipment recognized in Q1 2022 of approximately $42 million, with cash only being received in Q2. This was offset by a reduction in realized gold and copper prices, with decreases of 19% and 25% respectively compared to Q1 2021. Given no sales at the Oksut mine during the quarter, $51 million was used from treasury, including income tax payments of approximately $22 million to Oksut tax authorities related to the 2021 tax year, together with the annual royalty payment of $8 million for the same year. Free cash flow deficit from continuing operations for the quarter was $31 million, primarily driven by the $55.4 million deficit from the currently inactive Oksut mine, together with a $6.1 million deficit at the Molybdenum business unit. As inventory levels remained relatively high, reductions in working capital are expected in the second half of the year. The net loss from continuing operations was $2.6 million in the quarter, with a $36.2 million adjusted net loss for the quarter. Earnings from operations were minimal at $2.7 million, contributed by the Mount Milligan mine, attributable to mark-to-market adjustments from historical provisional copper and gold concentrate sales, along with reduced gold sales and lower copper prices realized. This included mark-to-market adjustments. Earnings also reflected a $1.5 million loss from the Oksut mine primarily from exploration costs, and a $3.4 million loss from the Molybdenum business unit. For the quarter, there were three adjusting items, which included reclamation provisions, site recovery during care and maintenance of $41.4 million, primarily as a result of changes in underlying discount rates used, Kumtor-related legal and other costs of $3.2 million, and income and mining tax adjustments of $4.3 million. Moving to Slide 13, given the significant movement from previously issued all-in sustaining cost guidance compared to Q2 actual results, we reprised the highlights over three key items. The removal of the Oksut mine's planned production and sales in Q2 increased the all-in sustaining costs by $337 per ounce, given the planned low-cost profile of the mine. Secondly, the timing of planned releases at the Mount Milligan Mine remained unchanged but we expect higher costs in the first half of the year compared to the second half, specifically as 90% of gold production is planned for the second half. This resulted in a higher cost profile in the first half of the year, shown on the slide as a $229 bearing. The company's fuel and Canadian dollar hedging programs have offset inflationary pressures within 2021 budgeting processes and included in the original guidance. The third point is the company's treatment of copper revenue as a by-product in relation to the Mount Milligan mine, affecting all-in sustaining costs. Recent significant decreases in copper prices and unsettled provisional sales contracts resulted in an increase of $468 in all-in sustaining costs during Q2 compared to the original guidance. Now moving to Slide 14, the company had seven to eight unsettled copper contracts at the end of each quarter. Rising copper prices in 2020 and 2021 benefited the company through provisional pricing, while the recent sharp decrease in copper prices has led to decreased revenue and cash receipts. For accounting purposes, the copper price varied from a high of $4.75 per pound at the end of Q1 2022 to a low of $3.71 per pound at the end of Q2 2022. The mark-to-market copper price adjustments made at the end of the quarter contributed approximately $560 per ounce of negative impact on all-in sustaining costs at Mount Milligan during Q2. To date, the company's copper-hedging program has focused on production, not the quotational period, with zero-cost collars being the preferred financial instrument. The collars' pricing has yielded a realized gain or loss of $9 million. Moving into the second half of 2022, with these copper prices, the hedges hold value. Average oil prices in 2022 are expected to be $3.65; in 2023, $4; and in 2024, also $4. Finally, in Slide 15, I've largely covered the key points from the previous slides. I'll highlight that the company exited Q2 with a cash balance of $723 million, demonstrating liquidity of $1.1 billion. This liquidity does not factor in gold-in-carbon, currently valued at approximately $100 million as the company will continue pursuing these initiatives in Q3. Given our strong financial position, the Board declared a quarterly dividend of $0.07 per share. This concludes my remarks. We would like now to turn it over to Q&A for those on the call. Thank you.

Our first question comes from Fahad Tariq with Credit Suisse. Please go ahead.

Hi, good morning. Thanks for taking my question. A point of clarification on Oksut. If the gold room retrofit is completed by the end of the year and you're able to recycle the activated carbon again, does the permitting still become a constraint in 2023? Or is it no longer required?

