Hedge funds slash bullish wagers on gold before war jitters
Speculators have reduced net-long positions by 3.6%.
Centerra Gold Inc. (TSX: CG) reported Tuesday net earnings of $18.1 million or $0.08 per common share (basic) in the first quarter of 2016, compared to net earnings of $40.7 million or $0.17 per common share (basic) for the same period in 2015. The decrease in earnings reflects a 65% decrease in gold ounces sold, in part due to gold shipment delays at Kumtor, and a 4% lower average realized gold price1, compared to the first quarter of 2015, which was partially offset by lower operating costs and lower share-based compensation charges in the first quarter of 2016.
Gold production for the first quarter of 2016 decreased 49% compared to the same period in 2015, reflecting Kumtor processing lower grades mined from the upper benches in cut-back 17, blended with low-grade stockpiled ore, along with lower recoveries. In contrast, in the comparative quarter of 2015, Kumtor mined and processed the high-grade final benches from cut-back 16.
Kumtor ended the first quarter of 2016 with approximately 33,165 ounces of gold doré on hand due to delays in shipping gold to Kyrgyzaltyn during the quarter. Gold shipments to Kyrgyzaltyn resumed in the normal course in April and all of Kumtor’s gold doré inventory was shipped and sold to Kyrgyzaltyn by the end of April 2016.
2016 First Quarter Highlights
of the end of April 2016 all gold doré inventory was shipped and sold to Kyrgyzaltyn.
“We are pleased to report that Centerra is well positioned to achieve its production and cost guidance for the year, which is further underpinned by the favourable oil and currency exchange rate environment. Kumtor had strong gold production in the quarter producing 86,444 ounces which was in line with our expectations. Kumtor’s all-in sustaining costs were a competitive $916 per ounce sold1. During the quarter Kumtor gold shipments were delayed resulting in a deferral of gold sales and cash flow generation from March to April,” CEO Scott Perry said.
“Our team continues to pursue a number of business improvement opportunities at both the operational and corporate levels. A recent operational highlight of note is Kumtor’s mill productivity enhancement initiatives whereby the mill has been achieving processing levels in excess of 18,500 tonnes per day. At the corporate level, we recently completed a head office restructuring whereby our manpower levels have been reduced by up to 20% making us a leaner, more robust competitor within the industry.”
