Greetings, and welcome to the Centerra Gold 2020 Second Quarter Results Conference Call and Webcast. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Friday, July 31, 2020.

I would now like to turn it to John Pearson, Vice President, Investor Relations. Please go ahead sir..

Thank you, operator. I would like to welcome everyone to Centerra Gold's second quarter results conference call. We have summary slides which are available on Centerra Gold website to accompany each speaker's remarks.

Today's call is open to all members of the investment community and media and following the formal remarks the operator will give the instructions for asking a question and then we will open the phone line to questions. Please note that all figures are in U.S. dollars unless otherwise noted.

Joining me today remotely is Scott Perry, President and Chief Executive Officer; Darren Millman, Chief Financial Officer; Dan Desjardins, Chief Operating Officer; and Yousef Rehman, our General Counsel.

I would like to caution everyone that certain statements made today maybe forward-looking statements and as such are subject to known and unknown risks which may cause our actual results to differ from those expressed or implied. Also certain of the measures we will discuss today are non-GAAP measures.

Please refer to our description of non-GAAP measures in the news release and MD&A.

For a more detailed discussion of the material risks, assumptions and uncertainties please refer to our news release and MD&A issued this morning along with the unaudited financial statements and notes and our other filings all of which can be found on SEDAR and the company's website at CenterraGold.com.

And now I'll turn the call over to Scott Perry. .

Thanks John and good morning everyone and thanks for dialing into our Q2 earnings conference call. I hope and wish that everyone is safe and well during these extraordinary times of the COVID-19 pandemic. In terms of my remark I'm just referencing slide 5 of our accompanying earnings conference call presentation deck.

Just looking at each of these bullet points, first bullet point here just regards the COVID-19 pandemic obviously extraordinary times. I think we as a team, as a company we've been very diligent in terms of the preventative measures and the protocols we've put in place and I think it's been serving us well to the best of our knowledge.

All three of our operations are currently virus free and so you see that in terms of our operating results, our levels of productivity etc. Generally speaking we've been unaffected by the COVID-19 pandemic. In terms of safety, continues to be a primary focus for us as well as the COVID-19 pandemic.

The well-being the health and the safety of our employees is our number one focus.

In terms of safety, we had a number of milestones in the quarter but really one of the key notable ones Oksut our new operation in Turkey just recently achieved three million man hours of lost time incident free operations which is a fantastic milestone for the property and full credit very commendable to our leadership team in Turkey.

Likewise you can see here in the third bullet point one of the key milestones during the quarter was Oksut which is our new gold mining operation, our third operation we actually declared and achieved commercial production during the quarter. This has been again a fantastic milestone.

We poured first gold in January and to be so quickly declaring commercial production thereafter I think is very competitive. In terms of the operational results I think is a great quarter for the company. You can see here in the fourth bullet point we produced just under 220,000 ounces of gold and just over 19 million pounds of copper.

There was an excellent level of gold production and copper production and you can see that really resonates in the bullet points below where if I reference the last bullet point our own sustaining cost company-wide was very competitive $804 per ounce.

You can see in parenthesis there each of our operations were each producing gold lower than an [indiscernible] sustaining cost of $700 per ounce. So at Kumtor $692 per ounce and Mount Milligan $679 per ounce at Öksüt very low cost at $537 per ounce.

So albeit Öksüt still in its sort of initial ramp up phase that already is presenting as one of our lowest cost operations in our portfolio. So obviously in terms of prevailing gold price environment this makes for a very high margin business. If I move to the next slide on slide 6, just to address some of the financial highlights.

You can see the first bullet point here just given that low all-in sustaining costs the high level of productivity and the high margins that I referenced earlier.

You can see that's really flowing through in terms of the bottom line profitability and I'll talk at free cash flow but first bullet point here our net earnings during Q2 was $80.7 million which equates to $0.27 per share but when you look at the free cash flow if I move to the second bullet point and the third bullet point the cash provided by operations was a very strong $268 million but here in the third bullet point I think this is really the key takeaway the business is performing really well just given the current gold price environment, the level of production, the low all-in sustaining costs and you can see that's really resonating in terms of our free cash flow generation.

So in Q2 on a company-wide basis we generated $169 million of positive free cash flow but really I think one of the key takeaways we look at in parenthesis there all of our operations are generating very meaningful positive free cash flow. So Kumtor itself generated $157 million of positive free cash flow.

Mount Milligan generated $34 million positive free cash flow and what I was most pleased with is Öksüt we only just declared commercial production but in its first sort of stub quarter of commercial production it's already generating positive free cash flow of $5 million and I think this presents well in terms of where our business is going as we move forward here quarter-over-quarter we're expecting meaningful progressive increases in production from Öksüt and that's going to put us in really good stead to see growing free cash flows coming out of Turkey.

