Centerra Gold Annual Report 2020

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FY2020 Annual Report · Centerra Gold

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DELIVER
OON
RESULTS

CENTERRA GOLD INC. ANNUAL REPORT 2020

Corporate Profile

Centerra Gold (“Centerra”)

is a Canadian-based gold

mining company engaged in

operating, developing,

acquiring and exploring gold

properties in North America,

Asia and other markets

worldwide.

The Company operates three

mines, the Mount Milligan

Mine in British Columbia,

Canada, the Kumtor Mine

in the Kyrgyz Republic

and the Öksüt Mine in Turkey,

and is one of the largest

Western-based gold producers

in Central Asia.

In 2020, Centerra produced

824,059 ounces of gold and

82.8 million pounds of copper.

Centerra’s objectives are to

build shareholder value by

maximizing the potential of

its current properties, deliver

profitable growth through

its existing operations, add

additional exploration

properties and exploration

joint ventures and continue to

increase its mineral reserves

and resources.

Centerra’s common shares

trade on the Toronto Stock

Exchange (TSX) under

the symbol CG. The Company

is headquartered in Toronto,

Ontario, Canada.

Cautionary Note Regarding

Forward-looking Statements

Forward-looking information

involves risks, uncertainties

and other factors that could

cause actual results,

performance, prospects and

opportunities to differ

materially from those

expressed or implied by such

forward-looking information.

For a detailed discussion of

such risks and other factors,

see the Management’s

Discussion and Analysis

(MD&A) included in this

Annual Report, see page 1

of the MD&A, 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, 2020.

DELIVER ON RESULTS

824,059
ounces

OUR THREE MINES

PRODUCED

824,059 OUNCES OF GOLD

IN 2020 AND EXCEEDED

ANNUAL GUIDANCE

DELIVER

(cid:2) COVID-19 – All Sites Maintained Proactive Measures, Strict

Hygiene Protocols, and Social Distancing.

(cid:2) Safety – Öksüt Achieved Four Million Work Hours Without

a Lost Time Injury.

(cid:2) Exceeded 2020 Gold Production Guidance, 824,059 Ounces

of Gold Produced; Met Copper Production Guidance,
82.8 Million Pounds of Copper Produced.

(cid:2) 2020 Gold Production Costs of $419 Per Ounce Sold.
(cid:2) 2020 All-In Sustaining Costs1 on a By-product Basis of

$729 Per Ounce Sold, Lower Than Guidance.

(cid:2) 2020 All-In Costs1 on a By-product Basis of $1,059 Per

Ounce Sold.

(cid:2) 2021 Production Guidance of 780,000 Ounces of Gold

and 75 Million Pounds of Copper (mid-points).

Retained Earnings Profile
(as at December 31)

s
n
o

i
l
l
i

m
$
S
U

1,800

1,600

1,400

1,200

1,000

800

600

400

200

2,000

1,600

1,200

800

400

)
z
o
/
$
S
U

(

e
c

i
r
p

o
G

04
06
● Retained Earnings

● Cumulative Dividends

18
● Gold Price

1) All-in sustaining costs and all-in costs on a by-product basis per ounce sold are non-GAAP

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

Centerra Gold Inc. Annual Report 2020

$930

million

$604

million

IN 2020, CASH PROVIDED

BY OPERATIONS OF $930 MILLION

AND GENERATED FREE CASH FLOW 1

OF $604 MILLION, RESULTING

IN A SOLID BALANCE SHEET

WITH NO DEBT

OON RESULTS

(cid:2) 2020 Net Earnings of $408.5 Million

(cid:2) Debt-free Balance Sheet and

or $1.39 per Share (basic).

(cid:2) Cash Provided by Operations in 2020
of $930 Million (Kumtor $661 Million,
Mount Milligan $185 Million,
Öksüt $146 Million).

(cid:2) 2020 Free Cash Flow1of $604 Million
(Kumtor $438 Million, Mount Milligan
$150 Million, Öksüt $105 Million).

Cash Balance of $545 Million as at
December 31, 2020.

(cid:2) Quarterly Dividend of C$0.05 per

Common Share.

(cid:2) Kumtor Technical Report Update,
Five-Year Extension to Mine Life
Extending Operations to 2031.

Gold Production
by Mine Site

Gold
Mineral Reserves 2
(as at December 31)
(Millions of contained
ounces of gold)

16.0

16.3

14.2

11.1 11.2

Gold Production
Outlook 3
(Thousands of ounces)

970 980

824

783

780

)
z
o
k
(

n
o

i
t
c
u
d
o
r
p

o
G

900

750

600

450

300

150

17
16
● Kumtor
● Mount Milligan
● Öksüt

21E

22E

23E

1) All-in sustaining costs and all-in costs on a by-product basis per ounce sold and free

cash flow are non-GAAP measures and are 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 February 24, 2021.

3) 2019 and 2020 actual results; 2021, 2022 and 2023 represent mid-point of guidance ranges.

DELIVER ON RESULTS

Centerra Gold Inc. Annual Report 2020

CCEO’S MESSAGE

2020

WAS AN EXTRAORDINARY YEAR WITH

161,855 ounces of gold and 82.8 million pounds

THE CHALLENGES WE FACED FROM

of copper at an all-in sustaining cost on a

THE GLOBAL PANDEMIC. We changed the way

by-product basis1 of $541 per ounce sold, which

we did business to minimize the effect of the

was lower than the low end of its all-in sustaining

pandemic by establishing strict COVID-19

cost guidance. Our newest mine, Öksüt, achieved

protocols at our mine sites to help prevent

commercial production on May 31, 2020 and

infection and reduce the potential transmission

favourably exceeded both its gold production and

of COVID-19. We implemented travel restrictions

cost guidance, realizing 106,068 ounces of gold

and temporarily closed various administration

production at an all-in sustaining cost on a

ofﬁces including our head ofﬁce in Toronto.

by-product basis1 of $494 per ounce sold, which

In addition, the operating mine sites continued

was lower than the low end of its all-in sustaining

to assess the resiliency of their supply chains,

cost guidance, making it our lowest cost producer.

increasing mine site inventories of key materials

and developing and implementing contingency

Financially in 2020, Centerra recorded net

plans to allow for continued operations. We want

earnings of $408.5 million or $1.39 per share

to thank every one of our employees for their

(basic) and generated on a Company-wide basis

efforts during these challenging times and their

$930.0 million of cash from operations. In 2020,

continued focus on safety as we remain steadfast

Company-wide, we generated $603.8 million of

in providing a safe workplace where everyone

free cash ﬂow1, including $437.9 million of free

returns home safely every day.

cash ﬂow1 from Kumtor, $150.2 million from

Mount Milligan and $105.2 million from Öksüt.

Despite the COVID-19 pandemic in 2020, each

During the year, the Company repaid its debt

of Centerra’s mines delivered solid operating

and ended the year with no debt and cash of

performances and we favourably exceeded

$545.2 million. In January 2021, we completed

consolidated gold production and cost guidance

the sale of our 50% interest in the Greenstone

for the year. In 2020, Mount Milligan achieved its

Gold Mines Partnership and received a cash

highest level of mill throughput and highest level

payment of approximately $210 million (including

of concentrate production since the start of

adjustments) further adding to our strong

operations in 2014 and Öksüt poured ﬁrst gold

balance sheet.

and achieved commercial production. Our three

operations delivered more than 824,000 ounces

In 2019, we announced our commitment to

of gold at an all-in sustaining cost on a by-product

conform to the World Gold Council’s Responsible

basis1 of $729 per ounce sold, which was lower

Gold Mining Principles. In 2020, we completed all

than the low end of our all-in sustaining cost

Year 1 requirements, in addition to a Year 3

guidance. Kumtor had another strong year where

on-site assurance at the Öksüt Mine, and

gold production was at the top end of guidance,

published our 2020 RGMP Progress Report.

delivering 556,136 ounces of gold at an

The RGMP assurance identiﬁed two

all-in sustaining cost on a by-product basis1 of

non-conformances in the area of human rights.

1) Non-GAAP measure and

$741 per ounce sold, which was lower than the

In 2020, we already began to develop a Human

is discussed under

low end of its all-in sustaining cost guidance.

Rights Standard, which will ultimately form the

“Non-GAAP Measures” in

the Management’s Discussion

and Analysis accompanying

In 2020, Mount Milligan exceeded the upper

basis of our Human Rights Policy. In addition,

end of its gold production guidance and achieved

we will assess the options, including due diligence

this Annual Report.

its copper production guidance, producing

procedures, training, community engagement,

DELIVER ON RESULTS

Centerra Gold Inc. Annual Report 2020

and social assessments, that will be required

a new ESG website which reﬂects our

to ensure that our business activities avoid

commitment to our people, the communities

complicity with or directly causing human rights

we operate in and our natural environment.

abuses throughout our supply chain and

communities.

Looking to the future, we ﬁled an updated

Kumtor Mine Technical Report in February 2021

Throughout 2020, we also continued work on

showcasing an extended mine life for Kumtor.

the development of a climate change strategy

The new Kumtor life-of-mine adds signiﬁcantly to

aligned with the recommendations made by

the open pit mineral reserves and has extended

the Task Force on Climate-related Financial

Kumtor’s mine life by ﬁve years. The new Kumtor

Disclosures. As part of this work, we completed

mine life is now 11 years and milling operations

an initial prioritization of climate-related risks

are extended to 2031. The new life-of-mine plan

and opportunities and will look to ﬁnalize a

has consistent annual gold production averaging

Company-wide climate change strategy by

590,000 ounces for ﬁve years commencing in

the end of 2021.

2022 at an average life-of-mine all-in sustaining

costs on a by-product basis1 of $828 per ounce

In addition, in 2020, as part of our continued

sold. Furthermore, in February we issued our

global focus on diversity, equity and inclusion

inaugural three-year outlook, which reﬂects a

(DE&I), we became a Silver Partner sponsor of

growing gold production proﬁle in 2022 and

International Women in Mining, a leading global

2023. This brings Centerra close to expected

women’s organization pursuing gender equality

annual gold production of approximately one

and promoting women’s voices, access to

million ounces with an attractive declining cost

opportunities and leadership in mining.

proﬁle, which is expected to generate signiﬁcant

In partnership with the Canadian Centre for

diversiﬁed free cash ﬂow from our operations.

Diversity and Inclusion, we created an 18-month

roadmap and kicked off our DE&I global current

For 2021, we are estimating Company-wide

state assessment project to gather insights on

gold production to be in the range of 740,000

diversity and inclusivity at Centerra, raise

to 820,000 ounces and 70 million to 80 million

awareness and develop localized DE&I strategies

pounds of copper production from Mount

and initiatives. As of February 2021, Centerra

Milligan.

employees have completed more than 800 hours

ENVIRONMENT

We are committed to

protecting the natural

environment and

minimizing adverse

impacts caused by our

operations or activities.

SOCIAL

Our People First vision

encompasses health

and wellness, safety,

diversity and inclusion,

and talent management

and development.

of training on diversity, equity and inclusion, with

At Mount Milligan, 2021 production guidance

a particular focus on recognizing unconscious

assumes achieving an average daily throughput

bias. To support these activities, we announced

of approximately 60,000 tonnes per calendar day

GOVERNANCE

the creation of a new Executive DE&I Council

for the year with gold and copper production

and ﬁve regional DE&I Committees across

expected to be slightly back-end weighted.

the organization.

In 2021, the ﬁrst half of the year represents 45%

or more of the 2021 annual metal production total

Operating in an ethical and

Finally, we are committed to continuously

while the second half of the year will represent

strengthening our ESG disclosure. In 2020,

up to 55% of the 2021 annual metal production

we published our inaugural Sustainability

total. We plan to continue to work on continuous

Accounting Standards Board (SASB)-aligned

improvement projects in 2021, including

2019 ESG Report and early in 2021 launched

secondary crusher improvements and the

transparent manner

is critical to maintaining

the trust of our employees,

business partners

and external stakeholders,

including communities

of interest and our investors.

DELIVER ON RESULTS

Centerra Gold Inc. Annual Report 2020

75%

WE MAXIMIZED

THE POTENTIAL OF OUR ASSETS,

AND EARNINGS FROM MINE OPERATIONS

INCREASED 75% IN 2020

installation of staged ﬂotation reactors, which

of Phase 2 of the heap leach facility, where

is expected to improve metal recoveries in

excavation has been completed and the Company

future years.

is currently carrying out levelling activities, with

clay placement expected to start in May 2021.

At Kumtor, gold production in 2021 is expected

to rise steadily throughout the year, with the ﬁrst

We will continue to invest in our properties in

quarter of 2021 contributing approximately

2021. Total capital expenditures excluding

15% of annual gold production due to processing

capitalized stripping are estimated to be in the

lower average grades from the ore stockpiles.

range of $200 to $235 million, which includes

Gold production rises to approximately 35%

$130 to $150 million of sustaining capital and

of the annual production in the fourth quarter of

$70 to $85 million of growth capital. Total

2021. Mine operations are expected to increase

capitalized stripping costs in 2021 are estimated

to a mining rate of approximately 550,000 tonnes

to be in the range of $230 to $245 million

per day from the average mining rate of 280,000

of that, $220 to $230 million is related to the

tonnes per day in 2020, focusing mainly on waste

development of the open pit at Kumtor and

stripping from cut-back 20 during the ﬁrst half

$10 to $15 million for open pit development

of 2021, accessing greater amounts of ore in

at Öksüt.

the second half of the year and accessing the

high-grade ore in the fourth quarter. The Kumtor

We are committed to global exploration, with

mill is scheduling a six-day mill maintenance

a robust exploration budget of $50 million in

shutdown in the third quarter of the year to

2021. The majority of the spending, $34 million,

complete a replacement of the regrind mill motor

will be for brownﬁelds exploration at Kumtor

and carry out SAG mill and regrind mill relines

($21 million), Mount Milligan ($6 million) and

and other maintenance work.

Öksüt ($3.5 million) to add to the resource base

and convert resources into reserves. Greenﬁelds

At Öksüt, 2021 will be the ﬁrst full year of

and generative exploration activities will focus

operations. Gold production is expected to be

on our existing properties and joint ventures in

back-end weighted, with the ﬁrst half of the year

Canada, Finland, Turkey, United States and to

representing 35% or more of the 2021 annual

investigate new regions to meet the long-term

gold production total while the second half of the

growth of Centerra.

year will represent up to 65% of the 2021 annual

gold production total. Mining will continue at the

We look forward to another strong year of

Keltepe pit in 2021 while the Güneytepe pit is

proﬁtable production, and we thank our

expected to be developed from early 2022,

employees for their continued commitment to

assuming receipt of the forestry permit from the

maintaining safety, health and environmental

local authorities. The average grade of ore

standards at our mines and for safely achieving

stacked to the heap leach pad in 2021 is

the production goals of the Company.

expected to be approximately 1.27 g/t gold,

which is lower than the average grade of ore

Scott G. Perry

stacked in 2020 of approximately 1.40 g/t gold.

President and

In 2021, Öksüt is expected to achieve a

Chief Executive Ofﬁcer

project-to-date accumulated heap leach recovery

of 75%. The Company continues with construction

DELIVER ON RESULTS

Centerra Gold Inc. Annual Report 2020

FFINANCIAL & OPERATING
HIGHLIGHTS

SELECTED ANNUAL INFORMATION ($ millions except as noted)

Revenue
Production costs
Earnings from mine operations
Revenue-based taxes
Exploration and business development
Corporate administration
ARO revaluation at non-operating sites
Asset impairment – Mount Milligan
Net earnings (loss)
Earnings (loss) per common share – $ basic
Adjusted net earnings(1)
Adjusted earnings per common share(1) – $ basic
Cash provided by operations
Cash ﬂow 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 restricted cash
Total assets
Gold produced – ounces
Gold sold – ounces
Copper produced – 000’s payable pounds
Copper sales – 000’s payable pounds
Gold production costs per ounce of gold sold(2)
Gold – All-in sustaining costs on a by-product basis –

$ per oz sold(1)(2)

Gold – All-in costs on a by-product basis – $ per oz sold(1)(2)
Gold – All-in sustaining costs on a co-product basis –

$ per oz sold(1)(2)

Average realized gold price (consolidated) – $ per oz sold(1)(2)

2020

1,689
591
786
138
47
46
53
_

409
1.39
462
1.57
930
3.14
935
604
609
548
3,136
824,059
828,816
82,816
80,477
419

729
1,059

799
1,670

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

$
$

2019

2018

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

$
$

1,375
677
450
116
46
45
35
231
(94)
(0.32)
182
0.62
334
1.14
397
35
97
71
2,702
783,308
780,654
71,146
67,430
465

708
1,126

737
1,309

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

$
$

1,129
578
343
93
35
30
40
–
108
0.37
118
0.40
218
0.75
222
(68)
(64)
179
2,827
729,556
709,330
47,091
44,370
464

754
1,100

750
1,175

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

(2) Combines streamed and unstreamed amounts.

DELIVER ON RESULTS

Centerra Gold Inc. Annual Report 2020

Management’s Discussion and Analysis
For the Period Ended December 31, 2020

This Management Discussion and Analysis (“MD&A”) has been prepared as of February 23, 2021 and is
intended to provide a review of the financial position and results of operations of Centerra Gold Inc.
(“Centerra” or the “Company”) for the three and twelve months ended December 31, 2020 in comparison
with the corresponding periods ended December 31, 2019. This discussion should be read in conjunction
with the Company’s audited financial statements and the notes thereto for the year ended December 31,
2020 prepared in accordance with International Financial Reporting Standards (“IFRS”). The Company’s
audited financial statements and the notes thereto for the year ended December 31, 2020, are available at
www.centerragold.com and on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at
www.sedar.com. In addition, this discussion contains forward looking information regarding Centerra’s
business and operations. Such forward-looking statements involve risks, uncertainties and other factors
that could cause actual results to differ materially from those expressed or implied by such forward looking
statements. See “Caution Regarding Forward-Looking Information” in this discussion. All dollar amounts
are expressed in United States dollars (“USD”), except as otherwise indicated. All references in this
document denoted with NG indicate a non-GAAP term which is discussed under “Non-GAAP Measures”
and reconciled to the most directly comparable GAAP measure.

Caution Regarding Forward-Looking Information
Information contained in this document which are not statements of historical facts, and the documents
incorporated by reference herein, may be “forward-looking information” for the purposes of Canadian
securities laws. Such forward-looking information involves risks, uncertainties and other factors that could
cause actual results, performance, prospects and opportunities to differ materially from those expressed or
implied by such forward looking information. The words “believe”, “expect”, “anticipate”,
“contemplate”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”,
“understand” and similar expressions identify forward-looking information. These forward-looking
statements relate to, among other things: statements regarding 2021-2023 Outlook and 2021 Guidance,
including guidance on production, cost and capital spend in 2021, and the assumptions used in preparing;
the impact, if any, of the Kyrgyz Parliamentary election and the aftermath on the Kumtor mine; planned
exploration in 2021; possible impacts to its operations relating to COVID-19; the Company’s expectations
regarding having sufficient liquidity for 2021; the Company’s expectation regarding having sufficient water
at Mount Milligan in the medium term, and its plans for a long term solution; and expectations regarding
litigation involving the Company including the HRS litigation impacting the Mount Milligan mine.

Forward-looking information is necessarily based upon a number of estimates and assumptions that, while
considered reasonable by Centerra, are inherently subject to significant technical, political, business,
economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual
results to differ materially from those projected in the forward-looking information. Factors and
assumptions that could cause actual results or events to differ materially from current expectations include,

CENTERRA GOLD INC. ANNUAL REPORT 20201among other things: (A) strategic, legal, planning and other risks, including: political risks associated with
the Company’s operations in the Kyrgyz Republic, Turkey and Canada; the failure of the Kyrgyz Republic
Government to comply with its continuing obligations under the Strategic Agreement, including the
requirement that it comply at all times with its obligations under the Kumtor Project Agreements, allow for
the continued operation of the Kumtor mine by KGC and KOC and not take any expropriation action
against the Kumtor mine; actions by the Kyrgyz Republic Government or any state agency or the General
Prosecutor's Office that serve to restrict or otherwise interfere with the payment of funds by KGC and KOC
to Centerra; resource nationalism including the management of external stakeholder expectations; the
impact of changes in, or to the more aggressive enforcement of, laws, regulations and government
practices, including unjustified civil or criminal action against the Company, its affiliates or its current or
former employees; risks that community activism may result in increased contributory demands or business
interruptions; the risks related to outstanding litigation affecting the Company; the impact of the delay by
relevant government agencies to provide required approvals, expertise and permits; potential impact on
the Kumtor Project of investigations by Kyrgyz Republic instrumentalities; the impact of constitutional
changes in Turkey; the impact of any sanctions imposed by Canada, the United States or other jurisdictions
against various Russian and Turkish individuals and entities; potential defects of title in the Company’s
properties that are not known as of the date hereof; the inability of the Company and its subsidiaries to
enforce their legal rights in certain circumstances; the presence of a significant shareholder that is a state-
owned company of the Kyrgyz Republic; risks related to anti-corruption legislation; risks related to the
concentration of assets in Central Asia; Centerra not being able to replace mineral reserves; Indigenous
claims and consultative issues relating to the Company’s properties which are in proximity to Indigenous
communities; and potential risks related to kidnapping or acts of terrorism; (B) risks relating to financial
matters, including: sensitivity of the Company’s business to the volatility of gold, copper and other mineral
prices, the use of provisionally-priced sales contracts for production at Mount Milligan, reliance on a few
key customers for the gold-copper concentrate at Mount Milligan and at Kumtor there is reliance on
Kyrgyzaltyn, as Centerra sells all of its gold doré produced from the Kumtor Mine to Kyrgyzaltyn pursuant
to the Restated Gold and Silver Sale Agreement; use of commodity derivatives, the imprecision of the
Company’s mineral reserves and resources estimates and the assumptions they rely on, the accuracy of the
Company’s production and cost estimates, the impact of restrictive covenants in the Company’s credit
facilities which may, among other things, restrict the Company from pursuing certain business activities or
making distributions from its subsidiaries, the Company’s ability to obtain future financing, the impact of
global financial conditions, the impact of currency fluctuations, the effect of market conditions on the
Company’s short-term investments, the Company’s ability to make payments including any payments of
principal and interest on the Company’s debt facilities depends on the cash flow of its subsidiaries; and
(C) risks related to operational matters and geotechnical issues and the Company’s continued ability to
successfully manage such matters, including the stability of the pit walls at our operations, the movement
of the Davidov Glacier, waste and ice movement and continued performance of the buttress at the Kumtor
mine; the occurrence of further ground movements at the Kumtor mine and mechanical availability; the
risk of having sufficient water to continue operations at the Mount Milligan mine and achieve expected mill
throughput; changes to, or delays in, transportation routes, including cessation or disruption in rail and
shipping networks whether caused by decisions of third party providers or force majeure events (including
COVID-19); the success of the Company’s future exploration and development activities, including the
financial and political risks inherent in carrying out exploration activities; inherent risks associated with
the use of sodium cyanide in the mining operations; the adequacy of the Company’s insurance to mitigate
operational risks; mechanical breakdowns; the Company’s ability to replace its mineral reserves; the
occurrence of any labour unrest or disturbance and the ability of the Company to successfully re-negotiate
collective agreements when required; the risk that Centerra’s workforce and operations may be exposed to

CENTERRA GOLD INC. ANNUAL REPORT 20202widespread epidemic including, but not limited to, the COVID-19 pandemic; seismic activity in the vicinity
of the Company’s properties; long lead times required for equipment and supplies given the remote location
of some of the Company’s operating properties; reliance on a limited number of suppliers for certain
consumables, equipment and components; the ability of the Company to address physical and transition
risks from climate change and sufficiently manage stakeholder expectations on climate-related issues; the
Company’s ability to accurately predict decommissioning and reclamation costs; the Company’s ability to
attract and retain qualified personnel; competition for mineral acquisition opportunities; risks associated
with the conduct of joint ventures/partnerships; and the Company’s ability to manage its projects effectively
and to mitigate the potential lack of availability of contractors, budget and timing overruns and project
resources. For additional risk factors, please see section titled “Risks Factors” in the Company’s most
recently filed Annual Information Form available on SEDAR at www.sedar.com.

