Built for success

BUILT FOR SUCCESS

CENTERRA GOLD INC. ANNUAL REPORT 2019

BUILT FOR SUCCESS

Corporate Profile Centerra Gold (“Centerra”) is a Canadian-based gold mining company engaged in operating, developing, acquiring and exploring gold properties in

THE ÖKSÜT GOLD PROJECT IN TURKEY

North America, Asia and other markets worldwide and is one of

PRODUCED FIRST GOLD IN JANUARY OF 2020.

the largest Western-based gold producers in Central Asia.

The Company operates two

CENTERRA’S PROVEN AND PROBABLE RESERVES

flagship assets, the Mount Milligan Mine in British Columbia, Canada

ARE 11.1 MILLION OUNCES OF CONTAINED GOLD

and the Kumtor Mine in the Kyrgyz Republic and now has a

AND 1,589 MILLION POUNDS OF CONTAINED COPPER.

third operating gold mine, the 100% owned Öksüt Mine in Turkey.

In 2019, Centerra produced 783,308 ounces of gold and

THE KUMTOR STRATEGIC AGREEMENT WAS COMPLETED

71.1 million pounds of copper from its two operations.

WITH THE KYRGYZ REPUBLIC GOVERNMENT IN

Centerra’s objectives are

AUGUST 2019.

to build shareholder value by maximizing the potential of its current properties, deliver profitable growth through the

CORPORATE HIGHLIGHTS

development of its late-stage properties such as Kemess Underground, Kemess East and Greenstone, add additional exploration properties and

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at AISC1 of $708 per ounce

exploration joint ventures and continue to increase its reserves and resources.

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Centerra’s shares trade on

The Company is headquartered in Toronto, Ontario, Canada.

2020 estimated gold production2 up to 820koz, copper production2 up to 90Mlbs, AISC1 of $820 to $870 per ounce

the Toronto Stock Exchange (TSX) under the symbol CG.

2019 actual gold production 783koz, copper production 71Mlbs,

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2019 cash provided by operations $334 million

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Öksüt construction 89% complete. First gold pour achieved January 2020

Cautionary Note Regarding Forward-looking Statements Such forward-looking information involves risks, uncertainties and

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Progressing two advanced stage growth projects in Canada

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Announced dividend in first quarter 2020

other factors that could cause actual results, performance, prospects and opportunities

1)

to differ materially from those

Release dated March 26, 2020.

expressed or implied by such forward-looking information, see page 1 of the MD&A. For a detailed discussion of such

All-in sustaining costs per ounce sold (AISC) is a non-GAAP measure discussed under “Non-GAAP Measures” in the Company’s most recent MD&A and News

2)

Due to the rapidly evolving risks relating to COVID-19, this guidance will not reflect the Company’s estimates of its 2020 performance if there are any further significant disruptions to any of its operations. Readers are cautioned to carefully

risks and other factors, see the

consider the risks identified in the Company’s news release and management’s

Management’s Discussion and

discussion and analysis filed on March 26, 2020 and the Company’s most recently

Analysis (MD&A) included in this

filed Annual Information Form.

Annual Report and the Company’s most recent Annual Information Form which is available on SEDAR. All dollar amounts are expressed in U.S. dollars in this report, except as otherwise indicated.

Information is given as of December 31, 2019 unless otherwise specified.

CENTERRA GOLD INC. Annual Report 2019

RETAINED EARNINGS PROFILE

WE HAVE A STRONG BALANCE SHEET

1,600

WITH POSITIVE RETAINED EARNINGS.

2,000

1,400

1,200

800 800

600 400

400

$1,375 MILLION IN 2019 FROM

Gold price (US$/oz)

1,000

$1,129 MILLION IN THE COMPARATIVE PERIOD AS A RESULT OF 10% MORE GOLD OUNCES SOLD AND ACHIEVING 11% HIGHER AVERAGE REALIZED

200 0

GOLD PRICE IN 2019. DURING THE

0 10

11

12

13

14

● Cumulative Dividends

2020 (3) ESTIMATED GOLD PRODUCTION

15

16

17

18

YEAR, OUR OPERATING MINES

19

● Gold Price

OUTPERFORMED EXPECTATIONS.

