Centerra Gold Updates Reserves and Resources Total Gold Reserves 8.1 million Contained Ounces
TORONTO, ONTARIO -- (Marketwire) -- 02/09/12 -- This news release contains forward-looking information that is subject to the risk factors and assumptions set out on page 14 and in our Cautionary Note Regarding Forward-looking Information on page 16. All figures are in United States dollars.
Centerra Gold Inc. (TSX: CG) today issued updated estimates for the Company's reserves and resources based on its successful 2011 exploration program.
Highlights (using $1,200/oz. gold)
-- Replaced reserves mined in Kumtor Central Pit.
-- Measured and Indicated resource base increased 36% or 1.8 million
contained ounces of gold to 6.7 million contained ounces of gold.
-- Added 393,000 ounces of contained gold to the high-grade inferred SB
Underground resource.
-- Initial Measured and Indicated resource of 824,000 ounces of contained
gold at the ATO project in Mongolia.
-- New gold resource of 289,000 contained ounces Indicated and 211,000
contained ounces Inferred on the Kara Beldyr project in Russia.
-- Opportunity for resources at Ortacam North in Turkey.
During 2011, Centerra's Proven and Probable gold reserves increased 694,000 contained ounces (before accounting for 2011 production) to 8.1 million ounces of contained gold, compared to 8.2 million ounces as of December 31, 2010. This represents an increase of 9% before accounting for 793,000 contained ounces processed at Kumtor and Boroo during 2011. All 2011 year-end reserves were estimated using a gold price of $1,200 per ounce compared to $1,000 per ounce at December 31, 2010.
At the Kumtor mine, in the Kyrgyz Republic, an estimated 704,000 ounces of contained gold have been added to reserves, representing an increase of 11%, before accounting for 2011 production. After accounting for processing of approximately 709,000 ounces of contained gold in 2011, Kumtor's proven and probable mineral reserves remain at 6.3 million ounces of contained gold as of December 31, 2011.
In Mongolia, at the Boroo mine, after accounting for processing of approximately 84,000 ounces of contained gold in 2011, proven and probable reserves total 298,000 ounces of contained gold. At the reserve gold price assumption, the Boroo operation could potentially continue to feed the mill for over two years utilizing existing low-grade stockpiles. At the Gatsuurt project, proven and probable reserves remain unchanged at 1.5 million ounces of contained gold.
Steve Lang, President and CEO of Centerra Gold said: '2011 was another successful exploration year for Centerra. We replaced reserves mined at Kumtor, generated initial resources at ATO and Kara Beldyr, and brought more than 2.4 million new ounces of gold into reserves plus resources and an additional 600,000 ounces of gold into inferred resources at an average cost of less than $15 per ounce. We entered our first joint venture in China, added a second joint venture in Russia and our strong drill results at Ortacam North in Turkey should produce an initial resource statement by the end of 2012.'
Year-end Reserves and Resources
Reserves
As of December 31, 2011, Centerra's proven and probable reserves increased 694,000 contained ounces (before accounting for 2011 production) to 8.1 million ounces of contained gold, compared to 8.2 million ounces as of December 31, 2010. This represents an increase of 9% before accounting for 793,000 contained ounces processed at Kumtor and Boroo during 2011. All 2011 year-end reserves were estimated using a gold price of $1,200 per ounce compared to $1,000 per ounce at December 31, 2010.
At Kumtor, before accounting for the processing of 709,000 contained ounces during 2011, proven and probable reserves increased by 704,000 contained ounces of gold replacing reserves mined during the year. All of the increase in the Central Pit open pit reserves is a result of additional exploration drilling primarily on the Southwest Extension of the SB Zone. This drilling has continued to outline a new zone of mineralization that lies immediately to the northwest of the Southwest Extension of the SB Zone. The drilling has also increased the average reserve grade for the Central Pit to 3.7 g/t Au, compared to 3.4 g/t Au in 2010. There has been no change in cut-off grades used for reserve estimation.
At Boroo, after accounting for the processing of 84,000 contained ounces during 2011, proven and probable reserves total 298,000 contained ounces of gold. At the reserve gold price assumption, the Boroo operation could potentially continue to feed the mill for over two years utilizing existing low-grade stockpiles.
At Gatsuurt, proven and probable reserves remain unchanged at 1.5 million contained ounces of gold.
Resources
As of December 31, 2011, Centerra's measured and indicated resources increased by 36% or 1.8 million ounces over the December 31, 2010 figures to total 6.7 million ounces of contained gold, compared to 4.9 million contained ounces as of December 31, 2010. The increase from the 2010 year-end measured and indicated resources is attributable to an increase in resources at Kumtor together with the addition of new resources for both the ATO project in Mongolia and the Kara Beldyr joint venture project in Russia.
The Company's inferred resources also increased by 570,000 contained ounces of gold year-over-year. At Kumtor, the inferred resources in the high-grade underground SB Zone increased by 393,000 contained ounces to 1.8 million contained ounces of gold with an average grade of 13.6 g/t. This increase is primarily a result of exploration drilling that has extended the strike length of the high-grade underground resources along strike to the northeast and southwest. The cut-off grade was lowered to 6 g/t Au, from the 7 g/t Au used in previous estimates, which reflects updated cost estimates for mining, however, this has only a minimal impact of the resource estimation. Inferred open pit resources decreased by 65,000 contained ounces of gold in the Central Pit. In addition, exploration drilling in 2011 at the Northeast Prospect resulted in the addition of 150,000 contained ounces of gold to the inferred open pit resources to 278,000 ounces of contained gold with an improvement of grade to 2.1 g/t Au.
The initial resource estimate for the ATO project in Mongolia has a measured and indicated resource of 824,000 ounces of contained gold together with significant silver, lead and zinc and an inferred resource of 26,000 ounces of contained gold together with silver, lead and zinc.
The resource estimate on a 100% basis for the Gord Zone on the Kara Beldyr property in Russia has an indicated resource of 289,000 ounces of contained gold and an inferred resource of 211,000 ounces of contained gold. At the time of the news release Centerra holds a 70% equity interest in the property.
