Centerra Gold (NYSE:CGAU) reported higher second-quarter production at its Mount Milligan and Öksüt operations, raised its consolidated 2026 gold production outlook and outlined continued spending on a pipeline of gold, copper and molybdenum projects.
President and Chief Executive Officer Paul Tomory said the company delivered “strong operational execution across the portfolio,” with Mount Milligan recording its third consecutive quarter in line with the mine plan released in its September 2025 prefeasibility study. Öksüt’s first-half performance supported a 9% increase in the operation’s annual gold-production guidance.
Operating Results and Guidance
Mount Milligan produced more than 38,000 ounces of gold during the second quarter, up 29% from the prior quarter, along with 13.1 million pounds of copper. Interim Chief Operating Officer Mike Sylvestre said year-to-date production was in line with the mine plan and that the operation remained on track to produce 140,000 to 155,000 ounces of gold and 50 million to 60 million pounds of copper this year.
Gold production and sales at Mount Milligan are expected to be higher in the third quarter because of planned mine sequencing. Its second-quarter all-in sustaining costs, or AISC, on a by-product basis were $1,269 per ounce, affected by higher sustaining capital expenditures. The company reaffirmed full-year Mount Milligan AISC guidance of $1,200 to $1,300 per ounce.
Öksüt produced more than 32,500 ounces of gold in the second quarter, exceeding plan due to higher grades and improved operating practices. The company raised Öksüt’s full-year production guidance to 120,000 to 135,000 ounces. Second-quarter AISC at the mine was $1,952 per ounce, reflecting lower ounces produced and sold and higher sustaining capital expenditures versus the prior quarter.
Centerra maintained its full-year Öksüt AISC forecast of $1,850 to $1,950 per ounce. Tomory said the company is assessing opportunities to extend Öksüt’s mine life through potential low-grade oxide material outside the current reserve pit and through residual leaching. He said the company sees the potential for a one- to three-year extension, though not necessarily all at once, and expects to provide an optimization-study update with year-end disclosures in early 2027.
Financial Performance and Capital Returns
Chief Financial Officer Ryan Snyder said Centerra generated adjusted net earnings of $79 million, or $0.40 per share, in the second quarter. Sales totaled more than 72,000 ounces of gold and 13.4 million pounds of copper. The company reported average realized prices of $3,437 per ounce for gold and $5.30 per pound for copper, including the effect of Mount Milligan streaming arrangements.
Consolidated AISC on a by-product basis was $1,707 per ounce, and Centerra reaffirmed its full-year guidance of $1,650 to $1,750 per ounce.
Cash flow from operations was $66 million, while free cash flow was negative $23 million. Snyder attributed the free-cash-flow deficit to the scheduled timing of statutory tax and annual royalty payments in Turkey. Mount Milligan generated $118 million of operating cash flow and $89 million of free cash flow, while Öksüt generated $16 million and $11 million, respectively.
U.S. Moly used $45 million in operating cash flow and recorded a free-cash-flow deficit of $89 million, largely due to Thompson Creek restart spending and a working-capital increase at Langeloth tied primarily to rising molybdenum prices.
- Centerra repurchased 2.9 million shares for $50 million during the second quarter.
- The board authorized up to $200 million in share repurchases for full-year 2026; $72 million had been completed during the first six months.
- The company declared a quarterly dividend of $0.07 per share.
- Quarter-end cash was $451 million, while total liquidity exceeded $1 billion after the company expanded its revolving credit facility to $600 million.
Snyder said the undrawn four-year credit facility was extended and upsized at more favorable pricing. Management said it does not currently plan to draw on the facility and views it primarily as financial flexibility and a safety net.
Project Pipeline and Molybdenum Business
Centerra is advancing early site work, engineering, procurement and purchases of long-lead equipment at the Goldfield project. The accelerated work increases 2026 capital spending to between $60 million and $70 million, but the company maintained the project’s overall capital estimate of $252 million and its current 2028 timeline.
Tomory said the additional spending is intended to reduce execution risk and secure current pricing rather than indicate a changed project scope. The company is continuing to assess whether Goldfield’s schedule could ultimately be advanced.
At Thompson Creek, approximately 52% of infrastructure refurbishment had been completed as of the second quarter. The operation mined 12.4 million tons during the quarter, its highest rate since the restart began in September 2024 and a 33% increase from the first quarter. Centerra said the project remains on track for first production in mid-2027 and within its total capital estimate of $425 million to $450 million.
Langeloth reached normal operating levels during the quarter following its provisional April restart. Centerra expects Langeloth to produce 11 million to 13 million pounds of roasted molybdenum and sell 15 million to 17 million pounds during 2026. About 3.8 million pounds of molybdenum were sold in the second quarter at an average realized price of $29.73 per pound.
Tomory said molybdenum prices were about $32 to $33 per pound, compared with $20 per pound assumed when Thompson Creek was approved. Hélène Timpano, President of U.S. Moly, said the market is developing a large deficit driven by both supply and demand factors, with China competing for concentrate outside its domestic market.
Management said it sees substantial value in the U.S. molybdenum business and could consider alternatives such as a sale or initial public offering if market conditions warrant, though Tomory said the company was not committing to either option.
Centerra also said Kelly Strong will join the company as executive vice president and chief operating officer in mid-August, succeeding Sylvestre in the operating leadership role.
About Centerra Gold (NYSE:CGAU)
Centerra Gold Inc is a gold mining company incorporated in Canada and headquartered in Toronto. The company specializes in the exploration, development and operation of precious metals properties, with a focus on gold production. Centerra’s portfolio includes the Mount Milligan mine in British Columbia, Canada, and the Otjikoto mine in Namibia. Both operations produce gold and copper concentrates and employ modern mining methods and processing facilities to optimize recovery rates and minimize environmental impact.
In addition to its producing assets, Centerra is advancing the development of its Greenstone Gold Project in Ontario, Canada, which, upon completion, is expected to become one of Canada’s largest gold mines.
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