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Centerra Gold Inc. (TSE:CG)
:CG
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Centerra Gold
(NYSE:CG)
74Outperform
Positive Factors
Financial Performance
Centerra is well-positioned vis-à-vis its peers given relatively steady operational outlook, stable jurisdictional exposure, a strong balance sheet, and peer-leading FCF and capital returns.
Operational Expansion
The definitive feasibility study for Centerra's molybdenum business unit envisages restart of the Thompson Creek mine.
Negative Factors
Operational Challenges
The Langeloth metallurgical facility is already operational, and processes third-party molybdenum concentrate at reduced capacity (~30%).
Centerra Gold (CG) vs. S&P 500 (SPY)
Market Cap
C$1.84B
Dividend Yield3.36%
Average Volume (3M)948.90K
Price to Earnings (P/E)16.9
Beta (1Y)1.59
Revenue Growth29.49%
EPS GrowthN/A
CountryCA
Employees1,150
SectorBasic Materials
Sector Strength61
IndustryGold
Share Statistics
EPS (TTM)0.49
Shares Outstanding210,206,600
10 Day Avg. Volume1,054,946
30 Day Avg. Volume948,899
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.06
Price to Cash Flow (P/CF)3.50
P/FCF Ratio6.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.40Price Target Upside30.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Centerra Gold Business Overview & Revenue Model
Company DescriptionCenterra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects include the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt Gold Mine located in Turkey. The company was incorporated in 2002 and is headquartered in Toronto, Canada.
How the Company Makes MoneyCenterra Gold generates revenue primarily through the extraction and sale of gold and, to a lesser extent, other precious metals such as copper. The company's key revenue streams include the sale of gold produced from its mining operations, primarily the Mount Milligan Mine in Canada and the Öksüt Mine in Turkey. Centerra Gold's earnings are significantly influenced by the price of gold, production levels, and the efficiency of its mining operations. The company may also engage in strategic partnerships and joint ventures to explore and develop additional mining projects, further contributing to its revenue growth. Additionally, Centerra Gold focuses on cost management and operational efficiency to maximize profitability.
Centerra Gold Financial Statement Overview
Summary
Centerra Gold demonstrates strong revenue growth and operational efficiency, supported by a solid balance sheet with low leverage. Profitability margins are good but can improve further, and the cash flow position is healthy, indicating strong operational cash generation and positive free cash flow growth, positioning the company well for future investments and debt management.Income Statement
Centerra Gold has shown strong revenue growth with a 14.39% increase from the previous year, demonstrating robust demand and operational efficiency. The gross profit margin for TTM is 34.85%, indicating effective cost management. However, the net profit margin stands at 8.32%, suggesting room for improvement in controlling non-operational expenses. The EBIT margin of 16.03% and EBITDA margin of 26.49% reflect solid operational performance.72
Positive
Balance Sheet
The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.013, indicating minimal reliance on debt financing. The equity ratio of 74.74% suggests a solid capital structure and financial stability. The return on equity (ROE) is 5.97%, signaling moderate profitability relative to shareholders' equity, presenting an opportunity for enhanced returns.78
Positive
Cash Flow
Operating cash flow to net income ratio is robust at 3.37, showcasing strong cash generation relative to net income. The free cash flow growth rate is positive at 11.21%, reflecting an increase in cash available for reinvestment or debt reduction. However, the free cash flow to net income ratio is 1.71, indicating that a significant portion of earnings is effectively translated into free cash flow.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.25B | 1.09B | 850.19M | 900.14M | 1.69B | 1.38B | Gross Profit |
| 436.44M | 264.00M | 178.52M | 291.96M | 786.04M | 450.08M | EBIT |
| 200.70M | 17.84M | 108.01M | 173.98M | 438.22M | 136.85M | EBITDA |
| 331.66M | 143.98M | 59.67M | 300.35M | 130.43M | 152.10M | Net Income Common Stockholders |
| 104.12M | -81.28M | -77.21M | 446.95M | 408.54M | -93.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 151.71M | 615.77M | 531.92M | 949.40M | 548.66M | 42.72M | Total Assets |
| 2.83B | 2.28B | 2.34B | 2.68B | 3.14B | 2.70B | Total Debt |
| 189.29M | 24.21M | 13.97M | 20.20M | 18.91M | 92.65M | Net Debt |
| 37.59M | -588.73M | -517.94M | -927.03M | -526.26M | 49.93M | Total Liabilities |
| 678.68M | 606.52M | 525.62M | 632.95M | 669.99M | 635.81M | Stockholders Equity |
| 2.15B | 1.67B | 1.81B | 2.04B | 2.47B | 2.07B |
| Cash Flow | Free Cash Flow | ||||
| 178.28M | 160.29M | -82.91M | 322.26M | 603.77M | 34.71M | Operating Cash Flow |
| 351.06M | 245.60M | -1.98M | 414.76M | 930.01M | 334.15M | Investing Cash Flow |
| -154.95M | -90.29M | -255.64M | 36.43M | -303.38M | -309.65M | Financing Cash Flow |
| -83.89M | -74.28M | -157.69M | -49.14M | -123.99M | -133.49M |
Centerra Gold Technical Analysis
Positive
8.75
Price Trends
8.71
Positive
8.56
Positive
8.94
Negative
Market Momentum
0.01
Negative
53.71
Neutral
79.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CG, the sentiment is Positive. The current price of 8.75 is above the 20-day moving average (MA) of 8.41, above the 50-day MA of 8.71, and below the 200-day MA of 8.94, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 53.71 is Neutral, neither overbought nor oversold. The STOCH value of 79.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CG.