Centerra Gold Inc.
2011 Year-end Gold
Reserve and Resource
Summary
(as of December 31, 2011)
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Gold Mineral Reserves (1) (12) (13)
(tonnes and ounces in thousands)
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Proven Probable
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Grade Contained Grade Contained
Property(3) Tonnes (g/t) Gold (oz) Tonnes (g/t) Gold (oz)
----------------------------------------------------------------------------
Kumtor (5) 3,023 1.6 153 56,671 3.4 6,125
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Boroo (7) 8,767 0.8 215 891 2.9 83
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Gatsuurt (8) (15) - - - 16,349 2.8 1,489
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Total 11,790 1.0 368 73,911 3.2 7,697
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Total Proven and Probable
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Grade Contained
Property(3) Tonnes (g/t) Gold (oz)
----------------------------------------------
Kumtor (5) 59,694 3.3 6,278
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Boroo (7) 9,658 1.0 298
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Gatsuurt (8) (15) 16,349 2.8 1,489
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Total 85,701 2.9 8,065
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Gold Measured and Indicated Mineral Resources(2) (12) (13)
(tonnes and ounces in thousands)
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Measured Indicated
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Grade Contained Grade Contained
Property(3) Tonnes (g/t) Gold (oz) Tonnes (g/t) Gold (oz)
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Kumtor (4) (5) 43,262 2.3 3,141 22,687 2.3 1,658
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Boroo (4) (7) 452 2.2 32 4,464 1.5 210
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Gatsuurt (4) (8)
(15) - - - 5,533 2.4 426
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Ulaan Bulag (9) - - - 1,555 1.5 73
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ATO (10) 10,305 1.4 466 11,978 0.9 358
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Kara Beldyr (11) - - - 3,790 2.4 289
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Total 54,019 2.1 3,639 50,007 1.9 3,014
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Total Measured and Indicated
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Grade Contained
Property(3) Tonnes (g/t) Gold (oz)
-----------------------------------------------
Kumtor (4) (5) 65,949 2.3 4,799
-----------------------------------------------
Boroo (4) (7) 4,916 1.5 242
-----------------------------------------------
Gatsuurt (4) (8)
(15) 5,533 2.4 426
-----------------------------------------------
Ulaan Bulag (9) 1,555 1.5 73
-----------------------------------------------
ATO (10) 22,283 1.2 824
-----------------------------------------------
Kara Beldyr (11) 3,790 2.4 289
-----------------------------------------------
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Total 104,026 2.0 6,653
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Gold Inferred Mineral Resources(2) (12) (13)
(14)
(tonnes and ounces in thousands)
-----------------------------------------------
-----------------------------------------------
Grade Contained
Property(3) Tonnes (g/t) Gold (oz)
-----------------------------------------------
Kumtor Open Pit
(4) (5) 9,195 2.4 694
-----------------------------------------------
Kumtor SB
Underground (6) 4,040 13.6 1,760
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Kumtor Stockwork
UG (6) 1,633 12.0 629
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Boroo (4) (7) 7,323 1.0 235
-----------------------------------------------
Gatsuurt (4) (8)
(15) 5,926 2.6 491
-----------------------------------------------
Ulaan Bulag (9) 315 1.3 13
-----------------------------------------------
ATO (10) 1,418 0.6 26
-----------------------------------------------
Kara Beldyr (11) 3,354 2.0 211
-----------------------------------------------
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Total 33,204 3.8 4,059
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(1) The mineral reserves have been estimated based on a gold price of $1,200
per ounce.
(2) Mineral resources are in addition to reserves. Mineral resources do not
have demonstrated economic viability.
(3) Centerra's equity interests as of this news release are: Kumtor 100%,
Gatsuurt 100%, Boroo 100%, Ulaan Bulag 100%, ATO 100% and Kara Beldyr
70%. All contained ounces in table above are shown on a 100% basis.
(4) Open pit resources occur outside the current ultimate pits which have
been designed using a gold price of $1,200 per ounce.
(5) The open pit reserves and resources at Kumtor are estimated based on a
cut-off grade of 0.85 gram of gold per tonne for the Central Pit and 1.0
grams of gold per tonne for the Southwest, Sarytor and Northeast
deposits.
(6) Underground resources occur below the Central pit and are estimated
based on a cut-off grade of 6.0 grams of gold per tonne.
(7) The open pit reserves and resources at Boroo are estimated based on a
0.5 gram of gold per tonne cut-off grade.
(8) The open pit reserves and resources at Gatsuurt are estimated using
either a 1.2, 1.4 or 1.5 grams of gold per tonne cut-off grade depending
on ore type and process method and include the Central Zone and Main
Zone deposits.
(9) The open pit resources at Ulaan Bulag are estimated on a cut-off grade
of 0.8, 0.9 or 1.0 grams of gold per tonne depending on ore type and
process method
(10)The ATO open pit resources are estimated based on a Net Smelter Return
(NSR) cut-off grade of $6.50 NSR per tonne for oxide mineralization and
$25.50 NSR per tonne for sulphide mineralization
(11)The open pit resources at Kara Beldyr are estimated based on a 1.0 gram
of gold per tonne cut-off grade and the contained ounces are shown on a
100% basis.
(12)A conversion factor of 31.10348 grams per ounce of gold is used in the
reserve and resource estimates.
(13)Numbers may not add up due to rounding.
(14)Inferred mineral resources have a great amount of uncertainty as to
their existence and as to whether they can be mined economically. It
cannot be assumed that all or part of the inferred resources will ever
be upgraded to a higher category.
(15)In July 2009, the Mongolian Parliament enacted legislation that would
prohibit mineral prospecting, exploration and mining in water basins and
forest areas in the territory of Mongolia and provides for the
revocation of mining and exploration licenses affecting such areas. The
legislation exempts any 'mineral deposit of strategic significance'. If
the legislation is not repealed or amended or if Gatsuurt is not
designated as a 'mineral deposit of strategic importance' that is exempt
from this legislation, mineral reserves at Gatsuurt may have to be
reclassified as mineral resources or eliminated entirely.