The fourth bullet point here just given the strong level of profitability, strong free cash flows you can see one of the things that, Darren our Chief Financial Officer, he's been very focused on eliminating all the debts on our balance sheet and we've now finished the quarter with a debt-free balance sheet which I think presents really well and I think it's a very competitive balance sheet which is our comparative peer group.

So we finished the quarter with a net cash position of $212 million and if you take into account our available credit lines we now have a total liquidity of $712 million. So very strong treasury position and obviously positions our business very well moving forward.

The fifth bullet point here we continue to maintain our guidance which was originally issued at the beginning of this year. As I mentioned the outset we haven't seen any meaningful impact in terms of the COVID-19 pandemic. So we didn't withdraw our guidance. We actually continue to maintain and reiterate that guidance moving forward.

Last bullet point I will reference here is that our dividend shareholders may have noted that we've now increased our quarterly dividend by 25% on a go forward basis. We're going to be looking to maintain that quarterly dividend at $0.05 per share. Last thing I'll reference on this slide is just the charts here at the bottom.

I think it just speaks to some of the bullet points above but you just look at where our business is going and I think it's a scenario about our fundamentals are strengthening here quarter-over-quarter just given the rising gold price environment but we're also benefiting from a lot of devaluation that we're seeing in the local currencies in terms of the jurisdictions where we operate as well as a lower diesel fuel price environment.

So the margins that we're seeing in our business now are potentially the highest margins that I personally have seen in the five years that I've been in the company.

So just looking at the charts moving from left to right you can see Kumtor we had a fantastic Q1 but in Q2 here it's been even better more than anything because of the higher gold price but you can see it come towards the quarter-over-quarter increase in free cash flow $157 million in Q2.

Likewise at Mount Milligan you see the growth quarter-over-quarter but likewise Oksut again this is our new operating mine in Turkey and very pleased to see that already transitioning to positive free cash flow and as I mentioned earlier as we move forward over the course of this year we are expecting a meaningful progressive quarter-over-quarter increase in gold production.

So that's going to bode well in terms of where Oksut profitability and free cash loads are going to be going here in Q3 and Q4. And then obviously it all resonates in the chart there on the bottom right in terms of the company wide free cash flow.

Again I think that was a very competitive sort of peer leading level of free cash flow of the company generating $169 million of positive free cash flow. Just moving on to slide 7, again just focusing on the free cash flow theme, you can see the chart here in the top left.

It's just the typical waterfall charges illustrating the level of free cash flow that was generated by the operating mines.

So you can see all three mines together generated $294 million of free cash flow and this is for the first six months of this year on a year-to-date basis and the red decrements you can just see how we've been deploying that cash flow.

So the first decrement there obviously one of our key focus has been eliminating any sort of debt facilities on our balance sheet and as I mentioned earlier now finish the quarter with a debt-free balance sheet.

You can see we've also been, we've redistributed $17 million in terms of dividend distributions and then you can see the remaining decrement associate with our development projects corporate G&A and exploration. I will reference the chart in the bottom left.

Again I've spoken to these numbers the positive free cash flow but whenever I'm presenting this charter I like to talk to 2019.

So when you look at Q2, Q3, Q4 you can see the level of positive free cash flow that we're generating on a company-wide basis was relatively modest but you can see the significant step up that took place in Q1 of 2020 and so what I like to reference is in 2019 obviously the company we're very focused on the construction of Oksut and so a lot of the positive free cash flow we're generating from Kumtor and Mount Milligan we're using that free cash flow to finance the construction and offset and as we exited 2019 construction was essentially pretty close to being complete and so you can see the immediate step up in positive free cash flow in Q1 of 2020.

That step up it's even more pronounced when you look at the Q2 result of $169 million of positive free cash flow because obviously Oksut we're no longer in construction has now transitioned into operations. We declared commercial production and as you saw in our Q2 results Oksut was actually generating positive free cash flows.

So again I think this puts us in really good stead.

It bodes really well for what we can expect in terms of Centerra's go forward profile as Oksut is going to be increasingly contributing meaningful positive free cash flow and again this puts us in really good state as we move forward here and last point I'd reference is I realized gold price during the quarter was just over $1,600 per ounce obviously we are in a much stronger goal price environment as we speak.

So if that does continue again it just bodes really well for where our profitability and positive free cash flow is going. The chart at the bottom right speaks to the debt free balance sheet that I spoke to earlier.

You can see year-over-year we've been very progressively paying down our debt and we've now successfully achieved a debt-free balance sheet and finishing the quarter of a net cash balance of $212 million.

With that I'm now going to look to pass the call over to Dan Desjardins who's our chief operating officer and Dan will expand a bit more on some of the operational highlights. So Dan please..