There can be no assurances that forward-looking information and statements will prove to be accurate, as
many factors and future events, both known and unknown could cause actual results, performance or
achievements to vary or differ materially from the results, performance or achievements that are or may be
expressed or implied by such forward-looking statements contained herein or incorporated by reference.
Accordingly, all such factors should be considered carefully when making decisions with respect to
Centerra, and prospective investors should not place undue reliance on forward looking information.
Forward-looking information is as of February 23, 2021. Centerra assumes no obligation to update or
revise forward-looking information to reflect changes in assumptions, changes in circumstances or any
other events affecting such forward-looking information, except as required by applicable law.

CENTERRA GOLD INC. ANNUAL REPORT 20203TABLE OF CONTENTS

Overview ...................................................................................................................................................... 5
Consolidated Financial and Operational Highlights ............................................................................... 6
Overview of Consolidated Results ............................................................................................................. 7
Outlook ........................................................................................................................................................ 9
Risks That Can Affect Our Business ....................................................................................................... 17
Financial Performance ............................................................................................................................. 19
Balance Sheet Review ............................................................................................................................... 21
Market Conditions .................................................................................................................................... 23
Financial Instruments ............................................................................................................................... 26
Operating Mines and Facilities ................................................................................................................ 27
Pre-Development Projects ........................................................................................................................ 43
Quarterly Results – Previous Eight Quarters ........................................................................................ 44
Related party transactions ....................................................................................................................... 45
Contingencies............................................................................................................................................. 46
Contractual Obligations ........................................................................................................................... 48
Accounting Estimates, Policies and Changes ......................................................................................... 48
Disclosure Controls and Procedures and Internal Control Over Financial Reporting ...................... 49
Non-GAAP Measures ............................................................................................................................... 49
Qualified Person & QA/QC – Production, Mineral Reserves and Mineral Resources ...................... 54
Mineral Reserves and Mineral Resources .............................................................................................. 55

CENTERRA GOLD INC. ANNUAL REPORT 20204Overview

Centerra is a Canadian-based gold mining company focused on operating, developing, exploring and
acquiring gold properties worldwide and is one of the largest Western-based gold producers in Central Asia.
Centerra’s principal operations are the Kumtor Gold Mine located in the Kyrgyz Republic, the Mount
Milligan Gold-Copper Mine located in British Columbia, Canada, and the Öksüt Gold Mine located in
Turkey. The Company has one property in Canada in the pre-development stage, the Kemess Underground
Gold Property. The Company sold its interest in the Greenstone Gold Mines Partnership, which included
its interest in the Hardrock deposit, effective January 19, 2021, and as a result, treated it as available for
sale as at December 31, 2020. The Company owns exploration properties in Canada, the United States of
America and Turkey and has options to acquire exploration joint venture properties in Canada, Finland,
Turkey, and the United States of America. The Company owns various assets within its Molybdenum
Business Unit, particularly the Langeloth metallurgical processing facility in Pennsylvania, United States
of America and two primary molybdenum mines currently on care and maintenance, Thompson Creek Mine
in Idaho, United States of America, and the Endako Mine (75% ownership) in British Columbia, Canada.

As of December 31, 2020, Centerra’s significant subsidiaries are as follows:

Entity

Property - Location

Kumtor Gold Company (“KGC”)

Kumtor Mine - Kyrgyz Republic

Current

Property

Status
Operation

Ownership
100%

Thompson Creek Metals Company Inc.

Mount Milligan Mine - Canada

Operation

100%

Öksüt Madencilik A.S. (“OMAS”)

Öksüt Mine - Turkey

Operation

100%

Langeloth Metallurgical Company LLC

Langeloth - United States

Operation

100%

AuRico Metals Inc.

Greenstone Gold Mines LP
(“Greenstone”)

Thompson Creek Mining Co.

Kemess Underground Project -
Canada

Pre-development

100%

Greenstone Gold Property - Canada Available for sale(1)

50%

Thompson Creek Mine - United
States

Care and
Maintenance

100%

75%

Thompson Creek Metals Company Inc.

Endako Mine - Canada

(1)

Property divestment completed on January 19th, 2021.

Centerra’s common shares are listed for trading on the Toronto Stock Exchange under the symbol CG. As
of February 23, 2021, there are 295,856,546 common shares issued and outstanding, options to acquire
3,251,500 common shares outstanding under its stock option plan and 936,947 units outstanding under its
restricted share unit plan (exercisable on a 1:1 basis for common shares).

The Company reports the results of its operations in U.S. dollars, however not all of its costs are incurred
in U.S. dollars. As such, the movement in exchange rates between currencies in which the Company incurs
costs and the U.S. dollar also impacts reported costs of the Company.

CENTERRA GOLD INC. ANNUAL REPORT 20205
Consolidated Financial and Operational Highlights

Unaudited ($ millions, except as noted)

Three months ended December 31

Twelve months ended December 31

Financial Highlights

Revenue

Production costs

Standby costs

Depreciation, depletion and amortization

Earnings from mine operations

Net earnings (loss)
Adjusted net earnings(1)

Cash provided by operations
Adjusted cash provided by operations(1)

Cash provided by operations before changes in working capital
Free cash flow (deficit)(1)
Adjusted free cash flow(1)
Sustaining capital expenditures(2)
Non-sustaining capital expenditures(2)(3)
Capitalized stripping(2)

Total assets

Long-term debt and lease obligations
Cash, cash equivalents and restricted cash(4)

Per Share Data
Earnings per common share - $ basic (5)
Adjusted net earnings per common share - $ basic (1)(5)

Per Ounce Data (except as noted)
Average gold spot price ($/oz)(6)
Average realized gold price ($/oz sold)(1)(6)
Average copper spot price ($/lb)(6)
Average realized copper price ($/lb sold)(1)(6)

Operating Highlights

Gold produced (oz)

Gold sold (oz)

Copper produced (000's lb)

Copper sold (000's lb)

2020

2019 % Change

2020

2019

2018

386.8 $

312.5

24% $ 1,688.7 $ 1,375.3 1,129.3

138.3
-
65.1
183.4

149.4

9.1

59.3

94.7

(7%)
(100%)
10%
94%

590.6
6.7
305.3
786.1

676.6

578.4

9.1

10.8

239.6

196.9

450.1

343.3

95.2 $

(12.2)

880% $

408.5 $

(93.5)

107.5

104.5 $

22.3

369% $

461.9 $

181.5

118.1

182.0
182.0
187.8
76.8
76.8
33.7
20.2
55.3

92.5

93.0

(0.4)

16.7

42.3

28.2

97%
97%
102%
100%
100%
102%
(52%)
96%

930.0
935.0
852.7
603.8
608.8
97.7
69.8
154.0

334.1

217.5

396.7

221.9

398.5

341.4

34.7

(68.4)

97.3

(64.0)

74.2

148.9

86.8

97.7

76.5

103.9

$ 3,136.0 $ 2,701.7

16% $ 3,136.0 $ 2,701.7 2,826.7

14.3
547.9

88.3

70.7

(84%)
675%

14.3
547.9

88.3

70.7

183.5

179.2

0.32 $

(0.04)

900% $

1.39 $

(0.32)

0.35 $

0.08

338% $

1.57 $

0.62

0.37

0.40

1,876
1,760
3.27
2.79

1,483

1,403

2.68

2.23

27%
25%
22%
25%

1,772
1,670
2.80
2.22

1,393

1,269

1,309

1,175

2.73

2.09

2.96

2.02

172,446 194,507
169,950 169,892
18,079

20,376
18,975

14,301

(11%) 824,059 783,308 729,556
0% 828,816 780,654 709,330
71,146 47,091
13%
33%

82,816
80,477

67,430 44,370

Unit Costs
Gold production costs ($/oz sold)(7)
Gold - All-in sustaining costs on a by-product basis ($/oz sold)(1)(7)
Gold - All-in costs on a by-product basis ($ /oz sold)(1)(7)
Gold - All-in sustaining costs on a co-product basis($/oz sold)(1)(7)
Copper production costs ($/lb sold)(7)
Copper - All-in sustaining costs on a co-product basis – ($/lb)(1)(7)

474 $

974 $

455

799

4% $

22% $

419 $

729 $

465

708

464

754

1,352 $

1,331

2% $

1,059 $

1,126

1,100

1,073 $

1.24 $

1.79 $

829

1.50

2.28

29% $

799 $

(17%) $

1.18 $

(21%) $

1.47 $

737

1.46

1.85

750

1.26

1.77

2020 vs 2019
%Change

23%

(13%)

(26%)

27%

75%

537%

154%

178%

136%

114%

1640%

526%

32%

(53%)

101%

16%

(84%)

675%

534%

153%

27%

28%

16%

19%

(10%)

(6%)

(19%)

(21%)

(1) Non-GAAP measure. See discussion under “Non-GAAP Measures”.
(2) Capital expenditures are presented on a cash basis.
(3) Non-sustaining capital expenditures are distinct projects designed to have a significant increase in the net present value of the mine. In the current year,
non-sustaining capital expenditures included construction costs related to the Öksüt mine and additional costs related to cut-back 20 at the Kumtor mine.

Includes restricted cash of $2.7 million as at December 31, 2020 (December 31, 2019: $28.0 million and December 31, 2018: $27.5 million).

(4)
(5) As at December 31 2020, the Company had 295,827,906 common shares issued and outstanding.
(6) Average for the period as reported by the London Bullion Market Association (US dollar Gold P.M. Fix Rate) and London Metal Exchange (LME).
(7) Combines streamed and unstreamed amounts.

CENTERRA GOLD INC. ANNUAL REPORT 20206

Overview of Consolidated Results

Fourth Quarter 2020 compared to Fourth Quarter 2019
Net earnings of $95.2 million and adjusted net earningsNG of $104.5 million were recognized in the fourth
quarter of 2020, compared to a net loss of $12.2 million and adjusted net earningsNG of $22.3 million in the
fourth quarter of 2019. The increase in adjusted net earningsNG was due to contributions from the new Öksüt
mine in 2020 with 39,380 gold ounces sold in the fourth quarter, 25% higher average realized prices for
both gold and copper and lower production and depreciation costs at Kumtor, partially offset by decreased
gold ounces sold at Kumtor and higher depreciation costs at the Mount Milligan mine.

Cash provided by operations was $182.0 million in the fourth quarter of 2020, compared to cash provided
by operations of $92.5 million in the fourth quarter of 2019. The increase in cash provided by operations
was due to increased earnings from mine operations including earnings from the Öksüt mine which began
production in 2020 and increased cash from working capital due to the processing of previously built-up
stockpiles at the Kumtor mine.

Free cash flowNG of $76.8 million was recognized in the fourth quarter of 2020 compared to a free cash
flow deficitNG of $0.4 million in the fourth quarter of 2019. The increase in free cash flowNG was due to
higher cash provided by operations and lower non-sustaining capital expenditures as construction of the
Öksüt mine was completed, partially offset by increased capitalized stripping at Kumtor and greater
sustaining capital at the Mount Milligan and Kumtor mines.

Year ended December 31, 2020 compared to 2019
Net earnings were $408.5 million and adjusted net earningsNG were $461.9 million in 2020, compared to a
net loss of $93.5 million and adjusted net earningsNG of $181.5 million in 2019.

The increase in adjusted net earningsNG was due to contributions from the new Öksüt mine, 28% higher
realized gold prices, increased copper pounds sold at Mount Milligan and lower production costs at both
Kumtor and Mount Milligan. This was partially offset by lower gold ounces sold and an increase in
depreciation costs at the Kumtor and Mount Milligan mines.

Significant adjusting items to net earnings in 2020 include:

• $53.4 million asset retirement obligation (“ARO”) expense at the non-operating sites due to a

significant decrease in the risk-free rate assumption, and

Significant adjusting items to the net loss in 2019 include:

• $230.5 million impairment charge on the assets at the Mount Milligan mine,
• $34.5 million ARO expense at the non-operating sites due to a significant change in the risk-free

rate assumption, and

• $10.0 million charge relating to the completion of the Strategic Agreement with the Kyrgyz

Government.

Cash provided by operations of $930.0 million and adjusted cash provided by operationsNG of $935.0
million were recognized in 2020, compared to cash provided by operations of $334.1 million and adjusted
cash provided by operationsNG of $396.7 million in 2019. The increase in cash provided by operations was
due to increased earnings from mine operations in 2020 including contributions from the Öksüt mine,
increased cash from working capital from processing of stockpiles at Kumtor and a $22.8 million tax refund

CENTERRA GOLD INC. ANNUAL REPORT 20207

collected by the Molybdenum business unit, partially offset by a greater Kyrgyz Republic settlement
payment.

Free cash flowNG of $603.8 million and adjusted free cash flowNG of $608.8 million was recognized in 2020
compared to free cash flowNG of $34.7 million and adjusted free cash flowNG of $97.3 million in 2019. The
increase in adjusted free cash flowNG was due to higher cash provided by operations and lower non-
sustaining capital expenditures as construction at the Öksüt mine was completed, partially offset by an
increase in capitalized stripping at the Kumtor mine.

Safety and Environment
During the fourth quarter of 2020, the Öksüt mine achieved four million work hours without a lost time
injury.

There were nine reportable injuries company-wide in the fourth quarter of 2020, including one lost time
injury, six medical aid injuries and two restricted work injuries. During 2020, Centerra incurred thirty-seven
reportable injuries, including one fatal injury, ten lost time injuries, eighteen medical aid injuries and eight
restricted work injuries.

Centerra has implemented a number of proactive measures to prevent infection and reduce the spread of
COVID-19 for the health and safety of its employees, contractors, communities and other stakeholders.

There were no reportable incidents to the environment in the fourth quarter of 2020. For the year-ended
December 31, 2020, there was one reportable incident to the environment as reported in the third quarter of
2020.

CENTERRA GOLD INC. ANNUAL REPORT 20208

Outlook

2021 - 2023 Outlook
See “Material Assumptions” for material assumptions or factors used to forecast production and costs.

The Company’s three-year outlook is set out in the following table:

Gold Production

Kumtor
Mount Milligan(1)
Öksüt

Consolidated Gold Production
Copper Production(1)
Gold production costs(3)
All-in sustaining costs on a by-product basis(2),(3)
All-in sustaining costs on a by-product basis including
revenue-based taxes(2),(3),(4)
All-in costs on a by-product basis(2),(3)
Capital Expenditures

Sustaining capital expenditures
Non-sustaining capital expenditures(5)
Capitalized stripping costs(6)
Total Capital Expenditures
Outlook Assumptions(7)

Units

(Koz)

(Mlb)

($/oz)

($M)

2020

2021

2022

2023

Actual Guidance Outlook

Outlook

556
162
106

824

419
729

470 - 510
180 - 200
90 - 110

540 - 590
170 - 190
210 - 240

550 - 600
180 - 210
200 - 220

740 - 820

920 - 1,020 930 - 1,030

70 - 80

90 - 100

70 - 80

475 - 525
850 - 900

390 - 440
630 - 680

385 - 435
700 - 750

897 1,010 - 1,065 775 - 835

855 - 905

1,059 1,175 - 1,230 875 - 935

925 - 975

98
70
194

362

130 - 150
70 - 85
230 - 245

130 - 145
35 - 50
155 - 175

100 - 115
10 - 25
270 - 290

430 - 480

320 - 370

380 - 430

Gold Price
Copper Price
Canadian Dollar

1,750
3.40
1.25
(1) Mount Milligan production and ounces sold are on a 100% basis. The Mount Milligan Streaming Arrangement entitles Royal Gold to 35% and 18.75% of
gold and copper sales, respectively, from the Mount Milligan mine. Under the Mount Milligan Streaming Arrangement, Royal Gold will pay $435 per

($/oz)
($/lb)
(CAD/USD)

1,750
3.36
1.31

1,750
3.40
1.27

ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered. Assuming a market gold price of $1,750 per ounce and a market

copper price of $3.36 per pound, Mount Milligan’s average realized gold and copper price would be $1,290 per ounce and $2.82 per pound, respectively.

(2) Non-GAAP measure and is discussed under “Non-GAAP Measures”.
(3) Figures are for consolidated Centerra Gold.
(4)
Includes only revenue-based taxes at Kumtor.
(5) Non-sustaining capital expenditures are distinct projects designed to have a significant increase the net present value of the mine.
(6) Presented capitalized stripping includes a cash and non-cash component.
(7) Copper price for 2021 and CAD/USD exchange rates for 2021 and 2022, giving effect to hedges in place as at December 31, 2020.

CENTERRA GOLD INC. ANNUAL REPORT 20209

Kumtor
Centerra expects an increasing gold production profile at Kumtor over the 2021-2023 period. While the
mid-point of gold production in 2021 is expected to be approximately 12% lower than 2020 gold production
at the mine, Centerra expects 2022-2023 gold production levels to return to or exceed 2020 levels.
Expansion of the mine fleet capacity is expected to allow Kumtor to exceed 2019 mining levels. 2021
capital expenditures are forecast to be less than what is reported in the 2021 Kumtor Technical Report due
to eight haul truck purchases being deferred to 2022. Mill improvement projects, including a tower mill
project for regrinding of flotation tails is expected to allow Kumtor to achieve higher targeted gold
production levels. Gold production and all-in sustaining costs on a by-product basisNG over the three-year
period are expected to reflect a growing gold production profile with unit costs per ounce fluctuating
primarily due to changes in gold production.

Mount Milligan
Centerra expects strong gold and copper production at Mount Milligan over the 2021-2023 period. The
Mount Milligan mill is expected to maintain a stable average daily throughput of approximately 60,000
tonnes per day, the maximum permitted rate. Installation of staged flotation reactors are expected to
contribute to achieving targeted gold and copper production levels in 2022 and beyond. All-in sustaining
costs on a by-product basisNG is expected to be at or below 2020 levels over the three-year period. Centerra
expects to have adequate water inventory levels for targeted throughput and is working with government
regulators, its First Nations partners, and other stakeholders to maintain access to its existing water
resources and secure a stable long-term water solution. The long-term water solution is expected to require
additional infrastructure, the capital for which is not included in the capital expenditure guidance. Mount
Milligan’s current water level is in excess of 6 million cubic metres.

Öksüt
Gold production at Öksüt in 2021 is expected to be approximately the same as 2020 levels, whereas in 2022
and 2023 gold production is expected to benefit from mining and processing higher grade ore from the
Güneytepe pit subject to receipt of all required permits. Construction of Phase 2 of the heap leach pad is
expected to be completed by the end of 2021, and with the expanded heap leach capacity, it is expected to
be sufficient to achieve targeted gold production in 2022 and 2023. As the Güneytepe pit ore becomes
available, the average grade of ore stacked to the heap leach pad is estimated to increase to approximately
2.22 g/t gold (Au) during 2022 and 2023 compared to the estimated 1.27 g/t Au in 2021 and the actual
stacked grade of 1.40 g/t Au in 2020. Gold production and all-in sustaining costsNG profiles over the three-
year period are expected to reflect a growing gold production profile with unit costs per ounce reducing
with the increases in gold production.

CENTERRA GOLD INC. ANNUAL REPORT 202010

2021 Guidance

2021 Gold Production Guidance
Centerra’s 2021 gold production is expected to be between 740,000 to 820,000 ounces.

Kumtor
Kumtor gold production in 2021 is expected to be in the range of 470,000 to 510,000 ounces and reflects
lower average grades in the ore stockpiles available for processing compared to 2020. Gold production is
expected to rise steadily throughout the year with the first quarter of 2021 contributing approximately 15%
of annual gold production rising to approximately 35% in the fourth quarter of 2021. Total tonnes mined
are expected to increase to a rate of approximately 550,000 tonnes per day from the average mining rate of
280,000 tonnes per day in 2020 due to the addition of new mining equipment, a resumption of waste rock
dumping at the Lysii waste rock dump and fewer expected restrictions due to COVID-19. Mine operations
are expected to be focused mainly on waste stripping from cut-back 20 during the first half of 2021,
accessing greater amounts of ore in the second half of the year and accessing the high-grade ore in the
fourth quarter. The Kumtor mill is scheduling a 6-day mill maintenance shutdown in the third quarter of
the year to complete a replacement of the regrind mill motor and carry out SAG mill and regrind mill relines
and other maintenance work.

Mount Milligan
At Mount Milligan, the Company expects to achieve an average daily throughput of approximately 60,000
tonnes per calendar day. Mill maintenance downtimes are scheduled for the first quarter (5 days) and third
quarter (4 days) to complete SAG Mill reline replacements and other maintenance work. Mount Milligan’s
total (streamed and unstreamed) gold production is forecast to be in the range of 180,000 to 200,000 ounces.
Gold and copper production is expected to be slightly back-end weighted in 2021 with the first half of the
year representing 45% or more of the 2021 annual metal production total while the second half of the year
will represent up to 55% of the 2021 annual metal production total. The Company plans to continue to work
on continuous improvement projects in 2021, including secondary crusher improvements and the
installation of staged flotation reactors which is expected to improve metal recoveries in future years.