This is real-time as you would have seen here, we met with the Ministry of Environment practically yesterday on August 9, and in terms of the solution moving forward, they have recommended that we follow the new environmental impact assessment, which will align our operations without sort of required permitting moving forward. So assuming the ADR facility retrofit is complete and we have the regulatory approvals in hand, that will allow us to continue regenerating carbon in 2023 or recycling carbon, which will put us in good order regarding what we expect to be permitted under our new EIA.

Okay. And just as a follow-up, the expectation now that in Q3 and Q4, there will be no additional inventory of gold-in-carbon? Is that the right way to think about it?

Yes. That's correct.

Our next question comes from the line of Trevor Turnbull with Scotiabank. Please go ahead.

Thank you. I wanted to discuss the suspension of the 2023 guidance. I was just wondering what drove that, and I assume some of it has to do with the permitting and the new EIA in general, but I was also wondering if it was related to looking for those enlarged grazing permits that would allow access to higher grades, as I understood it, some of those higher grades from those areas were part of the original 2023 plan.

Yes, Trevor, I would sum it up as a combination of all those items. Right now, we don't have visibility. We're highly confident that the ADR facility retrofit will be complete by the end of this year, but we must assume when the regulatory approvals for using that facility will be granted. With regards to the new EIA that we will be submitting by the end of this month, we have to make assumptions about when that will be approved, and currently, we just don't have a high degree of confidence that allows us to provide an outlook for 2023.

Sure, I understand. And just as a follow-up question on what's going on in Turkey, I know that when you first had the issue with building up an inventory of gold-in-carbon, there was talk of having a third party process that carbon for you. It seemed like a straightforward plan, but given the buildup in inventory, that didn't turn out to be as simple as we thought. Can you say anything about why that didn't turn out to be a viable plan?

We continue to consider those alternatives in terms of looking to monetize the gold in carbon potentially offsite, but in our discussions with regulators and the agencies, they've instructed us that their preferred approach is to remediate our facilities and complete the retrofit of our ADR facility. Our operating license prohibits us from transporting or exporting gold in carbon oxide, which would require an amendment, and the preferred operation from regulators is to remediate our facilities so we can continue to produce dore on-site. We will engage in those discussions, but currently, we assume the retrofit will be the main avenue for producing gold dore going forward.

Okay, I guess some permits are more rigid and narrow than we realized. Just one final question if I could on Mount Milligan. I saw you mentioned you wanted to assess the impact of capital and the tailings requirements and I was wondering if the capital would be related to stripping costs, expanding the tailings, or equipment and if there are any permitting hurdles to consider with respect to tailings?

Life of Mine work is quite advanced. There are meaningful opportunities to increase the conceptual reserve delineated asset life, which is favorable. But obviously, that means a larger pit, which results in more mining volume and capitalized stripping. Also, the life of mine processing volume will be considerably higher than in the previous life of mine plan. Yes, we would need a larger tailings storage facility, and that does require a permit amendment. Typically, this is routine for how we run our business, but simply put, yes, we would need to engage with regulators for a permit amendment for a larger tailings storage facility.

And sorry, one follow-up on that. When looking at a tailing amendment, is that entirely in the hands of the province? Or do you also have to engage with First Nations on that?

Yes, we must engage with First Nations and other stakeholders, but it's a provincial permit.

Our next question comes from the line of Anita Soni with CIBC. Please go ahead.

Good morning and thanks for taking my questions. I want to start with respect to Oksut. You included some disclosure indicating that you had stacked more than allowed from 2019 to 2021. Can I ask for the volumes that you stocked more than was permitted, and what the permitted amount was?

Sorry, Anita. I don't have that information readily available. There were discussions that took place yesterday. To be candid, we're still trying to clarify the regulators' position and interpret it correctly, so I don’t have those numbers.

Okay. I was trying to understand if the suspension of operations would mitigate that in their view. But you're not stacking now for six months, so will that make up for it?

