Centerra Gold (CGAU) Q3 2026 earnings review
Centerra Gold lowers mine cost plan, but buybacks drain cash
Centerra Gold is collecting more revenue from high metal prices while spending down its cash pile on mine building and share buybacks. Third-quarter revenue at the Canadian gold, copper and molybdenum miner rose 27% from a year ago to $500 million even as gold output fell 8%. Chief executive Paul Tomory cut the full-year sustaining cost outlook at the Mount Milligan mine by $100 per ounce on copper credits and raised the profit plan at the Langeloth molybdenum plant by $10 million.
| Revenue | $500.3M +27% from a year ago |
|---|---|
| Gold produced | 75,429 oz -8% from a year ago |
| Profit per share, excluding one-offs | $0.37 +12% from a year ago |
| Mount Milligan sustaining cost outlook | Cut $100/oz middle of the range: $1,150/oz |
⚖️ Verdict: 🟢 Bullish
The story got better because Mount Milligan delivered a 15% quarterly jump in gold output and the Thompson Creek mine restart reached 65% completion on budget. Those two operational steps eased standing worries about ore grades in British Columbia and construction costs in Idaho. The bad news: record share buybacks of $53 million and heavy project spending drained another $53 million from the cash balance, which fell to $398 million.
The question now is whether Centerra can keep buying back shares at this pace while building two North American mines at once. One view is that high gold and copper prices and next year's Turkish tax cut will refill the coffers; the other is that paying out more than free cash flow weakens the balance sheet before Thompson Creek opens in mid-2027. Fourth-quarter cash flow and the early-2027 Öksüt mine life study will show how much room the company has.
🐂 Bull Case
Mount Milligan Cost Cut Rests on Copper
Mount Milligan is Centerra's gold and copper mine in British Columbia. Chief executive Paul Tomory said the mine "delivered a fourth consecutive quarter on plan and remains on track to achieve its 2026 production guidance." Gold output there rose 15.4% from last quarter to 44,070 ounces, easing worries after two years of ore grade shortfalls.
Centerra tracks all-in sustaining costs (AISC), which measure the total cost to keep a mine running. When calculating this on a by-product basis, the company subtracts copper revenue from its gold mining costs. Because realized copper prices jumped 53.9% from a year ago to $5.74 per pound, Tomory lowered Mount Milligan's full-year by-product cost outlook by $100 per ounce.
- Mount Milligan by-product AISC: $985 per ounce in the third quarter, down 32.6% from a year ago
- Mount Milligan full-year by-product AISC outlook: cut to $1,100–$1,200 per ounce from $1,200–$1,300
- Company-wide co-product AISC (without subtracting copper revenue): $2,205 per ounce, up 20.3% from a year ago
What to watch: fourth-quarter gold output at Mount Milligan. By our math, the mine needs about 35,700 ounces in the final quarter to reach the middle of its full-year plan, which would prove the mine plan works for a full year.
Langeloth Profit Jumped on Cheap Stockpiles
Centerra's US Moly unit mines and processes molybdenum, a metal used to strengthen steel, and management has discussed eventually selling or listing the business. Its Langeloth plant in Pennsylvania roasts raw material into finished product. Following a January explosion that halted work, the plant has returned to normal operations and sold 4.6 million pounds this quarter, up 48.8% from a year ago.
Earnings before interest, taxes, depreciation and amortization (EBITDA), excluding one-offs, reached $16.5 million at Langeloth in the third quarter alone. That beat the $7 million to $12 million the Canadian miner had forecast for the entire year, so management raised the full-year outlook to $17 million to $22 million. However, the release noted that margins grew in part by "benefiting from inventory accumulated at lower market prices in prior periods" during the shutdown. By our math, the new full-year outlook leaves only $0.6 million of EBITDA for the fourth quarter at the middle of the range.
What to watch: Langeloth's fourth-quarter profit margin. Once the plant finishes selling the cheap inventory it built during the winter shutdown, margins will show what the roaster can earn at normal replacement costs.
Four Growth Projects Stay on Budget
Centerra is building a pipeline of four projects to replace aging reserves. At the Thompson Creek molybdenum mine in Idaho, workers have finished 65% of the plant refurbishment ahead of a mid-2027 restart. Tomory said the project is moving ahead "in a constructive price environment, and we expect to deliver the restart project within our capital cost estimate" of $425 million to $450 million, easing fears of further cost overruns.
At the Goldfield gold project in Nevada, targeting first output by late 2028, the miner finished permitting "with all major permits now in place for the Gemfield deposit, which accounts for approximately 80% of the life of mine production." Meanwhile, at the Öksüt gold mine in Türkiye, a new law cuts the corporate tax rate from 25% to 12.5% starting in January 2027, and an optimization study to extend the mine's life is due in early 2027.
