Centerra Gold Update | Paul Tomory, Ryan Snyder and Jimmy Connor
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Bloor Street Capital Inc. was paid a fee for producing this event. Bloor Street Capital Inc. and its affiliates may or may not hold …
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Paul and Ryan, thank you very much for joining us today. I want to provide a framework on where I want to take our discussion in the next few minutes. Paul, with you, I want to look at the overall operations at Centa Gold. And Ryan, with you, I would like to discuss the balance sheet and also capital allocation. So Paul, why don't we begin with you for those who are not familiar with Centa Gold? Can you provide a brief overview of the company and its assets? >> Yeah, thanks a lot, Jimmy. Great to be with you again here. Um we we operate principally in North America and we also have an operating mine in Turkey. Our two principal operating assets are gold focused. Our cornerstone is Mount Milligan in British Columbia. It's a long life copper gold asset in production where we have some expansion plans. And our other operating mine is a gold mine in Turkey, an oxide gold heat leach with several years of mine life and very high cash flow potential. We also have a very robust development pipeline. We just announced a pea on the chem asset which is in northern British Columbia north of Mount Milligan. It will our hope is that it becomes another cornerstone similar to Mount Milligan copper and gold with 15 years of mine life with lots of exploration potential. So what we're going to be doing there is shortly advancing to a a PFS. I'll I'll come back to the chem asset a little bit later. Also in the project portfolio, we are developing Goldfield, a gold oxide heat bleach project in Nevada that is now well advanced, fully fully approved. Uh most of the permits are in place and we're making good progress on the ground. And then lastly, we have our malibdum business unit which consists of the Thompson Creek project in Idaho, which is a mine reopening project combined with our Langaloth metallurgical roster in Pittsburgh. And the business plan here calls for reopening the Thompson Creek mine. We're well advanced on that project. We're about 18 months away from first production and then feeding the roster not only with uh direct feed from Idaho from Thompson Creek, but also supplementing it with third party feeds from from other mines to ramp up capacity utilization at that roster. So that's a quick tour through the portfolio. We're principally North America focused with assets in British Columbia, Idaho, and Nevada, but also with a very profitable mine in Turkey. And then the last point I'll touch on is we have a very robust balance sheet, over 500 million of cash and our entire project portfolio. We can quite comfortably fund it through existing liquidity reserves and we can get into more detail on that as the conversation evolves here. So that's a great overview and I want to examine your assets in more detail now so we can see the growth potential and also the value proposition and as you mentioned you just released a preliminary economic assessment on KS and I want to look at this in more detail just take us through the highlights and what does it mean for the future growth at Centa >> for sure it's a it's a really important asset for us it and our hope is that it becomes almost a twin to Mount Milligan where our cornerstone strategy is focused on copper and gold in British Columbia. ChemS is a past producer. It operated um profitably as a copper gold mine and it was put on care and maintenance. It has a very large remaining resource. And so the project contemplates a refurbishment of the process plant and the general infrastructure as well as the development of a new mining area located five or six kilometers away from the process plant. So we we've declared a resource here of 250 million tons of uh indicated and another 300 million tons of inferred material. A subset of that approximately 45 46% of that total resource will go into a mine plan here. And what we're targeting here is a 15-year mine life at roughly the same scale as Mount Milligan. 150 to 170,000 ounce a year of gold and uh in the range of 50 to 70 million pounds of copper annually. So in effect it becomes a mine very similar to Mount Milligan but most importantly it's unstreamed and uh Centaur will have direct exposure to both the gold and the copper revenue. So just a quick note on scope here we're contemplating about 800 million of capital investment and that'll be split roughly between upgrades to the existing infrastructure in the mill. So the mill needs to be brought up to modern standards. The camp needs to be refurbished. And then the second large category of capex is the development of the new mining area. As I mentioned, it's located several kilometers away from the mill. And we have to develop tunnel drives for conveyors to access that area which is located on the other side of our ridge. In addition, the mine plan will be both open pit and underground. So there will be some capital allocated to underground developments >> and Paul as you mentioned uh KS was a past producer. So one of the big advantages is that the infrastructure is already in place including a 300 km long power line but maybe you can just speak about the infrastructure in more detail and what it means on a capex point of view. >> Yeah that's right we we think that chem is a relatively lowrisisk project. Because I said much of the infrastructure is in place and some of the key elements of that infrastructure include that power line that you mentioned. It's over 300 km long. We own and operate it and in today's market the cost of rebuilding that power line would be well over a billion dollars. So we have it and it's it's in good condition. In fact, the cost to build chemists from the ground up would be well over $4 billion in the current market. And that's a huge advantage having a pass producer uh where the the tailings are in place. That's another uh major uh foot in the door in terms of reopening it. Also importantly though, many of the permits needed to reopen chemists are already in place from past uh a past project scope that Cinta had advanced a number of years ago. And lastly, we do have an agreement in place with a number of the First Nations in the area. Both the permit and and the uh the agreements with the First Nations will require some amendments because the scope of what we're proposing here is a little bit different than what had been proposed in the past. But as you had intimated, it provides a significant derisking that we have the infrastructure, we have a basis of permits and we have a framework for agreements with um local first nations. >> And what are the next steps at KS? >> Next step is we're moving immediately to a PFS. This will advance the engineering work, the understanding of the or body and we're targeting releasing that in the first half of 2027. >> So let's move on to Mount Meligan and this is your flagship project which is also located in the province of British Columbia. Copper gold mine a prefeasibility study was released last year. Can you just touch on the highlights of that study and what it means for the mine? Principally the prefeasibility study solidified the mine as having multi-deade of potential. Previously the reserve was 10 years until 2036 of production. That pfS extended the mine life to at least 2045. And I say at least because we have a lot of mineralization