Öksüt
At Öksüt, 2021 will be the first full year of operations and gold production is expected to be in the range of
90,000 to 110,000 ounces. Gold production is expected to be back-end weighted in 2021 with the first half
of the year representing 35% or more of the 2021 annual gold production total while the second half of the
year will represent up to 65% of the 2021 annual gold production total. Mining will continue at the Keltepe
pit in 2021 while the Güneytepe pit is expected to be developed from early 2022 assuming receipt of the
forestry permit from the local authorities. The average grade of ore stacked to the heap leach pad in 2021
is expected to be approximately 1.27 g/t Au, which is lower than the average grade of ore stacked in 2020
of approximately 1.40 g/t Au. In 2021, Öksüt is expected to achieve a project-to-date accumulated heap
leach recovery of 75%. The Company continues with construction of Phase 2 of the heap leach facility,
where excavation has been completed and the Company is currently carrying out levelling activities with
clay placement expected to start in May 2021.

CENTERRA GOLD INC. ANNUAL REPORT 202011

2021 Copper Production Guidance
Centerra expects total (streamed and unstreamed) copper production from the Mount Milligan mine to be
in the range of 70 to 80 million pounds.

Centerra’s 2021 production is currently forecast as follows:

Gold

Unstreamed Gold Production
Streamed Gold Production(1)
Total Gold Production(2)

Copper

Unstreamed Copper Production
Streamed Copper Production(1)
Total Copper Production(3)

Units

Kumtor

Mount
Milligan(1)

Öksüt

Centerra
Consolidated

(Koz)

470-510

117-130

90-110

677-750

63-70

(Koz)

470-510

180-200

90-110

740-820

(Mlb)

57-65

13-15

70-80

57-65

13-15

70-80

(1) The Mount Milligan Streaming Arrangement entitles Royal Gold to 35% and 18.75% of gold and copper sales, respectively, from the Mount Milligan mine.
Under the Mount Milligan Streaming Arrangement, Royal Gold will pay $435 per ounce of gold delivered and 15% of the spot price per metric tonne of

copper delivered.

(2) Gold production assumes recoveries of 81.9% at Kumtor, 63.9% at Mount Milligan and approximately 75% at Öksüt.
(3) Copper production assumes 78.8% recovery for copper at Mount Milligan.

CENTERRA GOLD INC. ANNUAL REPORT 202012

2021 Sales, All-in Sustaining and All-in Unit Costs GuidanceNG
Centerra’s 2021 sales, all-in sustaining costs per ounceNG calculated on a by-product and co-product basis,
and all-in costs per ounceNG calculated on a by-product basis are forecasted as follows:

Ounces of gold sold

(Koz)

470 - 510

180 - 200

90 - 110

Units Kumtor

Mount
Milligan

Öksüt

Centerra
Consolidated(2)
740 - 820

Gold production costs
All-in sustaining costs on a by-product basis(1)
Revenue-based taxes

($/oz)

400 - 450

650 -700

500 - 550

475 - 525

($/oz) 950 - 1,000

530 - 580

730 - 780

850 - 900

($/oz)

250 - 255

160 - 165

All-in sustaining costs on a by-product basis,
including revenue-based taxes (1), (2), (3)
All-in costs on a by-product basis(1),(2),(3)
Gold - All-in sustaining costs on a co-product
basis(1),(2)
Copper production costs
Copper - All-in sustaining costs on a co-product
basis (1),(2)

($/oz) 1,200 - 1,255

530 - 580

730 - 780

1,010 - 1,065

($/oz) 1,365 - 1,420

590 - 640

790 - 840

1,175 - 1,230

($/oz) 950 - 1,000

910 - 1,025

730 - 780

950 - 1,055

($/lb)

1.30-1.45

1.75-1.95

1.30-1.45

1.75-1.95

(1) All-in sustaining costs and all-in costs on a by-product and co-product basis are non-GAAP measures and are discussed under “Non-GAAP Measures”.
Gold production cost per ounce is different from the all-in sustaining costs on a by-product basis measure and is considered the nearest GAAP measure.
(2) Mount Milligan production and ounces sold are on a 100% basis (the Mount Milligan Streaming Arrangement entitles Royal Gold to 35% and 18.75% of
gold and copper sales, respectively). Unit costs and consolidated unit costs include a credit for forecasted copper sales treated as by-product for all-in

sustaining costs and all-in sustaining costs including revenue-based taxes. Production for copper and gold reflects estimated metallurgical losses resulting

from handling of the concentrate and metal deductions, subject to metal content, levied by smelters.

(3)

Includes revenue-based taxes at Kumtor.

Gold production costs are expected to increase to $475 to $525 per ounce range up from 2020 consolidated
gold production costs of $419 per ounce due to higher operating costs at Kumtor and Öksüt, lower gold
production at Kumtor and lower copper production at Mount Milligan.

Consolidated all-in sustaining costs on a by-product basisNG are expected to be in the range of $850 to $900
per ounce. Kumtor’s all-in sustaining costs on a by-product basisNG are expected to increase to $950 to
$1,000 per ounce range driven by lower gold production and higher capitalized stripping and mining costs
reflecting the expansion of mining activities. Mount Milligan’s all-in sustaining costs on a by-product
basisNG are expected to be in line with 2020 levels as higher production costs attributable to increased mill
throughput are offset by higher gold production and a higher credit for copper sales. Öksüt’s all-in
sustaining costs on a by-product basisNG are expected to increase to a range of $730 to $780 per ounce,
reflecting lower ore grades, higher sustaining capital expenditures and capitalized stripping costs compared
to 2020.

Consolidated all-in costs on a by-product basisNG are expected to be in the range of $1,175 to $1,230 per
ounce. Kumtor’s all-in costs on a by-product basisNG are expected to be in the range of $1,365 to $1,420
per ounce due to lower gold production, higher all-in sustaining costs, increases in non-sustaining capital
and site exploration expenditures planned for 2021. Mount Milligan’s all-in costs on a by-product basisNG
of $590 to $640 per ounce are expected to be in line with 2020. Öksüt’s all-in costs on a by-product basisNG
are expected to be between $790 to $840 per ounce reflecting the higher all-in sustaining costs offset by
lower non-sustaining capital expenditures planned for 2021.

CENTERRA GOLD INC. ANNUAL REPORT 202013

Consolidated cash flow provided by operations and consolidated free cash flow NG are expected to be in
the range of $750 to $800 million and the range of $350 to $400 million (assuming US$1,750 gold price),
respectively.

2021 Capital Expenditures
Projected capital expenditures is currently forecast as follows:

Projects ($ millions)
Kumtor mine(2)
Mount Milligan mine
Öksüt mine(2)
Other(3)
Consolidated Total

Capitalized
Stripping

220 - 230
-
10 - 15

-
230-245

Capital

Sustaining Non-sustaining
Capital(1)
60 - 70
5 - 10

55 - 65
65 - 70
5 - 10

5
130-150

5
70-85

Total

335 - 365
70 - 80
15 - 25

10
430-480

1) Non-sustaining capital expenditures are distinct projects designed to increase the net present value of the mine.
2) Capitalized stripping costs include cash components of $185 to $205 million at Kumtor mine, and $10 to $15 million at Öksüt mine.
3) Non-sustaining capital relates to the completion of construction at Öksüt and development activities at Kemess Underground Project.

Kumtor
Sustaining capital expenditure is projected at $55 to $65 million in 2021 and relates primarily to major
overhauls, purchase of mining equipment, replacement of regrind mill motor, and dewatering projects.

Non-sustaining capital investment at Kumtor for 2021 is forecast at $60 to $70 million which includes,
expansion of the leach circuit, the tower mill project for regrinding of flotation tails to improve future
recoveries, and additional capital expenditures for mine life extension related to development of the cut-
back 21 and Hockey Stick zones, including mine fleet expansion and raising of the tailings dam.

The cash component of capitalized stripping costs related to the development of the open pit is expected to
be $185 to $205 million of the $220 to $230 million range for total capitalized stripping costs.

Mount Milligan
Sustaining capital expenditure in 2021 is forecast to be $65 to $70 million and relate primarily to tailings
storage facility costs, major overhauls and water management costs.

Non-sustaining capital investment at Mount Milligan for 2021 is forecast at $5 to $10 million for the
installation of staged flotation reactors to improve future metal recoveries.

Öksüt
In 2021 sustaining capital spending is estimated to be $5 to $10 million and relates primarily to the costs
for construction of the Phase 2 heap leach expansion, and electric equipment costs.

The cash component of capitalized stripping costs related to the development of the open pit is expected to
be $10 to $15 million representing 100% of total capitalized stripping costs.

CENTERRA GOLD INC. ANNUAL REPORT 202014

Kemess Underground Project
In 2021, total spending at the Kemess Underground Project is estimated at approximately $13 to $15
million, including $11 million for care and maintenance activities.

Molybdenum Business Unit
In 2021, the Langeloth metallurgical roasting facility is expected to generate sufficient operating margins
to cover the care and maintenance costs of the Endako mine and the Thompson Creek mine. Care and
maintenance expenses related to the Molybdenum unit are currently estimated to be between $14 and $15
million for 2021 and the Company’s assumed molybdenum price is $9.00 per pound.

2021 Exploration Expenditures
Planned exploration expenditures for 2021 are expected to be $50 million, including approximately $34
million for brownfields exploration (Kumtor - $21 million, Mount Milligan - $6 million, Öksüt - $3.5
million and Kemess - $3 million) and the balance for greenfields and generative exploration programs.

2021 Corporate Administration
Corporate and administration expense for 2021 is forecast to be between $35 million and $40 million
(including $8 million to $10 million of stock-based compensation expense).

2021 Depreciation, Depletion and Amortization
Consolidated depreciation, depletion, and amortization (DD&A) expense included in costs of sales expense
for 2021 is forecasted to be in the range of $240 to $270 million, including Kumtor’s DD&A expense of
$150 to $170 million, Mount Milligan’s DD&A expense of $55 million to $65 million, and Öksüt’s DD&A
expense of $25 to $35 million.

2021 Taxes
Pursuant to the Restated Investment Agreement, Kumtor’s operations are not subject to corporate income
taxes. Instead, the Restated Investment Agreement imposes a tax of 13% on gross revenue plus 1% of gross
revenue payable to the Issyk-Kul Development Fund. The Mount Milligan operations are subject to
corporate income tax and British Columbia mineral tax. The British Columbia mineral tax is forecast to be
between $7 and $9 million. At Öksüt, income tax is expected to be between $1 to $2 million. At the
Canadian parent company level, corporate income tax for 2021 is forecast to be nil.

CENTERRA GOLD INC. ANNUAL REPORT 202015

2021 Sensitivities
Centerra’s revenues, earnings, and cash flows for 2021 are sensitive to changes in certain key inputs or
currencies. The Company has estimated the impact of any such changes on revenues, net earnings, and
cash flows.

Impact on
($ millions)

Production
Costs &
Taxes

5.5 - 6.0

0.1 - 0.5

Capital
Costs

Revenues Cash flows

Net Earnings
(after tax)

Impact on
($ per ounce
sold)
AISC(2)(3) on
by-product
basis

34.0 - 37.5 28.5 - 31.5

28.5 - 31.5

2.5 - 3.0

3.0 - 5.5

3.0 - 5.0

6.0 - 7.0

5.5- 7.0

11.5 - 14.0

1.0 - 2.0

9.5 - 11.0

1.5 - 2.0

3.0 - 4.0

0.5 - 1.0

17.0 - 21.0

5.5 - 7.0

23.0 - 25.5

1.0 - 2.0

2.0 - 2.5

11.0 - 13.0

9.5 - 11.0

14.5 - 16.0

3.5 - 5.0

3.0 - 4.0

5.5 - 6.0

Gold price
Copper price(4)
Diesel fuel(3)
Kyrgyz som(1)
Canadian dollar(1)(3)
Turkish lira(1)

$50/oz

10%

1 som

10 cents
1 lira

(1) Appreciation of currency against the U.S. dollar will result in higher costs and lower cash flow and earnings, depreciation of currency against the U.S.

dollar results in decreased costs and increased cash flow and earnings.
(2) Non-GAAP measure. See discussion under “Non-GAAP Measures”.
(3)
Includes the effect of hedging programs.
(4) 2021 copper sales are hedged up to 85%.

Production, cost and capital forecasts for 2021 are forward-looking information and are based on key
assumptions and subject to material risk factors that could cause actual results to differ materially and which
are discussed herein under the headings “2021 Material Assumptions” and “Caution Regarding Forward-
Looking Information” in this document and under the heading “Risks That Can Affect Our Business” in
this document and the Company’s most recently filed Annual Information Form.

2021 Material Assumptions
Material assumptions or factors used to forecast production and costs for 2021, after giving effect to the
hedges in place as at December 31, 2020, include the following:

•

•
•

a market gold price of $1,750 per ounce and an average realized gold price at Mount Milligan of
$1,290 per ounce after reflecting the streaming arrangement with Royal Gold (35% of Mount
Milligan’s gold at $435 per ounce).
a market copper price of $3.36 per pound and an average realized copper price at Mount Milligan
of $2.82 per pound after reflecting the streaming arrangement with Royal Gold (18.75% of Mount
Milligan’s copper at 15% of the spot price per metric tonne).
a molybdenum price of $9.00 per pound.
exchange rates:

o $1USD:$1.31 Canadian dollar,
o $1USD:80.00 Kyrgyz som,
o $1USD:7.50 Turkish lira.

• diesel fuel price assumption:

o $0.44/litre at Kumtor,
o $0.69/litre (CAD$0.90/litre) at Mount Milligan.

CENTERRA GOLD INC. ANNUAL REPORT 202016

Kumtor Fuel
The assumed diesel price of $0.44/litre at Kumtor assumes that no Russian export duty will be paid on the
fuel exports from Russia to the Kyrgyz Republic. Diesel fuel for Kumtor is sourced from separate Russian
suppliers. The diesel fuel price assumes a price of oil of approximately $53 per barrel. Crude oil is a
component of diesel fuel purchased by the Company, such that changes in the price of Brent crude oil
generally impacts diesel fuel prices.

Mount Milligan Streaming Arrangement
The Mount Milligan Mine is an open pit mine located in north central British Columbia, Canada producing
a gold and copper concentrate. Production at Mount Milligan is subject to an arrangement with RGLD Gold
AG and Royal Gold, Inc. (together, “Royal Gold”) pursuant to which Royal Gold is entitled to purchase
35% of the gold produced and 18.75% of the copper production at the Mount Milligan Mine for $435 per
ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered (the “Mount Milligan
Streaming Arrangement”). To satisfy its obligations under the Mount Milligan Streaming Arrangement the
Company purchases refined gold and copper warrants and arranges for delivery to Royal Gold. The
difference between the cost of the purchases of refined gold and copper warrants, and the corresponding
amounts payable to the Company under the Mount Milligan Streaming Arrangement is recorded as a
reduction of revenue and not a cost of operating the mine.

Other Material Assumptions
Other material assumptions used in forecasting production and costs for 2021 can be found under the
heading “Caution Regarding Forward-Looking Information” in this document. Production, cost, and capital
forecasts for 2021 are forward-looking information and are based on key assumptions and subject to
material risk factors that could cause actual results to differ materially and which are discussed under the
heading “Risks That Can Affect Our Business” in the Company’s most recent Annual Information Form.

Risks That Can Affect Our Business

Overview
The Company is subject to risks that can have a material effect on the profitability, future cash flow,
financial condition of the Company and its stated mineral reserves. Some of these risks relate to the mining
industry in general, and others apply to specific properties, operations or planned operations. The Company
has implemented an enterprise risk management (“ERM”) program which applies to all of its operations
and corporate offices. The program is based on leading international risk management standards and
industry best practice. It employs both a bottom-up and top-down approach to identify and address risks
from all sources that threaten the achievement of the Company’s objectives.

Centerra’s Vice President, Risk & Insurance is responsible for providing the requisite tools, guidance, and
leadership of the ERM program. Each operating site and project are responsible for identifying, assessing,
mitigating, and monitoring risk. Efforts are coordinated by appointed “Risk Champions” who facilitate the
process and provide regular reporting to Centerra’s Vice President, Risk & Insurance.

The risk management program at Centerra considers the full life of mine cycle from exploration through to
closure. All aspects of the operation and the Company’s stakeholders are considered when identifying risks.
As such, the Company’s risk program encompasses a broad range of risks including technical, financial,
commercial, social, reputational, environmental, health and safety, political and human resources related
risks.

CENTERRA GOLD INC. ANNUAL REPORT 202017

Board and Committee Oversight
The Risk Committee of the Board of Directors has oversight responsibilities for the policies, processes and
systems for the identification, assessment, and management of the Company’s principal strategic, financial,
and operational risks. To ensure consistent communication of risks amongst Board committees, the
members of the Risk Committee are comprised of at least one member from each of the other standing
committees of the Board. Each of the other Board committees is responsible for overseeing risks related to
their area of responsibility and reviewing the policies, standards and actions undertaken to mitigate such
risks.

Management Oversight
The Company’s executive team meets regularly with its Vice President, Risk and Insurance to review the
risks facing the organization and to discuss the implementation and effectiveness of mitigation actions.

Principal risks
The following section describes the risks that are most material to the Company’s business. This is not a
complete list of the potential risks the Company faces; there may be others the Company is not aware of,
or risks that the Company feels are not material today that could become material in the future. For a more
comprehensive discussion about the Company’s risks, see the most recently filed Annual Information Form.

Strategic, Legal and Planning Risks
Strategic, legal and planning risks include political risks associated with the Company’s operations in the
Kyrgyz Republic, Turkey, United States and Canada; resource nationalism; reliance on cash flow from its
subsidiaries; the impact of changes in, or more aggressive enforcement of laws, regulations and government
practices including with respect to the environment; impact of community activism on laws and regulations;
increases in contributory demands or business interruption; delays or refusals to grant required permits and
licenses; status of the Company’s relationships with local communities; Indigenous claims and consultation
issues relating to the Company’s properties which are in proximity to Indigenous communities; the risks
related to outstanding litigation affecting the Company; the impact of any sanctions imposed by Canada,
the United States or other jurisdictions against various Russian and Turkish individuals and entities;
potential defects of title in the Company’s properties that are not known as of the date hereof; the inability
of the Company and its subsidiaries to enforce their legal rights in certain circumstances; the presence of a
significant shareholder that is a state-owned company of the Kyrgyz Republic; conflicts of interest among
its board members; risks related to anti-corruption legislation; Centerra’s future exploration and
development activities not being successful; Centerra not being able to replace mineral reserves and
resources; risks related to mineral reserves and resources being imprecise; production and cost estimates
may be inaccurate; reputational risks, particularly in light of the increase in social media; inability to
identify new opportunities and to grow the business; large fluctuations in the Company’s trading price that
are beyond the Company’s control or ability to predict and mitigate; potential risks related to kidnapping
or acts of terrorism.

Financial Risks
The Company is subject to risks related to its financial position and liquidity, including sensitivity of the
Company’s business to the volatility of gold, copper and other mineral prices; the use of provisionally-
priced sales contracts for production at Mount Milligan; reliance on a few key customers for the gold-
copper concentrate at Mount Milligan and at Kumtor there is reliance on Kyrgyzaltyn, as Centerra sells all
of its gold doré produced from the Kumtor Mine to Kyrgyzaltyn pursuant to the Restated Gold and Silver
Sale Agreement; use of commodity derivatives; sensitivity to fuel price volatility; the impact of currency

CENTERRA GOLD INC. ANNUAL REPORT 202018

fluctuations; global financial conditions; access to future financing including the impact of environmental,
social and corporate governance (“ESG”) practices and reporting on the Company’s ability to obtain future
financing or accessing capital; the impact of restrictive covenants in the Company’s credit facility which
may, among other things, restrict the Company from pursuing certain business activities; the effect of
market conditions on the Company’s short-term investments; the Company’s ability to make payments
including any payments of principal and interest on the Company’s debt facilities, which depends on the
cash flow of its subsidiaries; ability to obtain adequate insurance coverage; and changes to taxation laws in
the jurisdictions where the Company operates.

Operational Risks
Mining and metals processing involve significant production and operational risks. Some of these risks are
outside of the Company’s control or ability to predict and mitigate. Risks include but are not limited to the
following: unanticipated ground and water conditions; shortages of water for processing activities; adjacent
or adverse land or mineral ownership that results in constraints on current or future mine operations;
geological risks, including earthquakes and other natural disasters; metallurgical and other processing risks;
unusual or unexpected mineralogy or rock formations; ground or slope failures; pit flooding; tailings design
or operational issues, including dam breaches or failures; structural cave-ins, wall failures or rock-slides;
flooding or fires; equipment failures or performance problems; periodic interruptions due to inclement or
hazardous weather conditions or operating conditions and other force majeure events; lower than expected
ore grades or recovery rates; accidents; changes to, or delays in, transportation routes, including cessation
or disruption in rail and shipping networks whether caused by decisions of third party providers or force
majeure events (including COVID-19); interruption of energy supply; labour disturbances; the availability
of drilling and related equipment in the area where mining operations will be conducted; the failure of
equipment or processes to operate in accordance with specifications or expectations; tailings management
facilities; exposure of workforce to widespread pandemic (including COVID-19); cyanide use; regulations
regarding greenhouse gas emissions and climate change; development and construction costs being over
budget; predicting decommissioning and reclamation costs; attracting and retaining qualified personnel;
long lead times required for equipment and supplies given the remote location of some of the Company’s
operating properties, and the potential that COVID-19 could disrupt such supply chains; reliance on a
limited number of suppliers for certain consumables, equipment and components; and security of critical
operating systems.

Financial Performance

Fourth Quarter 2020 compared to Fourth Quarter 2019

Revenue of $387 million was recognized in the fourth quarter of 2020 compared to $313 million in the
fourth quarter of 2019. The increase in revenue was due to higher average realized gold and copper prices,
increased copper pounds sold at the Mount Milligan mine and 39,380 gold ounces sold at Öksüt in 2020,
partially offset by fewer gold ounces sold at the Kumtor mine.

Gold production was 172,446 ounces in the fourth quarter of 2020 compared to 194,507 ounces in the fourth
quarter of 2019. Gold production in the fourth quarter of 2020 was 90,402 ounces at Kumtor, 42,664 ounces
at Mount Milligan and 39,380 ounces at Öksüt, which commenced commercial production on May 31,
2020. At the Kumtor and Mount Milligan mines, the 39% and 7% decreases, respectively, were due to
lower grades and recoveries at both sites due to mine plan sequencing.

CENTERRA GOLD INC. ANNUAL REPORT 202019

Copper production at the Mount Milligan mine was 20.4 million pounds in the fourth quarter of 2020
compared to 18.1 million pounds in the fourth quarter of 2019. The increase in copper production was due
to higher throughput as the process plant achieved an average throughput of 59,762 tonnes per calendar day
in the quarter.

