Q2 2017 Centerra Gold Inc Earnings Call
Aug 01, 2017 AM CEST
CG.TO - Centerra Gold Inc
Q2 2017 Centerra Gold Inc Earnings Call
Aug 01, 2017 / 01:30PM GMT
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Corporate Participants
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* Darren J. Millman
Centerra Gold Inc. - CFO & VP
* Gordon Dunlop Reid
Centerra Gold Inc. - COO & VP
* John W. Pearson
Centerra Gold Inc. - VP of IR
* Scott Graeme Perry
Centerra Gold Inc. - CEO & Non-Independent Director
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Conference Call Participants
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* David Haughton
CIBC World Markets Inc., Research Division - MD & Head of Mining Research
* Rahul Paul
Canaccord Genuity Limited, Research Division - Director
* Robert Reynolds
Crédit Suisse AG, Research Division - Research Analyst
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Presentation
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Operator [1]
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Ladies and gentlemen, thank you for standing by, and welcome to the Centerra Gold 2017 Second Quarter Results Conference Call. (Operator Instructions) As a reminder, this call is being recorded Tuesday, August 1, 2017.
I would now like to turn the conference over to Mr. John Pearson, Vice President, Investor Relations. Please go ahead, sir.
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John W. Pearson, Centerra Gold Inc. - VP of IR [2]
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Thank you, Carlos. I would like to welcome everyone to Centerra Gold's Second Quarter Conference Call. Today's conference call is open to all members of the investment community and media. First, in listen-only mode, and then, we will open it up to questions after the formal remarks. Also, slides are available on Centerra's website to supplement each speakers' remarks. Following the formal remarks, as I mentioned, the operator will give the instructions for asking a question, and then, we'll open the phone line to questions. Please note that all figures we are using on this call are in U.S. dollars, unless otherwise noted.
Joining me on the call today from Mount Milligan actually, is Scott Perry, Chief Executive Officer; Frank Herbert, President; Darren Millman, Chief Financial Officer; and Gordon Reid, Chief Operating Officer.
I would like to caution everyone that certain statements made on this call may be forward-looking statements, and as such, are subject to known and unknown risks and uncertainties, which may cause actual results to differ from those expressed or implied. Also, certain of the measures we will discuss today are non-GAAP measures and I refer you to our description of non-GAAP measures in the combined news release and MD&A. For a more detailed discussion of the material assumptions, risks and uncertainties, please refer to our news release, the MD&A, which were issued last night along with the unaudited financial statements and notes and to our other filings, all of which can be found on SEDAR and the company's website.
At this time, I'll turn the call over to Scott.
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Scott Graeme Perry, Centerra Gold Inc. - CEO & Non-Independent Director [3]
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Okay. Hi John, and good morning, everyone, and thank you for dialing into our earnings conference call. As John mentioned, the management team and the Board of Directors are actually up at Mount Milligan today. We've been up here for our routine board meetings, and then, we're spending a day up here at site just showcasing the assets to our Board of Directors, pretty excited to be doing so, particularly so given we think it's an asset that's going to be underpinning a very strong future for Centerra.
I'm going to be referencing our presentation, that's on the website, as John mentioned, and I'm just starting off on Slide #5, which is entitled 2017 corporate update for second quarter. First and foremost, just in terms of safety, as we've spoken about on previous calls, we continue to focus on rolling out our Work Safe, Home Safe program, and we've had a great penetration during the quarter, particularly at Kumtor. Our recruiting contacts at Kumtor, we had some 2,600 employees, and as of couple of weeks ago, we've now cycled every single employee through this training program. So kudos and it's commendable to the management team at Kumtor just in terms of the solid progress we're making there.
In terms of the financial results, Darren will speak to these in more detail, but in terms of the headline net earnings results, it was $0.08 per share, which is inclusive of a $41 million carrying value adjustment on our Gatsuurt project, that I think, all in all, demonstrated significant profitability, especially relative to the prior year corresponding period.
In terms of metal output, we had very strong gold production of some just under 196,000 ounces. Likewise, in terms of copper production, which was approximately 15 million pounds. The strong level of production certainly resonates in terms of our unit cost profile. What we're referencing here are all-in sustaining cost profile for the quarter, that came in at $742 per ounce. So definitely position the portfolio well in terms of earnings and profitability and that's what you see in the financial statements reported overnight.