Thanks Scott. Good morning everyone. Please move to slide 9. Our Q2 operational highlights start with safety and we have a number of highlights. In April both Kemess and Oksut both achieved a one year lost time injury free.

At Kumtor where you have 900 contractors they've just achieved two years without a lost time incident and then in July at Oksut the 1100 strong workforce there hit 3 million man-hours without an LTI. This is a majority of these hours were during the very difficult winter we had through construction and with all majority of new employees.

So we feel very proud of that operation. On the production front we had a very strong quarter. We produced 219,692 ounces of gold and 19.1 million pounds of copper at an all-in-sustaining cost of $804 per ounce sold. In terms of the Q2 results by operation Kumtor continues to produce at a steady rate.

We're blending the cutback 19 ore feed from the stockpile and in the quarter we had a recovery rate of 84% which was very strong. On the COVID front in Kyrgyzstan it was substantially under control in April and May in the country due to strong measures taken by the government. Although recently there has been a large increase in cases in Kyrgyzstan.

Due to the remoteness of our operation the company is able to test and quarantine employees and contractors at our off-site quarantine facility before going to the mine site. This has allowed us to the best of our knowledge keep the property virus free.

On the operating supplies we've built up in case of interruptions and we do have strong support from government to continue operations. Kumtor in the second quarter produced 173,245 ounces that's what they poured at an all-in sustaining cost of 696.

The site did have some large capital equipment purchases in the quarter and will benefit from that long into the future. We finalized our new design for the Lysii waste dump in the quarter, taking into account all the learning lessons from the tragic failure that we had.

This was submitted to government in the quarter and just the past week we did receive approval from the government to return to the Lysii waste dump which will see us get back up to planned tonnages for cutback 20 in Q3 given the benefit from the haulage profiles, the reduced haulage distance and the resulting efficiencies.

Kumtor generated $156.9 million free cash flow in Q2 and that brought our year-to-date free cash flow to $253 million. Taking into account the successful drilling campaign of 2018-2019 Kumtor is on track to release an updated 4311 technical report this fall validating that this mine it really is a tier one mine.

Shifting over to Mount Milligan, COVID in northern British Columbia is very much under control. We continue to keep strong discipline according to government guidelines which has helped us run at full capacity since late May.

We did have two weeks where we shut down the mine but we also brought the mill down for a full maintenance shut in April which set the site up for success and we've been able to run at our full complement of employees since.

We achieved a throughput average in the quarter of 48,000 tons per day which reflected a planned shut down for the mill that we did but we also achieved a record throughput tonnage mark in June exceeding 63,500 tons per day along with excellent recovery of both copper and gold.

So in the quarter Mount Milligan produced 35,656 ounces of gold and all-in sustaining cost of a very strong 679 and it produced 19.1 million pounds of copper. On the process water topic, we had a very wet spring and it's been continuing to be cool and wet. So we have ample water to run at full capacity.

At the end of June we had 6 million cubic meters of water and inventory and that's continued to build. So we continue to pursue medium and long-term solutions that will give us ample water to have no impacts on operations. Milligan generated $34 million in free cash flow in the quarter and 56 million for the year.

At our Oksut, our new mine as Scott mentioned our first gold pour was at the end of January and we achieved commercial production May 31. The COVID situation in Turkey is stable as the country executed a full control opening in April 15. Our mine has been operating.

It did have two weeks of interruption for the first two weeks of April but there's been little to no effect on operations since that time. Gold production front we did 10,791 ounces for the quarter at an all-in sustaining cost of 537 per ounce for one month of commercial production.

Even as we continue to ramp up the operation generated $13.5 million in cash from operations and 5 million free cash flow on the quarter. We go over to slide 10, we can talk about our operational key focus. For 2020 we continue to focus on improving our safety performance.

We've engaged some subject matter experts and adjust ourselves to improve our controls especially of key risks. At Oksut we have ramped up commercial production in mine tons, crushed or placed on the heap and our ADR plant is running as design. Subsequently the heap will keep increasing its leaching of ounces as per our plants.

By the end of Q2 we did have 1.2 million tons stacked on the heap under irrigation and a large ore stockpile waiting for crushing and placement. For 2020 Mount Milligan's team is focused on achieving consistent and improved mill throughput and recovery and is getting a stronger handle on the plant mechanical availability.

The operations team also is taking steps to improve its cost performance throughout the company. We are taking advantage of this lower commodity pricing to build our inventories and now Milligan we have flattened our organizational structure. We've scrutinized our rentals and all contracts as well as improving mine productivity.

