EX-99.1 2 exh_991x20230331.htm EX-99.1

Condensed Consolidated Interim

Financial Statements

For the Three Months Ended March 31, 2023 and 2022

---

Centerra Gold Inc.

Condensed Consolidated Interim Statements of Financial Position

(Unaudited)

									March 31, 2023						December 31, 2022
(Expressed in thousands of United States dollars)
Assets			Notes
Current assets
Cash and cash equivalents									$	412,068					$	531,916
Amounts receivable									139,747						92,161
Inventories									297,056						316,799
Other current assets			4						45,202						49,784
									894,073						990,660
Property, plant and equipment			5						1,257,428						1,272,792
Deferred income tax assets			10						59,700						61,900
Other non-current assets									8,586						10,557
									1,325,714						1,345,249
Total assets									$	2,219,787					$	2,335,909
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities									$	163,701					$	199,433
Income tax payable									4,731						1,890
Other current liabilities			4						54,899						73,529
									223,331						274,852
Deferred income tax liabilities			10						7,922						8,719
Provision for reclamation			7						251,775						227,867
Other non-current liabilities									12,809						14,180
									272,506						250,766
Shareholders' equity
Share capital			11						888,505						886,479
Contributed surplus									30,083						29,564
Accumulated other comprehensive loss									(7,609)						(3,323)
Retained earnings									812,971						897,571
									1,723,950						1,810,291
Total liabilities and shareholders' equity									$	2,219,787					$	2,335,909
Commitments and contingencies (note 13)

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

1

---

Centerra Gold Inc.

Condensed Consolidated Interim Statements of (Loss) Earnings and Comprehensive (Loss) Income

(Unaudited)

												Three months ended March 31,
(Expressed in thousands of United States dollars)																		2023						2022
(except per share amounts)			Notes
Revenue			6															$	226,529					$	295,223
Cost of sales
Production costs																		204,293						144,225
Depreciation, depletion and amortization																		18,508						37,489
Earnings from mine operations																		3,728						113,509
Exploration and evaluation costs																		17,910						8,160
Corporate administration																		14,792						12,278
Care and maintenance expense																		7,834						6,759
Reclamation expense (recovery)			7															15,566						(41,964)
Other operating expenses			8															12,890						3,494
(Loss) earnings from operations																		(65,264)						124,782
Other non-operating (income) expenses			9															(3,180)						5,323
Finance costs																		3,368						892
(Loss) earnings before income tax																		(65,452)						118,567
Income tax expense			10															7,998						29,167
Net (loss) earnings																		(73,450)						89,400
Other Comprehensive Loss
Items that may be subsequently reclassified to earnings:
Changes in fair value of derivative instruments			14															(4,286)						(1,755)
Other comprehensive loss																		(4,286)						(1,755)
Total comprehensive (loss) income																		$	(77,736)					$	87,645
(Loss) earnings per share:
Basic			11															$	(0.34)					$	0.30
Diluted			11															$	(0.34)					$	0.30
Cash dividends declared per common share (C$)																		$	0.07					$	0.07

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

2

---

Centerra Gold Inc.

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)

												Three months ended March 31,
																		2023			2022
(Expressed in thousands of United States dollars)
Operating activities						Notes
Net (loss) earnings																		$	(73,450)		$	89,400
Adjustments:
			Depreciation, depletion and amortization															20,435			38,793
			Reclamation expense (recovery)			7												15,566			(41,964)
			Share-based compensation expense															3,121			2,281
			Finance costs															3,368			891
			Income tax expense			10												7,998			29,167
			Income taxes paid															(1,130)			(24,423)
			Other															68			(1,032)
																		(24,024)			93,113
Changes in working capital						12												(75,762)			(64,829)
Cash (used in) provided by operating activities																		(99,786)			28,284
Investing activities
			Property, plant and equipment additions															(6,102)			(19,158)
			Acquisition of the Goldfield Project			16												—			(176,737)
			Proceeds from disposition of property, plant and equipment															1,472			1,905
			Increase in restricted cash			4												(3,424)			—
Cash used in investing activities																		(8,054)			(193,990)
Financing activities
			Dividends paid			11												(11,150)			(12,272)
			Payment of borrowing costs															(580)			(623)
			Repayment of lease obligations															(1,542)			(1,713)
			Proceeds from issuances of common shares															1,264			1,520
Cash used in financing activities																		(12,008)			(13,088)
Decrease in cash during the period																		(119,848)			(178,794)
Cash at beginning of the period																		531,916			947,230
Cash at end of the period																		$	412,068		$	768,436

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

3

---

Centerra Gold Inc.