1,000

IS UP TO 820KOZ, COPPER PRODUCTION

2,000

UP TO 90MLBS, AISC1 OF $820 TO

800

$870 PER OUNCE. IN 2019 600

WE EXCEEDED OUR 2019 GOLD PRODUCTION GUIDANCE, PRODUCING

400

783,309 OUNCES OF GOLD AND MET 200

OUR COPPER PRODUCTION GUIDANCE PRODUCING 71 MILLION POUNDS OF COPPER.

PROFITABLY GROWING GOLD PRODUCTION

GOLD PRODUCTION

0 16

17

18

19

0

20E(3)

Total

● Kumtor ● Mount Milligan ● Öksüt

● Operations

CENTERRA’S PORTFOLIO OF OPERATIONS

GOLD MINERAL RESERVES(2)

GOLD PRODUCTION

IS GENERATING SOLID CASH FLOWS.

(as at December 31) (Millions of contained ounces of gold)

(Thousands of ounces)

BASED ON THE PLANNED PRODUCTION

ALL-IN SUSTAINING COSTS(1) 783

730

814 754

599

14.2

THAT EXIST TO EXTEND THEIR LIVES,

● Development

($ per ounce sold)

785

16.0 16.3

OF OUR MINES AND THE OPPORTUNITIES WE EXPECT TO BE ABLE TO CONTINUE

1,000

Ounces (000’s)

● Retained Earnings

09

Greenstone

08

Kemess UG

07

Öksüt

06

Kumtor

05

Gold production (koz)

04

Mount Milligan

US$ millions

REVENUE INCREASED TO

1,600

1,200

682

687

16

17

708

537 11.1 8.4

TO PRODUCE STRONG CASH FLOWS FROM THESE SOURCES FOR YEARS TO COME. OUR BALANCE SHEET IS STRONG WITH $35 MILLION DEBT NET OF CASH AND $615 MILLION LIQUIDITY AS AT DECEMBER 31, 2019.

CENTERRA GOLD INC. Annual Report 2019

15

16

17

18

19

15

16

17

18

19

15

18

19

1) All-in sustaining costs on a by-product basis per ounce sold is a non-GAAP measure and is discussed under “Non-GAAP Measures” in the Management’s Discussion and Analysis accompanying this Annual Report.

2) For further information regarding gold mineral reserves, grades and quantities, see the Company’s news release dated March 26, 2020.

3) Due to the rapidly evolving risks relating to COVID-19, this guidance will not reflect the Company’s estimates of its 2020 performance if there are any further significant disruptions to any of its operations. Readers are cautioned to carefully consider the risks identified in the Company’s news release and management’s discussion and analysis filed on March 26, 2020 and the Company’s most recently filed Annual Information Form.

BUILT FOR SUCCESS

CEO’S MESSAGE THE COMPANY ACHIEVED AN IMPORTANT MILESTONE WITH THE FIRST GOLD POUR AT ÖKSÜT IN TURKEY. ÖKSÜT IS NOW OUR THIRD OPERATING MINE AND OUR THIRD SOURCE OF GOLD PRODUCTION

Financially in 2019, Centerra recorded a net loss of

GOING FORWARD.

$93.5 million or $0.32 per share (basic) and after adjusting the net loss for the $230.5 million

O

impairment charge on the assets at Mount Milligan, ur performance in 2019 was overshadowed by

a $34.5 million ARO expense at the non-operating

two troubling safety incidents we experienced

sites and the $10 million charge relating to the

at Kumtor in December 2019 and February 2020 that

completion of the Strategic Agreement with the

resulted in the loss of three of our employees. We

Kyrgyz Government, adjusted net earnings1 were

most sincerely apologize to the families, friends and

$181.5 million or $0.62 per share (basic). We

colleagues for these tragic incidents and we are fully

generated on a Company-wide basis $334.1 million

committed to understanding and learning from the

of cash from operations or $1.14 per share, which

contributing circumstances so that we can take all

included the Kyrgyz Republic settlement payment of

necessary steps to prevent such tragic incidents from

$62.6 million. At the operating asset level, the

happening in the future. We remain steadfast in our

Kumtor Mine generated $240 million of free cash

resolve to ensure that everyone who works at our

flow1 and Mount Milligan generated $26.5 million,

operations can do so safely and will return home

reflecting

safely, each and every day. There is nothing more

experienced in the first quarter of 2019 at Mount

important.