Kumtor is on track to deliver its updated 43,101 in the fall of 2020. We'll be converting a meaningful portion of our measured and indicating resources into reserves and showcasing an extended mine life. Finally we continue brownfield exploration with a planned $32 million investment company-wide including $20 million at Kumtor.

We move over to slide 11. This is the graph of our water inventory in the TSF and as you can see we have a substantial inventory as compared to the levels at the same time in the previous three years. On slide 12, these are photos of Oksut including last fall’s mining Heap Bleach Pad and facilities. As you can see there is blue sky over the site.

Now I'll turn the call over to Darren..

Thanks Dan and good morning everyone. For those following on our investor deck on slide 14 Centerra recorded $412 million in revenue during the quarter. This consisted of $346 million in gold sales, $40 million in copper sales and $26 million from a molybdenum business unit.

During the quarter the company's average gold price realized was $1,620 per ounce and $2.06 per pound of copper. In the quarter, we sold 217,000 ounces of gold, 170,000 ounces attributable to Kumtor, 35,000 ounces from Mount Milligan and 12,000 gold ounces being sold at Oksut.

As proof of mentioned by Scott and Dan Oksut achieved commercial production on May 31. In comparison to prior year quarter gold ounces sold had an increased by 10% and 7.7% increase in comparison to the first quarter of 2020. We sold 19.3 million pounds of copper a slight increase in comparison to the prior year quarter.

I'll just move over to slide 15. Net earnings of 80.7 million was recorded in the first quarter. This included a $17.1 million non-cash adjustment to our closed site asset retirement obligation. The expenses associated with the movement in the underlying discount rates with reference to U.S. and Canadian treasury bond rates.

There was no change to the underlying activities required to remediate the properties. The adjusted earnings after excluding the non-cash IRR expense was $97.8 million. The adjusted earnings per share for the quarter was $0.33.

From a consolidated cost perspective Centerra in the quarter production costs were $410 per ounce and all-in sustaining cost of $804 per ounce. At an asset level Kumtor recorded all in sustaining costs of $696 per ounce while Mount Milligan recorded an all-in-suspending cost of $679 per ounce for the quarter.

For the month of June Oksut recorded an all in sustaining cost of $537 per ounce. And all our operations recorded significant betterment in cash provided by operations. Kumtor recorded $220 million in cash from operations, a 138% increase.

Mount Milligan recorded $42 million, a 158% increase from operations with Öksüt contributing 13 million in a quarter. This translated to $160 million in consolidated free cash flow for the quarter with Oksut delivering 5 million in free cash flow while still in the early phases of ramp up.

Year-to-date the company has generated $246 million in free cash flow. As noted in the bottom left-hand table Centerra repaid all of its debt and finished with $212 million in cash and $712 million in total liquidity. On slide 15 I'd also refer you to the bottom right hand chart.

Year-to-date the company has produced 410,000 ounces of gold tracking very well to achieve guidance as Oksut ramps up in the second half of 2020. Cost year-to-date also tracking well with all-in sustaining cost of $804 per ounce below the current guidance range.

In the second half of 2020 the company expects the Kumtor will process more lower grade material than in the first half of 2020 but also expects an increase in production from Oksut mine as it continues to ramp up its gold production.

Full year gold production guidance for 2020 is being maintained between 740,000 ounces to 820,000 ounces for the year. Year-to-date the company spent $166 million on capital expenditure slightly below target with the remainder expected to be incurred in the second half of the year. Total CapEx for 2020 is guided to $415 million.

Given the financial strength of the company, the free cash flow generations now from all three mines, this Centerra board increased a quarterly dividend to $0.05 for the quarter at 25% increase and is expected to be at this consistent level "will still subject to regular board approvals." With that, I'd pass it back to Scott..

Thanks, Darren. And look, obviously look to wrap up the presentation here on Slide number 17. Just representing the top left quadrant here, just a couple of PowerPoints on your reference.

Obviously the first PowerPoint that Darren just spoke to, this is our guidance and this gives you a bit of an appreciation for us though in terms of I'll go now put them in top of the sheet and we're targeting up to 820,000 ounces of gold and then on sustaining copper rose $820 per ounce.

Obviously in the prevailing gold price environment, this is going to present very well and sometimes of our profitability and ongoing free cash flow generation potential.

As a reference here throughout the deck, the second bullet point here, we had a very strong competitive quarter, good level gold output and again at a very competitive own sustaining cost. That obviously really resonated here in the third bullet point you see that flowing through in terms of our profitability and our free cash flow generation.

I think was a peer leading result in terms of the quarterly free cash flow generation of a $169 million. Fourth bullet point, you can see that in terms of how it have been deploying that cash and very focused on presenting a debt free balance sheet. We've now achieved that here in Q2 finishing the quarter the net cash position of $212 million.

