Centerra Gold (CGAU) Q4 2025 earnings review
Metal Prices Mask Production Drift; Growth Spending Eats Cash
Centerra delivered a headline beat on earnings, but the quality of the result is heavily skewed by commodity price inflation rather than operational excellence. While Revenue jumped 33% YoY, gold production actually fell 3% in Q4 and 25% for the full year. The massive Net Income figure ($192.8M) is distorted by a $144.8M non-cash impairment reversal on Kemess. Realized gold prices surged 55% to $3,415/oz, creating a massive tailwind that management is using to fund the heavy capex required for the Thompson Creek restart. Without record metal prices, the narrative would be far grimmer: costs are rising (AISC +27% YoY) and 2026 guidance points to further production contraction and margin compression.
🐂 Bull Case
Centerra holds $529M in cash and $929M in liquidity. This allows them to fully fund the capital-intensive Thompson Creek restart (Molybdenum) and Goldfield/Kemess projects internally without diluting shareholders, even during a heavy investment year.
The company secured permit amendments to operate Mount Milligan through 2035, with a path to 2045 via the PFS. This secures the cornerstone asset's cash flow generation for two decades, removing a major overhang.
🐻 Bear Case
AISC rose 27% YoY in Q4 to $1,646/oz. 2026 guidance forecasts AISC rising further to $1,650-$1,750/oz. Inflation in Turkey and lower grades are permanently resetting the cost base higher, eroding the benefit of high gold prices.
Guidance indicates 2026 gold production (250-280koz) will be lower than 2025 actuals (275koz). With Öksüt grades normalizing and Mount Milligan stable, there is no near-term volume growth until Thompson Creek comes online in mid-2027.
⚖️ Verdict: ⚪
Neutral. The balance sheet is fortress-like and high metal prices provide a wide safety net, but the underlying trend is shrinking production and rising costs. The investment case relies entirely on successful execution of the Thompson Creek restart in 2027.
Key Themes
Price Environment as Savior
Operational results were mixed, but financial results were stellar solely due to macro factors. Average realized gold price hit $3,415/oz (+55% YoY) and copper $4.69/lb (+63% YoY). This massive pricing power offset the 3% drop in gold production and the 27% spike in unit costs. Sensitivity analysis shows a $100/oz change in gold price impacts cash flow by ~$33M, keeping Centerra highly levered to the spot price.
Langeloth Explosion & Suspension
A significant red flag: Operations at the Langeloth Metallurgical Facility were suspended in Jan 2026 following an explosion. While no injuries occurred, the facility won't restart until May 2026. This creates a working capital headwind in Q1 2026 as inventory builds up, and creates operational uncertainty in the Molybdenum segment just as the company ramps up Thompson Creek spend.
Heavy Capex Cycle Compressing FCF
The company is entering a heavy investment phase. Q4 Free Cash Flow collapsed 74% YoY to just $12M, despite record revenues. This was driven by a 106% increase in CapEx ($96M), primarily for the Thompson Creek restart. With 2026 non-sustaining capex guided at $260-$315M (mostly Thompson Creek), FCF yields will remain suppressed throughout the year despite high metal prices.
Kemess Project Revival
A new PEA for Kemess (Jan 2026) outlines a robust project with an NPV(5%) of $1.1B at conservative prices ($3,000/oz Au). Crucially, this project is unencumbered by streams (unlike Mount Milligan), offering cleaner margins. This adds a tangible long-term growth driver to the pipeline beyond Thompson Creek.
Other KPIs
Stable. Down from $65.3M in Q4'24. While Revenue was flat (~$137M), higher sustaining capex ($20.1M vs $7.8M) for the Tailings Storage Facility ate into cash generation. This asset remains the reliable workhorse funding the rest of the portfolio's growth.
Deteriorating rapidly. Costs surged 32% from $1,327/oz in Q4'24. This was driven by higher royalty expenses (linked to gold price) and lower sales volume. Management forecasts 2026 AISC even higher ($1,850-$1,950/oz), signaling that this asset's high-margin days are fading.
Misleadingly high. Includes a $144.8M non-cash impairment reversal for Kemess. Adjusted net earnings were $83.2M, which is still a healthy 127% increase YoY, but investors should ignore the headline GAAP number.
Guidance
Decelerating. The midpoint (265k) implies a ~4% decline from 2025 actuals (275k). This is driven by lower grades at Öksüt due to mine sequencing. The growth story is paused until 2027.
Accelerating/Worsening. The midpoint ($1,700) is 5.3% higher than 2025 actuals ($1,614) and 48% higher than 2024 ($1,148). Inflation in Turkey and lower denominators (ounces sold) are driving costs up faster than general inflation.
Accelerating. This is the peak spend year for the restart. This single line item will consume nearly all operating cash flow generated by Öksüt, heavily impacting 2026 Free Cash Flow.
Stable/Accelerating. Midpoint (55M) is roughly 9% higher than 2025 actuals (50.5M). Mount Milligan is performing consistently on copper recovery.
Key Questions
Langeloth Financial Impact
Repairs are estimated at only $5-10M, but what is the estimated working capital drag in Q1/Q2 2026 due to the suspension, and will this impact the funding timing for Thompson Creek?
Öksüt Cost Structure
With 2026 AISC guided at nearly $1,900/oz for Öksüt (up from ~$1,000 in 2024), is this the new normal for the life of mine, or is there a pathway to bring costs back down?
Thompson Creek Inflation
The total capital estimate for Thompson Creek increased by 5-10% to ~$425-450M. How much contingency remains in this number, and are you seeing labor inflation pressures in the US specifically?