Milligan. This enabled the Company to aggressively

the

reduced

throughput

levels

pay down its debt over the year by approximately During 2019, Centerra exceeded its consolidated

$111 million as well as repaying a $27 million

gold production and cost guidance, due to the

promissory note, ending the year with debt net of

strong operating performance at both operations,

cash of $35 million (excluding restricted cash of $28

delivering more than 783,300 ounces of gold at an

million). On January 30, 2020, we repaid the $78

all-in sustaining cost on a by-product basis of $708

million drawn balance on the Öksüt project finance

per ounce sold1, which was lower than the low-end

facility using lower cost funds from our corporate

of our all-in sustaining cost guidance. Kumtor had

credit facility and then cancelled the $150 million

another strong year exceeding its revised production

facility, which resulted in the release of $25 million of

guidance in delivering 600,201 ounces of gold

restricted cash. At the end of the year, the Company

production at an all-in sustaining cost on a by-

reported $43 million of cash, and cash equivalents.

1

product basis of $598 per ounce sold , which was lower than the low-end of its all-in sustaining cost

During 2019 the Company actively worked on a

guidance. In 2019, Mount Milligan exceeded the

number of ESG initiatives as it dedicates more

upper end of its gold production guidance and

resources

to

this

important

area,

with

the

achieved the mid-point of its copper production

continuation of our female empowerment program

guidance, producing 183,107 ounces of gold and

Leading from Within, adopting the World Gold

71.1 million pounds of copper. All-in sustaining cost

Council’s

on a by-product basis was above guidance at $828

(RMPG), forming a Company-wide tailings storage

per ounce sold1.In January 2020, the Kumtor Mine

facility (TSF) steering committee, completing a

received all the necessary approvals and permits to

preliminary desktop climate study which reviewed

recommence mining operations and at the end of

the Company’s physical climate risks across all its

the month, the Öksüt Project completed its first gold

sites and commencing an ESG issues assessment

pour on time and under budget.

Company-wide to identify, prioritize and validate the

CENTERRA GOLD INC. Annual Report 2019

Responsible

Gold

Mining

Principles

key ESG issues facing the operations and projectaffected stakeholders and groups.

ÖKSÜT TIMELINE

Looking forward in 2020 2, our main focus will be the ramp up of production at Öksüt, which represents

2009 G

our third operating asset and a third source of profitable production. We expect to achieve commercial production at Öksüt in 2020.

2015 G

At Kumtor we completed the Strategic Agreement

extend the mine life. At year-end, Kumtor’s mineral

2016 G

resources increased as a result of this drilling and we

2020.

June ESIA approval July Forestry permit

are in the process of updating Kumtor’s technical report which we plan to release in the second half of

July Positive feasibility decision to proceed with construction November EIA approval

in August 2019 and during the year invested significantly in exploration drilling to potentially

Öksüt joint venture formed, acquired 100% of project in 2013

2018 G

January Pastureland permit March Start main access and haul road construction

At Mount Milligan in 2020 2, we expect to run at full capacity throughout the year. In the summer of 2019

April Commence construction of site infrastructure

we experienced higher than normal rainfall during most of the second half of the year and we developed a new water wellfield in the Lower Rainbow Valley that began pumping water in late December adding to our other sources of surface water which has given us sufficient water in the

2019 G

tailing storage facility to run at full capacity. We also completed and filed in March 2020 an updated

May Commence stripping overburden August Commence mining and stockpiling ore

NI 43-101 technical report with an effective date of December 31, 2019 and continue to work with the

November Commence crushing and stacking ore on heap leach pad

relevant stakeholders to evaluate identified water sources to supply Mount Milligan’s mill for the lifeof-mine while meeting environmental and other parameters.

At our development properties, Kemess and the Greenstone Gold Property, our 50-50 joint venture

2020 G

with Premier Gold, we will continue to progress work on optimization studies and continue to de-risk both projects during 2020.

We are committed to global exploration, with an expanded exploration budget of $50 million in 2020.

The majority of the spending, $32 million, will be for brownfields exploration at Kumtor, Mount Milligan,

2020

.