to the west and southwest that we will continue to drill and ultimately incorporate into the resource. And we we expect that the mine will have well more years beyond 2045. In fact, to illustrate the confidence we have in Mine Life Extension there, I'll note that the tailings dam that we are designing, engineering, and ultimately building here as part of this expansion will have capacity until 2070. Just to give you an idea of uh the extent of the mineralization as part of that project to extend the mine life, we're also increasing throughput capacity in the next couple years by about 10%. And uh as I mentioned the the major scope of works will be the construction of a new tailings dam seven eight nine years from now as the current dam reaches full capacity. So we're very excited about Mount Milligan. We have 20 years of mine life with line of sight to significant resource extensions beyond that. And again relatively low risk because it's an operating mine. Uh we've just received the the permits for some of the incremental expansions needed in the near term and we're to continue advanced permitting for the the ultimate 2045 mine life. >> And this is one of the things I love about these copper gold deposits is the long mine life. A typical gold mine might have a 8 to 10 year mine life, but as it stands right now, Mount Meligan will be producing to 2045. And as you mentioned, it could go well beyond that with exploration. and and that is really the centerpiece of our our corporate strategy focused on these two large copper gold pferies. Mount Milligan with a 20-y year reserve life chem with an initial 15-year pea life. Both of those mines have very significant potentials. So in effect, what Senta will become is a very large copper gold producer with very long mine life in British Columbia. So let's leave the country of Canada and move to the country of Turkey where your second mine is. It's a gold mine. It's called Oakut. The current mine life is to 2029. Do you see any potential to extend that? >> Yes. So just a quick recap. This is a an oxide heat bleach, relatively straightforward. Uh Turkey is a great place to operate. We've had u a great track record there over the last three years. We've generated over 600 million of free cash flow from the mine in the last three years. We've recently launched a project to look at production life extension. The current reserve mine life ends in 2029. However, we we now know that there's very significant potential for heap leech production extension because the grades in the heap are significantly higher than the resource model had initially predicted. And so we've kicked off this year a project to look at residual leeching which we expect could add two to four years of additional production. And we're also doing a comprehensive review of mineral inventory on the property looking for the potential for oxide mining extension and then also longer term down the road the potential for sulfide deposits. So currently the mine life ends in 2029 based on our reserve but we are ongoing with a project that looks at production life extension and we expect to uh provide results on that at the end of uh 2026. >> And Turkey has a very uh strong mining sector. Would you consider acquiring another mining asset there or another gold mine? >> That's a good question, Jimmy. I one of the things that uh defines Centa right now is an increasing focus on North America and I think certain investors really like that profile. We we're not close to further investment in Turkey. But right now, our priority for capital allocation in terms of developing new mines, new projects is really focused on North America as evidenced by our project portfolio, KMAS, Milligan expansion, Goldfield and Thompson Creek. But we are not close to the potential for continuity in Turkey if the right conditions present themselves. >> The Goldfield project in Nevada is another growth opportunity for Cintara. And Ryan, you're responsible for this. You completed a technical study on Goldfield which showed a very attractive economics. Can you just talk about the highlights of this project and why it's a good fit for Centara's portfolio? >> Yeah, sure, Jimmy. As Paul noted, you know, we have the two uh longerlife gold copper assets in BC and and in the Kames pea, we're looking at a late 2031 first production in Kamese. And so that's a bit more of a longer term play. Um but in the medium term, we're trying to get as much gold exposure as we can. And so in addition to Mount Milligan, we have good production out of Oxuit. And we we looked at Goldfield um restudied that project earlier last year, understood the resource a bit more and found ways to really augment the recoveries through a crushing strategy that are going to improve the recoveries at site and felt comfortable after doing a PFS moving forward with Goldfield that it's a really good project for Cintara. Uh it's a $252 million capital project. Uh we've already started that. We're into site establishment and some of the detailed engineering and it's a relatively short uh development time frame. We're looking at first production from Goldfield in late 2028. So while we're developing these longerterm assets like KS, we are going to be getting more gold exposure in North America from Goldfield. Um when we put out the study last year and we used a gold price of 2500 and it had an NPV of 250 million and an IRRa of 30% at that metal price, obviously gold prices have zoomed well past that. Um, and at today's spot prices, Goldfield is an $800 million project, uh, a 70% IRR project, and one that's fairly simple. It's a it's a oxide heap leech, um, fairly low, uh, capital risk, and one that we think will be in production relatively soon. >> And Ryan, can you just clarify when you say it's going to be in production soon, uh, what year? >> Yeah, we're looking at late 2028. Um, so, so we're into, again, site establishment now and some of the early works. Um, it is not an overly complex uh project. Again, an an oxide heat leach um and we're quite confident we'll be in production by by late 2028. So, giving us uh far more gold exposure in our portfolio relatively soon. >> So, it's going to go into production at the same time Oxuit is coming off or coming to the end of its mine life. >> Yeah, I'd say Paul Paul commented earlier that we do have um some positivity around extending that oxuit mine life, especially with the residual leech and looking for other material on site. Um in a perfect world for us it actually complements Oxuit and stacks gold production on top of additional production um at our mine in Turkey. But if Oxuit does end um you know towards 2029 2030 this is a nice plug the gap until KS is ready uh increase in production for the company >> and Jimmy I think that leads into a broader question where let's say you look at Centa a year and a half ago. It wasn't 100% clear where the gold growth was going to come from. we had launched on the malibdum project and I think that that raised some questions in the market since they are committed to gold and copper and we now find ourselves 18 months later and we've got three significant uh projects on the go in that gold copper space which solidifies uh a real growth profile in gold and uh if you add up uh the throughput expansion Mount Milligan the the goldfield project and ks as we've described we see a path here to 500,000 ounces of gold equivalent a year plus in the next five six years. >> Let's discuss your Molly unit now which includes two mines and