What to watch: the Öksüt life-of-mine study in early 2027. Extending production past 2029 would allow Centerra to capture several more years of cash flow under the halved Turkish tax rate.
🐻 Bear Case
Record Buybacks and Projects Drain Cash
Tomory highlighted that "we also achieved a record level of share repurchases, reinforcing our commitment to returning capital to shareholders and our disciplined approach to capital allocation." Centerra bought back $53.0 million of its own stock in the third quarter and $125.2 million over the first nine months, and it plans to renew its buyback programme in November.
Those shareholder payouts are outstripping the cash the business generates after capital spending. Heavy spending at Thompson Creek ($81.2 million this quarter) and Goldfield ($29.9 million) pushed company-wide capital expenditures to $150.9 million, or 30.2% of revenue. As a result, free cash flow fell 82.7% from a year ago to $17.1 million, so the miner is funding its buybacks and dividends out of its cash pile.
- Nine-month shareholder payouts: $125.2 million in buybacks plus $29.9 million in dividends ($155.1 million total by our math)
- Nine-month free cash flow: $43.2 million, down 48.0% from a year ago
- Cash balance: $398.0 million, down $52.9 million from last quarter and down $130.9 million since December
- Unresolved cash overhangs: the press release gave no update on the Supreme Court appeal over Mount Milligan's 2% royalty or the liability on Goldfield's gold price hedges
What to watch: fourth-quarter buyback spending against the cash balance. Executing the remaining $74.8 million of the $200 million full-year buyback plan would push cash closer to $300 million before Thompson Creek finishes construction.
Metal Prices Carry Revenue as Volumes Fall
Centerra's top-line growth relies entirely on commodity markets rather than mining more metal. Third-quarter revenue rose 26.6% from a year ago to $500.3 million, driven by market prices that jumped 23.3% for gold, 44.1% for copper and 35.3% for molybdenum. Meanwhile, consolidated gold production fell 7.8% from a year ago to 75,429 ounces as Öksüt lapped a high-grade quarter from last year.
Furthermore, Centerra does not capture the full market price on its gold. Under a streaming contract at Mount Milligan, partner Royal Gold buys 35% of the mine's gold for just $435 per ounce. Because Mount Milligan made up a larger share of sales this quarter, Centerra's realized gold price rose only 9.6% from a year ago to $3,483 per ounce, trailing the $4,262 market average. By our math, the full-year outlook points to fourth-quarter gold production falling 14.1% from a year ago to about 60,800 ounces.
What to watch: realized gold price as a percentage of the market price in the fourth quarter. A higher share of sales from Mount Milligan will continue to cap the price Centerra actually collects per ounce.
Stock Pay and Taxes Lift Corporate Costs
While mine-level profit margins improved by 0.7 percentage points from a year ago—as lower depreciation (-2.3 percentage points of revenue) offset higher direct production costs (+1.6 percentage points)—overhead costs moved the other way. Share-based compensation for employees more than doubled to $20.8 million from $8.1 million a year ago, rising by 2.1 percentage points of revenue to 4.2%.
That stock-pay charge added $279 per ounce to company-wide sustaining costs by our math, pushing consolidated by-product AISC up 7.4% from a year ago to $1,775 per ounce despite the copper credits at Mount Milligan. At the same time, Centerra raised its full-year outlook for corporate administration expenses (excluding stock pay) by $5 million and lifted its full-year tax expense forecast by $6 million.
What to watch: fourth-quarter consolidated by-product AISC. Because nine-month costs sit at $1,729 per ounce, Centerra must bring fourth-quarter costs down to about $1,585 per ounce by our math to hit the middle of its $1,650 to $1,750 full-year plan.
💲 Other KPIs
Mine-level profit grew 29.1% from a year ago, slowing from an 81.9% jump in the second quarter as gold price comparisons got tougher. Mine profit equalled 35.2% of revenue, up 0.7 percentage points from 34.5% a year ago, because depreciation fell 5.6% to $33.4 million while direct production costs rose 30.2% to $290.8 million.
Profit excluding one-offs rose 8.1% from a year ago (or 12.1% per share to $0.37), after growing 50.5% in the second quarter. Reported net earnings dropped 69.6% to $88.7 million ($0.46 per share) because the year-ago quarter included a one-time $193.5 million accounting gain from reversing a past write-down at the Goldfield project.
Period-end share count fell 4.0% from 201.6 million a year ago and declined 1.3% from 196.1 million at the end of June. The Canadian miner retired 2.58 million shares for $53.0 million during the third quarter, paying an average of $20.51 per share by our math, compared with $16.99 per share in the second quarter.
🔮 Guidance
Unchanged. The plan calls for 275,000 ounces at the middle of the range, matching last year's 275,316 ounces. With 214,157 ounces produced in the first nine months, the outlook leaves 60,843 ounces for the fourth quarter by our math, a 14.1% drop from a year ago (Mount Milligan 140–155 koz and Öksüt 120–135 koz are also unchanged).