Condensed Consolidated Interim Statements of Shareholders' Equity

(Unaudited)

(Expressed in thousands of United States dollars, except share information)
			Number of Common Shares						Share Capital Amount						Contributed Surplus						Accumulated Other Comprehensive (Loss) Income						Retained Earnings						Total
Balance at January 1, 2023			218,428,681						$	886,479					$	29,564					$	(3,323)					$	897,571					$	1,810,291
Net loss			—						—						—						—						(73,450)						(73,450)
Other comprehensive loss			—						—						—						(4,286)						—						(4,286)
Transactions with shareholders:
Share-based compensation expense			—						—						1,174						—						—						1,174
Issued on exercise of stock options			239,429						1,570						(473)						—						—						1,097
Issued under the employee share purchase plan			37,512						203						—						—						—						203
Issued on redemption of restricted share units			31,391						253						(182)						—						—						71
Dividends declared and paid (C$0.07 per share)			—						—						—						—						(11,150)						(11,150)
Balance at March 31, 2023			218,737,013						$	888,505					$	30,083					$	(7,609)					$	812,971					$	1,723,950
Balance at January 1, 2022			297,064,750						$	984,095					$	30,809					$	6,829					$	1,021,883					$	2,043,616
Net earnings			—						—						—						—						89,400						89,400
Other comprehensive loss			—						—						—						(1,755)						—						(1,755)
Transactions with owners:
Share-based compensation expense			—						—						679						—						—						679
Issued on exercise of stock options			260,287						1,806						(506)						—						—						1,300
Issued under the employee share purchase plan			31,997						253						—						—						—						253
Issued on redemption of restricted share units			30,693						239						(186)						—						—						53
Dividends declared and paid (C$0.07 per share)			—						—						—						—						(12,272)						(12,272)
Balance at March 31, 2022			297,387,727						$	986,393					$	30,796					$	5,074					$	1,099,011					$	2,121,274

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

4

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

1. Nature of operations

Centerra Gold Inc. (“Centerra” or the “Company”) was incorporated under the Canada Business Corporations Act on November 7, 2002. Centerra’s common shares are listed on the Toronto Stock Exchange under the symbol “CG” and on the New York Stock Exchange under the symbol “CGAU”. The Company is domiciled in Canada and its registered office is located at 1 University Avenue, Suite 1500, Toronto, Ontario, M5J 2P1. The Company is primarily focused on operating, developing, exploring and acquiring gold and copper properties in North America, Türkiye, and other markets worldwide.

2. Basis of presentation

These unaudited condensed consolidated interim financial statements (“interim financial statements”) of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (“IFRS”), International Accounting Standard 34, Interim Financial Reporting (“IAS 34”), as issued by the International Accounting Standards Board (“IASB”). These interim financial statements do not contain all of the annual disclosures required by IFRS, and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022.

These financial statements were authorized for issuance by the Board of Directors of the Company on May 12, 2023.

3. Summary of significant accounting policies

These interim financial statements have been prepared using accounting policies consistent with those used in the Company’s audited consolidated financial statements as at and for the year ended December 31, 2022.

New standards and amendments issued but not yet effective or adopted are described below:

IAS 1, Presentation of Financial Statements

In January 2020, the IASB issued an amendment to IAS 1, Presentation of Financial Statements, to clarify one of the requirements under the standard for classifying a liability as non-current in nature. The amendment includes:

–Specifying that an entity’s right to defer settlement must exist at the end of the reporting period;

–Clarifying that classification is unaffected by management’s intentions or expectations about whether the entity will exercise its right to defer settlement;

–Clarifying how lending conditions affect classification; and

–Clarifying if the settlement of a liability refers to the transfer of cash, equity instruments, other assets, or services.

The Company will perform an assessment of the amendment on its financial statements prior to the effective date of January 1, 2024. Based on the currently available information, the Company does not anticipate any impact on its financial statements from this amendment.