a processing facility. Maybe you can just provide a brief overview of this unit and what's your strategy for these assets going forward. >> I'll give a brief overview and then Ryan can talk about the um the economics and how we're looking at the business case. As you said, the business unit from Libna comprises the two minds in the roster. But I I'll say very quickly off the top here that the Indacaco mine in British Columbia though it has a very significant resource yet in the ground. We don't have any plans to advance that project right now. We will remain on care and maintenance. So the core of our maluminum business unit strategy revolves around the reopening the Thompson Creek mine where we are well advanced as well as the ramp up of capacity utilization at our roster in Pittsburgh. But Ryan, why don't you talk about the business case and some of the activities that have been taking place over the last year? Sure. Yeah. And the focus really is on the US in a very constructive market for malibdinum right now. Um, as Paul commented earlier, mibdinum prices have been appreciating and and they're they're currently, you know, higher than what we used in our economic studies. But really the the plan is to restart Thompson Creek. Uh, as Paul noted, it's a about a $400 million capital project. We're about 30% of the way into that. So we've sunk a good chunk of capital already and have that mine feed go to our processing facility Langworth in Pittsburgh. And so we're looking this as looking at this as a vertically integrated business. Um we ultimately sell the products out of laying off to to the steel industry mainly to the large US steel customers and it it's a really exciting business. It's not gold or copper but we see really strong cash flows ahead for this business. Um when we put out the study around our malibdinum business plans uh it was an MPV of 472 million at 8% um through this vertically integrated business proposition. But again, we're partway into the capital spend and metal prices for malibdinum are ticking up. So we see a pretty strong return from our investment in malibdinum. Uh first production from Thompson Creek is about mid 2027. So we're not that far off from turning this into a usage of cash for Centa into a cash generating business. And if you go back even at our study prices, we're looking at 100 million plus of cash flow year from the combined asset. So, you know, it it's not gold, it's not copper, but it's a commodity that we think has a bright future and and we're happy to take that to first cash flow for the company. >> And Ryan, we should touch on the the environment in the US right now. The the current administration's policies around metals and manufacturing and a focus on the steel industry have created a very conducive environment for this business proposition in malibdum. We have a in effect a a US-based story here mining malibdum, processing it in Pittsburgh and supplying the domestic US steel industry. And over the course of the last year, we've seen strong uh uptick in demand for malibdum products. And a quick reminder here, malibdum is a steel alloying metal that is used to make steel in effect stronger, tougher, more resilient. It's used extensively in energy applications everything from uh pipelines to um to nuclear but also heavily used in aerospace and defense uh in in ship building. So wherever you need stronger tougher steels you you see malibdum alloy steels and we have seen an uptick a strong uptick in demand on the part of the domestic US steel makers. And given that Centa Gold is a gold focused company, would you consider selling this division or spinning it out as a separate company? >> It's something that that is always on the table. We recognize that malibdum within the company is a bit of a strange fit for a a gold mining company, but we love the business case. As Ryan described, it has the potential to generate very significant cash flow. The malibdum market is strong. So, what'll happen is it'll be a decision between, well, do we really like the cash flow? Do we like what it does for the balance sheet? what it does for our shareholders versus what it may look like as a standalone unit, say through a spin or an IPO. So, the answer to your question, Jimmy, is we recognize that strategically it's a a bit of an odd fit given what our peer group looks like, but it's also a great business, relatively low risk. So, we'll make that decision as market conditions warrant as we get closer to production. >> Paul, I want to ask you about your production profile. Now you've talked about your organic growth pipeline of projects. Can you just speak to what Centa will look like as a producer in the medium to longer term? >> Well, our our immediate goal here is to grow gold production and with with we talked about the the overlap of Oxuit and Goldfield earlier. So we will have overlap production in 2029 at Oxuit and Goldfield. So that'll be the first big bump up in in our production profile. We're hoping to extend Oxuit as as Ryan mentioned, but with our PA here on KS, we we plan to be in production there in late 2031. So what you're seeing is a steady build in that gold in that gold base. So got Mount Milligan, a minor throughput expansion coming in three years. We've got gold field. We've got KS coming. So what centa is transitioning into say five years from now I think that's a good medium-term window to look at is if our plants come to fruition here on chems what we will have is two largecale open pit with a combined underground at KS uh production base of gold and copper in British Columbia supplemented by gold field. So the medium-term sees us growing strongly principally with uh chem and Mount Milligan operating in tandem and then as we discussed earlier both of those have the potential for multi-deades of production. >> I want to bring Ryan to the conversation now and discuss your balance sheet liquidity and also capital allocation. Can you just speak to your capital allocation strategy, Ryan? >> Sure. Yeah, I'll answer it in two parts. Uh you mentioned the balance sheet. One of the hallmarks of Cinta is is a very strong balance sheet. As Paul noted, over 500 million of cash. We have no debt. Um we have a $400 million revolving credit facility that's untouched. And so we do have a lot of internally available liquidity and we make very strong cash flows at both Mount Milligan and Oxuit right now. And in terms of capital allocation, we obviously want to allocate that capital to the highest return use. Um Paul has outlined our development plans for our our internal assets and and we see good strong returns and good irr on all of those projects. So KS Goldfield Thompson Creek and the Mount Milligan expansion and we are going to allocate our liquidity towards those assets. But even looking at those assets, looking at the capital sequencing, we're going to have excess liquidity just on our internal basis. And so we have been allocating that capital to shareholders. We do pay a pretty steady dividend about six years straight of quarterly dividends but we have been ramping up our share buybacks because given where we've been trading given our relative and absolute valuation we think that's a high return use of cash as well. Um I think our our goal in 2025 was about hund00 million of share buybacks which is a public number um and we ended up relatively close to that. So big strong buybacks for a company our size. That's about 5% of our shares outstanding. And we bought back about 10% of our outstanding