At Mount Milligan, especially, we've always been putting forward that this going to be a very important source of low-cost, high-quality production. And I think you're seeing that here in the second quarter, all-in sustaining cost came in at $473 per ounce. I think this certainly positions Mount Milligan as a lower-cost quartile asset, especially here in North American sort of mining industry.
All of this resonates in terms of our cash flow generation. You can see during the quarter, strong cash flow generation. Kumtor generated some $103 million of the operating cash flow for working capital, likewise, Mount Milligan generated $30 million in positive cash flow before working capital. Likewise, you can see the same contributions there, Kumtor is in excess of $200 million and Mount Milligan year-to-date has generated some $61 million in positive operating cash flow.
In terms of the balance sheet. Again, Darren will touch on this. We finished the quarter in a relatively strong position. We have cash reserves of just in excess of USD 400 million. And just lastly, I think, the other key highlight in the overnight press release is our favorable revision to guidance for the full year. Kumtor is performing well -- very well -- I think it's exceeding our guidance, it's exceeding our internal plans. And on the back of that, we've favorably revised the gold production levels as well as favorably revising our cost guidance levels by approximately 8% on both metrics. So that really does position us well for the back half of this year, when you think about our go-forward earnings potential and cash flow generation potential.
Just moving on to the next slide on Slide 6. Just a few charts here that I'll reference. Firstly the chart there in the top left is just a waterfall graphical illustration of our year-to-date cash flow profile. I think the key takeaway is what it's illustrating, is we have been operating as a internally-funded business model. And you can see the 2 green increments there, represent the positive operating cash flow generated by the 2 operating assets. The key red decrement of $146 million is our capital investment expenditure requirements. And as you move to the right, you can see we've also been routinely and ahead of schedule reducing our debt. We reduced our EBRD credit facility by some $25 million in the said period. And then likewise, on the Mount Milligan credit facility, we've reduced that by some $35 million in the first 6 months of this year.
We would expect that trend to continue and are focusing on the back of the strong profitability and the strong production that we've seen from both assets. The pie chart on the top right is just again a summary of our treasury position. You can see in terms of cash reserves, in aggregate, we're sitting in around USD 400 million relative to a total gross debt position of some $447 million. So at the end of the second quarter, it was a net debt position of some USD 50 million. And, again, as we move forward, we expect to continue paying down debt. We are expecting stronger cash flow generation in the second half of this year in this metal price environment. So we would expect by the end of this year, that will be swinging in that position into a net cash position.
Just lastly, in terms of the chart there on the bottom right, just in terms of our retained earnings profile, obviously, we're very proud of this. At the end of Q2, we had a positive retained earnings balance of some USD 937 million. And, again, that obviously speaks to the quality of the operations and a profitability no matter where we've been during the prevailing gold price environment. I think this chart really does illustrate that nicely.
When you look at the blue segment here in these column charts, you can see, generally speaking, year-over-year, we've been growing our retained earnings, which speaks to that consistency in terms of profitability.
With that, I'm going to turn the call over to Gordon Reid, our Chief Operating Officer.
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [4]
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Thanks, Scott. Good morning, everyone. As Scott mentioned, Work Safe, Home Safe continues to be rolled out across the organization. 100% of our employees at Kumtor have completed the initial training. Mount Milligan's employees will be 100% complete in September. We have begun the training in our molybdenum division down at Langeloth in -- outside Pittsburgh, and Turkey and Mongolia will follow soon afterwards In the quarter, there were 3 reportable injuries. On April 11, at Kumtor, we've already reported to you about the fatal injury to Mr. [Batiko]. That official investigation was completed and closed out. There was also 2 medical aids, 1 at our TC Mine in Idaho and 1 at our Mount Milligan Mine. At the TC Mine, a medical aid occurred when a maintenance worker was splashed near his eyes by caustic solution during the repair of a leak, and a medical aid at Mount Milligan occurred when an environment technician slipped on a windfallen tree, which resulted in stitches. Both employees are expected to recover fully.
The total reportable injury frequency rate was 0.29 for the quarter and 0.20 for the year.
Moving to operations. For the quarter, on a consolidated basis, we produced 195,719 ounces of gold at an all-in sustaining cost of $742 per ounce. Copper is treated as a byproduct, and the revenue from the 15.1 million pounds produced at Mount Milligan in the quarter is included as an offset to the all-in sustaining cost.
Kumtor produced 138,623 ounces at an all-in sustaining cost of $780 per ounce, and Mount Milligan produced 57,096 ounces at an all-in sustaining cost of $473 per ounce.