And you can take in account all valuable credit facility capacity. As Darren mentioned, we have over $700 million of total treasury liquidity and certainly an internally funded business model moving forward. The fifth bullet point here just in terms of the dividend as Darren just mentioned here on the board declared a 25% increase.

And our quarterly dividends have increased to $0.05 per share. And this is the quarterly given that we expect to be maintaining moving forward. The last bullet point here then quite as earlier, everything we continue to be on track with releasing Kumtor's new 43-101 Mount Mine technical report we're targeting to release that in the fall of this year.

And with that study, we're looking to convert a meaningful portion of the mentioned and indicated resource increase that we announced back in March this year.

So, looking to convert this in a meaningful portion of that to reserve category and that's going to allow us to showcase a meaningful expansion in Kumtor's 200 ton added asset reserve lap moving forward.

Come to the, the target and top ride, you know, we now got an excess of $1.1 billion of positive retain earnings and just look at the history there in terms of the blue segment on these columns and in this chart you can see some tariffs and very good history in terms of profitability and obviously growing that retain earning balance regardless of where it'd been in the prevailing gold price cycle which is illustrated by the red line chart.

And then, what I think is one of the key takeaways from the quarter is the chart at the bottom of the slide we can say need to know operations been producing all the free cash flow. What I'm very pleased with this is when you look at the quarter-over-quarter progression in each operation or other operation that's showing very meaningful improvements.

And the profitability and the positive free cash flow and that reflects the underlying productivity, the underlying cost efficiency but also just the benefit of this the higher gold price environment that we're benefiting from. And Darren mentioned at Oksut, we're expecting a meaningful progressive increases in the gold output profile some offset.

So again, that's going to potentially present very well in terms of where our profitability and our free cash flow generation is going in the back half of second half of this year. With that, I look to wrap up the presentation there. But what I like to do now is pass the call back to the operator and we can move into Q&A session.

Operator, I can pass it to you, please..

Certainly. [Operator Instructions] And the first question from line of Bryce Adams from CIBC. Please go ahead..

Hi, good morning Scott and Dan. Thanks for taking my questions. I have two operational questions. Firstly, the big drive at Kumtor coming from the stockpiled ore will tick under 4 grams per ton. And the stockpiled ore grade is 1.8 grams to my understanding.

In that context, our question is for how long is that elevated grade profile sustainable and what's your grade outlook for the second half?.

Okay, thanks Bryce. I'll give that call to Dan. I'm sorry, I'll give your question to Dan, actually for hurrying up the -- Dan, do you want to touch on that just in terms of the different category the stockpiles we have in the sense in the 1.8 grams that Bryce touched on.

But also maybe just state just some of the positive grade reconciliations that we're seeing on the high grade and the medium grade..

Absolutely. Okay, thanks Bryce. It's a good question. Bryce, we have a large stockpile actually in our life of mine plan. You always see that we end up milling for a couple of years after the end of the mine life. So, we have do have a very large low grade stockpile set aside. Our cut-off grade is 0.8 of a gram.

So, when you see the average of the 1.8, that's the averaging of the whole thing. So, our second half as Darren indicated, we will be lowering the grade slightly.

But we're blending both our high grade, medium grade and whatever amount of our low grade that we want to put in in order to maximize our recoveries and make our plans through to the end of feeding the stockpile. So, to answer your question, we will, we'll still be we'll be lower than the second quarter, that's our current plan right now.

But we have a lot of flexibility depending on how much of are very high grade. As Scott alluded too also, we've been seeing some very good positive grade reconciliations in our high grade stockpile. And that we anticipate that probably to go forward but we don’t budget for that. So, those are additional allowances we end up getting on a regular basis..

I think I got it.

So, for the second half, do you think it would normalize back to sort of Q1 levels that a good draw to use?.

We were we're targeting guidance. We'll still believe we're going to be within guidance. So yes, it's certainly back also to the quarter one, yes..

My second question rise to Mount Milligan unit cost. So, 2020 cost per ton for mining and milling continue to demonstrate significant improvement over the 2019 levels.

Could you touch on and remind me what the key drivers are for that cost improvement?.

Well, one of our -- that's a good question, Scott, I got you I can take that, that's fine..

Yes, go ahead..

First of all, our new general manager from here, he's been there a year and a half ago who's being doing an excellent job just looking for efficiencies and we brought it different experts to do that. So, it's on but they've also benefitted from the lower diesel fuel price which is one of our major cost drivers.

And he's flattened his organizational structure. So, some of the labor costs are down. So, and overall he's found some efficiencies in mining. So, we are anticipating a continued benefit on the mining side..

And how significant is the Canadian dollar for those unit costs..