Centerra Gold Inc.
Polymetallic Mineral Resources as of December 31, 2011
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Gold Contained Silver Contained
Tonnes Grade Gold (21) Grade Silver
Category (000's) (g/t) (oz 000's) (g/t) (oz 000's)
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ATO Project (19)
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Oxide Mineral Resources (16) (17) (19) (20) (22) (23)
(greater than $6.50 NSR cut-off Grade)
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Measured Resources 3,345 1.4 146 8.8 950
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Indicated Resources 2,966 0.8 77 7.4 707
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Measured and Indicated 6,311 1.1 223 8.2 1,657
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Inferred Resources (18) 244 0.5 4 4.9 38
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Sulphide Mineral Resources(16) (17) (19) (20) (22) (23)
(greater than $25.50 NSR cut-off Grade)
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Measured Resources 6,960 1.4 320 7.5 1,685
----------------------------------------------------------------------------
Indicated Resources 9,012 1.0 281 7.9 2,301
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Measured and Indicated 15,972 1.2 601 7.8 3,986
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Inferred Resources (18) 1,174 0.6 22 5.2 196
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Lead Contained Zinc Contained
Tonnes Grade Lead Grade Zinc
Category (000's) (%) (lb 000's) (%) (lb 000's)
----------------------------------------------------------------------------
ATO Project (19)
----------------------------------------------------------------------------
Oxide Mineral Resources (16) (17) (19) (20) (22) (23)
(greater than $6.50 NSR cut-off Grade)
----------------------------------------------------------------------------
Measured Resources 3,345 - - - -
----------------------------------------------------------------------------
Indicated Resources 2,966 - - - -
----------------------------------------------------------------------------
Measured and Indicated 6,311 - - - -
----------------------------------------------------------------------------
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Inferred Resources (18) 244 - - - -
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Sulphide Mineral Resources(16) (17) (19) (20) (22) (23)
(greater than $25.50 NSR cut-off Grade)
----------------------------------------------------------------------------
Measured Resources 6,960 0.864 132,572 1.542 236,605
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Indicated Resources 9,012 0.692 137,486 1.269 252,123
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Measured and Indicated 15,972 0.767 270,058 1.388 488,728
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Inferred Resources (18) 1,174 0.704 18,221 1.068 27,642
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(16) Mineral resources have been estimated on the following metal prices
(gold $1,200 per ounce), (silver $20 per ounce), (lead $0.87 per lb),
(zinc $0.87 per lb).
(17) Mineral resources do not have demonstrated economic viability.
(18) Inferred mineral resources have a great amount of uncertainty as to
their existence and as to whether they can be mined economically. It
cannot be assumed that all or part of the inferred resources will ever
be upgraded to a higher category.
(19) Centerra's equity interest in the ATO project is 100%.
(20) Numbers may not add up due to rounding.
(21) The contained gold resources have also been included in Centerra's
2011 Year-end Gold Reserve and Resource Summary
(22) The ATO resources are estimated based on a Net Smelter Return cut-off
grade of $6.50 NSR per tonne for oxide mineralization and $25.50 NSR
per tonne for sulphide mineralization.
(23) Variables used to calculate NSR values include;
Oxide total recovery of gold=60%
Oxide total recovery of Silver=40%
Sulphide Net Smelter Return total recovery of gold=70%
Sulphide Net Smelter Return total recovery of
silver=70%
Sulphide Net Smelter Return total recovery of lead=81%
Sulphide Net Smelter Return total recovery of zinc=51%
Payable royalty on total recovered gold=9.0%
Payable royalty on total recovered silver=6.75%
Payable royalty on total recovered lead=6.75%
Payable royalty on total recovered zinc=6.75%
Centerra Gold Inc.
Reconciliation of Gold Reserves and Resources
(in thousands of ounces of contained gold)
(8) (9)
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2011 Addition
December 31 2011 (Deletion) December 31
2010 (1) Throughput(2) (3) 2011
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Gold Proven and Probable Mineral Reserves
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Kumtor (4) (5) 6,283 709 704 6,278
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Boroo(4) 392 84 (10) 298
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Gatsuurt (4) (7) (11) 1,489 0 0 1,489
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Total Proven and
Probable Reserves 8,164 793 694 8,065
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Gold Measured and Indicated Mineral Resources
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Kumtor (4) (6) 4,134 0 665 4,799
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Boroo(4) 242 0 0 242
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Gatsuurt(4) (7) (11) 426 0 0 426
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Ulaan Bulag(4) 80 0 (7) 73
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ATO(4) 0 0 824 824
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Kara Beldyr(4) 0 0 289 289
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Total Measured &
Indicated Resources 4,882 0 1,771 6,653
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Gold Inferred Mineral Resources (10)
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Kumtor Open Pit(4) (6) 759 0 (65) 694
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Kumtor Stockwork
Underground(4) 628 0 1 629
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Kumtor SB
Underground(4) 1,367 0 393 1,760
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Boroo(4) 233 0 2 235
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Gatsuurt(4) (7) (11) 491 0 0 491
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Ulaan Bulag(4) 11 0 2 13
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ATO(4) 0 0 26 26
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Kara Beldyr(4) 0 0 211 211
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Total Inferred
Resources 3,489 0 570 4,059
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(1) Reserves and resources as reported in Centerra's Annual Information
Form filed in March 2011.
(2) Corresponds to mill feed at Kumtor and Boroo.
(3) Changes in reserves or resources, as applicable, are attributed to
information provided by drilling and subsequent reclassification of
reserves or resources, an increase in the gold price, changes in pit
designs, reconciliation between the mill and the resource model, and
changes to operating costs.
(4) Centerra's equity interests as of this news release are as follows:
Kumtor 100%, Gatsuurt 100%, Boroo 100%, Ulaan Bulag 100%, ATO 100% and
Kara Beldyr 70%. Contained ounces are on a 100% basis in the table
above at each property.