Consolidated production guidance for 2014 -- 2017 has been revised upwards to 785,000 to 845,000 ounces of gold produced at an all-in sustaining cost of $693 per ounce to $747 per ounce on a by-product basis.
Kumtor will produce 525,000 to 555,000 ounces of gold, and Mount Milligan will produce 260,000 to 280,000 ounces of gold. Copper production will be 55 to 65 million pounds of copper for the year.
Unit mining cost at Kumtor in the second quarter was $1.13 per tonne mined. Mining costs were favorably impacted by fuel prices and by the continuous improvement projects I've spoken to you before, including improved haul roads that have resulted in improved tire life and higher average haulage speeds by the addition of greedy boards, which have added 10 tonnes per load and by other business improvement initiatives.
Kumtor accessed the Sarytor in June. This will be stockpiled, and as per the plan, will start to be fed to the mill in the fourth quarter.
Milling cost at Kumtor was $10.75 per tonne for the quarter. At Mount Milligan, average unit mining cost for the quarter was $1.72 per tonne mined. Mining is on track to achieve our 2017 targets. Milling cost at Mount Milligan was $5.21 per tonne for the quarter. The increased cost compared to Q1 is primarily due to the cost of an unbudgeted total shutdown to upgrade the ball mills as per recommendations from the ball mill drive manufacturer.
June mill throughput at Mount Milligan averaged 55,600 tonnes per day. We continue to see incremental improvements in both recovery and throughput from the ongoing continuous improvement initiatives. A drill program to expand and improve the resource at Mount Milligan will be initiated in Q3.
In Mongolia, after a significant review and discussion and taking into account the ongoing delays and negotiating equitable agreements with the Mongolian government, the outcome of certain technical studies and their impact on the project, the current gold price environment and the current Mongolian fiscal regime, we concluded that we could not support a carrying value of over $100 million and reduce the carrying value of our Mongolian assets to $60 million. We will continue to optimize the Gatsuurt project and continue to negotiate the requisite agreements with the Mongolian government.
At Öksüt, the pastureland land use permit approval remains outstanding. We expect the first gold pour to occur approximately 18 months after start of construction, which remains subject to receipt of the final permit and board approval. The power line construction was completed and the line energized. Engineering is 85% complete with the remaining engineering being deferred until we receive the pastureland permit. Critical long-lead items are being stored by the manufacturers. Drilling to expand the resource on the existing land position has been initiated.
I'll now turn the call over to Darren.
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Darren J. Millman, Centerra Gold Inc. - CFO & VP [5]
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Thanks, Gord. Good morning, everyone. And for those following on the slide deck, I'm on Slide 13. Total revenue from operations during the quarter was $275 million. Gold revenue increasing 37% to $220 million, and Kumtor's revenue increasing to $169 million with an additional 7,000 ounces sold compared to the comparative period.
Mount Milligan operations contributed $51 million and $27 million in gold and copper sales, respectively, from 3 concentrate shipments made during the quarter. A total of 188,225 ounces of gold was sold during the quarter and 14.4 million pounds of copper sold. The average realized price per ounce was $1,165 for the quarter. This accounts for both third-party gold sales and gold stream pour from the Mount Milligan Mine.
Operating cash flow before changes in working capital increased to $122 million from $60 million in the prior year comparative period. $23 million or $0.08 per share were earned during the quarter and this also includes the Gatsuurt impairment noted by Gord.
On July 31, we agreed terms with Centerra B.C. Holdings Facility syndicate to increase the revolver credit facility by $50 million to $125 million. The amendment to the facility was put in place to provide greater financial flexibility in the short-term. The other key change is now -- we are now permitted to make distributions up to Centerra without a matching prepayment requirement on the term debt. One condition for the execution under the amended revolver is to enter into a 2 hedge -- 2-year hedging program, inclusive of existing copper and gold hedges with a targeted minimum average price of gold at $1,200 per ounce and copper having minimum average of $2.50 per ounce. The new program will be heavily weighted towards collars for both copper and gold hedges. As hollered by Gord, we have positively revised production and cost guidance at Kumtor and reaffirmed our Mount Milligan guidance. You will note in charts below on Slide 14, both year-to-date and for the second quarter, a consolidated all-in sustaining cost achieved were under $750 per ounce, positioning Centerra well in the low-cost quartile compared to our peers.
Given our low-cost operations, both the Kumtor and Mount Milligan mines generated significant cash flow with $76 million and $51 million, respectively, generated to-date from operations.
