OMAS Öksüt Gold Project Visit – March 2016
Site Visit Itinerary 09:00 – 12:00 Project Review Presentations: Project Office - General – Mike Conference Room - Safety and Induction - Tarkan - Project – Emre - Operations – Alper. Y - CR and HR – Alper. S - Finance – John - Geology and Core - Mustafa 12:00 – 13:00 Lunch – Zile restaurant Alper Sezener 13:00 – 17:30 Site Visit: - Zile Temporary Access - Yusuf Construction Manager - Keltepe Pit - Alper. Y, Mustafa - Upper Develi Road Access - Yusuf, Emre and HLP – Weather Permitting - Water Wells Epce Village - Yusuf, Emre 17:30 – 18:30 Travel to Kayseri Ommer Hotel Mıke, Alper, John Shahla Hotel Reservations 3+3 18:30 Drop Adam Melnyk at Aiport Mike No hotel reservation Flight TK at19:45 to Istanbul 18:30 – 19:00 Freshen Up at Hotel 19:00 – 21:30 Dinner Mike, John, Alper Friday 18 th March 2016 06:45 Leave hotel for Airport TK 2011 Flight TK 2011 departure 08:40 Mike / Alper
OMAS Organization Chart Michael Fischer General Manager Alper Sezener John Suter Tarkan Yazıcı Alper Yılmaz Emre Kaytan Director Director HSSE&Training Mine Operations Project Manager External Affairs, HR Manager Manager Finance and Admin & Sustainability Occupational External Affairs Mine Operation Health&Safety Finance Sustainability Mine Planning Project Management (Project and Accounting Land and Permitting Mine Geology Design&Engineering Operation) Procurement Community Relations Process Construction OHS-Training Supply Chain Legal Compliance Maintenance Commisisioning Environment IT Human Resources Metallurgy Emergency Response Admin Communication Site HR and Admin Security • As of 1st of March 2016, total 39 employees are in place. • Key positions are hired for next step. • Local employment strategy will be implemented for recruitment process as part of existing manpower planning.
Feasibility Study Overview March 2016
5 Site Layout – Large Scale March 2016
Öksüt Mineral Reserves Proven Probable Total Proven & Probable Contained Contained Contained Tonnes Grade Tonnes Grade Tonnes Grade Zone Gold Gold Gold (kt) (kt) (kt) (g/ t) (g/ t) (g/ t) (koz) (koz) (koz) Keltepe --- --- --- 22,821 1.4 1,036 22,821 1.4 1,036 --- --- --- 3,316 1.2 125 3,316 1.2 125 Güneytepe Total --- --- --- 26,137 1.4 1,162 26,137 1.4 1,162 6 March 2016
Öksüt Mineral Resources (Exclusive of Reserves) Classification Unit Keltepe Güneytepe Total kt 2,024 76 2,100 Measured g/t 0.7 0.5 0.7 koz 44 1 46 kt 4,450 248 4,698 Indicated g/t 0.7 0.7 0.7 koz 106 5 111 kt 6,474 324 6,798 Measured g/ t 0.7 0.6 0.7 I ndicated koz 150 7 157 kt 1,705 675 2,380 Inferred g/t 0.8 1.0 0.8 koz 44 21 64 kt 8,179 1,000 9,179 Measured I ndicated g/ t 0.7 0.9 0.7 I nferred koz 194 28 221 Note: Resources clipped using a Whittle shell at US$1,450/oz. 7 March 2016
Production Schedule ● Construction starts in June 2016 ● Q3 2017 first gold production ● Due to the fact that Keltepe cutbacks 1 and 2 are significantly higher grade and lower strip than the final Keltepe cutback, the strip ratio increases significantly and the gold production drops as we transition to that final cutback – From 2017 – 2020 average gold production is 155koz/yr – From 2021 – 2023 average gold production is 89koz/yr ● Crushing ceases in 2023 but residual gold production from the pad continues into 2024 8 March 2016
Annual Gold Production and Mine Schedule Gold Production 200,000 150,000 100,000 50,000 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 Mine Schedule 14,000,000 5.0 12,000,000 Strip Ratio (w:o) 4.0 10,000,000 Tonnes 3.0 8,000,000 6,000,000 2.0 4,000,000 1.0 2,000,000 - 0.0 2016 2017 2018 2019 2020 2021 2022 2023 Total Ore Total Waste Strip Ratio 9 March 2016
Fresh Water Supply ● Requirement: 35 l/s, will reduce after Year 2 ● Main pumping station at P7 ● Property containing the wells has been purchased, and permitted. 10 March 2016
Electrical Power Supply ● Requested connected power supply: 20mVa ● Initial requirement: 8mVa ● Voltage supply, by TEIA Ş 154kV ● FS plan: Use TEIA Ş supply at 154kV on a dedicated line from a tie point 28kM from – the site 11 March 2016