(5) Kumtor open pit reserves include the Central Pit and the Southwest and
Sarytor Deposits.
(6) Kumtor open pit resources include the Central Pit, Southwest Deposit,
Sarytor Deposit and Northeast Deposit.
(7) Gatsuurt open pit reserves and resources include the Central Zone and
Main Zone deposits.
(8) Centerra reports reserves and resources separately. The amount of
reported resources does not include those amounts identified as
reserves.
(9) Numbers may not add up due to rounding.
(10) Inferred mineral resources have a great amount of uncertainty as to
their existence and as to whether they can be mined economically. It
cannot be assumed that all or part of the inferred resources will ever
be upgraded to a higher category.
(11) In July 2009, the Mongolian Parliament enacted legislation that would
prohibit mineral prospecting, exploration and mining in water basins
and forest areas in the territory of Mongolia and provides for the
revocation of mining and exploration licenses affecting such areas. The
legislation exempts any 'mineral deposit of strategic significance'. If
the legislation is not repealed or amended or if Gatsuurt is not
designated as a 'mineral deposit of strategic importance' that is
exempt from this legislation, mineral reserves at Gatsuurt may have to
be reclassified as mineral resources or eliminated entirely.
Exploration Update
To view the graphics, maps/drill sections, geological interpretation and complete drill results discussed in this news release, please visit the following link: http://file.marketwire.com/release/209CG.pdf
or visit the Company's web site at: www.centerragold.com.
KYRGYZ REPUBLIC
During the fourth quarter of 2011, exploration drilling programs continued in the Kumtor Central Pit, from the Kumtor underground and on the Kumtor concession at the Northeast, Southwest and Sarytor areas.
Kumtor Pit
In the fourth quarter of 2011, the drilling program focused on testing the extent and grade of mineralization within and below the KS11 pit design and for mineralization at deeper elevations in the Saddle and SB Zones. Fourteen drill holes were completed during the quarter and a further four holes were in progress at quarter-end.
Drilling in the fourth quarter to test the Southwest Extension of the SB Zone returned a number of significant mineralized intercepts both within and immediately below the KS11 design pit. This drilling has continued to outline a new zone of mineralization that lies immediately to the northwest of the Southwest Extension of the SB Zone. The zone has been intersected on five contiguous 40 metre spaced drill sections form section -26 to section -42. Some of the better drill intercepts are 3.4 g/t Au over 31.1 metres including 7.7 g/t Au over 5.3 metres and 3.4 g/t Au over 38.9 metres, including 8.2 g/t Au over 9.9 metres in hole D1577. Hole D1585 intersected 3.3 g/t Au over 21.9 metres; 3.1 g/t Au over 12.5 metres and hole D1591 intersected 2.6 g/t Au over 37.8 metres. Hole D1576 intersected 4.6 g/t Au over 52.0 metres including 16.4 g/t Au over 9.1 metres. Hole D1584 intersected 3.8 g/t Au over 29.1 metres including 9.2 g/t Au over 3.8 metres. Hole D1580 intersected 5.8 g/t Au over 16.5 metres; 2.8 g/t Au over 18.9 metres including 8.0 g/t Au over 4.7 metres. Hole D1583 intersected 5.5 g/t Au over 29.2 metres including 12.1 g/t Au over 8.4 metres. Hole D1573 interested 2.3 g/t Au over 17.6 metres; 8.3 g/t Au over 32.3 metres including 16.9 g/t Au over 8.9 metres.
The results from this drilling have been used in the year end resource model update and the associated increase in reserves and resources.
Three holes were drilled to test the down dip extension of the mineralization in the middle of the SB Zone. Hole D1589 on section 2 intersected 1.6 g/t Au over 5.9 metres; 2.7 g/t Au over 39.3 metres; 1.5 g/t Au over 4.3 metres and 2.5 g/t Au over 11.2 metres. Drill hole D1588 intersected mineralization immediately below the KS 11 pit design on section -6 with grades of 5.8 g/t Au over 35.5 metres. Drill hole D1597 drilled on section -6 intersected mineralization with intercepts of 2.7 g/t Au over 4.0 metres; 5.8 g/t Au over 37.3 metres (including 12.4 g/t Au over 12.8 metres) and 1.8 g/t Au over 5.2 metres.
Drill hole D1575 was drilled to test for the down dip continuation of the Saddle Zone mineralization at the 3,300 metre elevation intersected 3.8 g/t Au over 70.6 metres (including 12.4 g/t Au over 8.4 metres); 1.5 g/t Au over 11.8 metres; 2.3 g/t Au over 10.1 metres and 2.9 g/t Au over 15.1 metres.
Drilling of the new zone of mineralization on the Southwest Extension of the SB Zone and the down dip extensions of the Saddle Zone and SB Zones will continue in the first quarter of 2012.
True widths for the mineralized zones are typically from 45% to 95% of the stated intercept.
Decline Exploration
One underground exploration drill hole, UD1594 is in progress in Decline 1 to test the Kumtor structure at the 3,450 metre elevation in the southwest part of the SB Zone extension.
Resource Delineation Drilling
Seven holes were completed as part of the Stockwork Zone infill resource delineation program in the fourth quarter. Some of the better intercepts are 10.0 g/t Au over 13.4 metres in hole UD1586 ; 8.2 g/t Au over 33.9 metres in hole UD1574 and 3.6 g/t Au over 51.3 metres (including 11.6 g/t Au over 3.9 metres and 7.4g/t Au over 8 metres) in hole UD1581 and 8.4 g/t Au over 16.9 metres including 18.4 g/t Au over 4.7 metres in hole UD1590.
Drilling in the Stockwork Zone will continue with two drills in the first quarter of 2012.
True widths for the mineralized zones are typically from 45% to 90% of the stated intercept.
Regional Exploration
Regional exploration drilling continued in the fourth quarter of 2011 with up to four drills testing targets in the Northeast, Sarytor, and Southwest areas.