Gold production costs were $474 per ounce in the fourth quarter of 2020 compared to $455 per ounce in
the fourth quarter of 2019. The increase was primarily due to higher gold production costs per ounce at the
Kumtor mine, partially offset by the low gold production cost of $350 per ounce at Öksüt in the fourth
quarter of 2020.

All-in sustaining costs on a by-product basisNG were $974 per ounce in the fourth quarter of 2020 compared
to $799 per ounce in the fourth quarter of 2019. The increase was due to higher capitalized stripping costs
at Kumtor, higher sustaining capital at both Kumtor and Mount Milligan and lower ounces sold at Kumtor,
partially offset by higher copper credits. Consolidated gold ounces sold in the fourth quarter of 2020 was
consistent with the fourth quarter of 2019 as the decrease in ounces sold at Kumtor was offset by the
addition of the Öksüt mine which recorded all-in sustaining costs on a by-product basisNG of $586 per ounce.

All-in costs on a by-product basisNG were $1,352 per ounce in the fourth quarter of 2020 compared to $1,331
per ounce in the fourth quarter of 2019. The increase was due to higher all-in sustaining costs on a by-
product basisNG, partially offset by lower non-sustaining expenditures as construction of the Öksüt mine
was completed.

Exploration expenditures of $13 million were recognized in the fourth quarter of 2020 compared to $9.1
million in the fourth quarter of 2019. The increase was primarily due to additional brownfield exploration
activity carried out at the Kumtor and Mount Milligan mines.

Financing costs of $5.5 million were recognized in the fourth quarter of 2020 compared to $5.3 million in
the fourth quarter of 2019. The increase was primarily due to costs associated with the new corporate
revolving credit facility.

Corporate administration costs of $17.4 million were recognized in the fourth quarter of 2020 compared to
$9.2 million in the fourth quarter of 2019. The increase was primarily due to an increase in share-based
compensation, positively impacted by the performance of the Company’s share price relative to the
S&P/TSX Global Gold CAD$ Index and an increase in advisory fees associated with the disposal of the
Company’s interest in the Greenstone Gold Mines Partnership.

Year ended December 31, 2020 compared to 2019

Revenue of $1,689 million was recognized in 2020 compared to $1,375 million in 2019. The increase was
primarily due to a 28% higher average realized gold price and 19% more copper pounds sold.

Gold production was 824,059 ounces in 2020 compared to 783,308 ounces in 2019. Gold production in
2020 was 556,136 ounces at Kumtor, 161,855 ounces at Mount Milligan and 106,068 ounces at Öksüt. At
Kumtor, the 7% decrease in gold production was due to processing stockpiled ore with lower grades and
recoveries in the fourth quarter of 2020. At Mount Milligan, the 12% decrease in gold production was due
to lower grades and lower recoveries, partially offset by higher throughput. Öksüt commenced production
in 2020, achieving commercial production on May 31, 2020.

CENTERRA GOLD INC. ANNUAL REPORT 202020

Copper production at Mount Milligan was 82.8 million pounds in 2020 compared to 71.1 million in 2019.
The increase was due to higher throughput, partially offset by lower recoveries.

Gold production costs were $419 per ounce in 2020 compared to $465 per ounce in 2019. The decrease in
2020 was due to an increase in ounces sold. The increase in consolidated gold ounces sold was due to the
ounces sold at Öksüt which recorded production costs of $356 per ounce sold.

All-in sustaining costs on a by-product basisNG were $729 per ounce in 2020 compared to $708 per ounce
in 2019. The increase was due to higher capitalized stripping costs at the Kumtor mine and higher sustaining
capital at both the Kumtor and Mount Milligan mines, partially offset by higher copper credits and greater
gold ounces sold as a result of the addition of the Öksüt mine. All-in sustaining costs on a by-product
basisNG at Öksüt were $494.

All-in costs on a by-product basisNG were $1,059 per ounce in 2020 compared to $1,126 per ounce in 2019.
The decrease was due to lower non-sustaining capital expenditures as construction of the Öksüt mine was
completed, partially offset by higher all-in sustaining costs on a by-product basisNG.

Exploration expenditures of $39.2 million were recognized in 2020 compared to $28 million in 2019. The
increase was due to additional brownfield exploration activity at the Kumtor and Mount Milligan mines.

Financing costs of $14.9 million were recognized in 2020 compared to $16.3 million in 2019. The spending
in 2020 included $2.4 million of costs associated with the new corporate revolving credit facility.

Corporate administration costs were $45.7 million in 2020, consistent with the prior year of $45.3 million.

Balance Sheet Review

$ millions

Consolidated:

Cash

Inventories

Assets-held-for-sale

Other current assets

Property, plant and equipment

Other non-current assets

Total Assets

Other current liabilities

Non-current debt

Provision for reclamation

Other non-current liabilities

Total Liabilities

Total Equity

Total Liabilities and Equity

As at

December 31, 2020 December 31, 2019

%Change

545.2

580.6

140.0

107.0

1,686.1

77.1

3,136.0

256.7

352.2

61.1

670.0

2,466.0

3,136.0

42.7

774.1

115.9

1,669.5

99.5

2,701.7

244.6

70.0

265.2

56.1

635.9

2,065.8

2,701.7

1177%

(25%)

100%

(8%)

(23%)

16%

(100%)

33%

19%

16%

CENTERRA GOLD INC. ANNUAL REPORT 202021

Cash as at December 31, 2020 was $545.2 million compared to $42.7 million as at December 31, 2019.
The increase was due to free cash flowNG of $603.8 million in 2020 and the release of a $25 million cash
deposit previously restricted by the Öksüt project financing facility. This was partially offset by the
repayment in full of the Öksüt project financing facility of $77.4 million.

Total inventory as at December 31, 2020 was $580.6 million compared to $774.1 million as at December
31, 2019. Total inventory includes stockpiles of ore, gold in-circuit, gold doré, copper and gold concentrate
and molybdenum inventory (collectively “Product Inventory”) of $373.1 million and supplies inventory of
$207.5 million, compared to $564.7 million and $209.4 million, respectively, as at December 31, 2019. The
decrease in Product Inventory was primarily attributable to Kumtor’s 2020 gold production coming from
ore stockpiles.

As at December 31, 2020, the Product Inventory balance consisted of 487,268 contained gold ounces on
surface at Kumtor, of which roughly 60% is expected to be processed in 2021, 80,552 contained gold ounces
and 19.5 million contained pounds of copper in stockpiles at Mount Milligan, of which roughly 15% is
expected to be processed in 2021 and 27,065 contained gold ounces on surface, stacked and in-circuit at
the Öksüt mine, which is expected to be processed in 2021.

The book value of property, plant and equipment as at December 31, 2020 was $1.69 billion compared to
$1.67 billion as at December 31, 2019. The increase in 2020 was related to increased capitalized stripping
at Kumtor, partially offset by the reclassification of the Greenstone Gold Mines Partnership as assets held
for sale.

Asset retirement obligations as at December 31, 2020 were $352.2 million compared to $265.2 million as
at December 31, 2019. The increase was primarily due to a reduction in the risk-free interest rate used to
calculate the present value of reclamation costs at the Company’s various sites and the disturbance to date
at the new Öksüt mine for its reclamation obligation.

In 1998, a reclamation trust fund was established to cover the future costs of reclamation at the Kumtor
mine. As at December 31, 2020, this fund had a balance of $47 million and is shown as long-term asset on
the balance sheet.

On December 31, 2020, the Company entered into a new $400 million four-year revolving credit facility
with a $200 million accordion feature (the “2020 Corporate Facility”). The interest rate payable on any
outstanding borrowings under the 2020 Corporate Facility is LIBOR plus 2.25% to 3.25% and the maturity
date of the facility is December 31, 2024. The 2020 Corporate Facility replaced the Company’s previous
$500 million revolving credit facility.

Total bank debt as at December 31, 2020 was nil compared to $70.0 million as at December 31, 2019. The
decrease was due to the repayment and subsequent cancellation of the Company’s Öksüt project financing
facility during 2020, which resulted in the release of $25 million in restricted cash. The Company’s
corporate revolving credit facilities were undrawn as at December 31, 2020 and December 31, 2019.

The Company’s total liquidity position is $945.2 million, representing a cash balance of $545.2 million and
$400 million available as part of the 2020 Corporate Facility. The strong liquidity position and forecasted
robust free cash flows from the Company’s Kumtor, Mount Milligan and Öksüt operations will be sufficient

CENTERRA GOLD INC. ANNUAL REPORT 202022

to satisfy working capital needs, fund its development and exploration activities and meet other liquidity
requirements through to the end of 2021. See “Caution Regarding Forward-Looking Information”.

Market Conditions

Commodity prices
The Company's profitability is materially affected by the market price of metals. Metal prices fluctuate
widely and are affected by numerous factors beyond the Company's control.

Three months ended December 31 Twelve months ended December 31 December 31, December 31,

Average spot price

Period end spot price

Metal

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

Gold (per oz)

1,876 $

1,483

27% $

1,772 $

Copper (per lb)

Molybdenum (per lb)

3.27

9.01

2.68

9.65

22%

(7%)

2.80

8.68

1,393

2.73

11.35

27% $

1,886 $

(24%)

3.03

10.02

1,517

2.80

9.20

24%

Foreign Exchange
The Company receives its revenue through the sale of gold, copper and molybdenum in U.S. dollars. The
Company has operations in Canada, including its corporate head office, the Kyrgyz Republic, Turkey and
the United States.

During 2020, approximately 40% of the Company’s combined expenditures (including capital costs and
lease payments) was in currencies other than the U.S. dollar, including the Canadian dollar (“CAD”),
Kyrgyz som (“SOM”) and the Turkish lira (“TRY”), consistent with 2019. The percentage of Centerra’s
non-U.S. Dollar costs by currency in 2020, consistent with 2019, was as follows:

CENTERRA GOLD INC. ANNUAL REPORT 202023A significant cost driver of Centerra is the performance of key currencies relative to the U.S. dollar. The
performance of these currencies over a 24-month period and at key reporting dates was as follows:

Key Currencies vs. the US Dollar

(source: Bloomberg)

10%

-10%

-20%

-30%

-40%

-50%

-60%

Canadian Dollar
Canadian Dollar

Kyrgyz Som

Turkish Lira

9
1
-
n
a
J

9
1
-
b
e
F

9
1
-
r
a
M

9
1
-
r
p
A

9
1
-
y
a
M

9
1
-
n
u
J

9
1
-
l

u
J

9
1
-
g
u
A

9
1
-
p
e
S

9
1
-
t
c
O

9
1
-
v
o
N

9
1
-
c
e
D

0
2
-
n
a
J

0
2
-
b
e
F

0
2
-
r
a
M

0
2
-
r
p
A

0
2
-
y
a
M

0
2
-
n
u
J

0
2
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0
2
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0
2
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0
2
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O

0
2
-
v
o
N

0
2
-
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e
D

Three months ended December 31 Twelve months ended December 31 December 31, December 31,

Average exchange rate

Period end exchange rate

Currency

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

USD-CAD

1.30 $

USD-Kyrgyz Som

USD-Turkish Lira

82.6

7.9

1.32

71.3

5.8

(2%) $

1.34 $

16%

36%

77.4

7.0

1.33

70.4

5.7

1% $

1.27 $

10%

23%

84.0

7.4

1.30

69.8

6.0

(2%)

20%

23%

The Company utilizes its foreign exchange hedging program in order to manage its exposure to adverse
fluctuations in the Canadian dollar, relative to the U.S dollar, see “Financial Instruments”. The Company
does not currently hedge the Kyrgyz som or Turkish lira.

CENTERRA GOLD INC. ANNUAL REPORT 202024Diesel Fuel Prices
Fuel costs represent a significant cost component for Centerra’s mining operations, representing 11% of
production costs. Prices for Kumtor’s diesel fuel generally reflect the price movements of Brent crude oil.
Kumtor sources its fuel from Russia either directly or through Kyrgyz distributors and prices include
additional costs such as seasonal premiums for winterizing fuel and transportation costs from the Russian
refineries. The prices for Mount Milligan’s diesel fuel are based on a supply agreement for weekly
deliveries and priced at the Prince George Rack rate. The Prince George Rack rate reflects general
benchmark movements, plus additional costs such as seasonal premiums for winterizing, costs to meet
regulatory requirements and transportation costs. Mining operations at Öksüt are outsourced, and the fuel
operating cost is included in the outsourcing contract costs, based on the published local retail diesel market
price.

Average spot price

Period end spot price

Three months ended December 31 Twelve months ended December 31 December 31, December 31,

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

0.40 $

53.89
45.26

0.50

81.69

62.42

(20%) $

(34%)
(27%)

0.40 $

52.49
43.21

0.51

81.47

64.16

(22%) $

(36%)

(33%)

0.41 $

62.00
51.80

0.49

85.19

66.00

(16%)

(27%)

(22%)

Commodity
Kumtor Diesel (per
ltr)

ULSD (per bbl)

Brent (per bbl)

The Company utilizes its diesel hedging program in order to manage its exposure to adverse fluctuations in
diesel fuel prices, see “Financial Instruments”.

CENTERRA GOLD INC. ANNUAL REPORT 202025

Financial Instruments

The Company seeks to manage its exposure to fluctuations in diesel fuel prices, commodity prices and
foreign exchange rates by entering into derivative financial instruments from time-to-time.

The hedge positions for each of these programs as at December 31, 2020 are summarized as follows:

Instrument

Unit Type

2021

2022

2021

2022

Total position (4) Fair value($'000's)

Average Strike Price

Settlements (% of exposure hedged)

As at December 31, 2020

FX Hedges

USD/CAD zero-cost collars(3)
USD/CAD forward contracts(2)

Total

CAD Fixed $1.33/$1.40 $1.32/$1.38 $217.8 million (39%) $149.0 million (28%) $366.8 million
$148.0 million

$102.0 million (19%) $46.0 million (9%)

$1.38

$1.32

CAD Fixed

$1.35

$1.32

$319.8 million (58%) $195 million (37%)

$514.8 million

Fuel Hedges
Brent Crude Oil zero-cost collars(1) Barrels Fixed $40/$46
Brent Crude Oil swap contracts(2) Barrels Fixed

$42

$44/$51

79,712 (10%)

96,966 (10%)

$47

206,485 (25%)

44,850 (5%)

ULSD zero-cost collars(1)
ULSD swap contracts(2)

Barrels Fixed $53/$59

$54/$64

59,404 (7%)

125,066 (13%)

Barrels Fixed

$55

$59

231,655 (28%)

70,850 (7%)

Total

Copper Hedges (Strategic
hedges):

577,256 (70%)

337,732 (35%)

176,678

251,335

184,470

302,505

914,988

13,458
7,159

20,617

688
1,937

748

2,500

5,873

Copper forward contracts(2)

Pounds Fixed

$3.37

N/A

59.8 million (91%)

N/A

59.8 million

(9,480)

Gold/Copper Hedges (Royal
Gold deliverables):

Gold forward contracts(2)
Copper forward contracts(2)

Ounces Float

Pounds Float

N/A

17,570

4.2 million

N/A

17,570

4.2 million

219

1,192

(1) Under the fuel zero-cost collars, the Company retains the right to buy fuel barrels at the contract’s ‘ceiling’ price if the market price was to
exceed this price upon contract expiration, while requiring the Company to buy fuel barrels at the ‘floor’ price if the market price fell below
this price upon expiration. At the end of each contract there is no exchange of the underlying item and the contract is financially settled.
(2) Under the swap and forward contracts, the Company ‘buys’ or ‘sells’ metals, currencies and commodities, at a specified price at a certain

future date.

(3) Under the currency zero-cost collars, the Company retains the right to buy foreign currency at the contract’s ‘floor’ price if the market price
was to fall below this price upon contract expiration, while requiring it to sell foreign currency at the ‘ceiling’ price if the market price was to
exceed this price upon expiration.

(4) Royal Gold hedging program with a market price determined on closing of the contract.

In the fourth quarter and year-ended December 31, 2020, Centerra’s Canadian dollar hedging program
resulted in a $2.7 million realized gain and $1.1 million realized gain, respectively, compared to no loss or
gain in either the fourth quarter or year-ended December 31, 2019.

In the fourth quarter of 2020, Centerra’s diesel hedging program resulted in a $3.0 million realized loss
compared to nil in the fourth quarter of 2019. For the year-ended December 31, 2020, Centerra’s diesel
hedging program resulted in a $6.5 million realized loss compared to a $0.7 million realized gain in 2019.

In the fourth quarter of 2020, the Company commenced a copper hedging program, entering into forward
contracts to lock in the copper price for the majority of Mount Milligan’s copper sales from December 2020
to the end of 2021. In the fourth quarter and year-end of December 31, 2020, Centerra’s copper hedging
program resulted in a $1.4 million realized loss.

As at December 31, 2020, Centerra has not entered into any off-balance sheet arrangements with special
purpose entities, nor does it have any unconsolidated affiliates.

CENTERRA GOLD INC. ANNUAL REPORT 202026

Operating Mines and Facilities

Kumtor Mine
The Kumtor open pit mine, located in the Kyrgyz Republic, is one of the largest gold mines in Central Asia.
It has been in production since 1997 and has produced over 13.2 million ounces of gold to December 31,
2020.

2021 Kumtor Technical Report Update
In February 2021, the Company issued a new technical report for the Kumtor mine, as at July 1, 2020 (the
“2021 Kumtor Technical Report”), extending its mine life by 5 years to 2031 and increasing its reserves
107%(1) to 6.3 million contained ounces of gold (73.3 million tonnes at an average gold grade of 2.66 grams
per tonne gold (g/t Au) using a gold price of $1,350 per ounce). All-in sustaining costs on a by-product
basisNG is estimated to be $828 per ounce and all-in costs on a by-product basisNG is estimated to be $1,044
per ounce for the life of mine. Gold production is expected to average 590,000 ounces at an average all-in
sustaining cost on a by-product basisNG of $782 per ounce, for five years commencing in 2022.

The 2021 Kumtor Technical Report provides an update of the 2015 technical report, including a mineral
resource model update based on extensive in-fill and expansion drilling in recent years. The 2021 Kumtor
Technical Report also revised the gold price assumptions, pit slope angles, capital and operating cost
estimates and metallurgical recovery estimates based on process plant improvements, all of which has
resulted in updated mineral resource and mineral reserve estimates, a revised ultimate pit design and an
updated mining plan. The technical report was prepared in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects (“NI 43-101”) and filed on SEDAR on February 24, 2021 with
an effective date of July 1, 2020.

(1) Reserve increase calculated by comparing the new 2021 Kumtor Technical Report effective as at July 1, 2020 compared to the December 31, 2019 reserve

statement (less mine depletion from January 1, 2020 to June 30, 2020).

Kyrgyz Republic
Political and social disruptions followed the Parliamentary election held during the first week of October
2020 and resulted in an interim government led by Prime Minister Sadyr Japarov following the resignation
of former President Sooronbai Jeenbekov. An early presidential election was held on January 10, 2021 and
Mr. Japarov was elected President.

Centerra and Kumtor will continue to cooperate and work with the Kyrgyz Government and state agencies
to ensure uninterrupted operation of the mine.

COVID-19 update
Kumtor continues to implement mitigation controls and health & safety precautions at the mine site to
contain the spread of COVID-19. As previously disclosed, open pit mining was operating at below capacity
in July, returned to full capacity in September and continued at full capacity through the fourth quarter.
Mill processing operated at full capacity throughout the year.

CENTERRA GOLD INC. ANNUAL REPORT 202027

Lysii waste dump update
In July 2020, Kumtor received a permit to utilize the Lysii Valley for dumping waste rock going forward.
Lysii Valley is expected to be the main mine waste rock dump for the next two years as it is closest to cut-
back 20. According to the new waste dumping plan in the Lysii Valley, waste rock will be placed at the
base of the valley initially and the waste rock dump will be developed up the valley creating slightly longer
haulage distances in the near-term.

Kumtor Operating Results

Unaudited ($ millions, except as noted)

Financial Highlights:

Revenue
Production costs

Depreciation, depletion and amortization

Standby costs

Earnings from mine operations

Revenue-based taxes

Exploration and development costs

Other operating expenses

Earnings from operations

Cash provided by mine operations

Cash provided by mine operations before changes in working capital
Free cash flow from mine operations (1)

Operating Highlights:

Tonnes mined (000's)

Tonnes ore mined (000's)

Average mining grade (g/t)

Tonnes processed (000's)

Process plant head grade (g/t)
Recovery (%)(2)
Mining costs ($/t mined material)

Processing costs ($/t processed material)

Gold produced (oz)

Gold sold (oz)
Average realized gold price ($/oz sold)(1)

Sustaining capital expenditures(3)
Non-sustaining capital expenditures(3)(4)
Capitalized stripping - cash

Capitalized stripping - non-cash

Capital expenditures - total

Unit Costs:

Three months ended December 31, Twelve months ended December 31,

2020

2019 % Change

2020

2019 % Change

178.1 $

200.5

(11%) $

981.6 $

42.4

38.5

97.2 $

25.2

5.5

2.8

49.6

46.6

9.1

95.2

28.3

4.3

7.6

(15%)

(17%)

100%

194.8

209.5

6.7

2% $

570.6 $

(11%)

28%

(63%)

138.5

15.9

21.8

827.5

228.6

181.3

9.1

408.5

116.4

11.3

23.9

63.7 $

55.0

16% $

394.4 $

256.9

(35%)

(4%)

(73%)

50%

(93%)

(74%)

18%

(44%)

(13%)

(18%)

(19%)

660.6

609.3

437.9

376.3

385.1

240.1

103,735
705

156,439
10,970

6.64

6,323

3.27

2.91

5,968

3.69

81.4%

83.5%

1.52

10.97

1.26

12.00

(39%)

(29%)
26%

556,136
569,213
1,725

600,201
600,231
1,379

94%

224%

71%

49%

81%

58.0

16.8

142.5

40.0

257.3

38.6

16.0

76.5

20.7

151.8

97.6

102.6

28.1

149.1

107.1

104.3

42,733

28,565

115

1.43

1,563

2.11

1,716

5.50

1,322

3.79

74.2%

85.3%

1.23

10.87

1.50

13.48

90,402

96,641

1,843

148,523
136,568
1,468

15.2

9.4

48.1

10.3

83.0

7.8

2.9

28.2

6.9

45.8

363

657

916

19%

(15%)

16%

100%

40%

19%

41%

(9%)

54%

76%

58%

82%

(34%)

(94%)

128%

(11%)

(3%)

20%

(9%)

(7%)

(5%)

25%

50%

86%

94%

70%

Gold production costs ($/oz sold)
Gold - All-in sustaining costs on a by-product basis ($/oz sold)(1)
Gold - All-in costs on a by-product basis ($ /oz sold)(1)

439 $

1,131 $

1,545 $

21% $

72% $

69% $

342 $

741 $

1,042 $

381

598

838

(10%)

24%

(1) Non-GAAP measure. See discussion under “Non-GAAP Measures”.
(2) Metallurgical recoveries are based on recovered gold, not produced gold.
(3) Capital expenditures are presented on a cash basis.
(4) Non-sustaining capital expenditures are distinct projects designed to have a significant increase in the net present value of the mine. In the current year,

non-sustaining capital expenditures included additional costs related to cut-back 20.