Financial Model * (All Figures in millions of US$) Production Profile: Ore Tonnes (millions) 26.1 Gold Grade 1.38 Waste Tonnes (millions) 51.1 Contained ounces 1,161,758 Recovered ounces 895,220 Gold Price 1,250/oz Gross Revenue 1,119.0 Operating Costs: Mining 140.7 Processing 135.1 Administration 83.5 Refining 3.0 Royalties (State, Stratex, and Teck) 35.6 Total OPEX (excludes capital stripping) 397.9 * Tax and Financial Model reviewed by Ernst and Young 12 March 2016
Financial Model (All Figures in millions of US$) Capital Costs Sustaining Capital (includes $30 million in 39.9 capitalized stripping) Expansion Capital 184.5 Reclamation 27.0 Government Refunds (12.3) Net Change in WC 0.0 Total Capital Costs (after refunds) 239.1 Total Capital Costs (after refunds & excluding 212.1 reclamation) EBI TDA 721.1 Undiscounted Pre-Tax CF (includes refunds) 482.0 Income Taxes * 46.0 After Tax Undiscounted CF 436.0 * Centerra is eligible for tax incentives under an Investment Incentive Certificate which are estimated to be worth $62 million at $1,250/oz gold 13 March 2016
Project Valuation Going Forward All In Unit Costs Free Cashflow (avg. LOM AISC = $490/oz) (US$/oz) Cumulative (US$M) 1,000 600 800 400 600 200 400 - 200 - (200) 2017 2018 2019 2020 2021 2022 2023 2024 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 AISC Growth Capital & Taxes NPV Sensitivities Discount Rate Base -15% + 15% Case 0% 5% 8% 10% Operating Costs 271.2 242.0 212.8 US$1,050 298.2 (137.7) 195.6 (106.1) 150.5 (91.5) 125.5 (83.3) Capital Costs 242.0 269.7 214.3 US$1,150 367.0 (68.9) 249.0 (52.7) 196.7 (45.3) 167.6 (41.2) Gold Grade 242.0 157.8 325.6 Gold US$1,250 435.9 301.7 242.0 208.8 Price Process Recovery 157.8 242.0 325.6 US$1,350 497.0 61.1 348.4 46.7 282.1 40.1 245.2 36.4 US$1,450 567.1 131.2 400.3 98.6 326.7 84.7 285.5 76.7 At a gold price of $767 per ounce and an 8% discount rate the project is cash flow neutral, but meets all foreseen capital and operating expenses including taxes 14 March 2016
Valuation – Returns on Oksut Project Projected Cashflow (US$M) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Incremental (19.7) (159.0) 15.1 140.2 170.2 111.5 55.5 62.1 46.9 11.7 1.4 Cumulative 1-Aug-2015 (19.7) (178.7) (163.6) (23.4) 146.8 258.3 313.8 375.9 422.8 434.5 435.9 2015 – 2025 Cash Flows Valuation Unit Value 435.9 NPV 0% US$M NPV 5% US$M 301.7 NPV 8% US$M 242.0 208.8 NPV 10% US$M IRR % 42.5 15 March 2016
Öksüt: Fully Funded High Margin Gold Producer 2015 Feasibility Highlights Mine Type Open Pit, Heap Leach Avg. LOM Annual Production 110koz Au Avg. LOM AISC 1 (US$/oz) $490 Reserve Mine Life 8 years Development Capex (US$MM) $221 Reserves 6 (Moz) at $1,250 gold 1.2 Öksüt Gold Au grade (g/t) Project 1.40 Life of Mine Strip Ratio (w:o) 2:1 First Gold Pour Q3-2017 IRR (after tax) 43% NPV (8%) - after tax >$240MM Catalyst Schedule Near-Term Gold Production EIA approval received in November 2015 250 2.50 Construction expected in mid-2016 200 2.00 Heap leach processing start expected mid-2017 Process Grade (g/tonne) Gold Production (000's) 150 1.50 2 stage crushing, stack at 11,000 tpd 100 1.00 Life of mine recovery of 77% 50 0.50 Significant exploration upside 0 0.00 2016 2017 2018 2019 2020 2021 2022 2023 2024 Bought back Stratex and Teck royalties 16 March 2016
Öksüt Social & Environmental Performance
Öksüt Project Location World ‐ class deposits Smaller high ‐ grade deposits K ı ş lada ğ (17 Moz), Çöpler (10 Moz) Kaymaz, Ovac ı k, Mastra,Efemçukuru, Bolkarda ğ 18 March 2016
Öksüt Location & Settlements Oksut Gold Project Settlement Population Develi center 64,381 Gazi 1,178 Epçe 882 Gömedi 90 ~300km south ‐ east of Ankara; ~60km south of Öksüt 608 Kayseri; and 8 km south of Develi Town in the Central Tombak 219 Anatolia Region. Sar ı ca 371 Population of Kayseri city is 1.25 million. Zile 430 Population of Develi Town 64,381. Yaz ı ba ş ı 266 19 March 2016
Öksüt Topography and Terrain 20 March 2016
Öksüt Baseline & Impact Studies Feasibility Study (NI 43 ‐ 101 compliant) preliminary draft completed for internal review. Turkish EIA document completed and EIA Granted 9 th November 2015. International standard ESIA nearing completion and 60 day public comment period starting April 2016. Water access and quality deemed a key focus area for the baseline and impacts assessments. New social, environmental and H&S management systems – including EMP/SMP components per our ESIA commitments. 21 March 2016
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