Centerra Gold Inc. ((TSE:CG)) has held its Q2 earnings call. Read on for the main highlights of the call.

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Centerra Gold’s latest earnings call struck an upbeat tone, with management emphasizing stronger production, firmer cash generation at key mines and ample liquidity to support growth and shareholder returns. While heavy spending on U.S. Moly and project work is dragging on near-term free cash flow and emissions, executives argued that current investment is laying the groundwork for higher, more stable output beyond 2026.

Raised 2026 Consolidated Gold Guidance

Centerra lifted its 2026 consolidated gold production guidance to 260,000–290,000 ounces, up from 250,000–280,000, pushing the midpoint to 275,000 ounces, a 3.8% increase. Management also reiterated confidence in meeting its 2026 copper target of 50–60 million pounds, underscoring a broader growth trajectory in both metals.

Oksut Outperformance and Guidance Upsize

Oksut continued to be a standout performer, delivering more than 32,500 ounces of gold in Q2 and beating internal plans. On the back of that strength, full-year Oksut guidance was raised to 120,000–135,000 ounces, with all-in sustaining costs expected between $18.50 and $19.50 per ounce after a Q2 AISC print of $19.52 per ounce.

Mount Milligan Strong Execution

Mount Milligan also impressed, producing over 38,000 ounces of gold in Q2, a 29% jump versus the prior quarter, and 13.1 million pounds of copper. Year-to-date output is tracking the pre-feasibility plan, and management reaffirmed full-year guidance of 140,000–155,000 ounces of gold and 50–60 million pounds of copper, with ASIC still targeted at $1,200–$1,300 per ounce.

Solid Financial Results and Cash Generation

Financially, the miner posted adjusted net earnings of $79 million, or $0.40 per share, reflecting strong realized prices and operating performance. Q2 sales topped 72,000 ounces of gold and 13.4 million pounds of copper, with consolidated by-product AISC at $17.07 per ounce, keeping the firm on pace for its annual cost guidance of $16.50–$17.50 per ounce.

Healthy Liquidity and Shareholder Returns

Liquidity remains robust, with quarter-end cash at $451 million and total liquidity exceeding $1 billion after upsizing the revolving credit facility to $600 million. Shareholder returns were prominent on the call, as Centerra completed $50 million of buybacks in Q2, has authorization for up to $200 million this year and declared a quarterly dividend of $0.07 per share.

Progress on Growth and Development Projects

The company advanced several growth projects, highlighted by Goldfield, where engineering, procurement and early site works are ramping up alongside a 2026 CapEx lift to $60–$70 million without changing the overall $252 million budget. At Mount Milligan, a new pre-feasibility study extended mine life to 2045 with plans for a 10% throughput increase from 2028, while Kemess moved toward a pre-feasibility study targeted for mid-2027.

Thompson Creek (U.S. Moly) Momentum

Thompson Creek’s restart is gathering pace, with around 52% of infrastructure refurbishment complete and Q2 ore mining rates hitting 12.4 million tons, up 33% quarter over quarter. Capital spent since late 2024 has reached $256 million, and the project remains on schedule for first molybdenum production in mid-2027, within a total expected capex of $425–$450 million.

Molybdenum Market Strength and Langeloth Operation

Centerra is benefiting from a strong molybdenum market, with prices running well above feasibility levels and supporting margins at the Langeloth plant. Langeloth returned to normal operations in Q2, selling about 3.8 million pounds of moly at an average realized price of $29.73 per pound, and is guiding to 11–13 million pounds roasted production and 15–17 million pounds in full-year sales.

Sustainability and Community Progress

Beyond the mines, the group highlighted initiatives in sustainability and community engagement, including the publication of its 2025 Sustainability Report. Local procurement spending rose 43% year on year to $191 million, community investments reached $3.1 million and workers completed over 100,000 hours of health and safety training.

Free Cash Flow Deficit Driven by Project Spend

Despite healthy operations, the quarter showed a free cash flow deficit of $23 million against $66 million of cash flow from operations, mainly due to timing of tax and royalty payments in Turkey. U.S. Moly activities were particularly cash hungry, using $45 million in operations and contributing to an $89 million free cash flow shortfall tied to restart spending and working capital build at Langeloth.

Sustaining CapEx and Unit Cost Volatility

Management acknowledged that higher sustaining capital expenditures are introducing volatility into unit costs at key sites, pushing consolidated AISC near the top of guidance. Mount Milligan’s Q2 ASIC, reported at $12.69 per ounce, and Oksut’s $19.52 per ounce by-product AISC both reflected heavier sustaining spend and lower ounces sold, underlining sensitivity of costs to investment timing.

Greenhouse Gas Emissions Increased

On the environmental front, total greenhouse gas emissions rose 15% year over year in 2025, largely due to intensified activity at Thompson Creek during its restart phase. Executives characterized this as a near-term setback tied to development work, with the expectation that emissions intensity will improve as new assets transition from build-out to steady-state production.

Short-Term Cash Consumption at U.S. Moly

A recurring theme was the short-term cash drain from U.S. Moly as Centerra invests ahead of revenue, with capital outlays to date at $256 million and more to come. This heavy front-loaded spending is weighing on consolidated cash generation now, but management framed it as necessary to capture future moly upside once Thompson Creek and associated assets are fully ramped.

Long-Dated Gold Hedges at Goldfield

The call also touched on risk management at Goldfield, where long-dated hedges with ceilings up to roughly $4,700 per ounce through 2030 were put in place to protect project economics. While these positions could cap upside for a portion of production if gold prices soar, the company stressed that about 80% of Goldfield’s expected ounces remain unhedged and exposed to the market.

Timing Effects on 2026 Free Cash Flow

Near-term free cash flow metrics were described as temporarily depressed by timing and one-off factors, including statutory taxes, royalties and project sequencing. Management emphasized that these effects should ease as major restarts and builds progress and as high-margin assets like Oksut and Mount Milligan continue to generate steady cash.

Forward-Looking Guidance and Outlook

Looking ahead, Centerra is steering investors toward rising gold output and stable copper volumes, anchored by its raised 2026 gold guidance and reaffirmed copper targets. With consolidated AISC expected between $16.50 and $17.50 per ounce and strong realized prices, the company is positioning its core mines, moly operations and development pipeline to translate today’s investment into stronger, more diversified cash flows over the next several years.

Centerra’s earnings call painted the picture of a miner in transition, balancing strong performance at Oksut and Mount Milligan against heavy spending and short-term cash strain in U.S. Moly and growth projects. For investors, the key takeaway is a portfolio that is delivering now while being reshaped for higher production and potentially stronger returns once major projects come online.