Did not. Not highly unless it's affected by the oil price. All our labor cost there and we buy a pretty much 100% locally, so..

Got it. Okay, that's it from me. Thanks for taking the questions. I'll talk to you all again soon, cheers..

Thanks..

The next question's from the line of Dalton Baretto from Canaccord Genuity. Please go ahead..

Thank you. Good morning, everybody. I like to talk a little bit about this COVID situation that seems to be escalating in Kyrgyzstan at potentially around Kumtor. And more specifically, I'm trying to understand the implications on your 2021 production profile.

So, in an year-to-date, we've only mined 585,000 tons of ore and that's been a function of the whole destined and so on. But if you're going to be curtailing rates going forward to keep the headcount down, what are the implications with 2021.

I mean, what's the plan to keep the mills out there?.

Thanks, Dalton. And Dan, do you want to -- Dan, how about you address that but then just also touch in the fact that we never scheduling to mine any ore this year and [indiscernible] but then I'll pass it over to you..

Yes, thanks. Thanks Dalton, a very good question and yes we have been affected on our total mine tons. But mostly due to our terrible incident in Lysii which caused us to have to hold from cut-back 20 which is our we're very high up in in one ridge down to our central valley which has greatly extended our whole distances.

Another complication that we've been having that we're getting through now is much of that whole distance is at the maximum of 10% grade. And during the past few months, this is our snowy season in the spring. And so, we've lost some time just from weather conditions, slippery conditions.

So, we believe we're coming around the corner now, now that we've got our permits to go back into Lysii and we've also come down kind of ways on that cut-back or more than a 100 meters down. So, we're looking much better.

The implications are right now we were not going to be mining any ore in the remainder this year and very little in the first two quarters of next year. So, it's all about the release of ore. What we've done is we've looked at our mine plans and with the drilling results we have adjusted our mine plans.

So, we're really seeing substantially similar ounce production for 2020 with our actuals that we know up to today as was in the original 43-101 life of mine plans that is public..

Okay. So, the finest -- sorry go ahead..

Sorry, Dan. Dan, misspoke a little bit when he said we're seeing a consistent level of production in 2020. I think Dan's referring to 2021. So, the success we had a number and we had to re go somewhat heavy..

Yes it's right, yes..

It's seems of our mine plan which is draft right now, we'll be releasing that in the fall of this year. But in terms of how we're recalibrating that, we are seeing a similar level of gold production in 2021 which is similar or consistent with what was in the original 43-101.

So, that expiration success has alleviated any challenges that we may be facing right now in terms of mining productivity level..

Okay, great. So, 2021 production is not rest despite but you may be mining last or now or this year..

Correct. And okay, that's something with. And I'm being repetitive, I apologize but in our regional plans this year, we'll never we won't even schedule re-mining any ore. The plan always for this year even pre-pandemic, is we're going to be exclusively treating ore from our stockpile inventory.

And in terms of that mining activity, we'd be exclusively focused on raised mining..

Right. No, I understand that but I'm just wondering where the ore from 2021 will come from.

So, that's our stockpile ore as well?.

So, the first half of 2021 is from stockpile ore and then was we sort of increasingly move into later Q3, Q4, then it's the release of ore from cut-back 21..

Understood, okay. And then just maybe one more question on the COVID issues and the impact on your workforce. Is that a function of you actually catching it before the mine gate and quarantining people or are you actually saying absentees and office while just given increasing rates..

And Dan, you want to take that, please?.

Yes, I'd be happy to. Well, there is a little bit of absentees and due to all the family stresses when obviously when family members are affected either moderately or severely. We can have people calling in and being sick. But a majority is that on our screening process where we're very stripped.

We for most of up until now we and we still do now, we test people twice. And so, that's picked up a lot of positive cases and because of that if they were quarantined with other people, those other people even will go off for two weeks longer because they had exposure to someone who's tested positive.

So, we've been very strict which did then effect in some of our crew changes because we anticipated certain 30, 40 people coming up and if one or two, if one was positive then all 45 for example. So, we've adjusted our strategies since February to account for the different changes. But we're feeling positive.

We continue to feel positive that we can operate through this time and we're getting great cooperation from government when we've had different challenges..

Okay, great. Just maybe one last ones made and I'd jump back in queue. So at Oksut, I understand the leach pad kinetics. But year-to-date you're just 19% of the low end of guidance from a production perspective.

Is that in-line with your plans and now you were thinking?.

Well no, good news Dalton, I think what I've been representing to the investment you need is that what you know the fact when we were sort of speaking in the capital market investment during Q1, Q2 as I said you're going to see the Q2 production will be doubled what we achieved in Q1.

And then here in Q3, again I'm expecting that we'll be producing more than double what we produced in Q2. So, for example if you look at our guidance, you'd be expecting us to be producing for the in excess with the 10,000 ounces per month year. And the back half of this year.