5

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

4. Other current assets and liabilities

			March 31, 2023						December 31, 2022
Other current assets
Current portion of derivative assets(1)			$	6,228					$	11,791
Receivable from Orion(2)			25,000						25,000
Prepaid insurance expenses			4,814						7,213
Deposits for consumable supplies			1,824						1,686
Marketable securities			832						830
Restricted cash(3)			3,424						—
Other			3,080						3,264
Total other current assets			$	45,202					$	49,784
Other current liabilities
Current portion of lease obligations			$	4,719					$	5,245
Current portion of derivative liabilities(1)			11,030						14,189
Current portion of provision for reclamation (note 7)			7,910						10,941
Deferred milestone payment (note 16)(4)			31,114						30,871
Deferred revenue(5)			—						12,283
Other			126						—
Total other current liabilities			$	54,899					$	73,529

(1)Relates to the diesel, foreign exchange, and copper hedging contracts (note 14).

(2)Payment from the Orion Resource Partners (USA) LP (“Orion”) receivable as part of the 2021 disposition of the Greenstone Partnership.

(3)Relates to cash pledged as security against the guarantee letter supporting the pastureland permit at the Öksüt Mine.

(4)The deferred milestone payment related to the acquisition of the Goldfield Project is amortized each period using the effective interest rate method (note 16).

(5)Relates to an advance payment received on the gold and copper concentrate for which the control transferred to a customer in January 2023.

5. Property, plant and equipment

The following is a summary of the carrying value of property, plant and equipment (“PP&E”):

			Buildings, Plant and Equipment						Mineral Properties(1)						Capitalized Stripping Costs						Construction in Progress						Total
Net book value
Balance January 1, 2022			$	835,475					$	354,898					$	23,910					$	57,808					$	1,272,091
Balance January 1, 2023			$	732,848					$	494,571					$	14,438					$	30,935					$	1,272,792
Balance March 31, 2023			$	718,381					$	496,960					$	15,647					$	26,440					$	1,257,428

(1)Includes exploration and evaluation assets of $326.4 million related to the Goldfield Project and the Kemess Project.

During the three months ended March 31, 2023, $8.0 million of additions were capitalized to PP&E while PP&E with a carrying value of $1.4 million was disposed of.

6

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

During the year ended December 31, 2022, $275.1 million of additions were capitalized to PP&E, including the $208.2 million related to the acquisition of Goldfield Project and associated transaction costs (note 16). During the year ended December 31, 2022, PP&E with a carrying value of $0.6 million was disposed of.

As at December 31, 2022, the Kemess Project’s carrying amount exceeded its estimated fair value less cost of disposal, and an impairment loss of $145.9 million ($138.2 million, net of tax) was recognized in the consolidated statements of (loss) earnings.

6. Revenue

Total revenue consists of the following:

			Three months ended March 31,
			2023						2022
Gold revenue			$	53,976					$	156,224
Copper revenue			49,435						68,240
Molybdenum revenue			113,504						58,554
Other by-product revenue(1)			4,328						3,188
Revenue from contracts with customers			$	221,243					$	286,206
Provisional pricing adjustment on concentrate sales(2)			7,598						10,832
Metal content adjustments on concentrate sales			(2,312)						(1,815)
Total revenue			$	226,529					$	295,223

(1)Includes silver, rhenium and sulfuric acid sales.

(2)Includes mark-to-market adjustment related to 17.7 million pounds of copper, 24,952 ounces of gold, and 104,076 pounds of molybdenum (March 31, 2022 - 23.3 million pounds of copper, 24,998 ounces of gold, and nil pounds of molybdenum) in the gold and copper concentrate and molybdenum product shipments subject to final pricing as at the period-end.

7. Reclamation

a.Reclamation provision

The following table reconciles the beginning and ending carrying amounts of the Company’s provision for reclamation.

			March 31, 2023			December 31, 2022
Balance, beginning of the period			$	238,809		$	337,480
Changes in estimate			1,138			75,705
Changes in discount rate			17,233			(168,520)
Accretion			2,161			5,616
Liabilities settled			—			(3,926)
Foreign exchange revaluation			344			(7,546)
Balance, end of the period			$	259,685		$	238,809
Current portion of reclamation provision			$	7,910		$	10,942
Non-current portion of reclamation provision			251,775			227,867
Total provision for reclamation			$	259,685		$	238,809

7

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

b.Reclamation expense (recovery)

Reclamation expense recognized in the condensed consolidated interim statements of (loss) earnings and comprehensive (loss) income for the three months ended March 31, 2023 was $15.6 million. The expense was primarily attributable to a decrease in the risk-free interest rates applied to discount the reclamation cash flows at the Endako Mine, Thompson Creek Mine and Kemess Project. As of March 31, 2023, the nominal risk-free interest rates used in discounting the reclamation provision were in the range of 2.9% to 3.7% at the Endako Mine, Thompson Creek Mine and the Kemess Project. As of December 31, 2022, the nominal risk-free interest rates used in discounting the reclamation provision were in the range of 3.3% to 4.0% at the Endako Mine and Thompson Creek Mine.