Centerra Gold Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Performance Comparison
TSE:CG
Centerra Gold
8.75
1.16
15.31%
AEM
Agnico Eagle
104.18
49.22
89.56%
GOLD
Barrick Gold
18.89
3.71
24.44%
EGO
Eldorado Gold
15.71
2.12
15.60%
KGC
Kinross Gold
12.20
6.57
116.70%
BTG
B2Gold
3.17
0.79
33.19%
Centerra Gold Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -6.20% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong free cash flow generation and progress in strategic projects like Thompson Creek and Mount Milligan. However, production challenges, particularly at Öksüt, and rising costs pose significant concerns. The strategic reevaluation of Goldfield adds uncertainty to future growth prospects.Highlights
Strong Free Cash Flow Generation
In the fourth quarter, Centerra Gold generated strong free cash flow of $47 million, driven by robust contributions from Mount Milligan, increasing the cash balance to $625 million.
Mount Milligan Performance
Mount Milligan produced almost 38,000 ounces of gold and 12.8 million pounds of copper in Q4. Full-year production was over 167,000 ounces of gold and 54 million pounds of copper. The site also achieved a mine life extension to 2036 due to increased reserves.
Progress on Strategic Projects
Significant advancements were made at Thompson Creek with detailed engineering work and fleet refurbishment 80% complete, targeting first production in the second half of 2027.
Liquidity and Capital Returns
Centerra Gold maintained a strong liquidity position with over $1 billion available and returned $88 million to shareholders through dividends and share buybacks in 2024.
Lowlights
Production Below Guidance
Full-year 2024 gold and copper production at Mount Milligan was below guidance due to lower grades encountered in Phases 6 and 9. Öksüt also faced higher all-in sustaining costs due to lower sales and inflationary pressures.
Challenges at Öksüt
Gold production at Öksüt is expected to decrease to 105,000 to 125,000 ounces in 2025. Additionally, all-in sustaining costs are projected to rise to $1,475 to $1,575 per ounce due to inflation in Turkey and a lower production profile.
Uncertain Future for Goldfield
Goldfield's initial resource of 706,000 ounces of gold does not meet the company's requirements for near-term development, leading to strategic reevaluation and potential shelving of the project.
Higher Consolidated Costs
2025 consolidated all-in sustaining costs are expected to rise to $1,400 to $1,500 per ounce, reflecting increased costs at Öksüt and broader inflationary pressures.
Company Guidance
During the Centerra Gold Fourth Quarter 2024 Conference Call, the company provided detailed guidance and performance metrics. Centerra Gold reported producing over 73,000 ounces of gold and 12.8 million pounds of copper in Q4, ending the year near the low end of their production guidance range. The cash balance increased to $625 million, driven by strong free cash flow from operations, particularly from Mount Milligan. The company also highlighted the restart of operations at Thompson Creek and progress in their U.S. Molybdenum operations. For 2025, Centerra Gold expects consolidated gold production to be between 270,000 and 310,000 ounces, with copper production ranging from 50 to 60 million pounds. The all-in sustaining costs for 2025 are projected to be $1,400 to $1,500 per ounce. The company remains focused on advancing key projects, including technical studies at Mount Milligan and Kemess, while also maintaining their commitment to responsible mining and sustainability initiatives.Centerra Gold Corporate Events
Centerra Gold to Announce Q4 2024 Results and 2025 Guidance
Jan 13, 2025
Centerra Gold Inc. announced it will release its fourth quarter 2024 operating and financial results, alongside 2025 guidance and year-end mineral reserves and resources estimates, after market closure on February 20, 2025. A conference call and webcast to discuss the results will be held on February 21, 2025. This announcement is part of Centerra Gold’s regular financial reporting activities and provides stakeholders with insights into the company’s performance and future outlook, which is critical for investors and market analysts in assessing the company’s strategic direction and market position.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.