And I can confirm that we already achieved that level of run rate here in the month of July at Oxford. Going to be a very meaningful progressive ramp up in gold production and it's progressing well..

That's fine. Thank you, guys I'll jump back in queue..

The next question's from the line of Mike Jalonen from Bank of America. Please go ahead..

Good morning, Scott and everyone. Just had a question, Greenstone, Scott, I'm sure you've noticed Iamgold moving ahead with Cote gold. It is a $1900 gold price for the IRR which was interesting but high price. So, just wondering what gold or it is, what the status is, project is? Okay, thanks..

Another same lines of questions. No change in status, both of our organic growth projects where obviously have the Kemess project in British Columbia and then we have the Greenstone joint venture project in on Ontario.

In terms of the economics that we've been looking at in terms of our prior economic assessments from office back to everything you know in our boardroom setting. We're not seeing a value proposition or a rate of return that would compel the board to make a per say decision or construction decision. And that continued to be the case.

So, if I look at the course of this year and moving on to the next year and that consisting our guidance, I presently don’t see as making a constructive decision on either of our project..

Okay, thank you..

The next questions from the line of Mike Parkin from National Bank. Please go ahead..

Hi guys, congrats on a really solid quarter. I just wondering for you know you mentioned you're continuing to progress on the long-term water solution from Mount Milligan.

So, any major milestone that should be watching for in the back half of the year?.

Dan, do you want to address that?.

Sure, Scott. In terms of milestone, that I wouldn’t say there's a milestone. We are having a formal application and we expect to file more detailed materials and analysis to support all the water sources that we're looking for. But in terms of milestone, that I don’t see anything on the long-term.

It's ticking along and as you can appreciate it's a work everyone process in terms of consultation with regulators and first nation. So, that's that all I can say on the long-term. We are looking at potentially expanding the current medium term water sources that we have. But again that's all part of the process..

Okay. And then, just one other follow-up to Bryce's question on the grade performance at tune during the second quarter.

Can you tell us what your internal budget was just to have a sense of like what that positive reconciliation factor was?.

I don’t think I can, Mike. As a matter of fact, a I tried in another court what our internal budget when it's there because you can imagine our budgetary is more of a stress target relative to get in which is somewhat discounted. So now, I don’t think I'm in a position to describe that, Mike..

Alright, just happy to see that it continues. Alright, well thanks very much and congrats on the quarter..

Thanks, Mike..

The next questions from the line of Trevor Turnbull with Scotiabank. Please go ahead..

Yes, thanks. Maybe just a quick kind of housekeeping question on the coronavirus related questions you addressed a minute ago.

I was just wondering, does the Kyrgyz Republic have any sort of travel restrictions that makes it hard to either bring in people that you need as consultants for whom to or even people on rotation that are trying to come in from other countries.

And just how are you addressing that?.

Dan, do you want to take that, please?.

Yes, very happy to. Just certainly since the beginning, the Kyrgyz government had greatly restricted regular flights. They did repatriate a lot of their nationals from around the world and that's really what brought the virus in.

And in terms of the government made it clear more than two months ago that any mining company or business that required their expats to come in, they approved that. But we have not taken advantage of that. We did not want to be contributing to any increase. So, we've dramatically decreased the number of expats that we have in country.

But we've learnt very well to manage from a distance and just as we have been doing here in Canada and Toronto. So, we don’t see any effect rate now on that.

In terms of consultancy, we've had some small delays and a few of our capital projects but we've been now been able to bring in the consultants required for both the different construction capital projects that we have. And we'd have to find different ways to be able to complete our 43-101 and have all the consultants' sign-off supports.

So, we're looking okay. In terms of our shift changes etcetera, we've extended our stay at the mine site which just makes it easier to do the screening. But we've been able to shift in and out people as we require..

Okay. You just mentioned the 43-101. And you've said that's coming out this fall.

Any tighter tie, I mean, can you tell us that's going to be Q3, Q4, any sense of better timing on that?.

Dan, why don’t I take that? Trevor, I don’t think we can give you any specific firmer timing on that. We've set up board meeting yesterday obviously in terms of discussion on the board. The board wants to make sure that we produce a very high quality products giving what we've been referencing.

And we stood and have a fixed time on in terms of when we're going to and then [indiscernible] the board and had a board meeting etcetera. So, I don’t think we can address that question..

Then the other thing I wanted to ask about Kumtor and with respect to the new trucks and the increase to the fleet. I think you said there was a 11 trucks getting added.

What does that kind of work out to in terms of increased haulage capacity that you've got compared to the existing fleet?.

Dan, will you attend it, please..

