UPDATE 1-Centerra Gold posts quarterly profit, boosted by Kumtor mine

Wed Jul 31, 2013 8:41pm EDT
 
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July 31 (Reuters) - Centerra Gold Inc posted a profit in the second quarter, compared with a loss a year earlier, helped by higher gold production at its flagship Kumtor mine in Kyrgyzstan that partially offset weaker gold prices.

The Canadian gold miner raised its annual consolidated gold production outlook to a range of 615,000 to 675,000 ounces from its previous range of 605,000 ounces to 660,000 ounces, compared with 387,076 ounces produced in 2012.

Net income was $1.6 million, or 1 cent per share, in the second quarter, compared with a net loss of $48.9 million, or 21 cents per share, a year earlier.

The price of gold fell 12.1 percent to average $1,416.27 per ounce in the second quarter from the year-ago period.

Operating cash costs per ounce fell to $577 compared to $831 per ounce a year earlier because of increased gold production and the resumption of lower cost methods to extract gold at its Boroo mine in Mongolia.

Gold production at the Kumtor mine rose to 72,365 ounces in the second quarter from 41,307 ounces a year earlier. The mine has accounted for as much as 12 percent of Kyrgyzstan's gross domestic product in recent years.

Centerra is continuing discussions with the Kyrgyz government regarding a potential restructuring to resolve all outstanding concerns relating to the Kumtor project, the company said on Wednesday.

Kyrgyzstan's parliament has set a new Sept. 10 deadline for the government to either agree to an improved mining deal with Centerra or unilaterally cancel the current arrangement.

The company's shares, which have risen almost 40 percent in the last month, closed at C$4.55 on Wednesday on the Toronto Stock Exchange.