shares over the last couple years. So the dual goal of this company is really to grow our internal assets, increase that gold and copper production profile as Paul talked about while reducing our share count at the same time to give investors more torque to that that future production profile into a rerate that we expect to come from Cintara. I think the other point I'll make is we are a bit of a unique company. We have so much in front of us in terms of development. It's all in North America or predominantly in North America which is great, but we're also a company that doesn't need financing to do it. We are going to fund this internally with our cash on hand and with cash flow from operations. We don't need to go to the equity markets and dilute shareholders to fund these projects. We don't need to do, you know, arduous financing streams or difficult debt deals. We have the financial capacity to build these assets, build these assets, excuse me, which makes them more real, right? And more credible that these will actually come online if you already have all the liquidity needed to do it. >> And I'm sorry, how much cash should you say you're sitting on? um you know over 500 million uh at the end of September which is the last public number it was 562 it'll end the year above 500 million as well and and so you know still sitting on a a very strong cash base while we have been really spending a lot on buybacks and while we have been investing heavily in Thompson Creek we've been able to keep our cash balance at a relatively high level while we're investing in our projects and returning capital to shareholders. >> And how do you put that cash to work? Yeah, I mean I think again while we have it uh we we we invest it, we make pretty good returns on it, but it is earmarked for for shareholders and for our projects. Um you know, when we look at at other opportunities, we think those two buckets give us the highest return on on our cash and and on our liquidity. And we're committed to to, you know, allocating the majority of our cash to those areas. And Jimmy, since we last spoke, we've also deployed some capital into investments in juniors, again to increase gold exposure, but also to potentially bring assets into the portfolio that makes sense for us. So, we we've got a half dozen or more 9.9% equity investments we've made. The two most notable ones are Liberty, which is advancing a project in Idaho, and then thesis, advancing a project north of Kass. And so the thought here is to look for equity investments in developers who have highquality projects where we believe there could be an industrial synergy with Centara's asset base down the road. I'm not saying we're going to take them over, but uh it provides that kind of optionality in the portfolio. So that's putting capital to work in investments with continued gold exposure in areas where we already operate. Paul, I want to ask you about valuation now because you are trading at a deep discount to many of your comps. And Ryan did mention that you've been active with the buyback because the stock is so cheap on a NEV basis, but maybe you can just speak to uh the valuation and look at it from a sum of parts point of view. >> This is what we believe is actually one of the most compelling features of Cintara. Our market cap today is 3.3 billion US, give or take it. The market's been very active lately. As Ryan mentioned, we have just over 500 million of cash in the bank. So on an enterprise value basis, $2.8 billion. The PFS we released on Mount Milligan yields a value that fully accounts for our enterprise value, 2.8 billion at prices, commodity prices well below spot. Well below spot. So from a very simplistic point of view, our valuation based on our share price, enterprise value of 2.8 billion, that's Mount Milligan. And that's an operating mine. It it does not have a lot of development risk. Many of the permits are in place. We're advancing the other ones. Relatively lowrisisk proposition. And then you take a spin through the rest of the portfolio. Our pea on KS shows a value of 1.1 billion at $3,000 gold and 450 copper. Then goldfield again pick your price but 500 million at prices below spot. UK in Turkey similar valuation five to six00 million of prices below spawn. So between chems goldfield and uh suit there's another $2 billion of value there and as Ryan mentioned the malibdum business unit with prices trading up on uh the commodity with capital being invested in in the asset. Um if you simply fast forward the DCF on the study they released you're looking at 7 8 900 million of value depending on the commodity price. So we believe on the basis of what I've just put together there that there's almost an equivalent amount of value sitting in in the other assets over over and above where Mount Milligan is which leads us to view ourselves as trading at 0.5 times which is a very very low multiple when you look at the pure group and again this is a commodity prices well well below spot we can fund all of our development I think Ryan explained that very well we can quite comfortably fund our projects, chem, goldfield, Thompson Creek out of existing liquidity. So there's no dilution coming on on on share issuance for for cash. So that's our fundamental value proposition, deep discount on asset valuation, some of the parts with a with a straightforward ability to fund our capital projects. And I think we we butress that conviction in valuation with a strong buyback that we've been running over the last year and a half. So that's our compelling value proposition is that we we think we trade at a deep discount to the sum of our parts of our our asset values and um I think we've we've seen some recognition of that as our shares have traded up but we believe that there's a lot of room yet for the share price to run just to get up to even let's say 7.8 on our valuation multiple. Well, Paul, this has been a great overview and as we wrap up, you've discussed a lot of detail on what you and your team will be working on in the coming months, but maybe you can just summarize for investors what they can expect in terms of news flow here in the first half of the year. >> Well, we of course we're going to be putting out our year-end results and um we will be advancing the the development of the projects at Thompson Creek and and Goldfield. So throughout the year, you will see milestone announcements on progress at the reopening of Thompson Creek. As we've mentioned, we're heading to first production there in about 18 months. We are going to be advancing site establishment works at Goldfield throughout the year. So what you're going to be seeing is incremental investment capital being put to work in those development projects. I mentioned that at Chems, we are moving into a PFS right now. We intend to release the results of that in the early part of 2027. And at UK suit as we mentioned we are working on a life of mine optimization study which is targeting production life extension principally through residual leeching but also potentially through new oxide or sulfide deposits and that study will be published at the end of 2026. So for all of our assets there's a there's quite a lot of advancement to take place over the next year. We'll be providing updates with each of our quarterly uh releases in the upcoming year here. Well, Paul and Ryan, that was a great overview and a great update, and I want to thank you both for spending time with us today and sharing the Centa Gold story. Jimmy, thank you for having us. It's always great to talk to you.