Reclamation recovery recognized in the condensed consolidated interim statements of (loss) earnings and comprehensive (loss) income for the three months ended March 31, 2022 was $42.0 million. The recovery was primarily attributable to an increase in the risk-free interest rates applied to discount the reclamation cash flows at the Endako Mine and Thompson Creek Mine. As of March 31, 2022, the nominal risk-free interest rate used in discounting the reclamation provision was 2.4% at the Endako Mine and Thompson Creek Mine. As of December 31, 2021, the nominal risk-free interest rate used in discounting the reclamation provision was 1.9% at the Endako Mine and Thompson Creek Mine.

8. Other operating expenses

						Three months ended March 31,
												2023						2022
Selling and marketing(1)												$	2,369					$	3,279
Öksüt Mine standby costs(2)												10,419						—
Other, net												102						215
Other operating expenses												$	12,890					$	3,494

(1)Primarily includes freight charges associated with the Mount Milligan Mine and the Langeloth processing facility.

(2)Includes costs incurred at the Öksüt Mine that could not be capitalized to production inventory during the period of suspension of operations.

9. Other non-operating (income) expenses

						Three months ended March 31,
												2023						2022
Kumtor Mine litigation and related costs(1)												$	—					$	6,490
Interest income(2)												(4,237)						(649)
Foreign exchange loss												1,046						423
Other expenses (income)												11						(941)
Other non-operating (income) expenses												$	(3,180)					$	5,323

(1)Primarily includes legal fees related to the Company’s international arbitration claim against the Kyrgyz Republic, negotiations with the government of Kyrgyz Republic and the filing for protection under Chapter 11 under the Federal US Bankruptcy Code by Kumtor Gold Company CJSC and Kumtor Operating Company CJSC, and related consulting costs that were all completed in 2022.

(2)Primarily includes interest on bank term deposits.

8

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

10. Income taxes

									Three months ended March 31,
												2023						2022
Current income tax expense												$	6,595					$	37,516
Deferred income tax recovery												1,403						(8,349)
Total income tax expense												$	7,998					$	29,167

The Company recognized income tax expense of $8.0 million for the three months ended March 31, 2023. The Company’s effective income tax rate of (12.2%), for the three months ended March 31, 2023 is lower than the statutory Canadian income tax rate of 26.5% primarily because of the decrease in current income taxes on income from the Öksüt Mine as a result of the suspension of gold room operations at the adsorption, desorption and recovery plant, partially offset by a one-time income tax levied by the Turkish government on taxpayers eligible to claim Investment Incentive Certificate benefits in 2022.

11. Shareholders' equity

a.(Loss) earnings per share

Computation for basic and diluted (loss) earnings per share:

						Three months ended March 31,
												2023						2022
Net (loss) earnings												$	(73,450)					$	89,400
Dilutive impact related to the PSU plan												(471)						(952)
Diluted (loss) earnings												$	(73,921)					$	88,448
Basic weighted average common shares (in thousands)												218,575						297,251
Dilutive impact of stock options (in thousands)												—						585
Dilutive impact related to the RSU plan (in thousands)												—						725
Dilutive impact related to the PSU plan (in thousands)												1,190						—
Diluted weighted average common shares (in thousands)												219,765						298,561
(Loss) earnings per share:
Basic												$	(0.34)					$	0.30
Diluted												$	(0.34)					$	0.30

For the three months ended March 31, 2023 and 2022, certain potentially anti-dilutive securities, including stock options, were excluded from the calculation of diluted (loss) earnings per share due to the exercise prices being greater than the average market price of the Company’s common shares for the respective periods.

9

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

Anti-dilutive securities excluded from the calculation are summarized below:

						Three months ended March 31,
												2023						2022
RSUs and stock options excluded from (loss) earnings per share (in thousands)												1,940						1,668

b. Dividends

On May 12, 2023, the Board approved a quarterly dividend of C$0.07 per share to shareholders of record on May 29, 2023.

12. Supplemental cash flow disclosures

Changes in working capital

						Three months ended March 31,
												2023						2022
Increase in amounts receivable												$	(48,735)					$	(63,670)
Decrease (increase) in inventory												20,741						(7,851)
Decrease in other current assets												2,631						2,850
(Decrease) increase in trade creditors, accruals and other liabilities												(48,636)						4,611
Decrease in other taxes payable												(1,763)						(769)
Changes in working capital												$	(75,762)					$	(64,829)

13. Commitments and contingencies

Commitments

As of March 31, 2023, the Company had entered into contracts to acquire PP&E totalling $2.8 million.