Yes, no problem. So, our existing fleet is just was just shy of a 100 trucks, 2/3rds being 789s. However, we're adding will look to be we've adding an 11 here, so that would be adding about 10% to our capabilities. And then, we'll be adding additional equipment most likely as we move forward with the 43-101..

And with respect to those trucks, obviously it increases your ability to move everything. But you're also facing some of these issues as you alluded to earlier with the relocation of the waste dump.

Is some of the new fleets excess capacity, is that actually getting is that a way of mitigating some of the longer haulage distances or is that truly or say 10% increase in capacity or is some of that eroded by the longer haulage distances?.

Yes, certainly you're correct. Some as we are planning to move more tons per year but not 10% more tons. So, it is because of the additional yes hauling distance..

Alright, I appreciate that. And then finally, just one last kind of strategic question for your guys. Scott, you went through a number of kind of bullet points with respect to the debt to balance sheet liquidity.

And not only where you stand in terms of a very comfortable liquidity position but also you're adding to that with free cash flow and Oksut continuing to ramp up. I'm sure you're starting to get capital allocation priority questions from investors.

We're getting them with respect to all of our companies and especially those that are building up more and more cash. You raised your dividend, so there is a little bit there but then you also I think just mentioned that neither of you two kind of pipeline projects are quite ready to make decisions on.

So, what are you telling investors with respect to capital allocation, what happens to all these cash?.

Trevor, your question is very appropriate and very valid. As I mentioned we've had a board meeting yesterday and we spent a lot of time talking about this in terms of capital allocation. We management having a strategy session with our board in September and as you can imagine that's one of the key agenda items is capital allocation.

And what we're going to do with this growing profitability, the strong free cash flow especially if the strong gold price environment continues. So, we recognize that. As I mentioned earlier we don't see ourselves making a construction decision that to our organic growth opportunities. So, capital locations going to be paramount.

But Trevor, I can't honestly I can't answer your question because we're going to be strategizing on that with the board in the month of September. But obviously if you're kind of referencing shareholder friendly initiatives I would acknowledge that there is certainly potential there for us to be considering that.

That's about as much as I can say Trevor. I'm sorry..

No problem. I think we'll be anxious to see what you guys come up with. That's all I had, thanks..

The next questions is a follow-up from Brian MacArthur from Raymond James. Please go ahead. .

Hi, good day. Most of my questions been answered but just want to clarify a couple things. First of all in the 43-101, are we going to have the benefit of the permits that you've just got from the Lysii waste dump i.e.

the benefits of the shorter hauls than you maybe would have had if you hadn't been able to use that going forward? Is that all going to be incorporated into this study? I mean I think it originally was but I wasn't sure what you were doing given that was a uncertain situation..

Yes.

Dan, you want to take that, please?.

Yes, absolutely. Yes, where we've definitely incorporated that. We never really thought it was uncertain the government would approve us going back but we had to go through the steps to get to actually get the adjusted permits from a safety angle, from an environmental angle. So, all those have been received.

We're going to we're building off of our end of June possibly even the end of July actuals for the 43-101. So, it'll reflect everything that as we understand it going forward..

Great, thanks. And I apologize to go back to the grades that Kumtor because obviously a flexibility with all the stockpiles there. But I just want to make sure some of the benefits positive reconciliation but are you actually and you mentioned you had to blend it to keep everything to get recoveries.

But you actually trying to manage obviously you got a stockpile there, gold prices are higher, are you actually trying to manage to the gold price here with therefore taking a little higher grade in near term or is it purely just balancing the blending to get the recoveries of what you're doing?.

Dan, you or I can take that but I just want to reiterate we are not managing to the gold price more than anything, Brian. We have been seeing positive grade reconciliations.

And I recognize when you look at our guidance for Kumtor and look at where we stand and it's the first half of this year that we're very well positioned in terms of what that could mean moving forward. But in terms of our guidance we continue to maintain it.

We continue, we haven't made any changes because I think we just want to be very measured and how we're guiding the market because there is uncertainty regarding the COVID-19 pandemic. But we're definitely not managing to the gold price. It's just been a positive stockpile to mill reconciliation.

But Dan, is there anything you want to add to that?.

Scott, that's right. Because we're feeding off stockpile over starting six months ago and going for another almost year, yes we're trying to have a steady state maximizing our recovery really is the greater focus..

Great, thanks. That's what I thought but I just wanted to make sure. Thank you..

And there are no other questions. I'll turn it back over for closing remarks..

John, do you want to close the call?.

Yes, that's great Scott. Thank you all for joining us on the call today. And I look forward to answering any further questions. So with that, we'll wrap up the call. Thank you..

That does conclude the conference call for today. We thank you for your participation and you can now disconnect your lines..