Centerra Gold shares drop after quarterly loss

Thu Aug 2, 2012 11:42am EDT
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(Reuters) - Shares of Centerra Gold Inc (CG.TO: Quote) fell more than 2 percent on Thursday, a day after the Canadian gold miner reported a quarterly loss on lower output at its Kumtor gold mine in Kyrgyzstan and higher operating costs.

Centerra reported a net loss of $54.6 million, or 23 cents a share, for the second quarter ended June 30. That compared with profit of $71.1 million, or 30 cents a share, in the year-earlier period.

Excluding one-time items, the company's adjusted net loss was $12.9 million, or 5 cents a share.

Analysts, on average, had expected a loss of 14 cents a share, according to Thomson Reuters I/B/E/S.

The company's shares fell 2.42 percent to C$6.86 on Thursday morning on the Toronto Stock Exchange. The stock has dropped more than 60 percent this year.

Revenue in the quarter fell 63 percent to $89.7 million as gold production dropped 66 percent. At the same time, cash costs rose 72 percent to $885 an ounce, compared with $513 an ounce in the second quarter of 2011.

Toronto-based Centerra maintained its adjusted full-year production outlook of 450,000 to 470,000 ounces of gold.

Earlier this year, Centerra was forced to cut its planned output at Kumtor by about a third due to ice movement in the pit at the high-altitude project. Kumtor is Centerra's largest gold mine.

The company is currently studying the possibility of expanding the pit, which would boost reserves and extend the mine's life. That study is expected to be completed in the third quarter.   Continued...