Northeast Area
Two holes were completed at the Northeast Prospect in the fourth quarter. The drill holes were designed to test for the extension of the high-grade mineralization identified 150 to 200 metres below surface on the northeast end of the Northeast Prospect. Both holes tested the down dip continuation of the known mineralization at 3,950 metre elevation which returned assays of 2.0 g/t Au over 30.2 metres; 5.8 g/t Au over 20.8 metres and 1.2 g/t Au over 6.0 metres in hole DN1569A and 1.8 g/t Au over 3.0 metres; 1.6 g/t Au over 24.7 metres; 2.6 g/t Au over 4.6 metres and 1.5 g/t Au over 10.0 metres in hole DN1578.
True widths for the mineralized zones are typically from 30% to 50% of the stated intercept.
Sarytor Area
Three drill holes were completed in the fourth quarter and were designed to test the down dip extension of the Sarytor mineralization. Hole SR-11-199 intersected a thick alteration zone with pyrite-albite-quartz metasomatites and returned intercepts of 2.9 g/t Au over 75.7 metres including 5.9 g/t Au over 6.3 metres. SR-11-200 returned results of 2.1 g/t Au over 15.3 metres and SR-11-201 returned intercepts of 5.1 g/t Au over 24.4 metres. Further drilling is planned in 2012 to test for continuity of down dip extensions of the mineralization.
True widths for the mineralized zones are typically from 70% to 95% of the stated intercept.
Southwest Area
In the fourth quarter two drill holes were completed to test beneath encouraging results from surface sampling of trenches. Hole SW-11-248 returned results of 4.5 g/t Au over 4.0 metres and hole SW-11-247 did not intersect any significant mineralization.
True widths for the mineralized zones are typically from 70% to 95% of the stated intercept.
Koendy Project
During the fourth quarter of 2011 exploration continued with road construction, trenching, geological mapping and the collection of geochemical, grab, chip and channel samples on targets identified on the Koendy license.
A complete listing of the drill results and supporting maps for the Kumtor pit have been filed on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com and are available at the company's web site at: www.centerragold.com
MONGOLIA
Field exploration work in the fourth quarter of 2011 was focused on the ATO Project.
Dornod Region
Exploration was carried out on the ATO prospect and the ATO District and included diamond drilling, trenching, mapping, geochemical and geophysical surveys.
One deep hole ATO-197 was completed to a depth of 710 metres to test for extensions of mineralization beneath Pipe #1. The hole intersected andesitic volcanic breccia and at deeper levels black siltstone and rhyolite porphyries. Altered rocks were intersected from approximately 240 to 660 metres, which correlates with the down dip projections of the southwest and northeast boundaries of Pipe #1. Two narrow intervals of strong Pb-Zn mineralization were interested approximately 200 metres below the previously intersected base metal mineralization with assays of 1.23% Zn, 0.47% Pb over 5.0 metres and 2.45% Zn, 0.57% Pb over 8.5 metres. There were no significant precious metal values.
Thirteen drill holes, ATO-187 to ATO-194, ATO-196 and ATO-202 to ATO-207, were completed to test geophysical and/or geochemical targets in the vicinity of the three mineralized pipes with no significant results.
Four large diameter holes, ATO-198 MET - ATO-201MET, were drilled to twin previous drill holes to provide composite samples for further metallurgical test work. Two holes were drilled in Pipe #1 and one in each of Pipes #2 and #4. The holes intersected the mineralization as expected but have not been sampled as the whole core is required for the metallurgical test work.
Seven holes, AP-01 to AP-07, were completed on the Apricot target which lies approximately 2.5 kilometres to the south of the ATO prospect. The prospect is comprised of andesite and mainly rhyolite porphyry, which are cut by narrow, quartz - sulphide veinlets and veinlet zones from a few centimetres to 1.5 metres oriented west to east and dipping steeply north. These zones commonly carry Au and Ag values with base metals up to 1%, As up to 1,000 ppm and Sb up to 100 ppm. Drilling confirmed the trenching results and returned narrow intercepts from quartz - sulphide veins (about 1 m), which carry high precious (Au and Ag) and base metals (Pb, Zn and Cu).
Two holes, AP-06 and 07, tested geochemical targets in the Apricot area. The holes intersected broad intervals of anomalous Ag (1 to 4 g/t). The data from the drilling are being compiled to determine what additional work, if any, is warranted.
The Southern Davkhar Tolgoi prospect, which lies 6.6 kilometres south of the ATO prospect, was tested with one hole DT-03, which targeted inferred altered porphyries in the southern part of the Davkhar Tolgoi prospect. The hole intersected tuff sandstone, siltstone and gabbro diorite dykes locally with propylitic alteration. The data are being compiled to determine what further work, if any, is warranted.
Nine holes, MG-01 - MG-09, were completed to test the Mungu Target. The Mungu Target is located approximately 500 metres north-northeast of the ATO pipes and was selected based on a subtle chargeability anomaly, as well as weak geochemical anomalies in soil and grab samples. The area is underlain by Jurassic gravels and volcanoclastic and rhyolite porphyries which were intersected in all holes together with several faults.
Holes MG-01, 03, 04 and 05 have intersected strongly brecciated, altered and sulphidized rhyolite porphyry at a depth of 140-150 metres. The mineralization is primarily pyrite +/- arsenopyrite sulphide mineralization with rare base metal sulphides. The sulphide mineralization fills breccia, forms veins, veinlets and stockwork. The mineralization is primarily silver and gold mineralization with only minor Pb and Zn. Silica alteration is common, but quartz veining is relatively rare. The better grades correlate with total sulphide content and quartz veins.
The host rocks and alteration and mineralization are different from those of the ATO pipes. The orientation, dip and strike and morphology of the mineralization is unclear making determination of the true width of precious mineralization difficult. The results are encouraging and the data are being compiled and further work is planned for the first quarter of 2012.
A complete listing of the drill results and supporting maps for the ATO Project have been filed on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com and are available at the Company's web site at: www.centerragold.com.