Contingencies

Mount Milligan Mine Royalty

The Company received a notice of civil claim in the first quarter of 2020 from H.R.S. Resources Corp. (“H.R.S.”), the holder of a 2% production royalty at Mount Milligan. H.R.S. claims that since November 2016 (when the royalty became payable) the Company has incorrectly calculated amounts payable under the production royalty agreement and has therefore underpaid amounts owing to H.R.S. The Company disputes the claim and believes it has correctly calculated the royalty payments in accordance with the agreement. The Company believes that the potential exposure in relation to this claim over what the Company has accrued, is not material.

14. Financial instruments

The Company’s financial instruments include marketable securities, amounts receivable (including embedded derivatives), derivative financial instruments and accounts payable, other current and non-current assets (including amounts receivable from Orion) and other current liabilities (including the deferred milestone payment to Waterton Nevada Splitter, LLC (“Waterton”)).

10

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

a.Derivative financial instruments

The Company uses derivative financial instruments as part of its risk management program to mitigate exposures to various market risks including commodity prices, foreign exchange rates and diesel fuel prices. The Company’s derivative counterparties are syndicate members of the Company’s Corporate Facility ($400.0 million revolving credit facility, which is available to be drawn upon), mitigating credit risk, and, on an ongoing basis, the Company monitors its derivative position exposures.

			March 31, 2023						December 31, 2022
Derivative instrument assets
Current
Foreign exchange contracts			$	732					$	112
Fuel contracts			1,143						2,572
Royal Gold deliverables(1)			1,783						1,410
Copper contracts			2,570						7,697
			6,228						11,791
Non-current
Foreign exchange contracts			1,020						633
Fuel contracts			272						444
Copper contracts			1,798						4,450
			3,090						5,527
Total derivative instrument assets			$	9,318					$	17,318
Derivative instrument liabilities
Current
Foreign exchange contracts			$	10,665					$	14,088
Fuel contracts			363						80
Royal Gold deliverables(1)			2						21
			11,030						14,189
Non-current
Foreign exchange contracts			3,332						4,575
Fuel contracts			274						13
			3,606						4,588
Total derivative instrument liabilities			$	14,636					$	18,777

(1)Relates to Royal Gold deliverables, which are gold and copper forward contracts for gold ounces and copper pounds, respectively, payable to Royal Gold.

11

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

Hedge derivatives

The derivative instruments outstanding as at March 31, 2023 that are accounted for as hedges are summarized below:

Average Strike Price

Total Position(1)

Instrument

Unit

2023

2024

2025

Type

Fuel hedge contracts

ULSD zero-cost collars

Barrels

$97/$108

$98/$110

N/A

Fixed

31,000

ULSD swap contracts

Barrels

$95

$98

$106

Fixed

115,800

Foreign exchange contracts

US$/C$ zero-cost collars

CAD

$1.26/$1.33

$1.28/$1.36

$1.32/$1.37

Fixed

516,000,000

US$/C$ forward contracts

CAD

$1.29

$1.32

$1.35

Fixed

342,000,000

Copper contracts

Copper zero-cost collars

Pounds

$4.00/$4.92

$4.00/$5.06

N/A

Fixed

24,801,975

(1)Total amounts expressed in the units identified.

Fuel contracts

The Company applies hedge accounting to derivative instruments it enters into to hedge a portion of its estimated future diesel fuel purchases at its Mount Milligan Mine operations to manage the risk associated with changes in diesel fuel prices on the cost of operations. The fuel hedge contracts are expected to settle over time by the end of 2025.

Foreign exchange contracts

The Company applies hedge accounting to the foreign exchange contracts it enters into to hedge a portion of its future Canadian dollar denominated expenditures. The foreign exchange contracts are expected to settle over time by the end of 2025.

Copper contracts

The Company applies hedge accounting to copper contracts it enters into to hedge a portion of the expected copper pounds sold (net of the portion attributable to the Royal Gold streaming arrangement) to manage the risk associated with changes to the London Metal Exchange (“LME”) copper price. The option collar contracts utilized create a price floor and allow for some participation in upward price movements. These hedges result in cash inflows or outflows only when the underlying LME copper price is below the collar floor or above the collar ceiling, respectively, at the time of settlement. These contracts are expected to settle over time by the end of 2024.