I can't speak on behalf of the regulator.

To my second question, another disclosure mentioned elevated mercury levels in nine employees. Is that concerning? How elevated were the levels? Are there any permissible mercury levels, and would that have implications for the amended EIA?

The health and well-being of our employees are paramount. After we identified high levels of mercury, we had all employees and contractors in that facility submit samples to assess levels. Any employees with elevated levels were sent for evaluation to a specialized hospital. I’m pleased to report that all the employees and contractors are fine. While it was concerning at times, we prioritized their health. Regarding the EIA, I don't believe there will be any impact. Our focus is again on the retrofit of the ADR facility, a shift in our processing operations, and the regulators advise us to submit a new EIA to align with our operational profile.

Our next question comes from Lawson Winder with Bank of America Securities. Please go ahead.

Hi, good morning and thank you for the time. I wanted to ask about Mount Milligan and its economics. Would you say that in the current inflationary environment and tailings capacity limitations, there are some questionable economics on extending the life of mine?

No. As I said, the report is in its final stages. We've identified several opportunities and trade-offs. On a preliminary basis, the unit cost profile is quite similar to the prior life of mine profile. Mount Milligan's performance in the first half of this year and in 2021 shows significant improvements in productivities and efficiencies. I don't see any reason why that would change in the new life of mine plan.

Okay. How many years are you thinking for the extension?

I can't disclose that yet.

Could you disclose the gold price assumption and hurdle rate for the study?

For the reserve itself, we use metrics at 13, 15 per ounce, and when we release the life of mine, we typically provide a cash flow section and sensitivity analysis. You can choose your desired gold price for projections.

Historically, you used a 15% after-tax IRR for projects. Would that apply here?

That rate is generally applicable for organic projects or inorganic opportunities we may consider as a benchmark. For our existing assets, the life of mine report will provide NPV at various discount rates.

One more question: Were you flagging any write down in the value of Oksut? Or is that still to be determined?

No. Given the high margin and temporary nature, there are no accounting or impairment adjustments expected as of June 30, and none are anticipated in the future.

The next question comes from Dalton Baretto with Canaccord. Please go ahead.

Thanks. Good morning, Scott and team. I want to start with Oksut. It seems the environmental regulators have been involved since May, looking at a broader scope than just the ADR plant. What triggered a broader review of Oksut, and is it realistic to assume the EIA will get approved by year end or early 2023?

I can't speculate or speak on behalf of the regulators, so I'd prefer not to answer. However, we've faced challenges with our ADR facility and the retrofit will require regulatory approval before commissioning. We've had many discussions with the ministry, and they've advised submitting a new EIA that will align with operational activities and permitted profiles. We expect to submit the EIA by the end of this month and hope for expedited processing, but I can't provide further clarity at this stage.

Thanks. As a follow-up, when the EIA is approved, will that automatically extend your operating permits, or will you need to go through another process?

We expect that the extension of the operating license will be automatic, and that application is already in the system.

Switching gears, you had mentioned internal studies on the Moly business unit around this time. What were the results of those studies, and how do you see the business going forward?

There are conceptual value surfacing opportunities in the Molybdenum business unit, and we continue to evaluate this. However, it is a work in progress, and we have nothing finalized that impacts our outlook or business model at this time.

Given your strong balance sheet and the clean break with Kyrgyz, should we anticipate that some meaningful buyback or special dividend could be back on the table, or is M&A the bigger focus now?

The strength of our balance sheet and liquidity profile is certainly discussed with our Board of Directors. While I cannot provide guidance on capital return initiatives beyond the quarterly dividend, we will continue discussions with the Board regarding any additional capital return initiatives if warranted.

We have no further questions on the phone line. I will turn it back to you, Mr. Caron.

Thank you everyone for joining us on our call today. We'll be available throughout the day if needed, so please feel free to reach out to myself for any additional questions. Thank you and goodbye.

That concludes today's call. We thank you for your participation and ask you to please disconnect your lines.