Centerra Gold : Q1 2024 FS

Condensed Consolidated Interim Financial Statements

For the Three months ended March 31, 2024 and 2023

Centerra Gold Inc.

Condensed Consolidated Interim Statements of Financial Position (Unaudited)

			March 31,		December 31,
			2024		2023
(Expressed in thousands of United States dollars)
Assets	Notes
Current assets
Cash and cash equivalents	$	647,606	$	612,941
Amounts receivable			70,925		70,763
Inventories			250,462		257,302
Other current assets	4		22,369		25,021
			991,362		966,027
Property, plant and equipment	5		1,225,201		1,237,506
Deferred income tax assets	11		56,400		57,900
Other non-current assets	6		54,010		19,333
			1,335,611		1,314,739
Total assets		$	2,326,973	$	2,280,766
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities	$	205,088	$	201,707
Income tax payable			73,722		40,952
Other current liabilities	4		28,890		54,778
			307,700		297,437
Deferred income tax liabilities	11		5,069		16,809
Provision for reclamation	8		259,334		272,566
Other non-current liabilities	6		36,884		19,712
			301,287		309,087
Shareholders' equity
Share capital	12		859,387		861,536
Contributed surplus			31,670		33,869
Accumulated other comprehensive income			217		7,451
Retained earnings			826,712		771,386
			1,717,986		1,674,242
Total liabilities and shareholders' equity		$	2,326,973	$	2,280,766

Commitments and contingencies (note 14)

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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Centerra Gold Inc.

Condensed Consolidated Interim Statements of Earnings (Loss) and Comprehensive Income (Loss) (Unaudited)

		Three months ended March 31,
(Expressed in thousands of United States dollars)			2024		2023
(except per share amounts)	Notes
Revenue	7	$	305,879	$	226,529
Cost of sales
Production costs			173,845		204,293
Depreciation, depletion and amortization			33,334		18,508
Earnings from mine operations
		98,700		3,728
Exploration and evaluation costs			14,957		17,910
Corporate administration			9,978		14,792
Care and maintenance expenses			5,892		7,834
Reclamation (recovery) expense	8		(25,002)		15,566
Other operating expenses	9		9,193		12,890
Earnings (loss) from operations
		83,682		(65,264)
Other non-operating income	10		(15,970)		(3,180)
Finance costs			3,361		3,368
Earnings (loss) before income tax	11		96,291		(65,452)
Income tax expense		29,861		7,998
Net earnings (loss)			66,430		(73,450)
Other Comprehensive Loss
Items that may be subsequently reclassified to earnings:	15
Changes in fair value of hedge derivative instruments		(7,234)		(4,286)
Other comprehensive loss			(7,234)		(4,286)
Total comprehensive income (loss)		$	59,196	$	(77,736)
Earnings (Loss) per share:	12
Basic	$	0.31	$	(0.34)
Diluted	12	$	0.30	$	(0.34)
Cash dividends declared per common share (C$)		$	0.07	$	0.07

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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Centerra Gold Inc.

Condensed Consolidated Interim Statements of Cash Flows (Unaudited)

		Three months ended March 31,
			2024		2023
(Expressed in thousands of United States dollars)
Operating activities	Notes
Net earnings (loss)		$	66,430	$	(73,450)
Adjustments:
Depreciation, depletion and amortization			34,732		20,435
Reclamation (recovery) expense	8		(25,002)		15,566
Share-based compensation expense			1,155		3,121
Finance costs			3,361		3,368
Income tax expense	11		29,861		7,998
Unrealized fair value loss on financial asset related to the Additional
Royal Gold Agreement	15a		1,500		-
Unrealized foreign exchange (gain) loss			(9,780)		748
Other			2,634		(680)
Cash provided by operating activities prior to changes in working capital		104,891		(22,894)
Income taxes paid			(394)		(1,130)
Other changes in working capital	13		(5,068)		(75,762)
Cash provided by (used in) operating activities			99,429		(99,786)
Investing activities
Property, plant and equipment additions			(18,212)		(6,102)
Increase in restricted cash			-		(3,424)
Proceeds from disposition of property, plant, and equipment			-		1,472
Cash settlement related to the Additional Royal Gold Agreement	15a		(24,500)		-
Cash used in investing activities			(42,712)		(8,054)
Financing activities
Dividends paid	12		(11,104)		(11,150)
Payment of borrowing and financing costs			(539)		(580)
Repayment of lease obligations			(1,859)		(1,542)
Proceeds from common shares issued			1,406		1,264
Payment for common shares repurchased	12		(9,956)		-
Cash used in financing activities			(22,052)		(12,008)
Increase (decrease) in cash and cash equivalents during the period			34,665		(119,848)
Cash and cash equivalents at beginning of the period			612,941		531,916
Cash and cash equivalents at end of the period		$	647,606	$	412,068

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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Centerra Gold Inc.