12

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

The table below provides a breakdown of the changes in the fair value of these derivatives contracts recognized in other comprehensive income (“OCI”) and the portion of the fair value changes reclassified to the statements of (loss) earnings:

									Three months ended March 31,
												2023						2022
Change in the fair value of derivative financial instruments												$	(1,688)					$	(2,087)
Reclassified to net (loss) earnings												(2,598)						332
Change in the fair value of derivative instruments included in OCI(1)												$	(4,286)					$	(1,755)

(1)Includes tax recovery of $nil (March 31, 2022 - recovery of $0.6 million).

Non-hedge derivatives

All derivative instruments not designated in a hedge relationship are classified as financial instruments at fair value through profit or loss, including the gold and copper forward contracts for gold ounces and copper pounds payable to Royal Gold. Changes in fair value of non-hedge derivatives at each reporting date are included in the condensed consolidated interim statements of (loss) earnings and comprehensive (loss) income as non-hedge derivative gains or losses, with the exception of spot and forward contracts associated with the Royal Gold deliverables, which are included in revenue.

For the Royal Gold deliverables, the Company delivers physical gold, as well as copper warrants, to Royal Gold based on a percentage of the gold ounces and copper pounds included in each final sale of concentrate to third party customers, including off-takers and traders, collectively, the customers of the Mount Milligan Mine (the “MTM Customers”), within two days of receiving or making a final payment. If a final payment from the MTM Customers is not received or paid within five months of the provisional payment date, then the Company will deliver an estimated amount of gold ounces and copper warrants, based on the quantities from the provisional invoice, for an estimated 90% of the material they are due to pay, based on the provisional invoice quantities.

The Company receives payment from the MTM Customers in cash, thus requiring the purchase of physical gold and copper warrants in order to satisfy the obligation to pay Royal Gold. In order to hedge its gold and copper price risk, which arises from timing differences, when physical purchase and concentrate sales pricing periods do not match, the Company has entered into certain forward gold and copper purchase and sales contracts, pursuant to which it purchases gold and copper at an average price during a quotation period, and sells gold and copper at a spot price. These contracts are treated as derivatives and are not designated as hedging instruments. The Company records its forward commodity contracts at fair value using a market approach based on observable quoted market prices.

The non-hedge derivative instruments outstanding as at March 31, 2023 are expected to settle by the end of the third quarter of 2023, and are summarized as follows:

Instrument			Unit			Type			Total Position(1)
Royal Gold deliverables
Gold forward contracts			Ounces			Float			17,720
Copper forward contracts			Pounds			Float			827,000

(1)Total amounts expressed in the units identified.

13

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

b.Provisionally-priced contracts

Amounts receivable

Upon the shipment and sale of gold and copper concentrate to various off-takers, the Company typically receives a payment equal to an amount ranging from 90% to 95% of the contracted value of contained metals, net of applicable treatment and refining charges, while the final settlement payment is not due for several months. Upon the shipment and sale of molybdenum products to selected customers, the Company receives a payment equal to an amount ranging from 50% to 100% of the contracted value of contained metal, net of applicable deductions, while the remaining payment is not due for several months.

Under the terms of these sales contracts, prices are subject to final adjustment, at the end of a future period, after control passes to the customer, based on quoted market prices during a quotation period specified in the contract. At the end of each reporting period, provisionally-priced receivables are marked to market based on the forward market price for the quotation period stipulated in the contract, with changes in fair value recognized in gold, copper and molybdenum revenue.

The amount of trade receivables related to the sales of gold and copper concentrate and molybdenum products prior to mark-to-market adjustment, the mark-to-market adjustment made during the period, and the fair value of provisionally-priced receivables as at March 31, 2023 and December 31, 2022, are summarized as follows:

			March 31, 2023			December 31, 2022
Trade receivables prior to mark-to-market adjustment			$	28,803		$	29,624
Mark-to-market adjustment related to gold and copper concentrate			3,771			7,294
Mark-to-market adjustment related to molybdenum products			(715)			3,775
Provisionally-priced trade receivables			$	31,859		$	40,693

As at March 31, 2023 and December 31, 2022, the Company’s net position consisting of copper, gold, and molybdenum sales contracts awaiting final pricing, can be summarized as follows:

