Mr. Paul Tomory reports

CENTERRA GOLD ANNOUNCES THOMPSON CREEK FEASIBILITY STUDY RESULTS AND STRATEGIC PLAN FOR US MOLYBDENUM OPERATIONS, INCLUDING A RESTART OF THE THOMPSON CREEK MINE AND RAMP-UP OF LANGELOTH

Centerra Gold Inc. has released the results from its Thompson Creek feasibility study, including a strategic, integrated business plan for its Molybdenum business unit (MBU) consisting of a restart of the Thompson Creek mine and a commercially optimized plan for the Langeloth metallurgical facility, collectively the United States molybdenum operations (U.S. moly). Centerra will host a conference call and webcast to discuss the strategic plan for U.S. moly on Friday, Sept. 13, 2024, at 9 a.m. Eastern Time. Details for the conference call and webcast are included at the end of the news release. All figures are in United States dollars. All production figures reflect payable metal quantities and are on a 100-per-cent basis, unless otherwise stated.

• Integrated value of Thompson Creek and Langeloth is expected to have after-tax NPV (net present value) (8-per-cent discount rate) of $472-million and IRR (internal rate of return) of 22 per cent;
• Langeloth, at full capacity and integrated with Thompson Creek, is expected to generate approximately $45-million earnings from operations and $50-million EBITDA (earnings before interest, taxes, depreciation and amortization) per year.

President and chief executive officer Paul Tomory commented: "Over the last year, we have developed a value-enhancing strategy for Centerra's U.S. molybdenum operations, centred around the vertical integration of Thompson Creek and Langeloth, and supported by strong molybdenum market fundamentals. The combined U.S. moly business is expected to produce an after-tax net present value (8 per cent) (NPV8 per cent) of $472-million. A key contributor to this value is Langeloth, which at full capacity, integrated with Thompson Creek, has the potential to generate robust annual EBITDA. Today, we announce the decision to unlock significant value through the restart of operations at Thompson Creek and a progressive ramp-up of production at Langeloth. When Thompson Creek begins production, currently targeted for the second half of 2027, it will provide additional high-grade, high-quality feed to Langeloth, enabling a ramp-up of production towards Langeloth's full annual capacity of 40 million pounds while improving operational flexibility to meet market demand."

Mr. Tomory continued: "We completed a feasibility study at Thompson Creek that has confirmed the capital estimate from the prefeasibility study, while adding another year of production. Following significant progress on permitting efforts in the second quarter 2024, we have pivoted from a two-phased approval to a single-phase capital investment of $397-million over three years, from now through mid-2027. Our total project costs guidance at Thompson Creek for the second half of 2024 is expected to be $55[-million] to $65-million. We will provide 2025 guidance for Thompson Creek with our annual guidance that is expected to be published early next year."

Mr. Tomory concluded: "We are continuing to explore strategic options to unlock the full potential of our molybdenum business, in line with Centerra's strategy to maximize the value of each asset in our portfolio. While Centerra expects to remain a gold-focused company, we acknowledge the significant value of our base metal assets."

Integrated U.S. moly highlights

• Robust integrated economics of Thompson Creek and Langeloth: Strong project economics due to synergies with the high-quality concentrate blend that could be achieved when Thompson Creek is vertically integrated with Langeloth. Once Thompson Creek resumes full production, the U.S. moly business is expected to generate sustainable strong annual cash flows.

• Improved integrated economics compared with the prefeasibility study (PFS) in September, 2023: Integrated economics based on the FS have improved as compared with the PFS, specifically the Thompson Creek updated life of mine (LOM) plan has an additional 12 million pounds of molybdenum being produced, one year of additional mine life, more concentrate produced in the first four years and a derisked capital estimate.