CENTERRA GOLD INC. ANNUAL REPORT 202028

Fourth Quarter 2020 compared to Fourth Quarter 2019
Earnings from mine operations of $97.2 million were recognized in the fourth quarter of 2020 compared to
earnings from mine operations of $95.2 million in the fourth quarter of 2019. The increase was primarily
due to a 26% higher average realized gold price and lower production and depreciation costs, offset by 29%
fewer gold ounces sold.

Kumtor Q4 cash provided by mine operations ($ millions)

36.1

5.1

3.0

126.2

36.5

149.1

97.6

Cash provided by mine operations of $97.6 million was recognized in the fourth quarter of 2020 compared
to $149.1 million in the fourth quarter of 2019. The decrease was primarily due to the lower gold sales,
partially offset by higher gold prices and increased cash from working capital due to production being
exclusively from stockpiles. Free cash flow from mine operationsNG of $28.1 million was recognized in the
fourth quarter of 2020 compared to $104.3 million in the fourth quarter of 2019. The decrease was due to
lower cash provided by mine operations, a 71% increase in capitalized stripping costs as Kumtor mined
cut-back 20 during the fourth quarter of 2020 and an increase in capital expenditure related to the timing of
equipment overhauls and the delivery of additional haul trucks to increase mining capacity.

During the fourth quarter of 2020, Kumtor continued mining cut-back 20. Tonnes mined were 42.7 million
in the fourth quarter of 2020 compared to 28.6 million tonnes in the fourth quarter of 2019. The increase
was due to the suspension of mining operations in December 2019 due to the Lysii waste rock dump
incident. The 42.7 million tonnes mined in the fourth quarter of 2020 were capitalized as waste stripping
for the benefit of future production from cut-back 20.

Mining costs were $1.23 per tonne in the fourth quarter of 2020 compared to $1.50 per tonne in the fourth
quarter of 2019. The decrease was primarily due to greater tonnes mined and lower diesel fuel prices. Total
mining costs were $52.4 million of which $48.1 million was capitalized in the fourth quarter of 2020,
compared to $42.8 million in mining costs of which $28.2 million was capitalized in the fourth quarter of
2019.

Gold production was 90,402 ounces from on-surface stockpiled ore in the fourth quarter of 2020 compared
to 148,523 ounces of gold produced in the fourth quarter of 2019. The decrease was primarily due to lower
average process plant head grades and lower gold recovery. During the fourth quarter of 2020, Kumtor’s
average process plant head grade was 2.11 g/t with a recovery of 74.2% compared to 3.79 g/t and a recovery
of 85.3% in the fourth quarter of 2019.

CENTERRA GOLD INC. ANNUAL REPORT 202029

Processing costs were $10.87 per tonne in the fourth quarter of 2020 compared to $13.48 per tonne in the
fourth quarter of 2019. The decrease was primarily due to 18% greater tonnes processed and lower
maintenance costs.

Gold production costs were $439 per ounce in the fourth quarter of 2020, compared to $363 per ounce in
the fourth quarter of 2019. The increase was primarily due to lower ounces sold.

Kumtor Q4 All-in sustaining costs on a by-product basis per ounceNG ($)

146

1,131

322

657

All-in sustaining costs on a by-product basisNG, which excludes revenue-based tax, were $1,131 per ounce
in the fourth quarter of 2020 compared to $657 per ounce in the fourth quarter of 2019. The increase was
primarily due to fewer ounces sold, an elevated level of capitalized stripping costs as mining activities were
concentrated on stripping cut-back 20 and greater sustaining capital costs relating to rebuilds and haul truck
fleet expansion, partially offset by lower production costs.

All-in costs on a by-product basisNG were $1,545 per ounce in the fourth quarter of 2020 compared to $916
per ounce in the fourth quarter of 2019. The increase was due to an increase in all-in sustaining costs on a
by-product basisNG and the purchase of haul trucks to support the mine expansion.

Year-ended December 31, 2020 compared to 2019
Earnings from mine operations of $570.6 million were recognized in 2020 compared to $408.5 million in
2019. The increase was primarily due to 25% higher average realized gold prices and lower production
costs, partially offset by fewer ounces sold and higher depreciation charges which largely represents
capitalized stripping costs being amortized into earnings as stockpiled inventories were processed through
the mill during the year.

CENTERRA GOLD INC. ANNUAL REPORT 202030

Kumtor YTD cash provided by mine operations ($ millions)

109.0

44.9

26.9

43.4

660.6

200.7

376.3

Cash provided by mine operations of $660.6 million was recognized in 2020 compared to $376.3 million
in 2019. The increase was due to higher earnings from mine operations, an increase in cash generated from
working capital as the plant processed ore from on surface stockpiles and lower Strategic Agreement
payments. Free cash flow from mine operationsNG of $437.9 million was recognized in 2020 compared to
$240.1 million in 2019. The increase was due to an increase in cash provided by mine operations, partially
offset by higher capitalized expenditures as the mining fleet was expanded, and higher capitalized stripping
costs as Kumtor mined waste material from cut-back 20 throughout the year.

In 2020, Kumtor finished mining cut-back 19 and continued stripping and managing the ice from cut-back
20. Tonnes mined were 103.7 million tonnes in 2020 compared to 156.4 million tonnes in 2019. The
decrease was primarily due to the suspension of mining operations from December 2019 to mid-January
2020, longer haulage distances as a result of the change in the waste dump location from the Lysii Valley
to the Central Valley for the first half of the year and lower equipment utilization due to workforce
availability (primarily COVID-19 related). Of the 103.7 million tonnes mined in 2020, 101.6 million tonnes
were capitalized as waste stripping for benefit of future production from cut-back 20.

Mining costs were $1.52 per tonne in 2020 compared to $1.26 per tonne in 2019. The increase was primarily
due to lower tonnes mined, and longer haulage distances, partially offset by lower diesel fuel prices, lower
maintenance costs and a favourable foreign currency exchange rate movement.

Gold production was 556,136 ounces of gold in 2020 from previously mined on-surface stockpiled ore,
compared to 600,201 ounces of gold produced in 2019. The decrease in 2020 was primarily due to lower
process plant head grade and lower gold recovery coming from the stockpiled ore. During 2020, Kumtor’s
average process plant head grade was 3.27 g/t with a recovery of 81.4% compared to 3.69 g/t and a recovery
of 83.5% in 2019.

Processing costs were $10.97 per tonne in 2020 compared to $12.00 per tonne in 2019. The decrease was
primarily due to increased tonnes processed and lower maintenance costs as a result of less maintenance
activities performed due to COVID-19.

CENTERRA GOLD INC. ANNUAL REPORT 202031

Gold production costs were $342 per ounce in 2020 compared to $381 per ounce in 2019. The decrease
was primarily due to increased tonnes processed, partially offset by lower grades and recovery.

Kumtor YTD All-in sustaining costs on a by-product basis per ounceNG ($)

741

110

598

All-in sustaining costs on a by-product basisNG, which excludes revenue-based tax were, $741 per ounce in
2020 compared to $598 per ounce in 2019. The increase was mainly due to higher capitalized stripping
costs, fewer ounces sold, higher sustaining capital representing the purchase of eleven haulage trucks to
increase mining capacity and higher Strategic Agreement contributions to the various regional funds in the
Kyrgyz Republic. This was partially offset by lower production costs.

All-in costs on a by-product basisNG were $1,042 per ounce in 2020 compared to $838 per ounce in 2019.
The increase was due to an increase in all-in sustaining costs on a by-product basisNG and greater revenue-
based taxes paid as a result of higher gold prices.

Mount Milligan Mine
The Mount Milligan Mine is an open pit mine located in north central British Columbia, Canada producing
a gold and copper concentrate. Production at Mount Milligan is subject to an arrangement with RGLD Gold
AG and Royal Gold, Inc. (together, “Royal Gold”) pursuant to which Royal Gold is entitled to purchase
35% of the gold produced and 18.75% of the copper production at the Mount Milligan Mine for $435 per
ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered. To satisfy its
obligations under the Mount Milligan Streaming Arrangement the Company purchases refined gold and
copper warrants and arranges for delivery to Royal Gold. The difference between the cost of the purchases
of refined gold and copper warrants, and the corresponding amounts payable to the Company under the
Mount Milligan Streaming Arrangement is recorded as a reduction of revenue and not a cost of operating
the mine.

CENTERRA GOLD INC. ANNUAL REPORT 202032

Water Update
Stored water inventory at Mount Milligan is critical to the ability to process ore through the mill on a
sustainable basis. Stored water was in excess of 6 million cubic metres as at December 31, 2020. In addition
to accessing water from surface water sources throughout 2020, Mount Milligan continued to access ground
water from the Lower Rainbow Valley wellfield as well as other groundwater wells near the tailings storage
facility during the year.

Exploration activities continue to focus on extending the groundwater capacity in the vicinity of the existing
infrastructure. The Company continues to pursue a longer-term solution to its water requirements at Mount
Milligan and is in discussions with regulators, its First Nations partners and other stakeholders. The
Company does not expect any interruptions to Mount Milligan operations in the medium term when
considering currently available water sources and inventory. See “Caution Regarding Forward-Looking
Information”.

Water Inventory

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COVID-19
Mount Milligan continues to monitor controls that have been put in place to manage the exposure of its
workforce to COVID-19 and has added to these controls as required. Mining and processing activities are
currently operating without any material disruption.

CENTERRA GOLD INC. ANNUAL REPORT 202033

Mount Milligan Operating Results

Unaudited ($ millions, except as noted)

Financial Highlights:

Gold revenue

Copper revenue

Total Revenues

Production costs

Depreciation, depletion and amortization

Earnings from mine operations

Exploration and development costs

Impairment

Other operating expenses

Earnings (loss) from operations

Cash provided by (used in) mine operations

Cash provided by mine operations before changes in working capital
Free cash flow (deficit) from mine operations(1)

Operating Highlights:

Tonnes mined (000's)

Tonnes ore mined (000's)

Tonnes processed (000's)

Process plant head grade gold (g/t)

Process plant head grade copper (%)

Gold recovery (%)

Copper recovery (%)

Mining costs ($/t mined material)

Processing costs - total ($/t processed material)

Concentrate produced (dmt)
Gold produced (oz) (2)
Copper produced (000's lb) (2)

Gold sold (oz)(2)
Copper sold (000's lb)(2)
Average realized gold price - combined ($/oz sold )(1)(2)
Average realized copper price - combined ($/lb sold) (1)(2)

Sustaining capital expenditures(3)

Unit Costs:

Three months ended December 31, Twelve months ended December 31,

2019 % Change
194.2

2020

46.7

53.0

99.7 $

47.8

17.7

34.2 $
3.0
-
2.7
28.4 $

44.0

44.2

30.7

10,935

5,350

5,498

0.40

0.24%

61.2%

73.4%

2.07

3.98

45,943

42,664

20,376

33,929

18,975

1,376

2.79

16.6

2019 % Change
37.9

23%

31.9

69.8

49.1

11.0

9.7

1.3

2.4

6.0

(18.8)

16.2

(27.7)

9,577

3,812

3,919

0.56

0.28%

67.1%

80.3%

2.43

7.43

41,688

45,984

18,079

33,324

14,301

1,137

2.23

8.9

66%
43% $

(3%)

60%
253% $

126%

14%
377% $

334%
173%

211%

14%

40%

(28%)

(12%)

(9%)

(15%)

(46%)

10%

(7%)

13%

33%

21%

25%

87%

2020
205.0

178.6

383.6 $

209.4

73.1

101.1 $
7.5

9.7
83.9 $

185.3

147.9

150.2

41,238

19,196

20,067

0.41

0.26%

62.9%

77.4%

1.80

140.8

335.0

232.7

53.3

49.0

4.0
214.4
8.0

(177.4)

62.2

85.7

26.5

39,466

15,736

16,350

0.53

0.26%

67.4%

81.3%

2.19

4.88
184,915
161,855
82,816

7.10
159,517
183,107
71,146

154,100
80,477

180,423
67,430

1,330

2.22

37.8

744 $
541 $
590 $
934 $
1.18 $

1.47 $

1,077

2.09

35.6

746

828

849

950
1.46

1.85

27%

15%

(10%)

37%

106%

88%

21%

(147%)

198%
73%

467%

22%

23%

(23%)

(0%)

(7%)

(5%)

(18%)

(31%)

16%

(12%)

16%

(15%)

19%

23%

(0%)

(35%)

(31%)

(2%)

(19%)

(21%)

Gold production costs ($/oz sold)
Gold - All-in sustaining costs on a by-product basis ($/oz sold) (1)
Gold - All-in costs on a by-product basis ($ /oz sold)(1)
Gold - All-in sustaining costs on a co-product basis ($/oz sold) (1)
Copper production costs ($/lb sold)
Copper - All-in Sustaining costs on a co-product basis ($/lb sold) (1)

716 $

831

469 $
558 $
1,033 $
1.24 $

1,114

1,155

1,269
1.50

(14%) $
(58%) $
(52%) $
(19%) $
(17%) $

1.79 $

2.28

(21%) $

(1) Non-GAAP measure. See discussion under “Non-GAAP Measures”.
(2) Mount Milligan production and sales are presented on a 100% basis. Under the Mount Milligan Streaming Arrangement, Royal Gold is entitled to 35% of
gold ounces and 18.75% of copper. Royal Gold pays $435 per ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered.

(3) Capital expenditures are presented on a cash basis.

Fourth Quarter 2020 compared to Fourth Quarter 2019
Earnings from mine operations of $34.2 million were recognized in the fourth quarter of 2020 compared to
$9.7 million in the fourth quarter of 2019. The increase was primarily due to higher average realized gold
and copper prices, higher copper sales and lower production costs, partially offset by an increase in
depreciation due to the revised mine life which was published in early 2020.

CENTERRA GOLD INC. ANNUAL REPORT 202034

Mount Milligan QTD cash provided by mine operations ($ millions)

8.1

2.0

0.7

44.0

10.4

10.7

30.9

(18.8)

Cash provided by mine operations of $44.0 million was recognized in the fourth quarter of 2020 compared
to a deficit of $18.8 million in the fourth quarter of 2019. The increase was primarily due to higher net
earnings from mine operations and an increase in cash generated from working capital. Free cash flow from
mine operationsNG of $30.7 million was recognized in the fourth quarter of 2020 compared to a deficit $27.7
million in the fourth quarter of 2019, due to an increase in cash provided by mine operations, partially offset
by an increase in capital expenditure related to the tailing storage facility.

During the fourth quarter of 2020, mining activities were in phases 4, 5 and 8 of the open pit. Total tonnes
mined were 10.9 million tonnes and total material moved was 11.9 million tonnes in the fourth quarter of
2020. In the comparative quarter of 2019, total tonnes mined were 9.6 million tonnes and total material
moved was 10.8 million tonnes.

Mining costs were $2.07 per tonne in the fourth quarter of 2020 compared to $2.43 per tonne in the fourth
quarter of 2019. The decrease was due to higher tonnage mined as a result of improved mining efficiencies,
lower diesel fuel prices, a reduction in contract service costs associated with the in-pit drilling program,
lower labour costs and a favourable foreign currency exchange rate. This was partially offset by increased
maintenance costs associated with major planned repairs of ancillary equipment.

Total mill throughput was 5.5 million tonnes, averaging 59,762 tonnes per calendar day in the fourth quarter
of 2020, approaching the permitted limit of 60,000 tonnes per calendar day, compared to 3.9 million tonnes,
averaging 42,599 tonnes per calendar day in the fourth quarter of 2019. Higher throughput was a result of
improved milling efficiencies and greater mechanical availability.

Gold production was 42,664 ounces in the fourth quarter of 2020 compared to 45,984 ounces in the fourth
quarter of 2019. The decrease was due to lower grades and recoveries, partially offset by increased
throughput. During the fourth quarter of 2020, Mount Milligan’s average process plant gold head grade
was 0.40 g/t compared to 0.56 g/t in the fourth quarter of 2019. Total copper production was 20.4 million
pounds in the fourth quarter of 2020 compared to 18.1 million pounds in the fourth quarter of 2019. The
increase was due to increased throughput, partially offset by lower grades and recoveries.

CENTERRA GOLD INC. ANNUAL REPORT 202035

Processing costs were $3.98 per tonne in the fourth quarter of 2020 compared to $7.43 per tonne in the
fourth quarter of 2019. The decrease was due to 40% higher tonnage, the timing of mill liner change-out,
lower water sourcing costs and a favourable foreign currency exchange rate movement.

Gold production costs were $716 per ounce in the fourth quarter of 2020 compared to $831 per ounce in
fourth quarter of 2019. The decrease was due to lower mining costs per tonne and lower processing costs
per tonne.

Copper production costs were $1.24 per pound in the fourth quarter of 2020 compared to $1.50 per pound
in the fourth quarter of 2019. The decrease was primarily due to lower mining costs per tonne and lower
processing costs per tonne.

Mount Milligan Q4 All-in sustaining costs on a by-product basis per ounceNG ($)

1,114

634

469

All-in sustaining costs on a by-product basisNG were $469 per ounce in the fourth quarter of 2020 compared
to $1,114 per ounce in the fourth quarter of 2019. The decrease was primarily due to increased copper
credits due to higher realized copper prices and lower production costs, partially offset by higher sustaining
capital related to the tailings storage facility.

All-in costs on a by-product basisNG were $558 per ounce in the fourth quarter of 2020 compared to $1,155
per ounce in the fourth quarter of 2019. The decrease was due to a decrease in all-in sustaining costs on a
by-product basisNG, partially offset by higher exploration and development costs.

Year-ended December 31, 2020 compared to 2019
Earnings from mine operations of $101.1 million were recognized in 2020 compared to $49.0 million in
2019. The increase was due to 23% higher average realized gold prices, higher copper pounds sold and
lower production costs. The increase was partially offset by higher depreciation, as a result of the change
in the mine life in 2020.

CENTERRA GOLD INC. ANNUAL REPORT 202036

Mount Milligan YTD cash provided by mine operations ($ millions)

20.8

10.6

28.3

185.3

27.2

39.2

53.6

62.2

Cash provided by mine operations of $185.3 million was recognized in 2020 compared to $62.2 million in
2019. The increase was due to greater earnings from mine operations and a reduction in working capital.
Free cash flow from mine operationsNG of $150.2 million was recognized in 2020 compared to $26.5 million
in 2019, due to an increase in cash provided by mine operations.

During 2020, mining activities were in phases 3, 4, 5 and 8 of the open pit. Total tonnes mined in 2020
were 41.2 million tonnes and total material moved was 45.1 million tonnes. In the comparative period of
2019, total tonnes mined were 39.5 million tonnes and total material moved was 43.2 million tonnes.

Mining costs were $1.80 per tonne in 2020 compared to $2.19 per tonne in 2019. The decrease was due to
lower diesel fuel price, lower contract service costs associated with the in-pit drilling program, a favorable
foreign currency exchange rate and higher tonnage mined due to improved efficiencies.

Mount Milligan reported record mill throughput in 2020, processing 20.1 million tonnes, averaging 54,827
tonnes per calendar day in 2020 compared to 16.4 million tonnes, averaging 44,795 tonnes per calendar day
in 2019. The increase in throughput is primarily due to the increased availability of water, continuous
improvement to mill operations and greater availability. In 2020, Mount Milligan recorded its highest level
of concentrate tonnes produced since the start of operations in 2014.

Gold production was 161,855 ounces in 2020 compared to 183,107 ounces in 2019. The decrease was due
to lower grades and recoveries, partially offset by higher throughput. During 2020, Mount Milligan’s
average process plant gold head grade was 0.41 g/t with a recovery of 63% compared to 0.53 g/t with a
recovery of 67% in 2019. Total copper production was 82.8 million pounds in 2020 compared to 71.1
million pounds in 2019. The increase was primarily due to higher throughput, partially offset by lower
copper recoveries.

Processing costs were $4.88 per tonne in 2020 compared to $7.10 per tonne in 2019. The per tonne decrease
was due to the higher throughput, decreased water sourcing costs, lower labour costs, a favorable foreign
exchange currency rate, and lower electricity costs. This was partially offset by higher mill consumables
costs due to the higher throughput.

CENTERRA GOLD INC. ANNUAL REPORT 202037

Gold production costs were $744 per ounce in 2020 consistent with $746 per ounce in 2019. The lower
production costs were offset by the lower gold ounces sold.

Copper production costs were $1.18 per pound in 2020 compared to $1.46 per pound in 2019, primarily as
a result of increased copper pounds sold and lower production costs.

Mount Milligan YTD All-in sustaining costs on a by-product basis per ounceNG ($)

126

828

210

541

All-in sustaining costs on a by-product basisNG were $541 per ounce for 2020 compared to $828 per ounce
in 2019. The decrease was primarily due to increased copper credits, lower production costs including
decreased water sourcing activities and lower diesel costs, partially offset by lower gold ounces sold.

All-in costs on a by-product basisNG were $590 per ounce in 2020 compared to $849 per ounce in 2019.
The decrease was due to a decrease in all-in sustaining costs on a by-product basisNG, partially offset by
higher exploration and development costs.

CENTERRA GOLD INC. ANNUAL REPORT 2020

Öksüt Mine
The Öksüt mine is situated in Turkey approximately 300 kilometres southeast of Ankara and 48 kilometres
south of Kayseri, the provincial capital. The nearest administrative centre is at Develi, located
approximately 10 kilometres north of the mine site.

The Öksüt mine achieved first gold pour on January 31, 2020 and achieved commercial production on May
31, 2020. Commercial production was declared after the operation completed its testing phase and the
constructed assets were operating in the manner intended by management. Up to the point of achieving
commercial production, gold revenue and the associated costs of production were capitalized.

During the fourth quarter of 2020, the construction of the Öksüt mine was finalized, with the completion of
leach pad phase 1C, a new overflow pond, and crusher modification. Additionally, during the quarter, the
Phase 2 expansion of the heap leach pad commenced with completion expected in 2021.