Centerra Gold Update | Paul Tomory, Ryan Snyder and Jimmy Connor
Summary
Bloor Street Capital Inc. was paid a fee for producing this event. Bloor Street Capital Inc. and its affiliates may or may not hold …Transcript
Paul and Ryan, thank you very much for joining us today. I want to provide a framework on where I want to take our discussion in the next few minutes. Paul, with you, I want to look at the overall operations at Centa Gold. And Ryan, with you, I would like to discuss the balance sheet and also capital allocation. So Paul, why don't we begin with you for those who are not familiar with Centa Gold? Can you provide a brief overview of the company and its assets? >> Yeah, thanks a lot, Jimmy. Great to be with you again here. Um we we operate principally in North America and we also have an operating mine in Turkey. Our two principal operating assets are gold focused. Our cornerstone is Mount Milligan in British Columbia. It's a long life copper gold asset in production where we have some expansion plans. And our other operating mine is a gold mine in Turkey, an oxide gold heat leach with several years of mine life and very high cash flow potential. We also have a very robust development pipeline. We just announced a pea on the chem asset which is in northern British Columbia north of Mount Milligan. It will our hope is that it becomes another cornerstone similar to Mount Milligan copper and gold with 15 years of mine life with lots of exploration potential. So what we're going to be doing there is shortly advancing to a a PFS. I'll I'll come back to the chem asset a little bit later. Also in the project portfolio, we are developing Goldfield, a gold oxide heat bleach project in Nevada that is now well advanced, fully fully approved. Uh most of the permits are in place and we're making good progress on the ground. And then lastly, we have our malibdum business unit which consists of the Thompson Creek project in Idaho, which is a mine reopening project combined with our Langaloth metallurgical roster in Pittsburgh. And the business plan here calls for reopening the Thompson Creek mine. We're well advanced on that project. We're about 18 months away from first production and then feeding the roster not only with uh direct feed from Idaho from Thompson Creek, but also supplementing it with third party feeds from from other mines to ramp up capacity utilization at that roster. So that's a quick tour through the portfolio. We're principally North America focused with assets in British Columbia, Idaho, and Nevada, but also with a very profitable mine in Turkey. And then the last point I'll touch on is we have a very robust balance sheet, over 500 million of cash and our entire project portfolio. We can quite comfortably fund it through existing liquidity reserves and we can get into more detail on that as the conversation evolves here. So that's a great overview and I want to examine your assets in more detail now so we can see the growth potential and also the value proposition and as you mentioned you just released a preliminary economic assessment on KS and I want to look at this in more detail just take us through the highlights and what does it mean for the future growth at Centa >> for sure it's a it's a really important asset for us it and our hope is that it becomes almost a twin to Mount Milligan where our cornerstone strategy is focused on copper and gold in British Columbia. ChemS is a past producer. It operated um profitably as a copper gold mine and it was put on care and maintenance. It has a very large remaining resource. And so the project contemplates a refurbishment of the process plant and the general infrastructure as well as the development of a new mining area located five or six kilometers away from the process plant. So we we've declared a resource here of 250 million tons of uh indicated and another 300 million tons of inferred material. A subset of that approximately 45 46% of that total resource will go into a mine plan here. And what we're targeting here is a 15-year mine life at roughly the same scale as Mount Milligan. 150 to 170,000 ounce a year of gold and uh in the range of 50 to 70 million pounds of copper annually. So in effect it becomes a mine very similar to Mount Milligan but most importantly it's unstreamed and uh Centaur will have direct exposure to both the gold and the copper revenue. So just a quick note on scope here we're contemplating about 800 million of capital investment and that'll be split roughly between upgrades to the existing infrastructure in the mill. So the mill needs to be brought up to modern standards. The camp needs to be refurbished. And then the second large category of capex is the development of the new mining area. As I mentioned, it's located several kilometers away from the mill. And we have to develop tunnel drives for conveyors to access that area which is located on the other side of our ridge. In addition, the mine plan will be both open pit and underground. So there will be some capital allocated to underground developments >> and Paul as you mentioned uh KS was a past producer. So one of the big advantages is that the infrastructure is already in place including a 300 km long power line but maybe you can just speak about the infrastructure in more detail and what it means on a capex point of view. >> Yeah that's right we we think that chem is a relatively lowrisisk project. Because I said much of the infrastructure is in place and some of the key elements of that infrastructure include that power line that you mentioned. It's over 300 km long. We own and operate it and in today's market the cost of rebuilding that power line would be well over a billion dollars. So we have it and it's it's in good condition. In fact, the cost to build chemists from the ground up would be well over $4 billion in the current market. And that's a huge advantage having a pass producer uh where the the tailings are in place. That's another uh major uh foot in the door in terms of reopening it. Also importantly though, many of the permits needed to reopen chemists are already in place from past uh a past project scope that Cinta had advanced a number of years ago. And lastly, we do have an agreement in place with a number of the First Nations in the area. Both the permit and and the uh the agreements with the First Nations will require some amendments because the scope of what we're proposing here is a little bit different than what had been proposed in the past. But as you had intimated, it provides a significant derisking that we have the infrastructure, we have a basis of permits and we have a framework for agreements with um local first nations. >> And what are the next steps at KS? >> Next step is we're moving immediately to a PFS. This will advance the engineering work, the understanding of the or body and we're targeting releasing that in the first half of 2027. >> So let's move on to Mount Meligan and this is your flagship project which is also located in the province of British Columbia. Copper gold mine a prefeasibility study was released last year. Can you just touch on the highlights of that study and what it means for the mine? Principally the prefeasibility study solidified the mine as having multi-deade of potential. Previously the reserve was 10 years until 2036 of production. That pfS extended the mine life to at least 2045. And I say at least because we have a lot of mineralization to the west and southwest that we will