Thank you for standing by. This is the conference operator. Welcome to the Centerra Gold First Quarter 2024 Conference Call. The conference is being recorded. I would now like to turn the conference over to Lisa Wilkinson, Vice President, Investor Relations and Corporate Communications with Centerra Gold. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Centerra Gold's first quarter 2024 results conference call. Joining me on the call today are Paul Tomory, President and Chief Executive Officer; Paul Chawrun, Chief Operating Officer; and Ryan Snyder, Chief Financial Officer. Our release this morning details our first quarter 2024 results. It should be read in conjunction with our MD&A and financial statements, both of which can be found on SEDAR, EDGAR, and on our website. All figures are in U.S. dollars unless otherwise noted. Presentation slides accompanying this webcast are available on Centerra's website. Following the prepared remarks, we will open the call for questions. Before we begin, I would like to caution everyone that certain statements made today may be forward-looking and are subject to risks, which may cause our actual results to differ from those expressed or implied. Please refer to the cautionary statements included in the presentation as well as the risk factors set out in our annual information form. Certain measures we will discuss are non-GAAP measures. Please refer to the description of non-GAAP measures in our news release and MD&A issued this morning. I will now turn the call over to Paul Tomory.

Thank you, Lisa, and good morning, everyone. We delivered another strong quarter of operating performance, and we're on track to deliver our full-year guidance. We continue to generate significant free cash flow, and our cash balance increased by $35 million to end of quarter at $648 million. We remain on track to meet our guidance in 2024 and at Mount Milligan, we continue to advance the site-wide optimization program, implementing tangible improvements in all areas of our operations. At Öksüt, as previously disclosed, we expect elevated production in the first half of the year, while Paul Chawrun will speak to our operations in more detail later in the call. Last year, we published our strategic plan that was focused on maximizing the value for each asset in our portfolio. Since then, we have worked diligently to execute that plan. Specifically, in the first quarter, we announced an additional agreement with Royal Gold, which allows us to assess Mount Milligan's potential to be a multi-decade operation. This was a key first step in our strategy to realize the full potential of this cornerstone asset in the top tier mining jurisdiction. At Öksüt, since the mine restarted full operation in June of 2023, we have generated three quarters of very strong free cash flow as we work through the elevated levels of inventory. The mine remains a strategic asset in our portfolio, and we believe that Öksüt will continue to generate positive free cash flow through its remaining mine life. We are focused on maximizing the value of our molybdenum business unit assets comprised of the Thompson Creek and Endako mines and the Langeloth metallurgical facility. Concurrent with assessing all strategic options for these assets, we recently completed a commercial optimization plan at Langeloth, geared at increasing profitability and evaluating its future potential. We are encouraged by the value opportunity at Langeloth, and we intend to provide additional details in conjunction with the Thompson Creek mine feasibility study, which we intend to release later this summer. Finally, I'd like to provide an update on our ESG initiatives. As we advance our climate and nature strategy, our focus has now shifted to conducting site level investigations to understand at a high level, our material exposures to climate and nature risks and opportunities. We will use this information to support strategic decision-making to identify feasible emission reduction pathways and initiatives. Meanwhile, we continue to maintain our commitment to our local communities by actively engaging in various partnerships, collaborations, and community-driven projects. This dedication is reflected in the positive impact observed, in particular, at the Öksüt mine where approximately 5,000 students and young athletes benefited from the diverse support of collaboration facilitated by our site team. These notable initiatives are implemented in cooperation with the local government and to support youth in sports. With that, I'll pass the call over to Paul Chawrun to discuss our operational performance.