In early February 2021, there was a temporary disruption in mining activity at the Öksüt mine due to a
labour dispute between the Company’s local mining contractor, Çiftay İnşaat Taahhüt ve Ticaret A.Ş
(“Çiftay”) and its employees. The Company worked closely with Çiftay management, as well as with local
government and other officials and the matter has been resolved.

During the third quarter of 2020, the Öksüt mine obtained an amendment to its environmental impact
assessment (“EIA”) certificate from the Minister of Environment and Urbanization. The amendment is to
accommodate changes to the Öksüt mine’s open pit mine design and pit optimization. Due to the delay in
receiving the amendment from the EIA and further potential delays in obtaining the related forestry permit,
the Öksüt mine plan and design is currently being further revised with the expectation that the high-grade
ore of the Güneytepe deposit will be accessed in 2022.

COVID-19
Öksüt continues to maintain active measures to prevent a COVID-19 outbreak at the site. Open pit mining
was suspended during the first quarter due to Turkish Government initiatives aimed at reducing the spread
of COVID-19 and resumed normal operations in April. Placement of ore on the heap leach pad from
stockpiles, ore irrigation, and the Adsorption-Desorption-Recovery plant continued to operate with limited
impact on production.

CENTERRA GOLD INC. ANNUAL REPORT 202039

Öksüt Operating Results

($ millions, except as noted)

Financial Highlights:

Revenue

Production costs

Depreciation, depletion and amortization

Earnings from mine operations

Exploration and development costs

Other operating expenses

Earnings from operations

Cash provided by mine operations

Cash provided by mine operations before changes in working capital
Free cash flow from mine operations (1)

Operating Highlights:

Tonnes mined (000's)

Tonnes ore mined (000's)

Ore mined - grade (g/t)

Ore crushed (000's)

Tonnes stacked (000's)

Heap leach grade (g/t)

Heap leach contained ounces stacked

Mining costs ($/t mined material)

Processing costs ($/t processed material)

Gold produced (oz)
Gold sold (oz)(2)
Average realized gold price ($/oz sold)(1)

Sustaining capital expenditures(3)
Non-sustaining capital expenditures(3)(4)
Capitalized stripping(3)
Capital expenditures - total

Unit Costs:
Gold production costs ($/oz sold)(5)
Gold - All-in sustaining costs on a by-product basis ($/oz sold)(1)(5)
Gold - All-in costs on a by-product basis ($ /oz sold)(1)(5)

Three months ended December 31, Twelve months ended December 31,
2020

2020

74.3 $

13.8

7.1

53.4 $

1.0

0.1

52.3 $

61.8

58.1

46.5

4,440

115

1.91

637

952

0.78

23,950

1.71

5.22

39,380

1,887

1.9

6.2

7.2

15.3

350 $

586 $

769 $

186.5

35.2

16.0

135.3

1.7

0.1

133.5

146.1

146.8

105.2

15,115

2,578

1.68

3,428

3,445

1.40

154,948

1.77

5.34

106,068

105,503

1,887

1.9

30.4

11.5

43.8

356

494

819

Includes 6,654 ounces sold before the mine was in commercial production.

(1) Non-GAAP measure. See discussion under “Non-GAAP Measures”.
(2)
(3) Capital expenditures are presented on a cash basis.
(4) Non-sustaining capital expenditures are distinct projects designed to have a significant increase in the net present value of the mine. In the current year,

non-sustaining capital expenditures included construction costs.

(5) Calculated starting from June 1, 2020, after Öksüt achieved commercial production effective May 31, 2020.

Fourth Quarter 2020
Earnings from mine operations were $53.4 million in the fourth quarter of 2020. Cash provided by mine
operations was $61.8 million and free cash flow from mine operationsNG was $46.5 million in the fourth
quarter of 2020. During the fourth quarter of 2020, the Company spent $6.2 million on construction and
development activities at Öksüt compared to $28.8 million in the fourth quarter of 2019.

Total ounces of gold sold were 39,380 in the fourth quarter of 2020 at an average realized price of $1,887
per ounce, resulting in revenue recognized of $74.3 million for the quarter.

CENTERRA GOLD INC. ANNUAL REPORT 202040

Mining in the fourth quarter of 2020 was focused on the development of phase 3 and phase 4 of the Keltepe
pit, with total tonnes mined of 4.4 million tonnes. Mining costs were $1.71 per tonne in the fourth quarter
of 2020.

Processing in the fourth quarter of 2020 was focused on the preparation, stacking and irrigation of the heap
leach pad, with tonnes stacked of 0.95 million at a grade of 0.78 g/t. Processing costs, including crushing
costs were $5.22 per tonne.

Gold production costs were $350 per ounce, all-in sustaining costs on a by-product basisNG were $586 per
ounce and all-in costs on a by-product basisNG were $769 per ounce for the fourth quarter of 2020.

Year-ended December 31, 2020
Earnings from mine operations were $135.3 million in 2020, representing earnings while in commercial
production. Cash provided by mine operations was $146.1 million and free cash flow from mine
operationsNG of $105.2 million were recognized in 2020, as capital costs associated with the project
continued to be incurred. During 2020, the Company spent $30.4 million on construction and development
activities at Öksüt compared to $86.5 million in 2019.

Total ounces of gold sold in 2020 was 105,503 ounces including 98,849 ounces while in commercial
production. The sale of gold was recorded as revenue starting on June 1, 2020, after Öksüt achieved
commercial production. Previously, revenue and costs of gold sales during the testing stage were capitalized
against construction costs.

Öksüt mined 15.1 million tonnes in 2020 at a cost of $1.77 per tonne. At the end of December 2020, 3.47
million tonnes of ore averaging 1.41 g/t gold had been placed onto the heap leach pad and was under leach
with an estimated accumulated recovery to date of 76.2% which includes estimated gold in process
inventory. Processing costs were $5.34 per tonne and total gold produced was 106,068 ounces in 2020.

Gold production costs per were $356 per ounce, all-in sustaining costs on a by-product basisNG were $494
per ounce and all-in costs on a by-product basisNG were $819 per ounce in 2020 (post commercial
production).

Molybdenum Business Unit
The molybdenum business includes two North American primary molybdenum mines that are currently on
care and maintenance: the Thompson Creek mine (mine and process plant) in Idaho and the 75%-owned
Endako mine (mine, process plant and roaster) in British Columbia. The molybdenum business also
includes the Langeloth metallurgical roasting facility (the "Langeloth Facility") in Pennsylvania. The
Thompson Creek mine (the “TC mine”) operates a molybdenum beneficiation circuit to treat molybdenum
concentrates to supplement the concentrate feed sourced directly for the Langeloth Facility. This
beneficiation process allows the Company to process high copper content molybdenum concentrate
purchased from third parties, which is then transported from TC mine to the Langeloth Facility for further
processing.

The molybdenum business provides tolling treatment services for customers by converting molybdenum
concentrates to molybdenum oxide powder, briquettes and ferromolybdenum products. Additionally,
molybdenum concentrates are purchased to convert to upgraded products which are then sold in the
metallurgical and chemical markets.

CENTERRA GOLD INC. ANNUAL REPORT 202041

COVID-19
At the end of the fourth quarter of 2020, the molybdenum business remained COVID-19 free.

($ millions, except as noted)

Financial Highlights:

Molybdenum (Mo) revenue

Tolling, calcining and other revenue

Total revenues

Production costs

Depreciation, depletion and amortization

Loss from mine operations

Exploration and development costs

Care and Maintenance costs - Molybdenum mines

Reclamation expense

Other operating expenses

Net loss from operations

Cash (used in) provided by operations
Free cash flow (deficit) from operations (1)

Operating Highlights (000's lbs):

Mo purchased

Mo roasted

Mo sold

Toll roasted and upgraded Mo

Average Mo spot price ($/lb)

Total capital expenditure

Three months ended December 31, Twelve months ended December 31,
2019 % Change

2019 % Change

2020

33.7

0.9

34.6 $

34.3

1.7

40.7

1.5

42.2

50.8

1.7

(1.3) $

(10.2)

3.1

9.3

0.4

0.1

3.3

34.5

0.6

(14.1) $

(48.7)

(17%)

(40%)
(18%) $

(33%)

0%
(87%) $

(100%)

(6%)

(73%)

(37%)
(71%) $

132.3

4.7

204.7

8.1

137.0 $

212.8

151.2

6.7

(20.9) $

12.9

53.4

2.1

215.2

5.0

(7.4)

0.1

13.4

34.5

2.7

(89.3) $

(58.1)

(3.8)

(6.2)

(12.9)

(14.1)

71%
56%

11.4

5.6

(20.2)

(25.0)

2,924

2,712

3,610

385

9.01

2.3

4,723

3,235

3,578

773

9.65

1.1

(38%)

(16%)

(50%)

(7%)

110%

13,577

13,760

13,667

2,383

8.68

5.8

17,779

17,384

16,035

5,059

11.35

5.4

(35%)

(42%)

(36%)

(30%)

34%

182%

(100%)

(4%)

55%

(22%)

54%

(156%)

122%

(24%)

(21%)

(15%)

(53%)

(24%)

(1) Non-GAAP measure. See discussion under “Non-GAAP Measures”.

Fourth Quarter 2020 compared to Fourth Quarter 2019
A loss from operations of $14.1 million was recognized in the fourth quarter of 2020 compared to a loss of
$48.7 million in the fourth quarter of 2019. The decrease was due to lower reclamation expense related to
the change in the asset retirement obligation and a higher gross margin on material sold.

Cash used in operations of $3.8 million was recognized in the fourth quarter of 2020, compared to $12.9
million in the fourth quarter of 2019. The decrease was due to a reduced loss from operations excluding the
non-cash movement in reclamation expense at the non-operating sites. A free cash flow deficit from
operationsNG of $6.2 million was recognized in the fourth quarter of 2020 compared to a free cash flow
deficit from operationsNG of $14.1 million in the fourth quarter of 2019, due to a decrease in cash used by
operations.

Molybdenum roasted was 2.7 million pounds in the fourth quarter of 2020 compared to 3.2 million pounds
in the fourth quarter of 2019. The decrease was the result of the decline in availability of feed for roasting.

CENTERRA GOLD INC. ANNUAL REPORT 202042

Moly Oxide Weekly Pricing (Jan 1, 2020 – December 31, 2020) $USD/lb

d
n
u
o
p

r
e
p
D
S
U
$

$14.00
$13.00
$12.00
$11.00
$10.00
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00

1 2 3 4 5 6 7 8 9 10 1112

2017

2018

2019

2020

Year-ended December 31, 2020 compared to 2019
A loss from operations of $89.3 million was recognized in 2020 compared to a loss of $58.1 million in
2019. The loss recorded in 2020 included a $53.4 million reclamation charge for an increase in the asset
retirement obligation, as a result of a decrease in the risk-free interest rate used for discounting the liability,
compared to a $34.5 million reclamation charge in 2019. The loss recorded in 2020 also included a $13.6
million non-cash write down in product inventory as a result of the continuing decline in the molybdenum
price compared to $8.4 million in 2019.

Cash provided by operations was $11.4 million in 2020 compared to cash used by operations of $20.2
million in 2019. The increase was due to a $22.8 million United States tax refund received in the current
year as a result of a change in income tax laws affecting prior year tax filings and an increase in cash
generated from working capital.

In 2020, 13.8 million pounds of molybdenum were roasted, including 2.4 million pounds from tolling
arrangements, which represented a 21% and 53% decrease over 2019, respectively. The decrease was
primarily due to the decline in demand for industrial products that use molybdenum which was adversely
affected by the demand disruption created by the COVID-19 pandemic.

Pre-Development Projects

Kemess Underground Project:
The Kemess Project (“Kemess”) is located in north-central British Columbia, Canada, approximately 250
kilometres north of Smithers, 430 kilometres northwest of Prince George and 209 kilometres from the
Mount Milligan mine. The Kemess site includes infrastructure from the past producing Kemess South
mine. There are currently no mining activities at the Kemess site and on-site activities consist of care and
maintenance work and pre-development activities for the proposed Kemess Underground Project.

COVID-19
The Kemess Project continues to monitor controls that have been put in place to manage the exposure of
its workforce to COVID-19 and has added to these controls as required. These measures have resulted in a
COVID-19 free environment.

CENTERRA GOLD INC. ANNUAL REPORT 2020

Fourth Quarter 2020 compared to Fourth Quarter 2019
Care and maintenance costs of $4.2 million were recognized in the fourth quarter of 2020, compared to
$5.2 million recognized in the fourth quarter of 2019. Capital expenditures of $2.2 million were recognized
in the fourth quarter of 2020, compared to $7.1 million in the fourth quarter of 2019. The capital
expenditures in the fourth quarter of 2020 included costs for technical engineering studies and the
installation and commissioning of site generators. The capital expenditures in the fourth quarter of 2019
included the construction of a water treatment plant and water distribution system.

Year-ended December 31, 2020 compared to 2019
Care and maintenance costs of $16.1 million were recognized in 2020, compared to $14.9 million
recognized in 2019. Capital expenditures of $12.9 million were recognized in 2020, compared to $32.7
million in 2019. The capital expenditures in 2020 included costs for technical engineering studies, water
treatment plant performance testing, completion of the southern collection system pond construction and
the installation and commissioning of site generators. The capital expenditures in 2019 included
expenditures for the water treatment plant, camp refurbishment and mobile equipment purchases.

Greenstone Gold Property:
The Greenstone Gold property is located in northern Ontario, Canada approximately 275 kilometres
northeast of Thunder Bay and includes the Hardrock deposit.

On December 15, 2020, the Company entered into an agreement with an affiliate of the Orion Mine Finance
Group (“Orion”) and Premier Gold Mines Limited to sell the Company’s 50% interest in the Greenstone
Partnership to Orion for cash consideration of $225 million, subject to certain adjustments and contingent
consideration of approximately $75 million, assuming a gold price of $1,500 per ounce, based on the
successful construction and operation of the mine, which will be recorded on achieving the applicable
milestones.

On January 19, 2021, the Company completed the sale of its 50% interest in the Greenstone Gold Mines
Partnership with final cash consideration received of $210 million, net of adjustments. As a result of the
closing of this transaction, the Company expects to recognize a gain of approximately $72 million in the
first quarter of 2021

Quarterly Results – Previous Eight Quarters

Over the last eight quarters, Centerra’s results reflect the impact of increasing gold sales during a period of
rising gold prices. Production costs have also benefited from decreasing diesel fuel costs and depreciating
Kyrgyz and Turkish currencies over the last eight quarters. Gold sold on a quarterly basis steadily increased
from the first quarter of 2019 to the third quarter of 2019, followed by a slight decline in the fourth quarter
of 2019 and increasing again in the first nine months of 2020 as the Öksüt mine reached commercial
production, with a decline in the fourth quarter of 2020 due to lower ounces sold at Kumtor. The third
quarter of 2019 reflects the impairment of $230.5 million recorded on the Mount Milligan mine and a $10
million Kyrgyz Republic settlement expense. A non-cash reclamation expense was recognized in the fourth
quarters of 2019 and 2020 of $31.4 million and $53.4 million, respectively, as a result of a change in the
interest rate used to discount the reclamation costs at the two molybdenum mine sites which are not in
operation. The quarterly financial results for the last eight quarters are shown below:

CENTERRA GOLD INC. ANNUAL REPORT 202044

$ million, except per share data
Quarterly data unaudited

Revenue
Net earnings (loss)
Basic earnings (loss) per share
Diluted earnings (loss) per share

Related party transactions

2020

2019

387
95
0.32
0.32

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206
0.70
0.68

413
88
0.30
0.29

374
20
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0.06

313
(12)
(0.04)
(0.04)

388
(165)
(0.56)
(0.56)

341
33
0.11
0.11

334
50
0.17
0.17

Kyrgyzaltyn
The sole customer of gold doré from the Kumtor mine, Kyrgyzaltyn JSC (“Kyrgyzaltyn”), is a shareholder
of the Company and is a state-owned entity of the Kyrgyz Republic. Gold produced by the Kumtor mine is
purchased at the mine site by Kyrgyzaltyn, for processing at its refinery in the Kyrgyz Republic pursuant
to the Restated Gold and Silver Sales Agreement (“Sales Agreement”), dated June 6, 2009 between KGC,
Kyrgyzaltyn and the Government of the Kyrgyz Republic. Amounts receivable from Kyrgyzaltyn arise
from the sale of gold to Kyrgyzaltyn. Kyrgyzaltyn is required to pay for gold delivered within 12 days from
the date of shipment. Default interest is accrued on any unpaid balance after the permitted payment period
of 12 days. The obligations of Kyrgyzaltyn are partially secured by a pledge of 2,850,000 shares of the
Company owned by Kyrgyzaltyn. Revenues from the Kumtor mine are subject to a management fee of
$1.00 per ounce based on sales volumes, payable to Kyrgyzaltyn.

The breakdown of the sales transactions and expenses with Kyrgyzaltyn, and the management fees paid
and accrued by KGC to Kyrgyzaltyn according to the terms of the Sales Agreement are as follows:

2020

2019

Sales:
Gross gold and silver sales to Kyrgyzaltyn(1)
Deduct: refinery and financing charges
Net sales revenue received from Kyrgyzaltyn
Expenses:
Contracting services provided by Kyrgyzaltyn(2)
Management fees payable to Kyrgyzaltyn
Expenses paid to Kyrgyzaltyn

995,111
(6,164)
988,947

658
569
1,227

836,689
(5,141)
831,548

1,146
600
1,746

$
(1) As at December 31, 2020, there is no amount receivable from Kyrgyzaltyn from gold sales (December 31, 2019 - $0.1 million).
(2) As at December 31, 2020, there is $0.9 million payable to Kyrgyzaltyn (December 31, 2019 - $1.2 million).

Transactions with directors and key management
The Company transacts with key management personnel and directors, who have authority and
responsibility to plan, direct and control the activities of the Company, for services rendered in their
capacity as directors and employees.

Key management personnel are defined as the executive officers of the Company including the President
and Chief Executive Officer, Vice President and Chief Financial Officer, Vice President and Chief
Operating Officer, Vice President and General Counsel, Vice President Business Development &
Exploration, and Vice President and Chief Human Resources Officer who joined the Company in February
2020.

CENTERRA GOLD INC. ANNUAL REPORT 202045

The increase in compensation for key management personnel salaries and benefits is a combination of
increase in executive officers from five to six together an increase in short-term incentives. The share-based
compensation is driven by performance of the Company’s share price relative to the S&P/TSX Global Gold
Index Total Return Index Value.

During the years ended December 31, 2020 and 2019, remuneration to directors and key management
personnel were as follows:

Compensation of directors

Fees earned and other compensation
Share-based compensation
Total expense

Compensation of key management personnel

Salaries and benefits
Share-based compensation
Total expense

2020
820
3,011
3,831

2020
6,354
9,264
15,618

2019
1,259
2,465
3,724

2019
4,311
7,756
12,067

In 2020, the Company incurred an amount of $94 for services rendered by a family member of one of
Centerra’s key management personnel. This person was acting as a consultant.

Contingencies

The following is a summary of contingencies with respect to matters affecting the Company and its
subsidiaries. Readers are cautioned that the following is only a brief summary of such matters. For a more
complete discussion of these matters, see the Company’s news releases and its most recently filed Annual
Information Form and specifically the section therein entitled “Risks that can affect our business” available
on SEDAR at www.sedar.com. The following summary also contains forward-looking statements and
readers are referred to “Caution Regarding Forward-looking Information”.

Kyrgyz Republic

The Kyrgyz Parliamentary elections held in early October 2020 resulted in a period of political and social
disruption in the Kyrgyz Republic, eventually leading to the cancellation of the Parliamentary election
results and the resignation of the then Kyrgyz Prime Minister and President. Presidential elections were
held in the Kyrgyz Republic on January 10, 2021, with Mr. Sadyr Japarov being elected President. A non-
binding referendum on the Kyrgyz Republic’s form of government was also held on January 10, 2021 and
the Company expects a process of constitutional reform to unfold in the coming months leading to a
presidential form of government.

The Company understands that a parliamentary commission has been formed by the Kyrgyz Republic
Parliament in February 2021, to review the effectiveness of the Kumtor Mine’s activities. The Company

CENTERRA GOLD INC. ANNUAL REPORT 202046

will review the mandate for the parliamentary commission when it becomes available to determine the
precise scope of the commission’s proposed review and its response to the inquiries, if necessary.

Despite the changes to the political landscape in the Kyrgyz Republic and the uncertainty of the
Parliamentary elections, the Kumtor operations have continued uninterrupted. The Company continues to
monitor the situation with the objective of ensuring that the Kumtor mine continues its operation
uninterrupted in accordance with its project agreements.

Canada

Mount Milligan Mine

As previously disclosed, in the first quarter of 2020, the Company received a notice of civil claim from
H.R.S. Resources Corp. (“H.R.S.”), the holder of a 2% production royalty at Mount Milligan. H.R.S. claims
that since November 2016 (when the royalty became payable) the Company has incorrectly calculated
amounts payable under the production royalty agreement and has therefore underpaid amounts owing to
H.R.S. The Company disputes the claim and believes it has correctly calculated the royalty payments in
accordance with the agreement. The Company believes that the potential exposure in relation to this claim,
over what the Company has accrued, is not material.

Other

The Company operates in multiple countries around the world and accordingly is subject to, and pays, taxes
under the various regimes in those jurisdictions in which it operates. These tax regimes are determined
under general taxation and other laws of the respective jurisdiction. The Company has historically filed,
and continues to file, all required tax returns and to pay the taxes reasonably determined to be due. The tax
rules and regulations in many countries are complex and subject to interpretation. From time to time the
Company’s tax filings are subject to review and in connection with such reviews, disputes can arise with
the taxing authorities over the Company’s interpretation of the country’s tax laws. The Company records
provisions for future tax assessments considered to be probable. As at December 31, 2020, the Company
did not have any material provision for claims or taxation assessments.

CENTERRA GOLD INC. ANNUAL REPORT 202047

Contractual Obligations

The following table summarizes Centerra’s contractual obligations as of December 31, 2020, including
payments due over the next five years and thereafter:

$ millions
Kumtor

Reclamation trust fund (1)
Capital equipment (2)
Operational supplies

Mount Milligan

Operational supplies
Leases

Öksüt

Capital equipment (2)
Operational supplies
Leases
Kemess Project

Project development

Corporate and other
Leases

Total

Due in Less
than One Year

Due in 1 to 3
Years

Due in 4 to 5
Years

Due After 5
Years

$ 22.0
27.3
24.1

6.0
27.3
24.1

$ 16.0
-
-

1.0
13.9

3.0
0.5
0.7

5.9

1.0
4.3

2.3
0.5
0.4

0.7

-
7.7

0.7
-
0.3

1.7

-
-

-
1.9

-
-
-

3.5

5.4

-
-
-

-
-

-
-
-

Total contractual obligations (2)

$ 98.4

$ 66.6

$ 26.4

(1) Centerra’s future estimated decommissioning and reclamation costs for the Kumtor mine are present-valued at $56.5 million to be incurred beyond
2031. The settlement agreement with the Kyrgyz Republic Government requires this restricted cash to be funded at a rate of $6.0 million per year until the

Reclamation Trust Fund reaches the total estimated reclamation cost for the Kumtor Project (no less than $69.0 million). The estimated future cost of

closure, reclamation and decommissioning of the project are used as the basis for calculating the amount remaining to be deposited in the Reclamation

Trust Fund ($69.0 million). On December 31, 2020 the balance in the Reclamation Trust Fund was $47.0 million (2019 - $40.9 million), with the remaining

$22.0 million to be funded over the life of the mine.