continue to drill and ultimately incorporate into the resource. And we we expect that the mine will have well more years beyond 2045. In fact, to illustrate the confidence we have in Mine Life Extension there, I'll note that the tailings dam that we are designing, engineering, and ultimately building here as part of this expansion will have capacity until 2070. Just to give you an idea of uh the extent of the mineralization as part of that project to extend the mine life, we're also increasing throughput capacity in the next couple years by about 10%. And uh as I mentioned the the major scope of works will be the construction of a new tailings dam seven eight nine years from now as the current dam reaches full capacity. So we're very excited about Mount Milligan. We have 20 years of mine life with line of sight to significant resource extensions beyond that. And again relatively low risk because it's an operating mine. Uh we've just received the the permits for some of the incremental expansions needed in the near term and we're to continue advanced permitting for the the ultimate 2045 mine life. >> And this is one of the things I love about these copper gold deposits is the long mine life. A typical gold mine might have a 8 to 10 year mine life, but as it stands right now, Mount Meligan will be producing to 2045. And as you mentioned, it could go well beyond that with exploration. and and that is really the centerpiece of our our corporate strategy focused on these two large copper gold pferies. Mount Milligan with a 20-y year reserve life chem with an initial 15-year pea life. Both of those mines have very significant potentials. So in effect, what Senta will become is a very large copper gold producer with very long mine life in British Columbia. So let's leave the country of Canada and move to the country of Turkey where your second mine is. It's a gold mine. It's called Oakut. The current mine life is to 2029. Do you see any potential to extend that? >> Yes. So just a quick recap. This is a an oxide heat bleach, relatively straightforward. Uh Turkey is a great place to operate. We've had u a great track record there over the last three years. We've generated over 600 million of free cash flow from the mine in the last three years. We've recently launched a project to look at production life extension. The current reserve mine life ends in 2029. However, we we now know that there's very significant potential for heap leech production extension because the grades in the heap are significantly higher than the resource model had initially predicted. And so we've kicked off this year a project to look at residual leeching which we expect could add two to four years of additional production. And we're also doing a comprehensive review of mineral inventory on the property looking for the potential for oxide mining extension and then also longer term down the road the potential for sulfide deposits. So currently the mine life ends in 2029 based on our reserve but we are ongoing with a project that looks at production life extension and we expect to uh provide results on that at the end of uh 2026. >> And Turkey has a very uh strong mining sector. Would you consider acquiring another mining asset there or another gold mine? >> That's a good question, Jimmy. I one of the things that uh defines Centa right now is an increasing focus on North America and I think certain investors really like that profile. We we're not close to further investment in Turkey. But right now, our priority for capital allocation in terms of developing new mines, new projects is really focused on North America as evidenced by our project portfolio, KMAS, Milligan expansion, Goldfield and Thompson Creek. But we are not close to the potential for continuity in Turkey if the right conditions present themselves. >> The Goldfield project in Nevada is another growth opportunity for Cintara. And Ryan, you're responsible for this. You completed a technical study on Goldfield which showed a very attractive economics. Can you just talk about the highlights of this project and why it's a good fit for Centara's portfolio? >> Yeah, sure, Jimmy. As Paul noted, you know, we have the two uh longerlife gold copper assets in BC and and in the Kames pea, we're looking at a late 2031 first production in Kamese. And so that's a bit more of a longer term play. Um but in the medium term, we're trying to get as much gold exposure as we can. And so in addition to Mount Milligan, we have good production out of Oxuit. And we we looked at Goldfield um restudied that project earlier last year, understood the resource a bit more and found ways to really augment the recoveries through a crushing strategy that are going to improve the recoveries at site and felt comfortable after doing a PFS moving forward with Goldfield that it's a really good project for Cintara. Uh it's a $252 million capital project. Uh we've already started that. We're into site establishment and some of the detailed engineering and it's a relatively short uh development time frame. We're looking at first production from Goldfield in late 2028. So while we're developing these longerterm assets like KS, we are going to be getting more gold exposure in North America from Goldfield. Um when we put out the study last year and we used a gold price of 2500 and it had an NPV of 250 million and an IRRa of 30% at that metal price, obviously gold prices have zoomed well past that. Um, and at today's spot prices, Goldfield is an $800 million project, uh, a 70% IRR project, and one that's fairly simple. It's a it's a oxide heap leech, um, fairly low, uh, capital risk, and one that we think will be in production relatively soon. >> And Ryan, can you just clarify when you say it's going to be in production soon, uh, what year? >> Yeah, we're looking at late 2028. Um, so, so we're into, again, site establishment now and some of the early works. Um, it is not an overly complex uh project. Again, an an oxide heat leach um and we're quite confident we'll be in production by by late 2028. So, giving us uh far more gold exposure in our portfolio relatively soon. >> So, it's going to go into production at the same time Oxuit is coming off or coming to the end of its mine life. >> Yeah, I'd say Paul Paul commented earlier that we do have um some positivity around extending that oxuit mine life, especially with the residual leech and looking for other material on site. Um in a perfect world for us it actually complements Oxuit and stacks gold production on top of additional production um at our mine in Turkey. But if Oxuit does end um you know towards 2029 2030 this is a nice plug the gap until KS is ready uh increase in production for the company >> and Jimmy I think that leads into a broader question where let's say you look at Centa a year and a half ago. It wasn't 100% clear where the gold growth was going to come from. we had launched on the malibdum project and I think that that raised some questions in the market since they are committed to gold and copper and we now find ourselves 18 months later and we've got three significant uh projects on the go in that gold copper space which solidifies uh a real growth profile in gold and uh if you add up uh the throughput expansion Mount Milligan the the goldfield project and ks as we've described we see a path here to 500,000 ounces of gold equivalent a year plus in the next five six years. >> Let's discuss your Molly unit now which includes two mines and a processing facility. Maybe you can just