January Proven and Probable Mineral Reserves of 1.3 million ounces of gold (as of December 31, 2019) Expected average annual production of 110,000 ounces of gold over an 8-year mine life January 31 Öksüt first gold pour

Öksüt and Kemess to add to the resource base and

CENTERRA GOLD INC. Annual Report 2019

BUILT FOR SUCCESS

the first quarter of 2020, which are expected to ramp up with the delivery of ore from current stockpiles on surface.

Company-wide, our all-in sustaining costs on a byconvert resources into reserves. Exploration and

product basis1 for 2020 are expected to be in the

Scott G. Perry

business development activities will focus on our

range of $820 to $870 per ounce sold. “All-in

President and

existing properties and joint ventures in Canada,

sustaining costs” is a non-GAAP measure and

Finland, Mexico, Turkey, and expand into new

includes our sustaining capital and corporate costs

regions to meet the long-term growth targets of

on a consolidated basis but excludes growth capital

Centerra.

and taxes. It is more fully described in “Non-GAAP

Chief Executive Officer

Measures” in the accompanying Management’s For 2020 2, we are estimating Company-wide gold

Discussion and Analysis.

production to be in the range of 740,000 to 820,000 ounces. Additionally, we are expecting 80 million to

We will continue to invest in our properties in 2020.

90 million pounds of payable copper production

Total capital expenditures excluding capitalized

from Mount Milligan for the year. The Company’s

stripping are estimated to be $169 million, which

guidance assumes Mount Milligan achieving an

includes $109 million of sustaining capital and $60

average daily throughput of approximately 55,000

million of growth capital. Total capitalized stripping

tonnes per calendar day.

costs in 2020 are estimated to be $236 million of that, $215 million ($173 million cash component) is

At Mount Milligan lower production is expected in

related to the development of the open pit at

the first half of the year due to processing ore with

Kumtor and $21 million for open pit development at

lower than the expected average gold and copper

Öksüt ($20 million cash component).

grades which are expected to increase over the second half of 2020 2 increasing metal production.

With our corporate credit facility, existing cash

Crusher maintenance was completed during January

reserves

at Mount Milligan and further mill maintenance

profitable production, we believe that our business

downtime is planned for the first quarter and third

plan and future growth can all be funded internally.

and

our

expectation

for

continued

quarter. The Company continues to work on several continuous electrification

improvement of

all

projects pumping

including

We thank our employees for their continued

equipment,

commitment to maintaining safety, health and

groundwater exploration and remediation of the

environmental standards at our mines and for

secondary crushing circuit and is actively reducing

achieving the production goals of the Company. We

costs throughout the operation.

look forward to another strong year of profitable production,

the

continued

de-risking

of

our

At Kumtor, a comprehensive mill maintenance

development properties, and, lastly, the expansion

shutdown occurred in December 2019 and the mill

of our exploration program into new regions.

was successfully restarted in early January. This shutdown is expected to reduce production levels in 1) Non-GAAP measure, see discussion under “Non-GAAP Measures”.

2) Due to the rapidly evolving risks relating to COVID-19, this guidance will not reflect the Company’s estimates of its 2020 performance if there are any further significant disruptions to any of its operations. Readers are cautioned to carefully consider the risks identified in the Company’s news release and management’s discussion and analysis filed on March 26, 2020 and the Company’s most recently filed Annual Information Form.

CENTERRA GOLD INC. Annual Report 2019

Scott G. Perry President and Chief Executive Officer

FINANCIAL AND OPERATING HIGHLIGHTS

SELECTED ANNUAL INFORMATION ($ millions except as noted) Revenue Earnings from mine operations Revenue-based taxes Exploration and business development Corporate administration ARO revaluation at sites on care and maintenance Kyrgyz Republic settlement Asset impairment – Mount Milligan Gain on sale of ATO Net (loss) earnings (Loss) earnings per common share – $ basic Adjusted net earnings (1) Adjusted net earnings per common share (1) – $ basic Cash provided by operations Cash provided by operations – $ per share Adjusted cash provided by operations (1) Free cash flow (deficit) (1) Adjusted free cash flow (deficit) (1) Cash, cash equivalents and short-term investments (including restricted cash) Total assets Gold produced – ounces Gold sold – ounces Copper produced – 000’s payable pounds Copper sales – 000’s payable pounds Production costs per ounce of gold sold (2) All-in sustaining costs on a by-product basis – $ per oz gold sold (1)(2) All-in sustaining costs on a by-product basis including taxes – $ per oz gold sold (1) Average realized gold price (consolidated) – $ per oz sold (1)(2)