Thank you, Paul. I'd like to start with Mount Milligan's safety performance. The operating team has embraced the site-wide optimization program, which starts with continuous improvement to our safety performance. They have been fully engaged, which is demonstrated through on-site and in-the-field interactions focused on safety leadership. We have started 2024 with improved safety performance and are committed to our journey towards Zero Harm. On Slide 5, we show operating highlights at Mount Milligan for the quarter. Mount Milligan started the year strong, producing over 48,000 ounces of gold and over 14 million pounds of copper in the first quarter. Mount Milligan is on track for its full-year production guidance of 180,000 to 200,000 ounces of gold and 55 million to 65 million pounds of copper. As we've previously disclosed, both gold and copper production are expected to be evenly weighted throughout the year, but sales in the second half of 2024 are expected to contribute approximately 55% of the annual sales. In the first quarter, all-in sustaining cost on a byproduct basis was $688 per ounce, 27% lower than last quarter due to lower sustaining capital spending and higher byproduct credits. We are starting to see benefits from the implementation of cost savings initiatives and production and productivity gains from the site optimization program. Looking ahead, we expect costs in the second quarter to be higher than the first quarter due to the lower percentage of annual sales in the first half of 2024, along with expected higher sustaining capital expenditures. Mount Milligan is still on track for its full-year 2024 cost guidance ranges. After the agreement with Royal Gold was announced in February, we initiated a preliminary economic assessment at Mount Milligan to update the large resource to include all of the drilling completed to date, identifying value-added initiatives to the plant such as throughput and flow sheet modifications and optimizing the mine plan. As a reminder, in addition to the 250 million tonnes of reserves at Mount Milligan, we have also identified 260 million tonnes of resources, most of which have been classified as indicated as well as significant additional drilled inventory, which has not been incorporated into resources yet. We intend to incorporate these additional resources into an optimized mine plan to support a PEA. Our work on the study is progressing and we expect to complete the PEA to demonstrate an operating concept in the first half of 2025. During the first quarter, we continued with our progress on the site-wide optimization program at Mount Milligan that was initially launched last year. This program has focused on analytic assessment of occupational health and safety as well as improvements in the mine and plant operations. Notable achievements in the first quarter were observed in key areas of the operation that provided tangible results. A few highlights include an improved safety record, including an increase in proactive safety interactions, fewer incidents, and a much lower severity rate when compared to the same period last year. An increase in the mining fleet mechanical availability, utilization, and overall productivity of the load haul cycle. These strategies have contributed to higher tonnes mined compared to the same period last year while simultaneously lowering the unit operating costs. Increased mill throughput per operating day due to consistent ore supply, renewed operating strategy of the flotation circuit, and equipment modifications installed during the planned shutdown. Finally, the plant has implemented strategies focused on increasing copper and gold recoveries. This includes real-time adjustments to the flotation circuit for improved stabilization with optimal grind sizing and throughput, producing a higher volume of gold-copper concentrate with lower copper grades as well as ore blending initiatives to improve the processing of elevated pyrite-bearing, high-grade gold, low-grade copper ore. Now moving on to Öksüt, I would like to commend the site team for achieving 3 million hours without a lost time injury in January. Our top priority is the health and safety of our workers, and we remain committed to our journey towards zero harm. On Slide 9, you can see the first quarter operating highlights at Öksüt, which had another quarter of strong operating performance. First quarter production was over 63,000 ounces, and we are on track to achieve our full-year production guidance with approximately 60% of the annual production weighted towards the first half of the year. This quarter, all-in sustaining cost on a byproduct basis was $823 per ounce, which is higher compared to the last quarter due to increased mining and hauling costs and higher weighted average cost per ounce in the remaining inventory as well as lower gold production and sales. Öksüt is on track to achieve its cost guidance ranges for the full year of 2024. I'll now pass it on to Ryan to walk through our financial highlights for the quarter.

