Kumtor Central Pit
plan maps, longitudinal and cross sections (PDF)
Centerra Goldes estimates total capital required to develop the new LOM at Kumtor is US $726 million of which $169 million is expansion capital related to the purchase of additional mining equipment, expansion of the tailings management facility and the expansion of the mill. Sustaining capital increased to $557 million due to the expanded fleet size and increased mine life. The LOM operating and capital cost including pre-stripping capital is $728 per ounce.

An estimated 3.6 million ounces of proven and probable reserves have been added with the new life-of-mine plan (LOM). After accounting for processing of 172,000 ounces of contained gold to September 30, 2012, Kumtor’s proven and probable mineral reserves now total 9.7 million ounces of contained gold. The new LOM plan is expected to provide a more consistent quarterly production profile after 2013 and is based only on open-pit mineral reserves. There continues to be an opportunity for underground mining beneath the new LOM open pit that will require further exploration drilling and completion of detailed technical studies.

Using a gold price of US $1,350 per ounce and a discount rate of 8%, the new Kumtor open-pit LOM has an NPV of approximately $1.9 billion. The new LOM plan is expected to result in the payment of approximately $1.5 billion in revenue-based taxes, based on $1,350 per ounce gold, along with significant other benefits to the Kyrgyz Republic such as continued local employment, extended procurement of local goods and services and continued support for community sustainable development.

The new Kumtor reserves and LOM incorporate the revised production guidance for the fourth quarter of 2012 as described in the Company’s third quarter news release issued on November 7, 2012.

In summary:

• Increased Proven and Probable reserves by 58% or 3.6 million contained ounces of gold, total open pit reserves of 9.7 million contained ounces of gold,
• Extended mine life by 5 years, life-of-mine plan (LOM) for the KS-13 open pit extends open pit mining to 2023 and milling operations to 2026,
• Optimized LOM open pit plan while maintaining future underground development option,
• Consistent annual gold production averaging 650,000 ounces for the first 10 years,
• Expand mill throughput by 18% in 2016 to 6.7 million tonnes per annum (approximately 18,400 tonnes per day),
• LOM expansion capital of $169 million and $557 million of sustaining capital, excluding pre-strip capital,
• Total LOM operating cost, pre-stripping and capital cost of $728 per ounce1, excluding revenue-based tax; $917 per ounce including revenue-based tax at $1,350 per ounce gold price,
• Net present value (NPV) of $1.9 billion at a 8% discount rate using a gold price of $1,350 per ounce; and a NPV of $3.4 billion using a gold price of $1,700 per ounce.