						Sales awaiting final pricing						Mark-to-market average price ($/unit)
			Unit			March 31, 2023			December 31, 2022			March 31, 2023			December 31, 2022
Copper			Pounds			17,687,005			17,439,697			4.10			3.81
Gold			Ounces			24,952			33,672			1,976			1,831
Molybdenum			Pounds			104,076			563,302			23.95			26.88

14

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

Trade payables

Upon the purchase of molybdenum concentrate from various vendors, the Company typically pays an amount ranging from 95% to 100% of the contracted value of contained metal, net of applicable deductions while the final settlement payment is not due for several months. Under the terms of these concentrate purchase contracts, prices are subject to final adjustment at the end of a future period, after control passes to the Company based on quoted market prices during the quotation period specified in the contract. At the end of each reporting period, provisionally-priced purchases are marked to market based on the forward market price for the quotation period stipulated in the contract, with changes in fair value recognized in inventory or production costs.

The amount of accounts payable related to the purchase of molybdenum concentrate prior to mark-to-market adjustment, the mark-to-market adjustment made during the period, and the fair value of provisionally-priced payables as at March 31, 2023 and December 31, 2022, are summarized as follows:

			March 31, 2023			December 31, 2022
Accounts payable prior to mark-to-market adjustment			$	37,213		$	28,453
Mark-to-market adjustment to molybdenum concentrate			(10,804)			35,743
Provisionally-priced accounts payable			$	26,409		$	64,196

As at March 31, 2023 and December 31, 2022, the Company’s net position of molybdenum purchase contracts awaiting final pricing can be summarized as follows:

Purchases awaiting final pricing

Mark-to-market average price ($/unit)

Unit

March 31, 2023

December 31, 2022

March 31, 2023

December 31, 2022

Molybdenum

Pounds

2,052,750

3,308,436

24.17

31.00

15

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

c. Fair value measurement

Classification and the fair value measurement by the level of financial assets and liabilities in the condensed consolidated interim statements of financial position were as follows:

March 31, 2023
			Level 1						Level 2						Level 3						Total
Financial assets
Provisionally-priced trade receivables			$	—					$	31,859					$	—					$	31,859
Marketable securities			832						—						—						832
Derivative financial instruments			—						9,318						—						9,318
			$	832					$	41,177					$	—					$	42,009
Financial liabilities
Provisionally-priced accounts payable			$	—					$	26,409					$	—					$	26,409
Deferred milestone payment to Waterton			—						31,114						—						31,114
Derivative financial instruments			—						14,636						—						14,636
			$	—					$	72,159					$	—					$	72,159

December 31, 2022
			Level 1						Level 2						Level 3						Total
Financial assets
Provisionally-priced trade receivables			$	—					$	40,693					$	—					$	40,693
Marketable securities			830						—						—						830
Derivative financial instruments			—						17,318						—						17,318
			$	830					$	58,011					$	—					$	58,841
Financial liabilities
Provisionally-priced accounts payable			$	—					$	64,196					$	—					$	64,196
Deferred milestone payment to Waterton			—						30,871						—						30,871
Derivative financial instruments			—						18,777						—						18,777
			$	—					$	113,844					$	—					$	113,844

During the three months ended March 31, 2023, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or out of Level 3 fair value measurements.

16

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

Valuation Techniques

Marketable securities

Marketable securities representing shares of publicly traded entities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy).

Provisionally-priced receivables

The fair value of receivables arising from copper, gold and molybdenum sales contracts that contain provisional pricing mechanisms are determined using the appropriate quoted forward price from the exchange that is the principal active market for the particular metal. As such, these receivables, which meet the definition of an embedded derivative are classified within Level 2 of the fair value hierarchy.

Provisionally-priced payables

The fair value of payables arising from molybdenum purchase contracts that contain provisional pricing mechanisms are determined using the appropriate quoted forward price from the exchange that is the principal active market for the particular metal. As such, these payables, which meet the definition of an embedded derivative are classified within Level 2 of the fair value hierarchy.

Derivative financial instruments

The fair value of gold, copper, diesel and currency derivative financial instruments, classified within Level 2, are determined using derivative pricing models that utilize a variety of inputs that are a combination of quoted prices and market-corroborated inputs. The fair value of the Company’s derivative contracts includes an adjustment for credit risk.

Deferred milestone payment to Waterton

The deferred milestone payment to Waterton, arising from the acquisition of Goldfield Project (note 16), was measured at fair value using the present value method at the date of acquisition. Subsequently, the fair value of the deferred milestone payment is amortized using the effective interest rate method.

