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Centerra Announces Second-Quarter Loss
Centerra Gold, operator of Boroo Mines in Mongolia, reported second-quarter losses, after contending with past months of low gold recoveries coupled with labor and licensing pitfalls. Net losses for the quarter were $79.6 million, or 36 cents a share, compared with profits from a year ago totaling $56 million, or 26 cents a share.
Excluding items, the Canadian company recorded a loss of $30.3 million, or 14 cents a share, compared with earnings of $13.8 million, or 6 cents a share.
Centerra’s Boroo mining licenses were reinstated on July 27 after a government suspension.  The Mineral Resources Authority of Mongolia suspended the licenses on June 12 for a period of up to three months.
The suspensions were due to “operating issues such as record keeping, incorrect land use and improper operating procedures”.
The mine, located 110 km outside of Ulaanbaatar, was also subject to a total work stoppage, which started on May 26 in protest of lay-offs.  On June 2, 11 of the workers started a hunger strike.  The labour dispute was settled on June 16.
The company is currently negotiating with the Mongolian government over the Gatsuurt gold development project – its second site in the country.
Total gold output for Centerra totalled 110,457 ounces at a total cash cost of US$667 per ounce produced, compared to 158,303 ounces at US$489 per ounce in 2008.
Company officials expected 160,000 to 170,000 ounces of gold to be produced at Boroo this year, prior to the strike.
Centerra also has operations in the Kyrgyzstan and Nevada, United States, and is partly owned by Canadian uranium producer Cameco Corporation.