You'll note in the table below, the overall cash balances have increased to $401 million at the end of the second quarter with our debt levels reducing to date by $60 million to $447 million. Based on forecast, we continue to expect both mines to generate significant cash flow for the remainder of 2017, with Q4 of 2017 still planned to achieve a highest level of production at both mines. I'll now turn it back to Scott, to wrap up.
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Scott Graeme Perry, Centerra Gold Inc. - CEO & Non-Independent Director [6]
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Okay. Thanks, Darren. Just referencing Slide 17 in terms of wrapping up. I think, really the key bullet point to reference here is the third bullet point on the left of the slide here. As Darren mentioned, I guess, the overnight results presenting -- we're reporting here very strong production, strong cost performance and strong earnings performance. That momentum, we expect to carry over into the second half of this year. As per our original guidance, for the beginning of this year, we expect to be a back-end weighted sort of production profile this year. And in terms of that all-in sustaining cost profile, year-to-date was sitting at $746 per ounce. I think you're going to see that continue to trend lower, then obviously that puts this revised guidance in favorable context. In terms of the revised guidance on the all-in sustaining cost, $693 to $747 per ounce and if you take that midpoint, I think that does really position Centerra as one of the lowest cost producers in terms of our comparative peer group. This will continue to showcase well on a go-forward basis, obviously, and we look forward to reporting that, as we make our way through the year.
With that operator, if I can pass the call over to you, just to open it up to any Q&A, please.
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Questions and Answers
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Operator [1]
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(Operator Instructions) Our first question comes from the line of Rahul Paul with Canaccord Genuity.
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Rahul Paul, Canaccord Genuity Limited, Research Division - Director [2]
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So at Mount Milligan, it looks like you did see a reasonable improvement in throughput in the month of June. I'm just wondering if you are able to comment on the trend that you've seen in Q3 so far, specifically in the month of July and have you seen that June performance continue?
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [3]
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I'll take that question, Rahul. Yes, Mount Milligan continues to improve on throughput. One of our main issues is the reliability of certain pieces of equipment and that total shutdown we had in June to upgrade the ball mills, not in June, in -- earlier in the third quarter -- in the second quarter to upgrade the ball mills, we've seen positive effects of that. We've also seen positive effects of the geomet model and other incremental improvements we're making to the comminution circuit. So yes, our production in June, we're seeing it carry forward.
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Rahul Paul, Canaccord Genuity Limited, Research Division - Director [4]
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Perfect. And then also on the gold recoveries. We saw an improvement there as well in Q2 with Q1. And do you see that -- I know there is quite a bit of a gap that you need to close between what you're seeing now in the life of mine, but this seems to be a little bit above what you may have budgeted for the year. Are those improvements -- do you see those improvements as being sustainable on the gold recovery side of Mount Milligan?
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [5]
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I do, Rahul. We've seen improvements in both gold and copper recovery, although, the more significant recovery improvements have been on copper. We've still seen improvements in gold, and we anticipate being on or better than our budgeted recovery for the year.
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Rahul Paul, Canaccord Genuity Limited, Research Division - Director [6]
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Fair enough, I mean, no doubt about it, copper is doing better. I mean, that's why I asked you about the whole set. Overall, it is good to see the improvement. If I could just move on to the Mongolian assets and the write-down that you took there. You mentioned it had to do with preliminary results from technical studies and the current (inaudible) gold price. Could you give us a bit more color? Are the economics still marginal at this point that you would not go ahead with Gatsuurt even if the investment agreements were signed? Or is it not as bad, just trying to understand a little bit further?
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [7]
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Sure. Well, we haven't completed, like, but we are working on an update to the feasibility study and that is not yet completed. We don't anticipate completing that till sometime in Q3. I mean the economics suggests that we do have a reserve depending on the gold price we use and it is economic, but it also suggests that it would be hard for us to support the carrying value we had at the time. As you know, they use different discount rates, et cetera, in terms of the financial justification preparing that value. So we took the position that we should write it down now, but the economics -- The feasibility study will be done in Q3, but the economics to date support the reserves at Gatsuurt.
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Rahul Paul, Canaccord Genuity Limited, Research Division - Director [8]
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Fair enough. And how much of the write-down was driven by a decrease in the gold price assumption and a change in the discount rate?