Condensed Consolidated Interim Statements of Shareholders' Equity (Unaudited)

(Expressed in thousands of United States dollars, except share information)

	Number of						Accumulated
		Share	Contributed		Other	Retained
	Common		Comprehensive	Total
	Shares		Capital		Surplus	Income (Loss)	Earnings
Balance at January 1, 2024	215,497,133	$	861,536	$	33,869	$	7,451	$	771,386	$1,674,242
Net earnings	-		-		-		-		66,430	66,430
Other comprehensive loss	-		-		-		(7,234)		-	(7,234)
Transactions with shareholders:
Repurchase of shares - Normal
Course Issuer Bid ("NCIB")	(1,783,800)		(9,956)		-		-		-	(9,956)
(note 12)
Related to the effect of share	-		3,426		-		-		-	3,426
repurchase liability (note 12)
Share-based compensation expense	-		-		727		-		-	727
Issued on exercise of stock options	237,773		1,747		(539)		-		-	1,208
Issued under the employee share	39,262		243		-		-		-	243
purchase plan
Issued on redemption of restricted	371,035		2,391		(2,387)		-		-	4
share units
Dividends declared and paid	-		-		-		-		(11,104)	(11,104)
(C$0.07 per share)
Balance at March 31, 2024	214,361,403	$	859,387	$	31,670	$	217	$	826,712	$1,717,986
Balance at January 1, 2023	218,428,681	$	886,479	$	29,564	$	(3,323)	$	897,571	$1,810,291
Net loss	-		-		-		-		(73,450)	(73,450)
Other comprehensive loss	-		-		-		(4,286)		-	(4,286)
Transactions with shareholders:
Share-based compensation expense	-		-		1,174		-		-	1,174
Issued on exercise of stock options	239,429		1,570		(473)		-		-	1,097
Issued under the employee share
purchase plan	37,512		203		-		-		-	203
Issued on redemption of restricted
share units	31,391		253		(182)		-		-	71
Dividends declared and paid
(C$0.07 per share)	-		-		-		-		(11,150)	(11,150)
Balance at March 31, 2023	218,737,013	$	888,505	$	30,083	$	(7,609)	$	812,971	$1,723,950

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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Centerra Gold Inc.

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

March 31, 2024

(Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

1. Nature of operations

Centerra Gold Inc. ("Centerra" or the "Company") was incorporated under the Canada Business Corporations Act on November 7, 2002. Centerra's common shares are listed on the Toronto Stock Exchange under the symbol "CG" and on the New York Stock Exchange under the symbol "CGAU". The Company is domiciled in Canada and its registered office is located at 1 University Avenue, Suite 1800, Toronto, Ontario, M5J 2P1. The Company is primarily focused on operating, developing, exploring and acquiring gold and copper properties in North America, Türkiye, and other markets worldwide.

2. Basis of presentation

These unaudited condensed consolidated interim financial statements ("interim financial statements") of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards ("IFRS"), International Accounting Standard 34, Interim Financial Reporting ("IAS 34"), as issued by the International Accounting Standards Board ("IASB"). These interim financial statements do not contain all of the annual disclosures required by IFRS, and should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2023.

These financial statements were authorized for issuance by the Board of Directors of the Company on May 13, 2024.

