After producing 77,860 ounces of gold from Kumtor project during the June quarter, Centerra Gold is on track to meet 2014 production and cost guidance. Kumtor contributed the majority of the company’s quarterly production of 92,124 ounces with the remainder from Boroo mine in Mongolia.

Kumtor’s total was higher than the 72,365 ounces produced in the corresponding quarter of 2013 as the company processed stockpiled ore from cut-back 15 that was mined during the fourth quarter of 2013. During the second quarter of 2014, Kumtor’s mill head grade averaged 2.35 grams/tonne with a recovery of 73.2%, compared with 2.17 grams/tonne and a recovery of 69.3% for the same quarter in 2013 when the mill processed metallurgically difficult stockpiled ore.

Tonnes processed were approximately 1.4 million for the second quarter, which was 6% higher than the comparative quarter of 2013 when the mill was affected by an unscheduled shutdown as a result of protesters’ actions.

During the second quarter of 2014, Kumtor’s mining fleet focused on stripping waste to establish access to the south portion of the Kumtor pit (cut-back 16) that is expected to provide high-grade ore at the end of the third quarter. The total waste and ore mined for the second quarter of 2014 was 49.5 million tonnes compared to 47.9 million tonnes in the comparative period of 2013, reflecting the increased mining fleet at Kumtor.

The total waste and ore mined for the first six months of 2014 was 100.3 million tonnes compared to 88.1 million tonnes in the comparative period of 2013, representing an increase of 14% due to the increased volume of higher density material mined, the shorter haulage distances of waste material used for construction of the buttress within the pit and the increased fleet capacity. The buttress, located at the bottom of the advancing Davidov glacier on the edge of the ultimate pit design is working effectively. However, there can be no assurance that the buttress will ultimately stop or sufficiently slow down the movement of the Davidov glacier. Ongoing monitoring will continue.

Centerra’s quarterly total was down from the 99,426 ounces produced in the corresponding period of 2013 while tor the six months to June 30 Centerra produced 208,794 ounces. Cash provided by operations increased to $71.7 million compared to $40.8 million in the second quarter of 2013.

The all-in sustaining costs per ounce sold was $1540, which excludes revenue-based tax in the Kyrgyz Republic, compared to $1537 in the same period in 2013. All-in costs per ounce sold, which excludes revenue-based tax in the Kyrgyz Republic and income taxes, was $1722 for the quarter compared to $1708 for the second quarter of 2013.

The company recorded a net loss of $29.6 million in the first half of 2014, compared to net earnings of $52.9 million in the comparative period of 2013. The decrease in earnings reflects lower realized gold prices, higher share-based compensation and increased depreciation, depletion and amortization (DD&A), and an inventory impairment charge at Kumtor.

Cost of sales increased 29% to $109.4 million in the second quarter, compared to $84.6 million in the comparative period of 2013, mainly as a result of the higher DD&A and the inventory impairment charge. DD&A associated with production increased to $60.9 million from $31.6 million in the comparative quarter of 2013.

Centerra’s president and CEO Ian Atkinson said, “I am pleased to report that during the quarter the Kumtor mine obtained approvals of its 2014 mine plan allowing the operation to continue uninterrupted. Both the operations performed well and we are on track to achieve our 2014 guidance.

“The company is continuing its discussions with the government regarding the potential restructuring of the Kumtor project to resolve all outstanding concerns relating to the project. We are in the process of drafting the definitive agreements and are continuing discussions with the Kyrgyz Government.” www.centerragold.com

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