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Darren J. Millman, Centerra Gold Inc. - CFO & VP [9]
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Rahul, the discount rate has grown from Mongolia, with the movements in interest rates. So that is a large impact. I can't recall what we used for the feasibility 10 years ago, but I think it was a lower gold price environment, but yes, that will just -- we're bringing out the feasibility in Q3, and all will be revealed.
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Rahul Paul, Canaccord Genuity Limited, Research Division - Director [10]
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Okay. Okay. And just moving on to Kyrgyzstan. Has the Kyrgyz government provided a response to the recent arbitration ruling? Have they commented about it in the parliament? Have there been any discussions? Have you spoken to them since then?
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Scott Graeme Perry, Centerra Gold Inc. - CEO & Non-Independent Director [11]
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So -- hi Rahul, this is Scott. I mean, there's really 2 questions you are asking there. In terms of the first question, on any sort of governmental reaction to the interim sort of measures application and ruling. No, I'm not aware of any sort of government comments or what have you, be it in public, be it in the parliament, speeches, et cetera, I haven't seen anything, and I haven't seen anything picked up in press clippings or what have you. So it's been relatively silent. And I'd like to think that the reason for that is, over the last 3 months, we've been very active in terms of discussions and ongoing negotiations, and I think the momentum there is very positive. It's hard for me to say much more than that, but no -- so yes, we have been very active discussions with the government recently, but not a lot of discussion around that interim sort of measures application ruling.
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Operator [12]
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Our next question comes from the line of Robert Reynolds with Crédit Suisse.
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Robert Reynolds, Crédit Suisse AG, Research Division - Research Analyst [13]
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Just on the Kumtor guidance raise on production. What exactly, I guess, happened there this year that resulted in the improved outlook? Did you have a positive grade reconciliation or better-than-expected mill throughput, a little bit more color there would be helpful?
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [14]
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Sure, Robert, it's Gordon here. As you know, 100% of our feed for this year, other than a little bit in the fourth quarter, will come from existing stockpiles. What we found is that the capping that we used in the blast hole model, as we built those stockpiles, particularly in the high-grade traction was overly conservative. So in the -- in our high-grade stockpile, we're getting more gold than anticipated. So that is certainly a contributing factor and that will continue until that high-grade stockpile is used up, which will happen later this year. And so that is a contributing factor to the improved performance. In addition, we've done many things at Kumtor to improve throughput through the mill and recoveries and productivity, in general, to reduce our overall unit cost. We added -- I mentioned I think we added these greedy boards, which has 10 tonnes per load, which over 100 units, significantly adds to our production coming out of the mine. We've done the improvements on our road, which has increased the haul speed, which again improves our production out of the mine. There's a number of things we've done, that improve our productivity, reduce our costs as well as the positive grade variance from the stockpiles.
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Robert Reynolds, Crédit Suisse AG, Research Division - Research Analyst [15]
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So just to follow up on the capping in the blast hole model. Is that something that you will be reviewing for the overall reserve model as well? Or is that more just related to this year's -- or the stockpiles that were built up over last year?
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [16]
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It's only related to last year's production. We had [EMEC] involved in this evaluation because of the -- we didn't quite understand why we were getting such a positive variance. And we confirmed that it does not impact the resource model. The resource model is performing as planned. But last year, when we mined through the SB Zone, we mined quite a bit more than we typically do, and this capping -- conservative capping wasn't picked up previously because it's only a small fraction of the total feed. This year, it's a much larger fraction with total feed and it was identified as an anomaly. We've investigated it. We've adjusted the capping going forward in the blast hole model, but it's a 1-year phenomenon and it will not impact the resource model.
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Robert Reynolds, Crédit Suisse AG, Research Division - Research Analyst [17]
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Okay. And then, just a finance question. In terms of the hedging that's required, if you decide to draw the additional $50 million on the B.C. facility, you provided, I guess, numbers on how many ounces and pounds would be required to hedge. If you drew the full $50 million, but how does that relationship work if you draw less than the full $50 million? Should we think of it as linear versus not drawing anything?
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Darren J. Millman, Centerra Gold Inc. - CFO & VP [18]
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No. So we need to -- condition to -- for the full $50 million is to put in place the entire hedge book as noted in the financial statements. So now you presented there, it's a reduction of, say, $25 million will still require that hedge book now.
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Operator [19]
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(Operator Instructions) Our next question comes from the line of David Haughton with CIBC.
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David Haughton, CIBC World Markets Inc., Research Division - MD & Head of Mining Research [20]
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Just looking at Mount Milligan. You had mentioned that the throughput had improved in June and the trend continues into this quarter. Have you seen any trade-off with the higher throughput versus the recovery? The recovery reported in the last quarter had exceeded expectations. Have you seen any trade-off there?