provide a brief overview of this unit and what's your strategy for these assets going forward. >> I'll give a brief overview and then Ryan can talk about the um the economics and how we're looking at the business case. As you said, the business unit from Libna comprises the two minds in the roster. But I I'll say very quickly off the top here that the Indacaco mine in British Columbia though it has a very significant resource yet in the ground. We don't have any plans to advance that project right now. We will remain on care and maintenance. So the core of our maluminum business unit strategy revolves around the reopening the Thompson Creek mine where we are well advanced as well as the ramp up of capacity utilization at our roster in Pittsburgh. But Ryan, why don't you talk about the business case and some of the activities that have been taking place over the last year? Sure. Yeah. And the focus really is on the US in a very constructive market for malibdinum right now. Um, as Paul commented earlier, mibdinum prices have been appreciating and and they're they're currently, you know, higher than what we used in our economic studies. But really the the plan is to restart Thompson Creek. Uh, as Paul noted, it's a about a $400 million capital project. We're about 30% of the way into that. So we've sunk a good chunk of capital already and have that mine feed go to our processing facility Langworth in Pittsburgh. And so we're looking this as looking at this as a vertically integrated business. Um we ultimately sell the products out of laying off to to the steel industry mainly to the large US steel customers and it it's a really exciting business. It's not gold or copper but we see really strong cash flows ahead for this business. Um when we put out the study around our malibdinum business plans uh it was an MPV of 472 million at 8% um through this vertically integrated business proposition. But again, we're partway into the capital spend and metal prices for malibdinum are ticking up. So we see a pretty strong return from our investment in malibdinum. Uh first production from Thompson Creek is about mid 2027. So we're not that far off from turning this into a usage of cash for Centa into a cash generating business. And if you go back even at our study prices, we're looking at 100 million plus of cash flow year from the combined asset. So, you know, it it's not gold, it's not copper, but it's a commodity that we think has a bright future and and we're happy to take that to first cash flow for the company. >> And Ryan, we should touch on the the environment in the US right now. The the current administration's policies around metals and manufacturing and a focus on the steel industry have created a very conducive environment for this business proposition in malibdum. We have a in effect a a US-based story here mining malibdum, processing it in Pittsburgh and supplying the domestic US steel industry. And over the course of the last year, we've seen strong uh uptick in demand for malibdum products. And a quick reminder here, malibdum is a steel alloying metal that is used to make steel in effect stronger, tougher, more resilient. It's used extensively in energy applications everything from uh pipelines to um to nuclear but also heavily used in aerospace and defense uh in in ship building. So wherever you need stronger tougher steels you you see malibdum alloy steels and we have seen an uptick a strong uptick in demand on the part of the domestic US steel makers. And given that Centa Gold is a gold focused company, would you consider selling this division or spinning it out as a separate company? >> It's something that that is always on the table. We recognize that malibdum within the company is a bit of a strange fit for a a gold mining company, but we love the business case. As Ryan described, it has the potential to generate very significant cash flow. The malibdum market is strong. So, what'll happen is it'll be a decision between, well, do we really like the cash flow? Do we like what it does for the balance sheet? what it does for our shareholders versus what it may look like as a standalone unit, say through a spin or an IPO. So, the answer to your question, Jimmy, is we recognize that strategically it's a a bit of an odd fit given what our peer group looks like, but it's also a great business, relatively low risk. So, we'll make that decision as market conditions warrant as we get closer to production. >> Paul, I want to ask you about your production profile. Now you've talked about your organic growth pipeline of projects. Can you just speak to what Centa will look like as a producer in the medium to longer term? >> Well, our our immediate goal here is to grow gold production and with with we talked about the the overlap of Oxuit and Goldfield earlier. So we will have overlap production in 2029 at Oxuit and Goldfield. So that'll be the first big bump up in in our production profile. We're hoping to extend Oxuit as as Ryan mentioned, but with our PA here on KS, we we plan to be in production there in late 2031. So what you're seeing is a steady build in that gold in that gold base. So got Mount Milligan, a minor throughput expansion coming in three years. We've got gold field. We've got KS coming. So what centa is transitioning into say five years from now I think that's a good medium-term window to look at is if our plants come to fruition here on chems what we will have is two largecale open pit with a combined underground at KS uh production base of gold and copper in British Columbia supplemented by gold field. So the medium-term sees us growing strongly principally with uh chem and Mount Milligan operating in tandem and then as we discussed earlier both of those have the potential for multi-deades of production. >> I want to bring Ryan to the conversation now and discuss your balance sheet liquidity and also capital allocation. Can you just speak to your capital allocation strategy, Ryan? >> Sure. Yeah, I'll answer it in two parts. Uh you mentioned the balance sheet. One of the hallmarks of Cinta is is a very strong balance sheet. As Paul noted, over 500 million of cash. We have no debt. Um we have a $400 million revolving credit facility that's untouched. And so we do have a lot of internally available liquidity and we make very strong cash flows at both Mount Milligan and Oxuit right now. And in terms of capital allocation, we obviously want to allocate that capital to the highest return use. Um Paul has outlined our development plans for our our internal assets and and we see good strong returns and good irr on all of those projects. So KS Goldfield Thompson Creek and the Mount Milligan expansion and we are going to allocate our liquidity towards those assets. But even looking at those assets, looking at the capital sequencing, we're going to have excess liquidity just on our internal basis. And so we have been allocating that capital to shareholders. We do pay a pretty steady dividend about six years straight of quarterly dividends but we have been ramping up our share buybacks because given where we've been trading given our relative and absolute valuation we think that's a high return use of cash as well. Um I think our our goal in 2025 was about hund00 million of share buybacks which is a public number um and we ended up relatively close to that. So big strong buybacks for a company our size. That's about 5% of our shares outstanding. And we bought back about 10% of our outstanding shares over the last couple years. So the