3. Summary of material accounting policies, critical accounting estimates and judgements

These interim financial statements have been prepared using material accounting policies and critical accounting estimates and judgments consistent with those used in the Company's audited consolidated financial statements as at and for the year ended December 31, 2023, except for the ones as listed below:

Critical accounting estimates and judgements

i. Additional Royal Gold Agreement

On February 13, 2024, the Company and its subsidiary Thompson Creek Metals Company Inc. ("TCM") entered into the Additional Royal Gold Agreement relating to the Mount Milligan Mine (refer to note 15a). Significant judgement was required to determine accounting for the contract, including the conclusion that it is a modification of a contract with a customer, under IFRS 15, Revenue recognition from contracts with customers, whereby the Company received the consideration in the form of a financial asset. Significant judgement was also required to determine whether all the cash flows in the Additional Royal Gold Agreement should be accounted for a single financial asset under IFRS 9, Financial Instruments. In addition, significant judgement was required to determine the basis for the initial valuation of the financial asset, including, among other things, Mount Milligan Mine's life of mine viewed from the perspective of the specific market participant deemed most relevant for this transaction.

Measurement of the financial asset includes various material assumptions that are subject to significant estimation. Actual results may differ from those amounts estimated. A change in any, or a combination of, the key assumptions used to determine the measurement of the financial asset, could have a material impact on the fair value of the financial asset. Refer to note 15a for key assumptions and estimation used in determining the fair value of the financial asset.

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Centerra Gold Inc.

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

March 31, 2024

(Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

New standards and amendments issued but not yet effective or adopted are described below:

IAS 1, Presentation of Financial Statements

In January 2020, the IASB issued an amendment to IAS 1, Presentation of Financial Statements, to clarify one of the requirements under the standard for classifying a liability as non-current in nature. The amendment includes:

• Specifying that an entity's right to defer settlement must exist at the end of the reporting period;
• Clarifying that classification is unaffected by management's intentions or expectations about whether the entity will exercise its right to defer settlement;
• Clarifying how lending conditions affect classification; and
• Clarifying if the settlement of a liability refers to the transfer of cash, equity instruments, other assets, or services.

The Company performed it's assessment on the amendment on its financial statements prior to the effective date of January 1, 2024. There is no material impact on the financial statements from the implementation of this amendment.

IFRS 18, Presentation and Disclosure in Financial Statements

In April 2024, the IASB has issued IFRS 18, the new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:

• the structure of the statement of profit or loss;
• required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements (that is, management-defined performance measures);
• enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.

IFRS 18 will replace IAS 1 while many of the other existing principles in IAS 1 are retained, with limited changes. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its 'operating profit or loss'.

IFRS 18 will apply for reporting periods beginning on or after January 1, 2027 and also applies to comparative information. The Company will perform an assessment of the impact of this new standard on its financial statements prior to the effective date of January 1, 2027.

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Centerra Gold Inc.

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

March 31, 2024

(Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

4. Other current assets and liabilities

		March 31,	December 31,
		2024		2023
Other current assets
Current portion of derivative assets(1) (note 15b)	$	5,018	$	10,304
Prepaid insurance expenses		4,621		5,999
Deposits for consumable supplies		6,237		3,629
Marketable securities		3,210		2,834
Prepaid assets		2,562		560
Asset held-for-sale		-		1,510
Other		721		185
Total other current assets	$	22,369	$	25,021
Other current liabilities
Current portion of lease obligations	$	6,022	$	6,106
Current portion of derivative liabilities(1) (note 15b)		3,810		2,965
Current portion of provision for reclamation (note 8)		14,400		28,087
Share repurchase liability (note 12)		4,658		8,084
Deferred revenue (2)		-		9,536
Total other current liabilities	$	28,890	$	54,778

1. Relates to the gold, diesel, foreign exchange, and copper hedging contracts.
2. Relates to an advanced payment received on the gold and copper concentrate for which control was transferred in January 2024.

5. Property, plant and equipment

The following is a summary of the carrying value of property, plant and equipment ("PP&E"):

		Buildings,		Mineral	Capitalized	Construction
		Plant and			Stripping		in		Total
		Equipment	Properties(1)		Costs		Progress
Net book value
Balance January 1, 2023	$	732,848	$	494,571	$	14,438	$	30,935	$	1,272,792
Balance January 1, 2024	$	692,592	$	456,068	$	35,093	$	53,753	$	1,237,506
Balance March 31, 2024	$	678,123	$	449,742	$	43,173	$	54,163	$	1,225,201

1. Includes exploration and evaluation assets of $273.5 million related to the Goldfield Project and the Kemess Project.

During the three months ended March 31, 2024, $15.3 million of additions were capitalized to PP&E. No PP&E was disposed of during the period.