Excludes trade payables and accrued liabilities.

(2)

Accounting Estimates, Policies and Changes

Accounting Estimates
The preparation of consolidated financial statements in accordance with IFRS requires management to
make judgments, estimates and assumptions that affect the application of the Company’s accounting
policies, which are described in note 3 of the consolidated financial statements, the reported amounts of
assets and liabilities and disclosure of commitments and contingent liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. The
determination of estimates requires the exercise of judgment based on various assumptions and other factors
such as historical experience, current and expected economic conditions. Actual results could differ from
those estimates.

Management’s estimates and underlying assumptions are reviewed on an ongoing basis. Any changes or
revisions to estimates and underlying assumptions are recognized in the period in which the estimates are
revised and in any future periods affected. Changes to these critical accounting estimates could have a
material impact on the consolidated financial statements.

The key sources of estimation uncertainty and judgment used in the preparation of the consolidated financial
statements that have a significant risk of causing a material adjustment to the carrying amounts of assets

CENTERRA GOLD INC. ANNUAL REPORT 202048

and liabilities and earnings within the next financial year are outlined in detail in note 4 of the December
31, 2020 financial statements.

Disclosure Controls and Procedures and Internal Control Over Financial Reporting

The Company’s management, including the CEO and CFO, is responsible for the design of disclosure
controls and procedures (“DC&P”) and internal controls over financial reporting (“ICFR”). Centerra
adheres to the Committee of Sponsoring Organizations of the Treadway Commission’s (“COSO”) revised
2013 Internal Control Framework for the design of its ICFR. There was no material change to the
Company’s internal controls over financial reporting that occurred during 2020 that has materially affected,
or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

The evaluation of DC&P and ICFR was carried out under the supervision of and with the participation of
management, including Centerra’s CEO and CFO. Based on these evaluations, the CEO and the CFO
concluded that the design and operation of these DC&P and ICFR were effective throughout 2020.

Non-GAAP Measures

In the fourth quarter of 2020, the Company elected to present the World Gold Council’s (“WGC”) financial
measure all-in costs on a by-product basis per ounce (“AIC”), which incorporates non-sustaining capital
expenditures and certain development and overhead costs in addition to the sustaining costs that are
included in the all-in sustaining costs on a by-product basis metric. Management believes the AIC metric
will assist stakeholders in understanding the costs associated with producing gold over the entire lifecycle
of the mine.

This document contains the following non-GAAP financial measures: all-in sustaining costs per ounce on
a by-product basis, all-in sustaining costs per ounce on a by-product basis including revenue-based taxes,
all-in sustaining costs per ounce on a co-product basis and all-in costs on a by-product basis per ounce. In
addition, non-GAAP financial measures include adjusted net earnings, adjusted net earnings per common
share (basic and diluted), average realized gold price, average realized copper price, adjusted cash provided
by operations, free cash flow from operations and adjusted free cash flow from operations. These financial
measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be
comparable to similar measures presented by other issuers, even as compared to other issuers who may be
applying the WGC guidelines, which can be found at http://www.gold.org.

Management believes that the use of these non-GAAP measures will assist analysts, investors and other
stakeholders of the Company in understanding the costs associated with producing gold, understanding the
economics of gold mining, assessing our operating performance, our ability to generate free cash flow from
current operations and to generate free cash flow on an overall Company basis, and for planning and
forecasting of future periods. However, the measures do have limitations as analytical tools as they may be
influenced by the point in the life cycle of a specific mine and the level of additional exploration or
expenditures a company has to make to fully develop its properties. Accordingly, these non-GAAP
measures should not be considered in isolation, or as a substitute for, analysis of our results as reported
under GAAP.

CENTERRA GOLD INC. ANNUAL REPORT 202049

Definitions
The following is a description of the non-GAAP measures used in this MD&A:

• All-in sustaining costs on a by-product basis per ounce include adjusted operating costs, the cash
component of capitalized stripping costs, corporate general and administrative expenses, accretion
expenses, and sustaining capital, net of copper and silver credits. The measure incorporates costs
related to sustaining production. When calculating all-in sustaining costs on a by-product basis, all
revenue received from the sale of copper from the Mount Milligan mine, as reduced by the effect
of the copper stream, is treated as a reduction of costs incurred. All-in sustaining costs on a by-
product basis per ounce excludes revenue-based taxes.

• All-in sustaining costs on a by-product basis per ounce including revenue-based taxes, include

revenue-based taxes at Kumtor.

• All-in sustaining costs on a co-product basis per ounce of gold or per pound of copper, are based
on an allocation of production costs between copper and gold based on the conversion of copper
production to ounces of gold equivalent. For the fourth quarter and year-end of 2020, 576 and 633
pounds of copper, respectively, were equivalent to one ounce of gold. All-in sustaining costs on a
co-product basis per ounce of gold or per pound of copper excludes revenue-based taxes.

• All-in costs on a by-product basis per ounce include all-in sustaining costs on a by-product basis
including revenue-based taxes, exploration and study costs, non-sustaining capital expenditures,
care and maintenance and pre-development costs.

• Non-sustaining capital expenditures are costs incurred at new operations and costs related to major

projects at existing operations where these projects will materially benefit the operation.

• Adjusted net earnings is calculated by adjusting net earnings (loss) as recorded in the consolidated
statements of income (loss) and comprehensive income (loss) for items not associated with ongoing
operations.

• Adjusted cash provided by operations is calculated by adjusting cash provided by operations as
recorded in the condensed consolidated interim statements of statements of cash flows for items
not associated with ongoing operations.

• Average realized gold price is calculated by dividing the different components of gold sales
(including third party sales, mark to market adjustments, final pricing adjustments and the fixed
amount received under the Mount Milligan Streaming Arrangement(1)) by the number of ounces
sold.

• Average realized copper price is calculated by dividing the different components of copper sales
(including third party sales, mark to market adjustments, final pricing adjustments and the fixed
amount received under the Mount Milligan Streaming Arrangement(1)) by the number of pounds
sold.

• Free cash flow is calculated as cash provided by operations less additions to property, plant and

equipment.

• Free cash flow from mine operations is calculated as cash provided by mine operations less

additions to property, plant and equipment.

• Adjusted free cash flow from operations is calculated as free cash flow adjusted for items not

associated with ongoing operations.

(1) Realized revenue for the gold and copper concentrate produced at the Mount Milligan mine reflects the actual price received from customers upon final
settlement for both the contained gold and copper, less the difference between the cost of the purchased refined gold and copper warrants to satisfy the

Company’s obligations under the Mount Milligan Streaming Arrangement and the amount the Company receives under that arrangement.

CENTERRA GOLD INC. ANNUAL REPORT 202050

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CENTERRA GOLD INC. ANNUAL REPORT 2020

Adjusted net earnings can be reconciled as follows:
Adjusted net earnings is intended to provide investors with information about the Company’s continuing
income generating capabilities. This measure adjusts for the earnings impact of items not associated with
ongoing operations.

($ millions, except as noted)

Net earnings

Adjust for items not associated with ongoing operations:
Kyrgyz Republic settlement
Asset Impairment - Mount Milligan
ARO revaluation at sites on care and maintenance
Adjusted net earnings

Net earnings (loss) per share - basic
Net earnings (loss) per share - diluted
Adjusted net earnings per share - basic
Adjusted net earnings per share - diluted

Three months ended December 31, Twelve months ended December 31,
2019

2019

2020

95.2 $

(12.2) $

408.5 $

(93.5)

-
-
9.3
104.5 $

0.32 $
0.32 $
0.35 $
0.35 $

-
-
34.5
22.3 $

(0.04) $
(0.04) $
0.08 $
0.08 $

-
-
53.4
461.9 $

1.39 $
1.37 $
1.57 $
1.55 $

10.0
230.5
34.5

181.5

(0.32)
(0.32)
0.62
0.62

$
$
$
$

Adjusted cash provided by operations can be reconciled as follows:

Three months ended December 31 Twelve months ended December 31

($ millions, except as noted)

Cash provided by operations

Adjust for items not associated with ongoing operations:

Kyrgyz Republic settlement payment

Adjusted cash provided by operations

2020

2019

2020

182.0 $

92.5 $

930.0 $

5.0

182.0 $

92.5 $

935.0 $

2019

334.1

62.6

396.7

Free cash flow and Adjusted free cash flow are calculated as follows:

($ millions, except as noted)

Cash provided by operations (1)

Adjust for:
Additions to property, plant and equipment (1)

Free cash flow (deficit)

Adjust for:

Kyrgyz Republic settlement payment

Adjusted Free cash flow (deficit)

Three months ended December 31 Twelve months ended December 31

2020

2019

2020

182.0 $

92.5 $

930.0 $

2019

334.1

(105.2)

(92.9)

(326.2)

(299.4)

76.8 $

(0.4) $

603.8 $

34.7

5.0

76.8 $

(0.4) $

608.8 $

62.6

97.3

(1) As presented in the Company’s Consolidated Statement of Cash Flows.

CENTERRA GOLD INC. ANNUAL REPORT 202052

Average realized sales price for gold
The average realized gold price per ounce sold is calculated by dividing gold sales revenue, together with
the final pricing adjustments and mark-to-market adjustments by the ounces sold, as shown in the table
below:

Average realized sales price for gold

Gold sales reconciliation ($ millions)
Gold sales - Kumtor
Gold sales - Öksüt

Gold sales - Mt. Milligan

Gold sales related to cash portion of Royal Gold stream
Mark-to-market adjustments on sales to Royal Gold
Final adjustments on sales to Royal Gold

Total gold sales under Royal Gold stream

Gold sales to third party customers
Mark-to-market adjustments
Final pricing adjustments
Final metal adjustments

Total gold sales to third party customers
Gold sales, net of adjustments
Refining and treatment costs
Total gold sales

Three months ended December 31,

Twelve months ended December 31,

2020

2019

2020

2019

178.1
74.3

5.1
0.2
(0.4)
4.9

41.2
2.4
(1.9)
0.3
42.0
46.9
(0.2)
46.7

200.5
-

5.1
0.7
(0.9)
4.9

32.8
2.7
(1.6)
(0.7)
33.2
38.1
(0.2)
37.9

981.6
186.5

23.5
6.3
(10.7)
19.1

175.0
4.0
9.0
(1.4)
186.6
205.7
(0.7)
205.0

827.5
-

27.4
1.7
(4.0)
25.1

164.3
(2.7)
8.6
(0.2)
170.0
195.1
(0.9)
194.2

Total gold revenue - Consolidated

299.2

238.4

1,373.1

1,021.7

Ounces of gold sold
Gold ounces sold - Kumtor
Gold ounces sold - Öksüt
Ounces sold to Royal Gold - Mt. Milligan
Ounces sold to third party customers - Mt. Milligan

Total ounces sold - Consolidated(1)

Average realized sales price for gold on a per ounce basis
Average realized sales price - Kumtor
Average realized sales price - Öksüt

Average realized gold price - Royal Gold
Average realized gold price - Mark-to-market adjustments
Average realized gold price - Final pricing adjustments
Average realized gold price - Mt. Milligan - Royal Gold

Average realized gold price - Third party
Average realized gold price - Mark-to-market adjustments
Average realized gold price - Final pricing adjustments
Average realized gold price - Final metal adjustments
Average realized gold price - Mt. Milligan - Third party
Average realized gold price - Mt. Milligan - Combined

96,641
39,380
11,842
22,087

136,568
-
11,577
21,747

569,213
98,849
53,684
100,416

600,231
-
62,800
117,623

169,950

169,892

822,162

780,654

1,843
1,887

435
15
(31)
419

1,866
108
(88)
13
1,899
1,376

1,468
-

435
43
(80)
398

1,510
126
(71)
(30)
1,535
1,137

1,725
1,887

435
118
(199)
354

1,743
40
90
(14)
1,859
1,330

1,379
-

435
27
(64)
398

1,397
(23)
73
(2)
1,445
1,077

Average realized sales price for gold - Consolidated

1,760

1,403

1,670

1,309

(1)

Includes ounces sold at Öksüt from June 1, 2020, after Öksüt achieved commercial production on May 31, 2020.

CENTERRA GOLD INC. ANNUAL REPORT 202053

Average realized sales price for Copper - Mount Milligan
The average realized copper price per pound is calculated by dividing copper sales revenue, together with
the final pricing adjustments and mark-to-market adjustments per pound, as shown in the table below:

Average realized sales price for Copper - Mount Milligan

Three months ended December 31,

Twelve months ended December 31,

2020

2019

2020

2019

Copper sales reconciliation ($ millions)

Copper sales related to cash portion of Royal Gold stream
Mark-to-market adjustments on Royal Gold stream
Final adjustments on sales to Royal Gold
Total copper sales under Royal Gold stream

Copper sales to third party customers
Mark-to-market adjustments
Final pricing adjustments
Final metal adjustments

Total copper sales to third party customers
Copper sales, net of adjustments
Refining and treatment costs
Copper sales

Pounds of copper sold (000's lbs)

Pounds sold to Royal Gold
Pounds sold to third party customers

Total pounds sold

Average realized sales price for copper on a per pound basis
Copper sales related to cash portion of Royal Gold stream
Mark-to-market adjustments on Royal Gold stream
Final pricing adjustments on Royal Gold stream

Average realized copper price - Royal Gold

Average realized copper price - Third party
Average realized copper price - Mark-to-market adjustments
Average realized copper price - Final pricing adjustments
Average realized copper price - Metal pricing adjustments

Average realized copper price - Third party

Average realized copper price - Combined

1.7
0.4
(1.3)
0.8

49.1
3.2
3.5
(0.2)
55.6
56.4
(3.4)
53.0

3,563
15,412
18,975

0.48
0.11
(0.37)
0.22

3.19
0.21
0.23
(0.01)
3.62

2.79

1.0
(0.6)
(0.2)
0.2

30.0
5.4
1.1
(1.0)
35.5
35.7
(3.8)
31.9

2,684
11,617
14,301

0.38
(0.21)
(0.07)
0.10

2.58
0.45
0.10
(0.09)
3.04

2.23

6.2
2.1
(3.5)
4.8

179.6
5.4
6.8
(2.8)
189.0
193.8
(15.2)
178.6

15,124
65,353
80,477

0.41
0.14
(0.23)
0.32

2.75
0.08
0.10
(0.04)
2.89

2.22

5.2
(0.9)
(0.1)
4.2

147.0
8.1
0.6
(2.0)
153.7
157.9
(17.1)
140.8

12,682
54,748
67,430

0.41
(0.07)
(0.01)
0.33

2.68
0.15
0.01
(0.04)
2.80

2.09

Qualified Person & QA/QC – Production, Mineral Reserves and Mineral Resources

The production information and other scientific and technical information presented in this document,
including the production estimates were prepared in accordance with the standards of the Canadian Institute
of Mining, Metallurgy and Petroleum and NI 43-101 and were prepared, reviewed, verified, and compiled
by Centerra’s geological and mining staff under the supervision of Slobodan (Bob) Jankovic, Professional
Geoscientist, member of the Association of Professional Geoscientists of Ontario (APGO) and Centerra’s
Senior Director, Technical Services, who is a qualified person for the purpose of NI 43-101. Unless
otherwise noted below, sample preparation, analytical techniques, laboratories used and quality assurance-
quality control protocols used during the exploration drilling programs are done consistent with industry
standards and independent certified assay labs are used.

The Kumtor deposit is described in a NI 43-101 technical report dated February 24, 2021 and filed on
SEDAR at www.sedar.com. The technical report describes the exploration history, geology, and style of
gold mineralization at the Kumtor deposit. Sample preparation, analytical techniques, laboratories used,
and quality assurance-quality control protocols used are described in the technical report.

CENTERRA GOLD INC. ANNUAL REPORT 202054

The Mount Milligan deposit is described in a NI 43-101 technical report dated March 26, 2020 and filed on
SEDAR at www.sedar.com. The technical report describes the exploration history, geology, and style of
gold mineralization at the Mount Milligan deposit. Sample preparation, analytical techniques, laboratories
used, and quality assurance-quality control protocols used during the exploration drilling programs are done
consistent with industry standards and independent certified assay labs.

The Öksüt deposit is described in a NI 43-101 technical report dated September 3, 2015 and filed on
SEDAR at www.sedar.com. The technical report describes the exploration history, geology, and style of
gold mineralization at the Öksüt deposit. Sample preparation, analytical techniques, laboratories used, and
quality assurance-quality control protocols used during the exploration drilling programs are done
consistent with industry standards and independent certified assay labs.

Mineral Reserves and Mineral Resources

On February 24, 2021, the Company released the results of the updated mineral reserve and mineral
resource estimates for the Kumtor Mine, the Mount Milligan Mine, the Öksüt Mine, and the Kemess
Property, all as of December 31, 2020. The 2020 mineral reserves and resources estimate excludes the
Greenstone property (Hardrock), the sale of which was announced December 15, 2020. For additional
details, please see the news release “Centerra Gold 2020 Year-End Mineral Reserves and Resources,
Kumtor Technical Report and Fourth Quarter Exploration Update” filed on SEDAR and posted on the
Company’s website on February 24, 2021.

Mount Milligan’s mineral reserves and mineral resources are presented on a 100% basis. Sales of gold and
copper from the Mount Milligan Mine are subject to the Mount Milligan Streaming Arrangement whereby
Royal Gold is entitled to 35% and 18.75% of gold and copper sales respectively. Under this streaming
arrangement, Royal Gold pays Centerra $435 per ounce of gold delivered and 15% of the spot price per
metric tonne of copper delivered.

Total gold mineral reserves and resources

Gold (000s attributable ounces contained) (1)(4)
Total proven and probable mineral reserves
Total measured and indicated mineral resources (2)
Total inferred mineral resources(2)(3)

6,722
(1) Centerra’s equity interests as at December 31, 2020, are as follows: Mount Milligan 100%, Kumtor 100%, Öksüt 100% and Kemess Underground and

5,379

Kemess East 100%. The mineral reserves and mineral resources above reflect Centerra's equity interests in the applicable properties.

(2) Mineral resources are in addition to mineral reserves. Mineral resources do not have demonstrated economic viability.
(3)

Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined economically. It cannot be assumed

that all or part of the inferred mineral resources will ever be upgraded to a higher category.

(4) Production at Mount Milligan is subject to a streaming agreement which entitles Royal Gold to 35% of gold sales from the Mount Milligan Mine. Under
the stream arrangement, Royal Gold will pay $435 per ounce of gold delivered. Mineral resources for the Mount Milligan property are presented on a

100% basis.

2020
11,166

2019
11,086

7,948

13,347

CENTERRA GOLD INC. ANNUAL REPORT 202055

2020
1,467

5,329

2019
1,589

5,327

Total copper mineral reserves and resources

Copper (million pounds contained) (1)(4)
Total proven and probable mineral reserves
Total measured and indicated mineral resources (2)
Total inferred mineral resources(2)(3)

502
(1) Centerra’s equity interests as at December 31, 2020, are as follows: Mount Milligan 100%, Kemess Underground 100%, Kemess East 100% and Berg

520

100%.

(2) Mineral resources are in addition to mineral reserves. Mineral resources do not have demonstrated economic viability.
(3)

Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined economically. It cannot be assumed

that all or part of the inferred mineral resources will ever be upgraded to a higher category.

(4) Production at Mount Milligan is subject to a streaming agreement which entitles Royal Gold to 18.75% of copper sales from the Mount Milligan mine.
Under the stream arrangement, Royal Gold will pay 15% of the spot price per metric tonne of copper delivered. Mineral resources for the Mount Milligan

property are presented on a 100% basis.

Total molybdenum mineral reserves and resources

Molybdenum (million pounds contained) (1)(3)(4)
Total proven and probable mineral reserves
Total measured and indicated mineral resources(2)
Total inferred mineral resources(3)

2020
-

636

2019
-

636

(1) Centerra’s equity interests are Berg 100%, Thompson Creek 100%, and Endako 75%.
(2) Mineral resources are in addition to mineral reserves. Mineral resources do not have demonstrated economic viability.
(3)

Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined economically. It cannot be assumed

that all or part of the inferred mineral resources will ever be upgraded to a higher category.

(4) Molybdenum mineral resources at Berg, Thompson Creek and Endako were estimated using a molybdenum price of $14.00 per pound. The exchange rate

used at Berg and Endako was 1USD:1.25CAD

Material assumptions used to determine mineral reserves and mineral resources are as follows:

Gold price
Gold mineral reserves ($/oz)
Gold mineral resources ($/oz)

Copper price
Copper mineral reserves ($/lb)
Copper mineral resources ($/lb)

Foreign exchange rates
1 USD : Cdn dollar
1 USD : Kyrgyz som
1 USD : Turkish Lira

2020

2019

1,250-1,350
1,500-1,550

1,250
1,500

3.00
3.50

1.25
70
5.50

3.00
3.50

1.25
65
5.50

CENTERRA GOLD INC. ANNUAL REPORT 202056

Centerra Gold Inc.

Consolidated Financial Statements

For the Years Ended December 31, 2020 and 2019

(Expressed in thousands of United States Dollars)

CENTERRA GOLD INC. ANNUAL REPORT 202057Report of Management’s Accountability

The accompanying audited consolidated financial statements of Centerra Gold Inc. were prepared by
management in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board. Management acknowledges responsibility for significant accounting
judgments and audited annual consolidated financial statements, including responsibility for significant
accounting judgments and estimates and the choice of accounting principles and methods that are
appropriate to the Company’s circumstances.

The Board of Directors is responsible for reviewing and approving the audited annual consolidated financial
statements together with other financial information of the Company and for ensuring that management
fulfills its financial reporting responsibilities. The Board of Directors carries out this responsibility
principally through its Audit Committee.

