Centerra Gold has increased its 2014 production guidance for the Boroo Gold Project from 45,000 to 50,000 ounces. The new guidance reflects increased production due to higher than expected recoveries in the first nine months of the current year from both the mill and heap leach operations. The forecasted annual production includes about 25,000 ounces from heap leaching and 25,000 ounces from the mill. The Boroo mill is expected to process ore stockpiles during the last quarter of the year with an average grade of 0.66 grams/tonne.
Centerra’s total gold production for the third quarter of 2014 totalled 110,792 ounces compared to 113,840 ounces in the comparative quarter of 2013. The majority of the company’s production comes from Kumtor mine in the Kyrgyz Republic.
At the Boroo mine quarterly production was 15,527 ounces compared to 23,550 ounces in the same period of 2013. The lower gold production results mainly from processing lower grade ore through the mill as the operation’s stockpiles are being depleted. The stockpiles are expected to be fully depleted in December 2014. Additionally, fewer ounces were produced from the heap leach operation due to leaching lower grade ore, as secondary leaching commenced in August 2014. The heap leach grade averaged 0.52 grams/tonne in the third quarter, compared to 0.75 from primary leaching in the third quarter of 2013.
During the quarter, the company and Boroo’s trade union signed a new 2-year collective agreement which will expire on June 30, 2016.
The Gatsuurt project remained under care and maintenance in the third quarter due to continued delays in permitting resulting from the Water and Forest Law which prohibits mining and exploration activities in water basin and forested areas.
During the third quarter of 2014 exploration expenditures in Mongolia were $1.1 million down from $1.9 million in the same period in 2013. The 2014 exploration expenditures were largely for activities at the company’s ATO project in eastern Mongolia.
Centerra says discussions with the government regarding the Gatsuurt project continue, including as to possible levels of government ownership in the project as well as the potential designation by Parliament of Gatsuurt as a strategic deposit.
The company expects that the Mongolian Parliament will consider the designation of Gatsuurt as a strategic deposit by the end of 2014. If Parliament ultimately approves this designation, it would have the effect of excluding Gatsuurt from the application of the Mongolian Water and Forest Law and would allow the Mongolian Government to acquire up to a 34% interest in Gatsuurt. The terms of any such participation are currently unclear and will be determined through negotiations with the government.