Thanks, Paul. Slide 10 details our first quarter financial results. First quarter net earnings were $66 million or $0.31 per share. There were several adjusting items in the quarter, including $25 million of reclamation provision revaluation recovery and $9 million of unrealized foreign currency exchange gains, among other things. As a result of these onetime items, adjusted net earnings in the first quarter were $31 million or $0.15 per share. In the first quarter, sales were 104,313 ounces of gold and 15.6 million pounds of copper. The average realized price was $18.41 per ounce of gold and $3.12 per pound of copper; both of these incorporate the existing streaming arrangements at Mount Milligan. At the Molybdenum business unit, approximately 2.9 million pounds of molybdenum was sold in the first quarter at the Langeloth facility. This annualized throughput rate of approximately 12 million pounds represents utilization of approximately 30% of the facility’s capacity. Consolidated all-in sustaining costs on a byproduct basis for the first quarter were $859 per ounce, and we remain on track to meet our full-year guidance for all production and unit cost metrics. In the first quarter of 2024, additions to property, plant, and equipment were $15 million and total capital expenditures were $17 million. Sustaining capital spending at Mount Milligan was relatively low in the first quarter, but we've maintained our full-year guidance and expect sustaining capital expenditures at Mount Milligan to increase throughout the year. Slide 11 shows our financial highlights for the quarter. In the first quarter, we continued to generate strong free cash flow. Cash provided by operating activities was $99 million in the quarter, and free cash flow was $81 million. In the first quarter, Öksüt generated $101 million in cash from operations and $90 million in free cash flow, while Mount Milligan generated $30 million of cash from operations and $24 million of free cash flow. The Molybdenum business unit as a whole used $7 million of cash from operations and had a free cash flow deficit of $7 million in this quarter. This related primarily to activities at the Thompson Creek Mine, as Langeloth operating cash flows were slightly positive for the quarter. Interest income was $8 million in the first quarter, which primarily includes interest on bank term deposits. We continue to generate significant interest income on our cash balance. In the first quarter, our cash balance grew by $35 million to $648 million despite making the $24.5 million payment related to the additional agreement to Royal Gold. This provides us with total liquidity of over $1 billion and positions us well to execute on our strategic plan and deliver shareholder value. Given our strong financial position, the Board declared a quarterly dividend of $0.07 per share. We were active on share buybacks in late February and through March, repurchasing 1.8 million shares for total consideration of $10 million in the first quarter. Returning capital to shareholders remains a key pillar in our capital allocation strategy, and we expect to remain active on the share buybacks dependent on market conditions. Looking ahead, the annual Turkish royalty payment related to 2023 performance and the income tax payments related to the fourth quarter of 2023 and the first quarter of 2024 will be made in the second quarter of this year. We expect these payments to be approximately $105 million. As a result, our cash flow in the second quarter of 2024 will be impacted by these routine statutory payments. As discussed by Paul Chawrun earlier, Öksüt continues to deliver strong operational results and we are on track to achieve our full-year production guidance. Ignoring the timing impact related to working capital movements, we expect strong cash flow from operations before working capital at Öksüt in all quarters this year. I'll pass it back to Paul for some closing remarks.

Thanks, Ryan. Our site teams have worked diligently to deliver strong performance at the start of the year. Our focus remains on delivering safe and consistent operating results each quarter and to maximize the value of each asset in the portfolio. We expect to continue to deliver our strategic plan that will drive future value and growth for Centerra over the remainder of 2024 and beyond. And with that, operator, I'll open the call to questions.

Operator Instructions. The first question comes from Raj Ray with BMO. Please go ahead.

Thank you, Operator. Good morning, Paul and team. My first question is about the optimization initiatives at Mount Milligan. It appears there has been a cost decrease of about 10% to 15% in part-time costs for both mining and processing compared to last year. Can you comment on how sustainable this cost level is? Do you anticipate a further reduction in your unit costs at Mount Milligan? Additionally, regarding the Molybdenum business unit, while I know you’re working on the feasibility study, are you also currently engaging in a strategic process, or will you wait for the results of the feasibility study before starting a strategic review?

I will address the molybdenum question first and then pass it to Paul for the Mount Milligan cost point. In our Molybdenum business unit, we currently have a threefold program. First, we are advancing the feasibility study, which we expect to complete by the end of the year. Second, we have finished the commercial optimization program at Langeloth, which has allowed us to establish a framework for contracts this year that enhances the profitability potential of the roaster, preparing us for a possible notice to proceed on the mine. Third, as you noted, we are actively running a strategic process that is progressing well, although it is largely dependent on the feasibility study results. We plan to provide more details on both the mine and the operating model for Langeloth later this summer. To summarize our three initiatives: completing the technical studies on the mine reopening plan, continuing work on commercial optimization and contracting strategies at Langeloth, and advancing the strategic process. If there are no follow-up questions on that, I will turn it over to Paul for the Milligan cost question.