Langeloth highlights

• Phased ramp up to full capacity: Langeloth plans to ramp up production progressively over the next few years to increase production toward its full capacity of 40 million pounds per annum by 2028, which aligns with Thompson Creek's first full year of production. At full capacity, the molybdenum feed to Langeloth is expected to consist of approximately one-third supplied by Thompson Creek and two-thirds purchased from third parties.
• At full capacity, Langeloth is expected to generate approximately $45-million in earnings from operations and $50-million of earnings before interest, taxes, depreciation and amortization (EBITDA) annually. Significant synergies and margin improvements are expected to result from increased capacity utilization at Langeloth, including improved blending flexibility and more higher-margin molybdenum products enabled by the high-quality feed from Thompson Creek.
• Strategic geographic location: Langeloth is strategically connected to the North American steel supply and sales markets via efficient transportation networks and reliable infrastructure. Being close to several major United States East Coast ports, Langeloth is also well located for importing molybdenum concentrates and exporting molybdenum products.
• Flexible and agile operations: With six roasters, the ability to produce a variety of finished molybdenum products and a potential total capacity of approximately 40 million pounds, Langeloth has flexibility to adapt to changing market and commercial conditions. Langeloth has value-added production capabilities, namely for ferromolybdenum and pure molybdenum oxide, positioning the business for opportunities and growth.
• Strong leadership and people: The Langeloth management team and staff are highly experienced, dedicated and committed to a strong culture of operational excellence and innovation. With 100 years of experience in processing molybdenum, the team at Langeloth has developed a strong commercial network and constructive engagement with local regulators.

Thompson Creek FS highlights

• Robust project economics: NPV8 per cent of $185-million and after-tax IRR of 15 per cent using an assumed flat molybdenum price of $20 per pound for the LOM. The economic assessment for Thompson Creek in the FS has been prepared on a stand-alone basis and does not include the benefits of integration with Langeloth.
• Derisked capital costs: Initial capital investment of approximately $397-million. The capital expenditures needed to restart Thompson Creek are significantly derisked due to an existing pit, significantly advanced equipment rebuilds and purchases, and an existing process plant that requires minimal upgrades and refurbishment. A majority of the anticipated capital expenditures are focused on capitalized stripping, plant refurbishment and mine mobile fleet upgrades.
• Initial mine life of 12 years: Average annual molybdenum production is estimated to be approximately 13 million pounds after initial ramp-up. The average LOM operating costs are $9.66 per molybdenum pound sold and LOM all-in sustaining costs (AISC) are $12.46 per molybdenum pound sold.
• Strong reserve base: The FS includes proven and probable molybdenum reserves of 161 million pounds, measured and indicated molybdenum resources of 63 million pounds, and inferred molybdenum resources of 17 million pounds, as of Sept. 1, 2024. The average reserve grade is 0.065 per cent molybdenum.

The company expects to file a technical report for Thompson Creek on its website, on SEDAR+ and EDGAR.

U.S. moly overview

U.S. moly, consisting of the Langeloth metallurgical facility near Pittsburgh, Penn., and the Thompson Creek mine in Idaho, is part of Centerra's MBU. The molybdenum assets were acquired by Centerra in 2016, along with the Mount Milligan gold-copper mine.

Langeloth

Langeloth is one of three molybdenum conversion facilities in the United States. Its facility and existing permits make it a unique and strategic asset, given its proximity to the North American steel market. Langeloth began commercial molybdenum conversion operations in 1924 and has historically operated at levels significantly higher than today. Over a two-year period prior to the suspension of the Thompson Creek mine in December, 2014, the volume of molybdenum roasted at Langeloth was around 37 million pounds per year.

Langeloth operates as a conversion facility of molybdenum concentrate into metallurgical and chemical grade products. These products are sold to steel, other metallurgical and chemical producers globally. Technical oxide is the main product manufactured by Langeloth due to its role as a key input in the manufacturing of high performance steels. It can potentially be further processed into value-added products that command a higher margin. Langeloth can also produce ferromolybdenum and pure molybdenum oxide, and it has the capability to produce byproducts such as rhenium, with flexibility to adjust the product mix depending on market demand and the quality of concentrates sourced. The availability of high-quality Thompson Creek concentrate provides significant commercial flexibility to the MBU.

Commercial optimization of Langeloth

Centerra has completed a commercial optimization plan at Langeloth, geared at increasing profitability and maximizing its future potential by increasing production levels, achieved by a ramp-up in the purchase of third party concentrates and the restart of the Thompson Creek primary molybdenum mine.

Langeloth is well positioned to capitalize on the current supply deficit in the molybdenum market and grow the business to meet the market demand. In the recent past Langeloth has operated slightly below its annual breakeven capacity of approximately 14 million pounds. The operation can be ramped up to full capacity to enable production of approximately 40 million pounds per year in a straightforward manner.