dual goal of this company is really to grow our internal assets, increase that gold and copper production profile as Paul talked about while reducing our share count at the same time to give investors more torque to that that future production profile into a rerate that we expect to come from Cintara. I think the other point I'll make is we are a bit of a unique company. We have so much in front of us in terms of development. It's all in North America or predominantly in North America which is great, but we're also a company that doesn't need financing to do it. We are going to fund this internally with our cash on hand and with cash flow from operations. We don't need to go to the equity markets and dilute shareholders to fund these projects. We don't need to do, you know, arduous financing streams or difficult debt deals. We have the financial capacity to build these assets, build these assets, excuse me, which makes them more real, right? And more credible that these will actually come online if you already have all the liquidity needed to do it. >> And I'm sorry, how much cash should you say you're sitting on? um you know over 500 million uh at the end of September which is the last public number it was 562 it'll end the year above 500 million as well and and so you know still sitting on a a very strong cash base while we have been really spending a lot on buybacks and while we have been investing heavily in Thompson Creek we've been able to keep our cash balance at a relatively high level while we're investing in our projects and returning capital to shareholders. >> And how do you put that cash to work? Yeah, I mean I think again while we have it uh we we we invest it, we make pretty good returns on it, but it is earmarked for for shareholders and for our projects. Um you know, when we look at at other opportunities, we think those two buckets give us the highest return on on our cash and and on our liquidity. And we're committed to to, you know, allocating the majority of our cash to those areas. And Jimmy, since we last spoke, we've also deployed some capital into investments in juniors, again to increase gold exposure, but also to potentially bring assets into the portfolio that makes sense for us. So, we we've got a half dozen or more 9.9% equity investments we've made. The two most notable ones are Liberty, which is advancing a project in Idaho, and then thesis, advancing a project north of Kass. And so the thought here is to look for equity investments in developers who have highquality projects where we believe there could be an industrial synergy with Centara's asset base down the road. I'm not saying we're going to take them over, but uh it provides that kind of optionality in the portfolio. So that's putting capital to work in investments with continued gold exposure in areas where we already operate. Paul, I want to ask you about valuation now because you are trading at a deep discount to many of your comps. And Ryan did mention that you've been active with the buyback because the stock is so cheap on a NEV basis, but maybe you can just speak to uh the valuation and look at it from a sum of parts point of view. >> This is what we believe is actually one of the most compelling features of Cintara. Our market cap today is 3.3 billion US, give or take it. The market's been very active lately. As Ryan mentioned, we have just over 500 million of cash in the bank. So on an enterprise value basis, $2.8 billion. The PFS we released on Mount Milligan yields a value that fully accounts for our enterprise value, 2.8 billion at prices, commodity prices well below spot. Well below spot. So from a very simplistic point of view, our valuation based on our share price, enterprise value of 2.8 billion, that's Mount Milligan. And that's an operating mine. It it does not have a lot of development risk. Many of the permits are in place. We're advancing the other ones. Relatively lowrisisk proposition. And then you take a spin through the rest of the portfolio. Our pea on KS shows a value of 1.1 billion at $3,000 gold and 450 copper. Then goldfield again pick your price but 500 million at prices below spot. UK in Turkey similar valuation five to six00 million of prices below spawn. So between chems goldfield and uh suit there's another $2 billion of value there and as Ryan mentioned the malibdum business unit with prices trading up on uh the commodity with capital being invested in in the asset. Um if you simply fast forward the DCF on the study they released you're looking at 7 8 900 million of value depending on the commodity price. So we believe on the basis of what I've just put together there that there's almost an equivalent amount of value sitting in in the other assets over over and above where Mount Milligan is which leads us to view ourselves as trading at 0.5 times which is a very very low multiple when you look at the pure group and again this is a commodity prices well well below spot we can fund all of our development I think Ryan explained that very well we can quite comfortably fund our projects, chem, goldfield, Thompson Creek out of existing liquidity. So there's no dilution coming on on on share issuance for for cash. So that's our fundamental value proposition, deep discount on asset valuation, some of the parts with a with a straightforward ability to fund our capital projects. And I think we we butress that conviction in valuation with a strong buyback that we've been running over the last year and a half. So that's our compelling value proposition is that we we think we trade at a deep discount to the sum of our parts of our our asset values and um I think we've we've seen some recognition of that as our shares have traded up but we believe that there's a lot of room yet for the share price to run just to get up to even let's say 7.8 on our valuation multiple. Well, Paul, this has been a great overview and as we wrap up, you've discussed a lot of detail on what you and your team will be working on in the coming months, but maybe you can just summarize for investors what they can expect in terms of news flow here in the first half of the year. >> Well, we of course we're going to be putting out our year-end results and um we will be advancing the the development of the projects at Thompson Creek and and Goldfield. So throughout the year, you will see milestone announcements on progress at the reopening of Thompson Creek. As we've mentioned, we're heading to first production there in about 18 months. We are going to be advancing site establishment works at Goldfield throughout the year. So what you're going to be seeing is incremental investment capital being put to work in those development projects. I mentioned that at Chems, we are moving into a PFS right now. We intend to release the results of that in the early part of 2027. And at UK suit as we mentioned we are working on a life of mine optimization study which is targeting production life extension principally through residual leeching but also potentially through new oxide or sulfide deposits and that study will be published at the end of 2026. So for all of our assets there's a there's quite a lot of advancement to take place over the next year. We'll be providing updates with each of our quarterly uh releases in the upcoming year here. Well, Paul and Ryan, that was a great overview and a great update, and I want to thank you both for spending time with us today and sharing the Centa Gold story. Jimmy, thank you for having us. It's always great to talk to you.