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [21]
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David, that's a good point. Typically if you would increase the throughput, you don't get the grind size that you need and it impacts recovery. In this case, so we're making improvements on both sides. We're seeing an improvement in recovery over our forecast and budget, and we're also seeing incrementally better throughput week-on-week, month-on-month, so we're making gains on both ends.
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David Haughton, CIBC World Markets Inc., Research Division - MD & Head of Mining Research [22]
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And also I am presuming that the better throughput is more a function of greater availability post the SAG rather than necessarily pushing more material through, it's just more uptime, is that right?
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [23]
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That's right. It's -- our main issue right now is reliability of the equipment. The SAG is performing well right now after these -- well, the SAG mill is working fine. Whenever we lose a piece of ancillary equipment such as the pebble crusher or a ball mill, that impacts throughput incrementally instead of 2,700 tonnes per hour, it could knock us down to 1,800 tonnes per hour, which isn't captured in the availability numbers, but does impact our average throughput. So it's working on the reliability of the ancillary equipment, which is our key focus right now.
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David Haughton, CIBC World Markets Inc., Research Division - MD & Head of Mining Research [24]
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All right. And you've still got a expectation of getting to 62,500 tonnes through 2018?
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Gordon Dunlop Reid, Centerra Gold Inc. - COO & VP [25]
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Yes, yes, yes, that's correct. We want to be achieving 60,000 tonnes per day on a sustained basis by the end of this year and targeting an incremental more to 62,500 by the end of 2018.
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David Haughton, CIBC World Markets Inc., Research Division - MD & Head of Mining Research [26]
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Got it. Just over to Turkey. It's good to see that their power lines in place and encouraging that perhaps the government is moving in the right direction for you. What's your engagement been like with the regulators and what sort of sense do you get about the consideration of this final permit?
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Scott Graeme Perry, Centerra Gold Inc. - CEO & Non-Independent Director [27]
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Good morning, David. It's Scott. Gord and myself and the management were just over in Turkey recently. And I think in terms of the level of engagement, I think the industry itself has been very engaged with the regulators and what have you. I think we're hearing a lot of positive things in terms of progress on these remaining permits that ourselves and some of our peers are looking for. We're relatively optimistic that we should be in receipt of our permit before year-end, but let's wait and see if that's what eventuates, but based on what we're hearing, it seems pretty positive. The other thing that you may have seen in Gord's slide, is just recently, the National Power Utility company has fully constructed 26 kilometers of power line infrastructure out to our project and that power line has been fully energized and connected. So we're kind ready to go there, and again, we are the sole customer on that power line. So really the one thing awaiting for us is this one outstanding permit and then we have everything that we need to break ground. I think everything that points to our optimism or our confidence is on the credit side, you may have seen in the financial statements, Darren has also extended, that credit facility, just in terms of the availability and the commitment time line there. So we're making sure we're ready to go, but that's about as much as I can say, Dave.
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David Haughton, CIBC World Markets Inc., Research Division - MD & Head of Mining Research [28]
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Okay. That's encouraging. Now for those of us that would like to show an adjusted earnings number for you. Clearly, we've got that impairment of $41.3 million to make the adjustment for, but that's on a pretax basis. Is there a tax implication there as well? What would the post-tax number be?
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Darren J. Millman, Centerra Gold Inc. - CFO & VP [29]
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Yes, under $2 million.
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David Haughton, CIBC World Markets Inc., Research Division - MD & Head of Mining Research [30]
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So it's relatively immaterial?
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Darren J. Millman, Centerra Gold Inc. - CFO & VP [31]
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Yes, correct.
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Operator [32]
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And we have no further questions from the phone line. I'll turn it over back to use, sir.
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Scott Graeme Perry, Centerra Gold Inc. - CEO & Non-Independent Director [33]
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John, do you want to wrap up? Do you want to close?
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John W. Pearson, Centerra Gold Inc. - VP of IR [34]
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Yes, that's perfect. Thanks Scott. And I want to thank the management team for calling in from Mount Milligan, and I want to thank, everyone, for joining us on this call. I'm here in Toronto. If people have further questions, give me a call. So thank you very much. We're going to wrap up now. Bye.
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Operator [35]
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Ladies and gentlemen, that concludes today's call. We thank you for your participation and ask you to please disconnect your lines.
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