15. Segmented information

The Company bases its operating segments on the way information is reported and used by the Company's chief operating decision-maker (“CODM”). The results of operating segments are reviewed by the CODM in order to make decisions about resources to be allocated to the segments and to assess their respective performances.

17

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

The following tables set forth operating results by reportable segment for the following periods:

Three months ended March 31, 2023
			Öksüt						Mount Milligan						Molybdenum						Total Segments						Corporate and other						Total
Revenue			$	—					$	110,937					$	115,592					$	226,529					$	—					$	226,529
Cost of sales
Production costs			—						84,570						119,723						204,293						—						204,293
Depreciation, depletion and amortization			—						17,289						1,219						18,508						—						18,508
Earnings (loss) from mine operations			$	—					$	9,078					$	(5,350)					$	3,728					$	—					$	3,728
Exploration and evaluation costs			412						381						2,547						3,340						14,570						17,910
Corporate administration			—						—						—						—						14,792						14,792
Care and maintenance			—						—						4,693						4,693						3,141						7,834
Reclamation expense			—						—						13,053						13,053						2,513						15,566
Other operating expenses			10,419						1,793						678						12,890						—						12,890
(Loss) earnings from operations			$	(10,831)					$	6,904					$	(26,321)					$	(30,248)											$	(65,264)
Other non-operating income																											(3,180)						(3,180)
Finance costs																											3,368						3,368
Loss before income tax																																	$	(65,452)
Income tax expense																											7,998						7,998
Net loss																																	$	(73,450)
Additions to PP&E			$	3,679					$	4,271					$	33					$	7,983					$	7					$	7,990

Three months ended March 31, 2022
			Öksüt						Mount Milligan						Molybdenum						Total Segments						Corporate and other						Total
Revenue			$	101,593					$	134,061					$	59,569					$	295,223					$	—					$	295,223
Cost of sales
Production costs			21,142						58,597						64,486						144,225						—						144,225
Depreciation, depletion and amortization			12,576						23,455						1,458						37,489						—						37,489
Earnings (loss) from mine operations			$	67,875					$	52,009					$	(6,375)					$	113,509					$	—					$	113,509
Exploration and evaluation costs			441						3,414						—						3,855						4,305						8,160
Corporate administration			—						—						—						—						12,278						12,278
Care and maintenance			—						—						3,729						3,729						3,030						6,759
Reclamation recovery			—						—						(41,964)						(41,964)						—						(41,964)
Other operating expenses			—						3,046						448						3,494						—						3,494
Earnings from operations			$	67,434					$	45,549					$	31,412					$	144,395											$	124,782
Other non-operating expenses																											5,323						5,323
Finance costs																											892						892
Earnings before income tax																																	$	118,567
Income tax expense																											29,167						29,167
Net earnings																																	89,400
Additions to PP&E(1)			$	(518)					$	9,744					$	222					$	9,448					$	200,728					$	210,176

(1)Corporate and other includes PP&E related to the acquisition of the Goldfield Project (note 16).

18

---

Centerra Gold Inc. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2023 (Expressed in thousands of United States dollars, except share and per share amounts, unless otherwise indicated)

16. Acquisition of the Goldfield Project

On February 25, 2022, the Company completed the acquisition of Gemfield Resources LLC, owner of the Goldfield Project in Nevada, USA, from Waterton. Management determined that the assets and processes acquired do not constitute a business and therefore accounted for the transaction as an asset acquisition.

The aggregate purchase consideration for the acquired assets, net of the assumed liabilities was as follows:

Cash consideration(1)			$	176,737
Deferred milestone payment, measured at the fair value on the acquisition date(2)			30,054
Total purchase consideration			$	206,791

(1)Includes a reimbursement of $1.7 million incurred by the seller for the construction of certain water supply infrastructure.

(2)The milestone payment shall become payable upon the earlier of: (i) the date that is 18 months following closing; (ii) Centerra making a construction decision with respect to the project; and, (iii) a change of control event. At the option of the Company, the deferred milestone payment is payable in cash or common shares of the Company (note 4).

The Company allocated the purchase consideration to the acquired assets and liabilities based on their relative fair values at the date of acquisition as follows:

Other current assets			$	64
Property, plant and equipment			205,957
Other non-current assets			1,200
Accounts payable			(153)
Provision for reclamation			(277)
Total assets acquired, net of liabilities assumed			$	206,791

The Company incurred acquisition-related costs of $2.3 million, which were separately capitalized to the property, plant and equipment acquired.

19