Okay. Thanks, Raj. Yes, I just in summary, we are very pleased with the progress of what we're calling the M Plus program to put Mount Milligan into the upper quartile of world-class assets, and that starts with the operations. We're seeing gains across the board, particularly in safety; the team is fully engaged, and nothing really happens unless we work with that. In terms of hardcore cost savings, yes, probably a reasonable number is around 10%. I'm cautious about actually stating a number just because it's an ongoing continuous improvement process. We've more or less completed Wave 1. We're in Wave 2 now. There's a plethora of continuous improvement initiatives we're working on the mine and the plant in all facets of the load/haul productivity cycle, the operating cost, looking at some of our supply chain recovery, reagent consumption, overall consumables with the steel, just on and on. So this is an ongoing process. If you take a snapshot, that's a reasonable estimate on where we're at. But we're continuing to focus long term.

Paul, just to follow up on the process optimization. Is there a target that you have with respect to where you expect to see recovery gold and copper recovery go through based on the optimization initiatives you guys are working on?

There is, Raj, but it needs to be integrated with throughput gains to optimize that trade-off, the grind size, and the overall recovery, some of the changes with the ore body itself. We have a geo-met model we are working through. So it is a target, but it's on a curve. So it's not just one hard number. And we are seeing significant gains. The other major aspect is we can improve our overall recovery by optimizing our sales. If we have lower copper concentrate, we can actually then improve our overall recovery. So there are definite targets, but it's not just one number.

Raj, to your point here. The overall program is advancing. We're very encouraged by the results, and I'd say that they're probably ahead of where we were expecting. A lot of the gain is related to recovery, particularly understanding the ore body better and adjusting performance in the process plant on dosing and various times and set points to ensure that we maximize throughput and recovery. We're very happy with the results to date, and we expect to continue to deliver gains there. But as Paul said, it's a very dynamic system, and so there aren't individual pinpoint answers on these questions.

Okay, that's good. Thanks, Paul.

The next question comes from Mike Parkin with National Bank. Please go ahead.

Hi guys. Congrats on solid Q1. Just following up on the Langeloth commercial optimization plan. What are some of the key kind of wins there that you're focusing on? Is that something that's booked in place? Or is there some improvements that we can expect to see going forward?

So the commercial model at Langeloth, just to remind, is we purchased third-party concentrates and then we sell molybdenum product principally to steel producers. We did a comprehensive review of how we enter into those contracts and establish minimum criteria for contracts to be acceptable. So all new contracts that we awarded this year conform to that minimum acceptable framework that we have. The contracts we have now in 2024 set the basis for the profitability model we have at Langeloth. In other words, the contracts we've awarded this year are commercially more attractive than they had been in the past because we adhere to this minimum criteria. Given those contracts we now have in place with the roaster running at approximately one-third of ultimate capacity, by grossing that number up to include the feed that will come from Thompson Creek, as well as further third-party material, we are very confident in the profitability of the roaster. I should add that the profitability of the roaster is not so dependent on molybdenum price. We basically clip a dollar per pound that is largely insulated from the prevailing spot price. So just to recap, we have a new framework for minimum acceptable contracts. We have implemented those. We are live on those contracts this year and when grossed up to full capacity yields a very profitable model at the roaster.

So if I go back to 2023, there was a big working capital hit that is less likely to be an event going forward? Like that was all kind of dependent on just how metal prices shifted, you've recouped that through the latter part of 2023. Will this new contract minimize that kind of risk?

We can't insulate fully against working capital movements because the working capital injection or release is driven by the molybdenum price associated with both the purchase of the concentrate contract and the sale of the final molybdenum product. We don't take very much price risk because the quotation periods are pretty closely aligned, but we do take working capital risk. If we're buying concentrate, which has a high molybdenum price associated with it and then selling a lower price, then we have that working capital movement. The reason there hasn't been working capital movement over the last several months, in any case, not a substantial money that molybdenum has been roughly flat at $20 a pound. We will have working capital movements when there's a mismatch between the price established with the concentrate purchase and that associated with the sale of the final product. But those are transitory events. As we ramp up capacity utilization in the roaster and if we do greenlight the Thompson Creek plant, a large portion of feed going to Langeloth will be our own concentrate from Thompson Creek with which there will be no working capital associated. So as we ramp up utilization of the roaster on a pound-to-pound basis, the working capital requirements will be less although in aggregate terms, they will still be increasing.