RUSSIA
Kara Beldyr JV
Centerra has earned a 70% interest in the Kara Beldyr joint venture as of January 2012. Further work will be funded on a pro rata basis with Centerra's partner Central Asia Gold. During the fourth quarter of 2011, 20 diamond drill holes were completed at the Gord, Ezen, Camp and Baran Zones on the Kara Beldyr Project.
Gord Zone
Six holes were completed at the Gord Zone on a 25 by 50 metre grid to fulfill the Russian Mineral Authorities Reserve and Resource report requirements.
The drill holes intersected quartz - sericite alteration at the expected depth and confirmed the width of the previous interpretation of the main zones and confirmed continuity of previously reported intercepts with the drilling increasing the overall tonnage. The best intercepts from this drilling are:
KB-107 - 4.9 g/t Au over 31.2 metres including 23.3 g/t Au over 1.0 metres
and 55.6 g/t Au over 1.1 metres and 15.1 g/t Au over 2.1 metres
KB-108 - 98.9 g/t Au over 8.8 metres including 568.9 g/t Au over 1.0 metres
and 278.8 g/t Au over 1.0 metre.
The results from this drilling have been used in the model developed for the initial resource estimate for the Gord Zone completed at the end of 2011.
Ezen Zone
Nine holes were completed at the Ezen prospect during the quarter. There is a strong geological correlation with results from previous drilling, including position of the northeast oriented major fault, width of altered rocks and style of sulphide mineralization. Assays for a number of the holes are pending. The most significant intersections received to date are:
KB-113 - 1.8 g/t Au over 8.0 metres
KB-114 - 1.5 g/t Au over 5.0 metres
The drilling to test the southwest extension of the Ezen Zone will continue in the first quarter of 2012.
Camp and Baran Zones
Three holes were completed to test for the southwest extension of the Camp Zone and two holes were completed to test the northeast end of the Baran Zone, which is interpreted to be a westerly extension of the Camp Zone, for a total of 5 holes of drilling in the fourth quarter. All holes intersected from 30 to 50 metres of altered quartz - sericite rocks controlled by a major fault hosted in sandstone in the Camp Zone and in diorite in the Baran Zone.
The drilling results in the Camp Zone are mixed with narrow high-grade zones intersected on all sections more continuous to the northeast and narrowing in the southwest direction. The correlation of the high-grade zones between holes and sections is poor. The Camp Zone is open in the northeast direction, where most of the higher grades were encountered.
True widths for the mineralized zones are typically from 70% to 90% of the stated intercept.
A complete listing of the drill results and supporting maps for the Kara Beldyr Project have been filed on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com and are available at the Company's web site at: www.centerragold.com.
TURKEY
Stratex International - Oksut JV
During the fourth quarter of 2011, Centerra earned a 50% interest in the Oksut property, a joint venture with Stratex International Plc and exercised its right to earn an additional 20% interest in the joint venture by funding $3 million of further exploration on the property over the next two years.
The property covers a gold bearing high sulphidation epithermal system. Diamond drilling programs have been carried out in 2009, 2010 and 2011 to test a number of the epithermal targets on the large property. This work has returned encouraging results from the Ortacam North prospects.
Ortacam North
A total of 17 holes have been drilled in the Ortacam North prospect in 2010 and 2011. Results to date have outlined a zone of gold mineralization in brecciated volcanic flow and pyroclastic rocks. The holes have identified an interpreted Au-mineralised vent breccia body. All of the holes intersect multiple zones of oxidized quartz kaolinite alteration and quartz-alunite alteration with variable amounts of massive silica and zones of hydrothermal brecciation. The drilling completed to date has outlined a significant zone of oxide mineralization over an area approximately 350 metres by 250 metres and the deposit is open in at least two directions to the north and east.
Results were received from preliminary cyanide soluble gold test work carried out on samples from holes ODD45 to 49 from the Ortacam North Zone. Overall, the results are encouraging with recoveries of 92% average for oxide material and 78% average for transitional material.
Additional drilling and preliminary metallurgical testwork are planned for the second quarter 2012 to follow up on the encouraging results.
Some of the better drill intercepts from drill holes completed on the Ortacam North prospect, are summarised in the table below:
Oksut JV 2010-2011 Drilling Results - Ortacam North
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Drill Hole From (m) To (m) Core Length (m) Au (g/t)
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ODD26 20.3 125.0 104.7 0.49
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ODD45 42.3 276.7 234.4 2.08
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includes 74.2 127.3 53.1 1.70
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and 139.3 224.5 85.2 3.96
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and 258.0 264.5 6.5 1.21
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289.0 302.4 13.4 0.47
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317.4 325.4 8.0 0.25
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ODD47 142.0 150.0 8.0 0.32
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162.0 167.6 5.6 0.37
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199.4 286.0 86.6 0.84
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includes 215.4 223.0 7.6 1.04
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and 239.0 249.0 10.0 1.94
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and 258.0 264.0 6.0 2.49
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----------------------------------------------------------------------------
ODD48 44.0 264.2 220.2 1.83
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includes 46.5 78.5 32.0 2.13
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and 98.0 140.7 42.7 1.34
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and 149.0 259.2 110.2 2.35
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ODD49 67.0 183.0 116.0 1.10
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includes 93.8 126.4 32.6 1.31
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and 137.0 150.0 13.0 2.16
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and 159.4 183.0 23.6 1.27
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ODD51 27.3 229.9 202.6 0.53
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includes 81.9 96.0 14.1 1.29
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257.6 277.4 19.8 0.30
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----------------------------------------------------------------------------
ODD52 31.9 44.5 12.6 0.34
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107.5 307.1 199.6 2.06
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includes 107.5 167.8 60.3 4.70
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and 203.1 231.0 27.9 1.55
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and 251.3 271.1 19.8 1.54
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and 282.8 288.8 6.0 1.56
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326.1 373.5 47.4 0.30
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389.0 403.0 14.0 0.33
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416.0 425.0 9.0 0.33
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ODD55 86.5 272.0 185.5 3.20
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includes 88.5 248.6 160.1 3.63
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282.0 332.1 50.1 0.55
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includes 287.5 295.5 8.0 1.32
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----------------------------------------------------------------------------
ODD56 83.3 101.3 18.0 0.69
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includes 92.3 97.3 5.0 1.21
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113.6 126.6 13.0 0.64
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144.5 203.5 59.0 1.25
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includes 155.5 171.3 15.8 1.48
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and 178.2 201.9 23.7 1.84
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209.5 253.1 43.6 0.54
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----------------------------------------------------------------------------
ODD57 19.4 36.0 16.6 0.55
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72.8 78.0 5.2 0.73
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94.5 323.6 229.1 1.02
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includes 99.5 106.5 7.0 3.24
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and 112.5 205.7 93.2 1.53
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----------------------------------------------------------------------------
Mineralized intervals are greater than 0.20 g/t Au and higher grade sub-
intervals are greater than 1.00 g/t Au.