At full capacity, significant synergies and margin improvements that will enhance future cash flow generation and profitability from U.S. moly are expected to result from: (1) ability to leverage fixed costs, related to increased capacity utilization at Langeloth from the current level of approximately one-third; (2) ability to blend the high-quality Thompson Creek concentrate with lower-quality third party concentrates; and (3) the ability, enabled by the quality of the Thompson Creek concentrate, to produce an increased volume of higher-margin final molybdenum products.

At full production capacity, integrated with Thompson Creek, the molybdenum conversion facility at Langeloth has the potential to generate annually approximately $50-million of EBITDA, $40-million in cash flow from operations and free cash flow of $35-million.

As a result of the compelling value opportunity, Centerra is initiating a progressive ramp-up at Langeloth to allow for commercial optimization. Langeloth is expected to ramp up production progressively toward its full capacity of 40 million pounds per annum by 2028, which aligns with Thompson Creek's expected first full year of production. At full capacity, the molybdenum feed processed at the Langeloth facility is expected to consist of approximately one-third supplied by Thompson Creek and approximately two-thirds purchased from third party providers. Further details on the restart of Thompson Creek are provided below.

Based on an assumed flat price of $20 per pound molybdenum, a working capital investment will be required over the period from 2025 to 2028 to support the ramp-up to full capacity. On a cash flow basis, this increase in working capital is expected to be largely offset by cash flow generated by Langeloth during the same period. The structure of commercial contracts at Langeloth helps to mitigate molybdenum price volatility. Concentrates are purchased at a discount to the prevailing market molybdenum price, while final products are generally sold at prices at or above this benchmark. As a result, the integrated operations of U.S. moly will be better positioned to withstand future fluctuations in molybdenum prices.

Reaching higher capacity utilization will depend on several factors which are not fully in Centerra's control, including the ability to acquire third party concentrates on favourable commercial terms over a significant period of time.

Thompson Creek

The Thompson Creek mine is a large open-pit primary molybdenum mine. It was a producing mine until it was placed on care and maintenance in December, 2014. It has an existing open pit, as well as established site infrastructure, processing facilities and equipment fleet.

Feasibility study

The company has completed a FS on the restart of mining at Thompson Creek, with the objective of realizing value for the U.S. moly business. A restart of Thompson Creek, on a stand-alone basis, is expected to result in NPV8 per cent of $185-million and IRR of 15 per cent, based on an assumed flat molybdenum price of $20 per pound. The FS includes an optimized mine plan with a 12-year mine life. A summary of the FS production profile is included in the attached table.

The cost profile associated with the FS is largely driven by the grade profile. AISC (all-in sustaining cost) per pound from 2028 to 2031 are expected to be lower than the LOM (life of mine) average due to higher grades and more ore tons mined, which is expected to result in stronger cash flows in these years. The average operating costs over the LOM are detailed in the attached table. These operating costs exclude capitalized pre-production costs, which are included in capital costs. Processing costs cover mill, tailings and water management costs.

Capital expenditures

Centerra is proceeding with a restart of Thompson Creek, which is expected to require an investment of approximately $397-million in total initial, non-sustaining capital expenditures over three years, from September, 2024, through mid-2027. In the second quarter of 2024, following environmental studies and regulatory reviews, Centerra obtained mine permit authorizations for additional lands at Thompson Creek, which will enable the proposed pit highwall layback included in the FS. As a result of receiving these mine permit authorizations, a key first step in the overall permitting process, the company is moving away from a two-phased capital approval previously disclosed to a single-phase capital investment over three years. Thompson Creek is pro-actively advancing environmental studies which should support future permitting, which will not be required until several years after first production.

Centerra's capital investment at the Thompson Creek mine is significantly derisked due to an existing pit, significantly advanced equipment rebuilds and purchases, and an existing process plant that requires some refurbishment. Early works to support the restart of operations at Thompson Creek are under way, progressing on budget and on schedule. The majority of the capital expenditures going forward are expected to be focused on prestripping activities and mill refurbishment. Over the first six months of 2024, capital spending at Thompson Creek was primarily related to refurbishment of existing mining mobile equipment and the purchase of additional mobile equipment, stripping activities and technical studies.

Updated 2024 uidance at Thompson Creek

For the second half of 2024, total project costs at Thompson Creek are expected to be $55-million to $65-million, primarily related to preproduction stripping and mine mobile fleet upgrades. Approximately $10-million of these costs will be expensed for accounting purposes, with the remainder treated as capital expenditures. Including the actual amounts spent in the first six months of 2024 of $20.9-million, full year 2024 project development costs guidance at Thompson Creek is $75-million to $85-million.