Unchanged. The middle of the range is 55 million pounds, up 9.0% from 50.5 million pounds last year. After producing 40.1 million pounds in the first nine months, the target requires 14.9 million pounds in the fourth quarter by our math, up 14.5% from 13.0 million pounds in the final quarter of 2025.
Unchanged. The middle of the range is $1,550 per ounce, up 19.5% from $1,297 in 2025. Nine-month direct gold costs averaged $1,536 per ounce, tracking just below the middle of the full-year target. Site targets also stayed unchanged at $1,450–$1,550 per ounce for Mount Milligan and $1,650–$1,750 per ounce for Öksüt.
Unchanged. The $1,700 per ounce middle of the range is 5.3% above last year's $1,614. Because nine-month costs averaged $1,729 per ounce ($1,775 in Q3), hitting the middle of the full-year plan requires fourth-quarter costs to fall to about $1,585 per ounce by our math. Öksüt's target stayed at $1,850–$1,950 per ounce.
Lowered cost outlook (a positive revision). Strong copper by-product credits allowed management to trim the target by $100 per ounce, putting the $1,150 midpoint 3.7% below last year's $1,194. With nine-month costs at $1,103 per ounce ($985 in Q3), the range leaves room for fourth-quarter costs up to $1,330 per ounce by our math.
Unchanged. After raising the Goldfield budget last quarter, the company kept all gold and copper capital plans steady: sustaining capital at $85–$105 million (Mount Milligan $80–$90M, Öksüt $5–$15M) and growth capital at $100–$125 million (Mount Milligan $35–$45M, Goldfield $60–$70M, Kemess $5–$10M). Nine-month total capital spending reached $164.2 million.
Raised tax expense (a higher cost). The middle of the range moved up $6 million to $128 million, entirely because Mount Milligan's British Columbia mineral tax forecast doubled from $6–$8 million to $12–$14 million on higher metal prices. Öksüt's tax outlook stayed at $105–$125 million, and nine-month total tax expense reached $110.2 million.
Raised expense. Centerra lifted its depreciation forecast by $15 million, entirely at Mount Milligan (now $55–$65 million vs $40–$50 million previously), while Öksüt stayed at $50–$60 million. With $95.2 million recorded over the first nine months, the new midpoint implies $19.8 million of fourth-quarter depreciation by our math.
Raised expense. Overhead costs excluding stock-based pay moved up $5 million at the middle of the range to $36 million. Nine-month spending has already reached $30.1 million, leaving $5.9 million for the fourth quarter at the midpoint by our math, down from $9.4 million in the third quarter.
Unchanged. Exploration spending remains split between $20–$25 million for existing mine sites and $20–$25 million for new projects ($35.9 million spent in the first nine months). Kemess care and maintenance stayed at $13–$15 million ($11.1 million YTD) and Kemess reclamation stayed at $2–$4 million ($0.8 million YTD).
Raised. Both profit ranges increased by $10 million after higher molybdenum prices and cheap winter inventory lifted third-quarter results. Because nine-month net earnings ($11.7 million) and Adjusted EBITDA ($18.9 million) are already near the full-year midpoints, the plan implies just $0.6 million of fourth-quarter EBITDA by our math.
Unchanged. Langeloth is still set to roast 11–13 million pounds (7.7 Mlb YTD) and sell 15–17 million pounds (12.1 Mlb YTD) by drawing down stockpiles. US Moly PP&E additions stayed at $208–$240 million ($195.1M YTD), Thompson Creek growth capital stayed at $190–$220 million ($173.6M YTD), and Langeloth DDA stayed at $4–$6 million.
❓ Key Questions
Why does the outlook imply near-zero Q4 profit at Langeloth?
Langeloth earned $18.9 million of Adjusted EBITDA in the first nine months, so the raised $17–$22 million full-year plan leaves only $0.6 million for the fourth quarter at the midpoint. Did cheap inventory account for all of the third-quarter profit?
Is there a minimum cash floor for the buyback programme?
Cash has fallen by $131 million this year to $398 million because $155 million in buybacks and dividends outpaced $43 million in free cash flow. With Thompson Creek and Goldfield still under construction, how low will management let the cash balance go?
What drove the $21 million jump in Q3 stock-based pay?
Share-based compensation rose to $20.8 million from $8.1 million a year ago, adding $279 per ounce to company-wide sustaining costs. Why did this expense rise so much in the third quarter, and why was full-year corporate overhead also raised by $5 million?
What is the status of the Mount Milligan royalty appeal?
In January, an appeals court ruled that Centerra must pay a 2% royalty on full Mount Milligan revenue before streaming deductions, and the company sought leave to appeal to the Supreme Court of Canada. Has the court decided to hear the case?