2019

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

1,375 450 116 46 45 35 10 231 _

$ $

2018

2017

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

1,129 343 93 35 30 40 – – 28 108 0.37 118 0.40 218 0.75 222 (68) (64)

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

1,199 499 97 16 38 – 60 – – 210 0.72 281 0.96 501 1.72 501 223 223

$ $

$ $

179 2,827 729,556 709,330 47,091 44,370 464 754

$ $

$ $

71 2,702 783,308 780,654 71,146 67,430 465 708

$ $

417 2,772 785,316 792,466 53,596 59,719 360 687

$ $

862 1,309

$ $

889 1,175

$ $

815 1,171

(94) (0.32) 182 0.62 334 1.14 397 35 97

Non-GAAP measure and is discussed under “Non-GAAP Measures” in the Management’s Discussion and Analysis accompanying this Annual Report.

Combines streamed and unstreamed amounts.

CENTERRA GOLD INC. Annual Report 2019

BUILT FOR SUCCESS

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CORPORATE INFORMATION

DIRECTORS

OFFICERS AND MANAGEMENT

MANAGEMENT

Michael S. Parrett

Scott G. Perry

Kevin D’Souza

Chair

President and Chief Executive Officer

Vice President, Security,

Daniel R. Desjardins*

Cam Duquette

Vice President and

Vice President, Health and Safety

Chief Operating Officer

John Fitzgerald

Bruce V. Walter Vice-Chair

Richard W. Connor

Sustainability and Environment

Dushen Kasenov

*effective January 1, 2020

Maksat Kobonbaev

Claudia D’Orazio*

& Technical Services

Stephen A. Lang

Vice President and Chief Human Resources Officer

John W. Pearson

Askar Oskombaev Jacques Perron Scott G. Perry Sheryl K. Pressler Susan L. Yurkovich

*effective February 10, 2020

Darren J. Millman

Vice President, Capital Projects

Vice President, Investor Relations

Claude Plourde Vice President, Controller

Vice President and Chief Financial Officer

Julie Robertson

Dennis C. Kwong

Vice President, Finance and Capital Projects

Vice President, Business Development and Exploration

Yousef Rehman Vice President, General Counsel and Corporate Secretary

Cathy Taylor Vice President, Risk and Insurance

Mark A. Wilson President, Base Metals Division

Deon Badenhorst President, Kumtor Gold Company

Ron Hampton Project Director, Kemess Mine

Chuck Hennessey General Manager, Mount Milligan Mine

Greg Herbert Site Manager, Endako Mine

Jim Kopp Site Manager, Thompson Creek Mine

Tom Ondrejko General Manager, Langeloth Metallurgical Company

Alper Sezener General Manager, Öksüt Madencilik A.S. CENTERRA GOLD INC. Annual Report 2019

TRANSFER AGENT

AUDITORS

For information on common share holdings, lost share certificates and address changes, contact:

KPMG LLP Bay Adelaide Centre 333 Bay Street Suite 4600 Toronto, Ontario Canada M5H 2S5

AST Trust Company (Canada)

P.O. Box 700 Station B Montreal, QC Canada H3B 3K3

STOCK EXCHANGE LISTING Toronto Stock Exchange

Symbol: CG North America phone toll free: 1.800.387.0825 or 416.682.3860 Fax: 1.888.249.6189 Email: inquiries@astfinancial.com

INVESTOR RELATIONS CONTACT John W. Pearson Vice President Investor Relations investor@centerragold.com

CORPORATE HEADQUARTERS Suite 1500 1 University Avenue Toronto, Ontario Canada M5J 2P1 T 416.204.1953 F 416.204.1954 www.centerragold.com

CENTERRA GOLD INC. Annual Report 2019

Printed in Canada

BUILT FOR SUCCESS

CENTERRA GOLD INC. Suite 1500 1 University Avenue Toronto, Ontario Canada M5J 2P1 T 416.204.1953 F 416.204.1954 www.centerragold.com