Sensitivity to molybdenum prices

The Thompson Creek FS and integration of Langeloth demonstrate strong economics at assumed flat molybdenum prices of $20 per pound. Langeloth provides resilience to low molybdenum prices in the cycle. The sensitivity to changes in molybdenum prices is illustrated in the attached table.

Mineral reserve and mineral resource estimates

Thompson Creek is an open pit operation that was active until 2014 when management made the decision to cease operations due to falling molybdenum prices. After approximately 10 years on care and maintenance, the historical mineral resource model needed to be updated. The attached tables outline the mineral reserve and resources at Thompson Creek as of Sept. 1, 2024.

Endako project

Centerra has a 75-per-cent interest in the Endako mine in Northern British Columbia, Canada, which is part of the MBU. The remaining 25-per-cent interest is held by Moon River Capital Ltd. Endako is expected to remain in care and maintenance while the company focuses on the Thompson Creek restart. Endako is an important primary molybdenum asset with a large defined resource in a top-tier jurisdiction, with a modern processing plant, providing longer-term optionality. Should Endako be restarted in the future, it has the potential to provide approximately one-third of the molybdenum feed supplied to Langeloth, which could either complement or replace the Thompson Creek feed.

Molybdenum market

Molybdenum is an industrial metal principally used for metallurgical applications such as a ferro-alloy in engineered, stainless and other speciality steels where high-strength, temperature-resistant or corrosion-resistant properties are sought. The addition of molybdenum enhances the strength, toughness, and wear and corrosion-resistance in steels. Molybdenum is used in major industries including chemical and petrochemical processing, oil and gas for drilling and pipelines, power generation, automotive, and aerospace. It is also required for several green energy applications, especially wind, geothermal and nuclear. Higher-purity molybdenum is also widely used in non-metallurgical applications such as petroleum refining catalysts, lubricants, flame-retardants in plastics, water treatment and as a pigment.

According to the World Bank report "Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition" (2020), molybdenum is named one of the cross-cutting minerals, like copper, needed across a range of low-carbon technologies, especially wind and geothermal. The report estimates that the cumulative molybdenum demand under the renewable energy road map scenario from the International Renewable Energy Agency may grow by 119 per cent through 2050 from green technologies only. Based on data from the International Molybdenum Association, the world used around 630 million pounds of molybdenum in 2023, with the most used in engineered steels (38 per cent), stainless steels (25 per cent) and chemicals (13 per cent). A variety of end uses and limited substitution ensures that molybdenum is not dependent on specific industries, making the demand for it relatively stable.

Conference call to discuss the strategic plan for U.S. moly

Centerra will host a conference call and webcast to discuss the strategic plan for U.S. moly on Friday, Sept. 13, 2024, at 9 a.m. Eastern Time. Details for the conference call and webcast are included herein.

Webcast

Participants can access the webcast on-line.

An archive of the webcast will be available for until end of day Dec. 13, 2024.

Conference call

Participants can register for the conference call on-line. Upon registering, you will receive the dial-in details and a unique PIN to access the call. This process will bypass the live operator and avoid the queue. Registration will remain open until the end of the live conference call.

Participants who prefer to dial in and speak with a live operator, can access the call by dialling 1-844-763-8274 or 647-484-8814. It is recommended that you call 10 minutes before the scheduled start time.

After the call, an audio recording will be made available via telephone for one month, until end of day Oct. 13, 2024. The recording can be accessed by dialling 412-317-0088 or 1-877-344-7529 and using the pass code 1752426. In addition, the webcast will be archived on Centerra's website.

About Centerra Gold Inc.

Centerra is a Canadian-based gold mining company focused on operating, developing, exploring and acquiring gold and copper properties in North America, Turkey and other markets worldwide. Centerra operates two mines: the Mount Milligan mine in British Columbia, Canada, and the Oksut mine in Turkey. The company also owns the Goldfield district project in Nevada, United States, and the Kemess project in British Columbia, Canada, and owns and operates the molybdenum business unit in the United States and Canada. Centerra's shares trade on the Toronto Stock Exchange under the symbol CG and on the New York Stock Exchange under the symbol CGAU. The company is based in Toronto, Ont., Canada.

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