UPDATE 2-Centerra Gold profit drops but miner cuts cost forecast

Tue May 6, 2014 7:35pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Adds cost forecast revision, mining license comments, background)

May 6 (Reuters) - Centerra Gold Inc reported a decline in first quarter profit on Tuesday as the price of gold dropped and its cost of sales increased.

The Canadian miner cut its forecast for full-year all-in sustaining costs, a benchmark gold sector cost metric, due to lower operating costs at its Boroo mine in Mongolia. The lower costs are partly due to a weaker local currency and a reduced royalty rate.

First-quarter net earnings were $2.1 million, or 1 cent a share, in the three months to the end of March compared with earnings of $51.4 million, or 22 cents, a year earlier.

Revenue fell to $148 million in the quarter from $192.3 million.

Centerra produced 116,669 ounces of gold in the first quarter, up from 115,220 a year earlier. All-in sustaining costs rose to $1,109 per ounce from $1,068 per ounce.

Analysts, on average, had been expecting a loss of 5 cents a share, according to Thomson Reuters I/B/E/S.

Centerra said its cost of sales increased 20 percent to $109.1 million because of the higher cost of processing ore at its flagship Kumtor mine in Kyrgyzstan. Access to the ore mined required more stripping of ice and waste.

The average price realized for its gold dropped 19 percent to $1,301 per ounce compared to a year ago.   Continued...