Okay. That's great information. Thanks, Paul. Regarding the timing of sales compared to production at Mount Milligan, can you explain what you currently know that leads to the mismatch between your sales and production? Is it solely based on the shipment dates of future freight?

Yes. It is predominantly that. Our last shipment of the first quarter was right at the end of the quarter and the way the boats are lining up will likely have a shipment in early July instead of the end of June. In looking at our shipping schedule and everything tied to our concentrate and the number of boats, you have extra boats in Q3 and Q4, but not really in Q2. You will see a bit of a step down in gold and copper sales. I think it's possible that the shipment timing can move around, but right now we are seeing a slightly lower sales in Q2, and then stepping up in Q3 and Q4. But again, with pretty flat production quarter by quarter throughout the year. It really is just a timing thing between June and July.

Okay. And then just sticking with Mount Milligan, your TC/RCs and refining costs have generally shown to be pretty flat. Is that something you're expecting to continue going forward, like on a U.S. dollar per pound or per tonne basis, you're sitting in around $0.45 for the last few quarters, fairly only $0.01 or $0.02 difference quarter to quarter? Is that something we could expect to sustain going forward? Or might some of this optimization make the concentrate TC/RCs actually drop off a bit?

Yes. I think you can view them as fairly flat. We have a mix of contracts. Some are long-term trader smelter contracts. Some are trader contracts that are more based on spot TC/RCs. Spot TC/RCs for copper are very low these days and negative in some cases. But when you average that with our benchmark prices on our longer-term contracts, it's averaging out to about that level. When we look at concentrate in general, one of the points that Paul made, if we are able to sell a lower grade copper concentrate, we may have more concentrate in total, and that may increase total TC/RCs that we pay if we're shipping more concentrate, but it will be more than offset with increased recoveries in metal gains, and we've done that analysis. So I think through this year, looking at it as about flat quarter-over-quarter makes sense. But there may be some scenario where that moves up a bit in the future to get the full benefit of recoveries.

This is an important point, Mike, that the initiatives Paul referenced and Ryan elaborated on involve trialing the shipment of lower copper content in the concentrate, which leads to better recovery. There will be associated costs, such as higher TC/RCs, logistics, and warehousing. The key point is that we have conducted these trials and observed improved recoveries in both copper and gold.

Okay. So it's a little bit of pain for a lot more gain.

That's right.

Okay. Great. Thanks very much, guys.

Operator Instructions. The next question comes from Anita Soni with CIBC. Please go ahead.

Good morning, Paul. A couple of questions. I think Mike has asked most of mine, but I just wanted to get an idea of how the CapEx plays out at both assets. There was a little bit of underspend this quarter, but I just wanted to understand specifically at Mount Milligan; where is the capital spend, and would it be in the summertime in Q2 and Q3 and then taper off in Q4? Or how does it work?

Yes, I'll speak first, Anita, and then Paul can chime in if he wants to elaborate. It's going to be quite heavy in Q2 and Q3. A lot of the Milligan CapEx is focused on the tailings storage facility and required lists and activity there this year as well as a pumping station for water. You couldn't really do some of those things in Q1. I would say the vast majority of the CapEx at Mount Milligan is planned for spring and summer. But then Q4 trailing off a little bit. So modeling the majority of Milligan CapEx, say is 75% of the year throughout the two middle quarters. Öksüt is a little more even. Q1 is pretty representative of what you'll see. There'll be little movements quarter-over-quarter, but that one is more even throughout the year.

Okay. The last point was regarding the capital for the care and maintenance and molybdenum business unit. I can't recall the exact details, but there was a notable underspend in some of that area.

Yes. So I think if we look at the molybdenum business unit, the one capital item at Langeloth is the acid plant shutdown, which is happening in Q2. It's happening right now. When we look at Thompson Creek, just a reminder, we've only guided the first half of the year. They did underspend a little bit in Q1. We still expect their first half spending to be similar to what we have out there guidance-wise, and then we will re-guide the second half of the year when we put out the results of the feasibility study. So I don't think we're expecting big changes on Thompson Creek from what they've been through in the first half.

Okay. That's it for my questions. Congrats on a good quarter.

Thank you.

This concludes today's question-and-answer session and today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.