Maximum of 5 metre internal dilution.
True widths of intercepts are currently unknown and drilled intercepts may
not be representative of true widths.
Tables are current to December 31st, 2011.
A complete listing of the drill results and supporting maps for Ortacam North prospect on the Stratex Oksut joint venture have been filed on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com and are available at the Company's web site at: www.centerragold.com.
To view the graphics, maps/drill sections, geological interpretation and complete drill results discussed in this news release, please visit the following link: http://file.marketwire.com/release/209CG.pdf
or visit the Company's web site at: www.centerragold.com.
Major Assumptions
The following material assumptions have been used to estimate reserves and costs:
-- a gold price of $1,200 per ounce
-- exchange rates:
-- $1USD:$1.01 CAD
-- $1USD:46.00 Kyrgyz Som
-- $1USD:1,235 Mongolian Tugrik
-- $1USD:0.74 Euro
-- diesel fuel price assumption:
-- $0.71/litre at Kumtor
-- $1.13/litre at Boroo
The assumed diesel price of $0.71/litre at Kumtor assumes that no Russian export duty will be paid on the fuel exports from Russia to the Kyrgyz Republic.
Diesel fuel is sourced from separate Russian suppliers for both sites and only loosely correlates with world oil prices. Political and supply pressures and policies may cause the average price of fuel from Russia to be higher. The diesel fuel price assumptions were made when the price of oil was approximately $99 per barrel.
Other important assumptions include the following:
-- Any recurrence of political and civil unrest in the Kyrgyz Republic will
not impact operations, including movement of people, supplies and gold
shipments to and from the Kumtor mine,
-- grades and recoveries at Kumtor will remain consistent with the life-of-
mine plan to achieve the forecast gold production,
-- the dewatering program at Kumtor continues to produce the expected
results and the water management system works as planned,
-- the remedial plan to deal with the Kumtor waste and ice movement
continues to be successful, see 'Kumtor Mine - Geotechnical Issues
Affecting the Kumtor Open Pit' in the Company's most recently filed
annual information form ('AIF'),
-- the Mongolian legislation which prohibits mineral prospecting,
exploration and mining in water basins and forest areas in Mongolia (the
'Water and Forest Law') will be amended or repealed to allow Gatsuurt to
proceed as planned, see Company's most recently filed AIF,
-- no unplanned delays in or interruption of scheduled production from our
mines, including due to civil unrest, natural phenomena, labour,
regulatory or political disputes, equipment breakdown or other
developmental and operational risks,
-- domestic inflation rates remain stable,
-- no further suspension of Boroo's operating licenses, and
-- all necessary permits, licences and approvals are received in a timely
manner.
Reserve estimates and cost estimates are forward-looking information and are based on key assumptions and subject to material risk factors. If any event arising from these risks occurs, the Company's business, prospects, financial condition, results of operations or cash flows could be adversely affected. Additional risks and uncertainties not currently known to the Company, or that are currently deemed immaterial, may also materially and adversely affect the Company's business operations, prospects, financial condition, and results of operations or cash flows. See the sections entitled 'Risk Factors' in the Company's most recently filed AIF, available on SEDAR at www.sedar.com and see also the discussion below under the heading 'Cautionary Note Regarding Forward-looking Information'.
Qualified Person & QA/QC
The reserves and resources estimates and other scientific and technical information in this news release were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101') and were reviewed, verified and compiled by Centerra's geological and mining staff under the supervision of Ian Atkinson, Certified Professional Geologist, Centerra's Senior Vice-President, Global Exploration, who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the exploration drilling programs are done consistent with industry standards and independent certified assay labs are used with the exception of the Kumtor project as described in its technical report.
The Kumtor deposit is described in Centerra's most recently filed AIF and a technical report dated March 22, 2011 prepared in accordance with NI 43-101. The technical report has been filed on SEDAR at www.sedar.com. The technical report describes the exploration history, geology and style of gold mineralization at the Kumtor deposit. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs at the Kumtor site are described in the technical report.
The Boroo deposit is described in Centerra's most recently filed AIF and a technical report dated December 17, 2009 prepared in accordance with NI 43-101, which is available on SEDAR at www.sedar.com. The technical report describes the exploration history, geology and style of gold mineralization at the Boroo deposit. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs at the Boroo site are the same as, or similar to, those described in the technical report.
The Gatsuurt deposit is described in the Company's most recently filed AIF and in a technical report dated May 9, 2006 prepared in accordance with NI 43-101. The technical report has been filed on SEDAR at www.sedar.com. The technical report describes the exploration history, geology and style of gold mineralization at the Gatsuurt deposit. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs at the Gatsuurt project are the same as, or similar to, those described in the technical report or AIF.
Cautionary Note Regarding Forward-looking Information
This news release and the documents referred to herein contain statements which are not statements of current or historical facts and are 'forward-looking information' within the meaning of applicable Canadian securities laws. Such forward-looking information involves risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Wherever possible, words such as 'believe', 'expect', 'anticipate', 'contemplate', 'target', 'plan', 'intends', 'continue', 'budget', 'forecast', 'projections', 'estimate', 'may', 'will', 'schedule', 'potential', 'strategy' and other similar expressions have been used to identify forward-looking information. These forward-looking statements relate to, among other things, Centerra's expectations regarding the timing of producing an initial resource statement for the Ortacam North prospect, the impact of the Water and Forest Law on the Company's Mongolian operations, business and political environment and business prospects including the timing and development of new deposits (including the ATO deposit) and the success of exploration activities.