During the year ended December 31, 2023, $121.7 million of additions were capitalized to PP&E, including lease arrangements with right-of-use asset additions of $16.5 million. During the year ended December 31, 2023, PP&E with a carrying value of $6.3 million was disposed of.

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Centerra Gold Inc.

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

March 31, 2024

(Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

6. Other non-current assets and liabilities

		March 31,	December 31,
		2024		2023
Other non-current assets
VAT receivable(1)	$	6,479	$	8,688
Non-current derivative assets(2)		1,392		5,332
Non-current supplies inventory		1,732		1,732
Non-current financial asset(3)		42,200		-
Other		2,207		3,581
Total other non-current assets	$	54,010	$	19,333
Other non-current liabilities
Non-current portion of lease obligations	$	16,113	$	18,102
Non-current deferred revenue(3)		19,200		-
Post-retirement benefits		1,332		1,244
Non-current derivative liabilities(2)		239		366
Total other non-current liabilities	$	36,884	$	19,712

1. Relates to the Öksüt Mine.
2. Relates to the diesel, foreign exchange and copper hedging contracts (note 15b).
3. Relates to the Additional Royal Gold Agreement (note 15a).

7. Revenue

Total revenue consists of the following:

Three months ended March 31,

		2024		2023
Gold revenue	$	190,940	$	53,976
Copper revenue		48,777		49,435
Molybdenum revenue		60,235		113,504
Other by-product revenue(1)		4,807		4,328
Revenue from contracts with customers	$	304,759	$	221,243
Provisional pricing adjustment on concentrate sales(2)		4,775		7,598
Metal content adjustments on concentrate sales		(3,655)		(2,312)
Total revenue	$	305,879	$	226,529

1. Includes silver, rhenium, toll and sulfuric acid sales.
2. Includes mark-to-market adjustment related to 12.5 million pounds of copper, 37,631 ounces of gold, and 214,819 pounds of
   molybdenum (March 31, 2023 - 17.7 million pounds of copper, 24,952 ounces of gold, and 104,076 pounds of molybdenum) in the gold and copper concentrate and molybdenum product shipments subject to final pricing as at the period-end.

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Centerra Gold Inc.

Notes to the Condensed Consolidated Interim Financial Statements (Unaudited)

March 31, 2024

(Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

8. Reclamation

1. Reclamation provision

The following table reconciles the beginning and ending carrying amounts of the Company's provision for reclamation.

March 31, 2024 December 31, 2023

Non-operating sites (1)
Balance, beginning of year	$	218,330	$	175,121
Changes in cost estimates		(9,117)		32,956
Changes in discount rate		(16,415)		1,407
Accretion		1,857		6,554
Liabilities settled		-		(222)
Foreign exchange revaluation		(1,887)		2,514
Balance, end of period	$	192,768	$	218,330
Operating sites (1)
Balance, beginning of year	$	82,323	$	63,688
Changes in cost estimates		1,120		14,664
Changes in discount rate		(2,323)		756
Accretion		714		2,413
Foreign exchange revaluation		(868)		802
Balance, end of period	$	80,966	$	82,323
Current portion of reclamation provision (2)		14,400		28,087
Non-current portion of reclamation provision		259,334		272,566
Total provision for reclamation	$	273,734	$	300,653

1. Non-operatingsites include the Endako Mine, Thompson Creek Mine, Kemess project and Goldfield project. Operating sites include the Mount Milligan Mine and Öksüt Mine.
2. Relates primarily to the Endako Mine.

For the three months ended March 31, 2024, the nominal risk-free interest rates used in discounting the reclamation provision were in the range of 3.42% to 4.20% (2023 - 3.09% to 3.88%) at operating sites and in the range of 3.34% to 4.34% (2023 - 3.02% to 4.03%) at non-operating sites.

b. Reclamation (recovery) expense

Reclamation recovery recognized in the condensed consolidated interim statements of earnings (loss) and comprehensive income (loss) for the three months ended March 31, 2024 was $25.0 million (expense of $15.6 million for the period ended March 31, 2023). The (recovery) expense was primarily attributable to the following:

		March 31, 2024		March 31, 2023
Changes in cost estimates	$	(9,619)	$	1,100
Changes in discount rate		(16,391)		14,454
Other		1,008		12
Total reclamation (recovery) expense	$	(25,002)	$	15,566

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