July 30, 2010 / 11:35 AM / in 7 years

CORRECTED - UPDATE 2-Centerra posts profit on strong gold price

(Changes dividend in paragraph 5 to 6 Canadian cents from 6 cents)

* Q2 EPS $0.13 vs yr-ago loss of $0.36/shr

* Q2 revenue up 46 pct to $152.2 mln (Adds details on results, CEO comment; In U.S. dollars unless noted)

TORONTO, July 30 (Reuters) - Centerra Gold (CG.TO) reported higher-than-expected quarterly earnings on Friday, as increased production and strong gold prices helped the miner return to profit after a loss the year earlier.

The Canadian gold miner’s net earnings came in at $29.8 million, or 13 cents a share. That compares with a net loss of $79.6 million, or 36 cents, a year earlier, when lower gold recoveries and increased costs took a toll.

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

Revenue was 46 percent higher at $152.2 million.

The company also announced an inaugural dividend of 6 Canadian cents per share, to be paid out to shareholders in September.

Centerra’s flagship property is the Kumtor mine in Kyrgyzstan. The mine is one-third owned by the Kyrgyz government and accounts for 7 percent of the Central Asian country’s GDP.

In April, former Kurmanbek Bakiyev was ousted as the country’s president, and the worst ethnic bloodshed in the country’s modern history ensued. At least 300 people were killed.

A new Kyrgyz constitution was approved in late June and Acting President Roza Otunbayeva was appointed until the end of 2011.

“It appears that stability has returned to the Kyrgyz Republic after the referendum held in June,” Centerra Chief Executive Steve Lang said in a press release, adding that the unrest did not cause any interruptions at the Kumtor mine.

Centerra also owns the smaller Boroo mine in Mongolia. Regulatory issues with the government have tied up the operation since June 2009.

The Boroo heap leach facility, which uses cyanide to extract gold from crushed ore, has been shut down since April 2009 pending a final operating permit, but gold production at the Boroo mine rose for the quarter on increased recoveries.

“We are pleased with the performance of both operations during the quarter as we produced more gold than expected,” Lang said in a press release.

Centerra’s gold production in the second quarter was 121,728 ounces compared with 110,457 ounces reported in the second quarter of 2009.

$1=$1.03 Canadian Reporting by Julie Gordon; Editing by Frank McGurty

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