Although the forward-looking information in this news release reflects Centerra's current beliefs as of the date of this news release based on information currently available to management and based upon what management believes to be reasonable assumptions, Centerra cannot be certain that actual results, performance, achievements, prospects and opportunities, either expressed or implied will be consistent with such forward-looking information. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by Centerra, are inherently subject to significant political, business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking information.
Material assumptions used to estimate reserves and resources and costs include those described under the heading 'Major Assumptions'. Other factors that could cause actual results or events to differ materially from current expectations include, among other things: the sensitivity of the Company's business to the volatility of gold prices; the political risks associated with the Company's operations in the Kyrgyz Republic and Mongolia; the impact of changes in, or more oppressive enforcement of, laws, regulations and government practices in the jurisdictions in which the Company operates; the effect of the November 2010 amendments to the 2006 Mongolian Minerals Law on the royalty payments payable in connection with the Company's Mongolian operations; the effect of the Water and Forest Law on the Company's operations in Mongolia, and in particular the fact that the Gatsuurt development property cannot proceed unless such legislation is amended or repealed or Gatsuurt is exempted from such legislation by being declared a strategic deposit; the impact of continued scrutiny from Mongolian regulatory authorities, including further investigations by the SSIA and other Mongolian regulatory authorities; in the Kyrgyz Republic, the impact of changes to, or the increased enforcement of, environmental laws and regulations relating to the Company's operations; the Company's ability to replace its reserves; ground movements at the Kumtor mine; waste and ice movement at the Kumtor mine; any labour unrest or disturbances at the Company's mines;
any difficulties in renegotiating collective labour agreements on terms satisfactory to the Company; litigation; the accuracy of the Company's reserves and resources estimate; the accuracy of the Company's production and cost estimates; the success of the Company's future exploration and development activities; competition for mineral acquisition opportunities; the adequacy of the Company's insurance; environmental, health and safety risks; defects in title in connection with the Company's properties; the impact of restrictive covenants in the Company's revolving credit facility; the Company's ability to successfully negotiate an investment agreement for the Gatsuurt development property to complete the development of the mine and the Company's ability to obtain all necessary permits and commissions needed to commence mining activity at the Gatsuurt development property; seismic activity in the vicinity of the Company's operations in the Kyrgyz Republic and Mongolia; long lead times required for equipment and supplies given the remote location of the Company's properties; illegal mining on the Company's Mongolian properties; the Company's ability to enforce its legal rights; the Company's ability to accurately predict decommissioning and reclamation costs; the Company's ability to obtain future financing; the impact of current global financial conditions; the impact of currency fluctuations; the effect of recent market conditions on the Company's short-term investments; the Company's ability to attract and retain qualified personnel; the Company's ability to make payments including payments of principal and interest on the Company's debt facilities; risks associated with the conduct of joint ventures; risks associated with the Company's largest shareholder, Kyrgyzaltyn JSC; and possible director conflicts of interest. There may be other factors that cause results, assumptions, performance, achievements, prospects or opportunities in future periods not to be as anticipated, estimated or intended. See 'Risk Factors' in the Company's most recently filed AIF available on SEDAR at www.sedar.com.
Furthermore, market price fluctuations in gold, as well as increased capital or production costs or reduced recovery rates may render ore reserves containing lower grades of mineralization uneconomic and may ultimately result in a restatement of reserves. The extent to which resources may ultimately be reclassified as proven or probable reserves is dependent upon the demonstration of their profitable recovery. Economic and technological factors which may change over time always influence the evaluation of reserves or resources. Centerra has not adjusted mineral resource figures in consideration of these risks and, therefore, Centerra can give no assurances that any mineral resource estimate will ultimately be reclassified as proven and probable reserves.
Centerra's mineral reserve and mineral resource figures are estimates and Centerra can provide no assurances that the indicated levels of gold will be produced or that Centerra will receive the gold price assumed in determining its mineral reserves. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While Centerra believes that these mineral reserve and mineral resource estimates are well established and the best estimates of Centerra's management, by their nature mineral reserve and mineral resource estimates are imprecise and depend, to a certain extent, upon analysis of drilling results and statistical inferences which may ultimately prove unreliable. If Centerra's reserve or reserve estimates for its properties are inaccurate or are reduced in the future, this could have an adverse impact on Centerra's future cash flows, earnings, results or operations and financial condition.
Centerra estimates the future mine life of its operations. Centerra can give no assurance that mine life estimates will be achieved. Failure to achieve these estimates could have an adverse impact on Centerra's future cash flows, earnings, results of operations and financial condition.
There can be no assurances that forward-looking information and statements will prove to be accurate, as many factors and future events, both known and unknown could cause actual results, performance or achievements to vary or differ materially from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this news release. Accordingly, all such factors should be considered carefully when making decisions with respect to Centerra, and prospective investors should not place undue reliance on forward-looking information. Forward-looking information is as of February 9, 2012. Centerra assumes no obligation to update or revise forward-looking information to reflect changes in assumptions, changes in circumstances or any other events affecting such forward-looking information, except as required by applicable law.
About Centerra
Centerra Gold Inc. is a gold mining company focused on operating, developing, exploring and acquiring gold properties primarily in Asia, the former Soviet Union and other emerging markets worldwide. Centerra is a leading North American-based gold producer and is the largest Western-based gold producer in Central Asia. Centerra's shares trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is headquartered in Toronto, Ontario, Canada.
Additional information on Centerra is available on the Company's website at www.centerragold.com and at SEDAR at www.sedar.com.
Contacts:
Centerra Gold Inc.
John W. Pearson
Vice President, Investor Relations
(416) 204-1241
john.pearson@centerragold.com
www.centerragold.com