The Audit Committee is appointed by the Board of Directors and all of its members are non-management
directors. The Audit Committee reviews the consolidated financial statements, management’s discussion
and analysis and the external auditors’ report; examines the fees and expenses for audit services; and
considers the engagement or reappointment of the external auditors. The Audit Committee reports its
findings to the Board of Directors for its consideration when approving the consolidated financial
statements for issuance to the shareholders. KPMG LLP, the external auditors, have full and free access to
the Audit Committee.

Original signed by:
Scott G. Perry
President and Chief Executive Officer

February 23, 2021

Original signed by:
Darren J. Millman
Vice President and Chief Financial Officer

CENTERRA GOLD INC. ANNUAL REPORT 202058
KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, ON M5H 2S5
Canada
Tel 416-777-8500
Fax 416-777-8818

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of Centerra Gold Inc.

Opinion

We have audited the consolidated financial statements of Centerra Gold Inc. (the Entity), which comprise:



the consolidated statements of financial position as at December 31, 2020 and December 31, 2019

the consolidated statements of earnings (loss) and other comprehensive income (loss) for the years
then ended December 31, 2020 and December 31, 2019

the consolidated statements of Shareholders’ equity for the years then ended December 31, 2020
and December 31, 2019

the consolidated statements of cash flows for the years then ended December 31, 2020 and
December 2019

and notes to the consolidated financial statements, including a summary of significant


accounting policies (Hereinafter referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated financial position of the Entity as at December 31, 2020 and December 31, 2019, and its
consolidated financial performance and its consolidated cash flows for the years then ended in
accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the “Auditors’ Responsibilities for the
Audit of the Financial Statements” section of our auditors’ report.

We are independent of the Entity in accordance with the ethical requirements that are relevant to our
audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in
accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements for the year ended December 31, 2020. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.

CENTERRA GOLD INC. ANNUAL REPORT 202059KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, ON M5H 2S5
Canada
Tel 416-777-8500
Fax 416-777-8818

We have determined the matters described below to be the key audit matters to be communicated in our
auditors’ report.

Evaluation of indicators of impairment and reversal of impairment for long-lived
assets

Description of the matter

We draw attention to Note 3(j), Note 4(i) and Note 9 to the financial statements. Long-lived assets,
including goodwill, are reviewed for impairment indicators at each reporting period. If an indicator of
impairment exists, the Company calculates the recoverable amount of the asset to determine if any
impairment loss is required. CGUs with previous impairment charges to long-lived assets, other than
goodwill, are monitored for potential indicators of impairment reversal. A cash-generating unit (“CGU”) is
identified as the smallest identifiable group of assets that generates cash inflows, which are largely
independent of the cash flows from other assets. Long-lived assets are $1.7 billion. Significant judgment
is required in assessing indicators of impairment or reversal of impairment. The Entity completes an
evaluation at each reporting period of potential impairment indicators or reversal of impairment,
considering both external and internal sources of information.

Why the matter is a key audit matter

We identified the evaluation of indicators of impairment and reversal of impairment for long-lived assets
as a key audit matter. Long-lived assets are material to the financial statements. Significant auditor
judgment is required to evaluate the results of our audit procedures and assess the Entity’s determination
of whether the internal and external factors, individually and in the aggregate, result in indicators of
impairment or reversal of impairment.

How the matter was addressed in the audit

The following are the primary procedures we performed to address this key audit matter.
We evaluated the Entity’s analysis of internal and external factors within their impairment and reversal of
impairment indicators memorandum by considering whether quantitative and qualitative information in the
analysis was consistent with other evidence in other areas of the audit. This included:

 Other evidence obtained in other areas of the audit, including estimates of mineral reserves and

Information included in Entity’s press releases and management’s discussion and analysis

resources and internal communications to management and the Board of Directors.

To assess the Entity’s ability to accurately forecast:
 We compared for certain CGUs the Entity’s operating and capital cost estimates to actual results
 We compared by CGU the Entity’s production estimates to actual production.
To search for significant changes in the external environment we:


Inspected publicly available market data for changes in the price of gold, copper, molybdenum prices,
discount rates and foreign exchange rates



Compared the Entity’s market capitalization to the carrying value of its net assets.

CENTERRA GOLD INC. ANNUAL REPORT 202060KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, ON M5H 2S5
Canada
Tel 416-777-8500
Fax 416-777-8818

Other Information
Management is responsible for the other information. Other information comprises:


the information included in Management’s Discussion and Analysis filed with the relevant Canadian
Securities Commissions.
the information, other than the financial statements and the auditors’ report thereon, included in the
“Annual Report”



Our opinion on the financial statements does not cover the other information and we do not and will not
express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit and remain alert for indications that the
other information appears to be materially misstated.

We obtained the information included in Management’s Discussion and Analysis filed with the relevant
Canadian Securities Commissions as at the date of this auditors’ report. If, based on the work we have
performed on this information, we conclude that there is a material misstatement of this other information,
we are required to report that fact in the auditors’ report. We have nothing to report in this regard.

The information, other than the financial statements and the auditors’ report thereon, included in the
“Annual Report” is expected to be made available to us after the date of this auditors’ report. If, based on
the work we will perform on this other information, we conclude that there is a material misstatement of this
other information, we are required to report that fact to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the
Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in
accordance with International Financial Reporting Standards (IFRS), and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Entity’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to cease
operations, or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Entity‘s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in

CENTERRA GOLD INC. ANNUAL REPORT 202061KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, ON M5H 2S5
Canada
Tel 416-777-8500
Fax 416-777-8818

accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit.

We also:


Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Entity's internal control.



Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

 Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditors’
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Entity to cease to continue as
a going concern.



Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.

 Communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.



Provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

CENTERRA GOLD INC. ANNUAL REPORT 202062KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, ON M5H 2S5
Canada
Tel 416-777-8500
Fax 416-777-8818

 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the group Entity to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.

 Determine, from the matters communicated with those charged with governance, those matters that
were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our auditors’ report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.

Chartered Professional Accountants, Licensed Public Accountants

The engagement partner on the audit resulting in this auditor's report is Daniel Gordon Ricica.

Toronto, Canada

February 23, 2021

CENTERRA GOLD INC. ANNUAL REPORT 202063Centerra Gold Inc.
Consolidated Statements of Financial Position

(Expressed in thousands of United States Dollars)

December 31,
2020

December 31,
2019

Assets
Current assets

Cash and cash equivalents
Amounts receivable
Inventories
Assets held-for-sale
Other current assets

Property, plant and equipment
Reclamation deposits
Other assets

Total assets

Liabilities and Shareholders' equity
Current liabilities

Accounts payable and accrued liabilities
Revenue-based tax payable
Income tax payable
Liabilities held-for-sale
Other current liabilities

Long-term debt
Deferred income tax liability
Provision for reclamation
Other liabilities

Shareholders' equity

Share capital
Contributed surplus
Accumulated other comprehensive income (loss)
Retained earnings

Total liabilities and Shareholders' equity
Commitments and contingencies (note 25)
Subsequent events (notes 5 and 23d)

Notes

6
7
5
8

9
13
10

5
8

12
22
13
10

545,180 $
66,108
580,587
140,005
40,961
1,372,841
1,686,067
47,083
30,018
1,763,168
3,136,009 $

232,704 $
5,073
2,474
2,255
15,322
257,828

-
39,473
351,149
21,541
412,163

975,122
30,601
11,600
1,448,695
2,466,018
3,136,009 $

42,717
79,022
774,060
-
36,869
932,668
1,669,516
40,999
58,470
1,768,985
2,701,653

238,339
744
1,034
-
4,692
244,809

70,007
33,733
265,049
22,211
391,000

960,404
26,278
(752)
1,079,914
2,065,844
2,701,653

The accompanying notes form an integral part of these consolidated financial statements.

Approved by the Board of Directors
Original signed by:
Michael S. Parrett

Richard W. Connor

CENTERRA GOLD INC. ANNUAL REPORT 202064Centerra Gold Inc.
Consolidated Statements of Earnings (Loss) and Comprehensive Income (Loss)
For the years ended December 31,
(Expressed in thousands of United States Dollars)
(except per share amounts)

2020

2019

Revenue

Cost of sales
Production costs
Depreciation, depletion and amortization
Standby costs
Earnings from mine operations

Revenue-based taxes
Exploration and development costs
Corporate administration
Care and maintenance expense
Impairment
Other operating expenses
Earnings (loss) from operations

Other expense (income), net
Finance costs
Earnings (loss) before income tax
Income tax expense (recovery)
Net earnings (loss)

Other Comprehensive Income (Loss)
Items that may be subsequently reclassified to earnings:
Net gain on translation of foreign operation
Net unrealized gain (loss) on derivative instruments
Post-retirement benefit
Other comprehensive income ("OCI")
Total comprehensive income (loss)

Basic earnings (loss) per share
Diluted earnings (loss) per share

Notes
15

1,688,675

1,375,328

22a

19
20

23
23

$
$

590,624
305,286
6,728
786,037

138,493
47,442
45,674
29,117
-
87,095
438,216

7,028
14,941
416,247
7,709
408,538

839
11,513
-
12,352
420,890

1.39
1.37

$
$

676,632
239,511
9,100
450,085

116,417
45,958
45,265
28,529
230,500
69,113
(85,697)

(1,450)
16,337
(100,584)
(7,071)
(93,513)

1,753
(395)
(22)
1,336
(92,177)

(0.32)
(0.32)

The accompanying notes form an integral part of these consolidated financial statements.

CENTERRA GOLD INC. ANNUAL REPORT 202065Centerra Gold Inc.
Consolidated Statements of Cash Flows
For the years ended December 31,
(Expressed in thousands of United States Dollars)

2020

2019

Operating activities
Earnings (loss) from operations

Notes

408,538

(93,513)

Adjustments for the following items:
Depreciation, depletion and amortization
Finance costs
Share-based compensation expense
Reclamation expense
Asset impairment
Other
Cash provided by operations before changes
in working capital
Changes in working capital
Cash provided by operations

Investing activities
Property, plant and equipment additions
Decrease (increase) in restricted cash
Increase in other assets
Cash used in investing

Financing activities
Debt drawdown
Debt repayment
Payment of borrowing costs
Lease payments
Proceeds from common shares issued
Dividends declared and paid
Cash used in financing
Increase (decrease) in cash during the year
Cash at beginning of the year
Reclassified to assets held-for-sale
Cash at end of the year

19
24b

24a

12
12

23d

314,947
14,941
20,348
53,135
-
40,747

852,656
77,359
930,015

(326,240)
25,246
(2,382)
(303,376)

250,000
(327,472)
(8,515)
(6,037)
7,793
(39,757)
(123,988)
502,651
42,717
(188)
545,180

245,746
16,337
19,773
34,439
230,500
(54,819)

398,463
(64,314)
334,149

(299,443)
(481)
(9,725)
(309,649)

302,804
(417,986)
(9,293)
(16,962)
7,949
-
(133,488)
(108,988)
151,705
-
42,717

The accompanying notes form an integral part of these consolidated financial statements.

CENTERRA GOLD INC. ANNUAL REPORT 202066Centerra Gold Inc.
Consolidated Statements of Shareholders' Equity
(Expressed in thousands of United States Dollars, except share information)

Number of
Common
Shares
291,999,949

1,505,768

169,890

14,849
293,690,456

Accumulated
Other

Share
Capital
Amount
$ 949,328 $
-
-

Contributed Comprehensive
(Loss) Income
(2,088)
-
1,336

Surplus
27,364
-
-

Retained
Earnings
$ 1,173,427 $
(93,513)
-

Total
2,148,031
(93,513)
1,336

-
9,960

1,015

1,940
(3,026)

-
-

1,940
6,934

1,015

101
$ 960,404 $
-
-

-
26,278
-
-

-
(752)
-
12,352

-
$ 1,079,914 $
408,538
-

101
2,065,844
408,538
12,352

1,490,465

-
10,641

10,564
(3,291)

520,165

1,096

-
-

10,564
7,350

1,096

Balance at January 1, 2019
Net loss
Other comprehensive income
Transactions with owners:

Share-based compensation expense
Issued on exercise of stock options
Issued under the employee

share purchase plan
Issued on redemption of
restricted share units

Balance at December 31, 2019
Net earnings
Other comprehensive income
Transactions with owners:

Share-based compensation expense
Issued on exercise of stock options
Issued under the employee share

purchase plan

Issued on redemption of restricted

share units

Dividend declared and paid
Balance at December 31, 2020

126,820
-
295,827,906

2,981
-
$ 975,122 $

(2,950)
-
30,601

-
-
11,600

-
(39,757)
$ 1,448,695 $

31
(39,757)
2,466,018

The accompanying notes form an integral part of these consolidated financial statements.

CENTERRA GOLD INC. ANNUAL REPORT 202067Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

1. Nature of operations

Centerra Gold Inc. (“Centerra” or the “Company”) was incorporated under the Canada Business
Corporations Act on November 7, 2002. Centerra’s common shares are listed on the Toronto Stock
Exchange. The Company is domiciled in Canada and its registered office is located at 1 University
Avenue, Suite 1500, Toronto, Ontario, M5J 2P1. The Company is primarily focused on operating,
developing, exploring and acquiring gold and copper properties in North America, Asia and other
markets worldwide.

2. Basis of presentation

a. Statement of Compliance

The consolidated financial statements of the Company and its subsidiaries are prepared in
accordance with International Financial Reporting Standards (“IFRS”), as issued by the
International Accounting Standards Board (“IASB”). These financial statements were authorized
for issuance by the Board of Directors of the Company (the “Board”) on February 23, 2021.

b. Basis of Presentation

Overview

These consolidated financial statements have been prepared on a going concern basis under the
historical cost basis, except for certain financial assets and liabilities which are measured at fair
value. The consolidated financial statements are presented in United States dollars with all
amounts rounded to the nearest thousand, except where otherwise noted.

Subsidiaries

These consolidated financial statements include the accounts of the Company and its consolidated
subsidiaries. All intercompany balances, transactions, income and expenses and gains or losses
have been eliminated on consolidation. Subsidiaries consist of entities from which the Company
is exposed, or has rights, to variable returns as well as the ability to affect those returns through
the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from
the date control is transferred to the Company and are de-consolidated from the date control ceases.
The Company reassesses whether or not it controls a subsidiary if facts and circumstances indicate
that there are changes to one or more of the elements of control.

CENTERRA GOLD INC. ANNUAL REPORT 202068Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Joint Arrangements

A joint arrangement is defined as an arrangement in which two or more parties have joint control.
Joint control is the contractually agreed sharing of control over an arrangement between two or
more parties. This exists only when the decisions about the relevant activities that significantly
affect the returns of the arrangement require the unanimous consent of the parties sharing control.

A joint operation is a joint arrangement whereby the parties have joint control of the arrangement
and have rights to the assets and obligations for the liabilities relating to the arrangement. These
consolidated financial statements include the Company’s interests in the assets, liabilities,
revenues and expenses of the joint operations, from the date that joint control commenced. The
Company’s 50% interest in the Greenstone Partnership and 75% interest in the Endako Mine have
been accounted for as joint operations.

Centerra’s significant subsidiaries are as follows:

Property - Location
Kumtor Gold Company ("KGC") Kumtor Mine - Kyrgyz

Entity

Current status
Operation

Entity
Type
Subsidiary

Basis of
Accounting
Consolidation

Property
Ownership
100%

Thompson Creek Metals
Company Inc.

Mount Milligan Mine -
Canada

Republic

Operation

Subsidiary

Consolidation

100%

Langeloth Metallurgical
Company LLC ("Langeloth")
Molybdenum Processing Facility

Öksüt Madencilik A.S.
("OMAS")

Langeloth - United States

Operation

Subsidiary

Consolidation

100%

Öksüt Mine - Turkey

Operation

Subsidiary

Consolidation

100%

Greenstone Gold Mines LP
("Greenstone Partnership")

Greenstone Gold Property
- Canada

Available for sale(a)

Joint operation

Proportionate
consolidation

50%

AuRico Metals Inc.

Thompson Creek Mining
Company

Thompson Creek Metals
Company Inc.

Kemess Project - Canada
("Kemess")

Thompson Creek Mine -
United States

Endako Mine - Canada

Pre-development

Subsidiary

Consolidation

100%

Care and
Maintenance

Subsidiary

Consolidation

100%

Joint operation

Proportionate
consolidation

75%

(a) Property divestment completed on January 19, 2021 (note 5).

As at December 31, 2020 the Company owns exploration properties in Canada, the United States
of America and Turkey and has options to acquire exploration joint venture properties in Canada,
Finland, Turkey, and the United States of America.

CENTERRA GOLD INC. ANNUAL REPORT 202069Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

3. Summary of significant accounting policies

The significant accounting policies summarized below have been applied consistently to all
periods presented in these consolidated financial statements.

a. Business combinations

The Company uses the acquisition method of accounting for business combinations, whereby the
purchase consideration transferred in the acquisition is allocated to the identifiable net assets
acquired on the basis of fair value. Certain fair values may be estimated at the acquisition date
pending confirmation or completion of the valuation process, within a measurement period not to
exceed one year from the acquisition date.

Acquisition-related costs are expensed as incurred. Assets acquired and liabilities assumed in a
business combination are measured initially at fair value at the acquisition date. The excess of the
consideration transferred over the fair value of the net assets acquired is recorded as goodwill. A
gain is recorded through the Statement of Earnings and Comprehensive Income (“Statement of
Earnings”) if the cost of the acquisition is less than the fair values of the identifiable net assets
acquired.

b. Non-current assets and disposal groups held-for-sale

Non-current assets or disposal groups are classified as assets held-for-sale (“HFS”) if it is highly
probable that they will be sold in their current condition within one year from the date of
classification. Assets and disposal groups that meet the criteria to be classified as HFS are recorded
at the lower of carrying amount and fair value less cost of disposal. Impairment losses on initial
classification as HFS and subsequent gains and losses on remeasurement are recognized in the
Statement of Earnings. Once classified as HFS, property, plant and equipment are no longer
depreciated. The assets and disposal groups classified as HFS are presented separately in the
Consolidated Statement of Financial Position (“Statement of Financial Position”).

c. Foreign currency

The functional currency of the Company, including its subsidiaries and joint operations is the
currency of the primary economic environment in which it operates. The functional currency of
the Company’s operations is the United States dollar (“USD”), except for the Greenstone
Partnership, which has a functional currency of the Canadian dollar (“Cdn$”). This results in
translation gains (losses) being recorded as part of Other Comprehensive Income in the Statement
of Earnings.

CENTERRA GOLD INC. ANNUAL REPORT 202070Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Foreign currency transactions are translated into an entity’s functional currency as follows:

- Non-monetary items that are measured at historical cost are translated at the historical
exchange rates prevailing at each transaction date. Non-monetary items that are measured
at fair value are translated at the exchange rate in effect at the date the fair value was
measured.

- Monetary items are translated at the closing rate in effect at the Statement of Financial

Position date.

- Revenue and expense items are translated using the average exchange rate during the

period.

d. Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term investments with original
maturities of 90 days or less. Cash and cash equivalents are classified as financial instruments
carried at amortized cost.

e. Restricted cash and restricted short-term investments

Cash and short-term investments which are subject to legal or contractual restrictions on their use
are classified separately as restricted cash and restricted short-term investments.

Inventories

Metal inventories, including heap leach ore, stockpiled ore, in-circuit gold, gold and copper
concentrate, gold doré and molybdenum inventory are valued at the lower of weighted average
production cost and net realizable value (“NRV”).

The cost of inventories is determined on a weighted-average basis and includes all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their present
location and condition. Costs of inventories include direct materials, direct labour, transportation,
shipping, freight and insurance costs, mine-site overhead expenses and depreciation, depletion and
amortization of mining assets. Molybdenum inventory additionally includes amounts paid for
molybdenum concentrate purchased from third parties, as well as costs associated with
beneficiation and roasting.

NRV is calculated as the estimated price in the ordinary course of business, less costs to be incurred
in converting the relevant inventories to saleable product and delivering it to a customer. Any
write-down of inventories to NRV or reversals of previous write-downs are recognized in the
Statement of Earnings in the period that the write-down or reversal occurs.

CENTERRA GOLD INC. ANNUAL REPORT 202071Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Supplies inventory and spare parts is valued at weighted average cost. Provisions are recorded to
reduce supplies inventory to NRV, which is generally calculated by reference to its salvage or
scrap value, when it is determined that the supplies are obsolete.

g. Property, plant and equipment

Buildings, plant and equipment

Buildings, plant and equipment are recorded at cost, including all expenditures incurred to prepare
an asset for its intended use. An item of buildings, plant and equipment is de-recognized upon
disposal or when no further future economic benefits are expected from its use or disposal. Any
gain or loss arising on de-recognition of the asset (calculated as the difference between any
proceeds received and the carrying amount of the asset) is included in the Statement of Earnings
in the year the asset is de-recognized.

Buildings, plant and equipment are depreciated according to either the units-of-production method
or on a straight-line basis over their expected useful life, according to the pattern in which the
asset’s future economic benefits are expected to be consumed. Depreciation commences when the
assets are considered available for use. Once buildings, plant and equipment are considered
available for use, they are measured at cost less accumulated depreciation and applicable
impairment losses.

Where an item of building, plant and equipment comprises major components with different useful
lives, the components are depreciated separately but are grouped for disclosure purposes as
building, plant and equipment. Major overhaul expenditures and the cost of replacement of a major
component are depreciated over the average expected period between major overhauls.

Management annually reviews the estimated useful lives, residual values and depreciation methods
of the Company’s building, plant and equipment and also when events and circumstances indicate
that such a review should be undertaken. Changes to estimated useful lives, residual values or
depreciation methods resulting from such reviews are accounted for prospectively.

The following table sets out the useful lives of certain assets:

Buildings, plant and equipment
Mobile equipment
Light vehicles and other mobile equipment
Furniture, computer and office equipment

Useful Life
2 to 20 years
2 to 10 years
2 to 10 years
2 to 5 years

CENTERRA GOLD INC. ANNUAL REPORT 202072Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Construction-in-progress

Assets under construction are capitalized as construction-in-progress until the asset is available for
use. The cost of construction-in-progress comprises its purchase price and any costs directly
attributable to bringing it into working condition for its intended use. Directly attributable costs
are capitalized until the asset is in a location and condition necessary for operation as intended by
management. These costs include: the purchase price, installation costs, site preparation costs,
survey costs, freight charges, transportation insurance costs, duties, testing and preparation charges
and estimated costs of dismantling and removing the item and restoring the site on which it is
located.

Costs incurred on properties in the development stage are included in the carrying amount of the
development project in construction-in-progress. A property is classified as a development
property when a mine plan has been prepared and a decision is made to commercially develop the
property. Development stage expenditures are costs incurred to obtain access to proven and
probable mineral reserves or mineral resources and provide facilities for extracting, treating,
gathering, transporting, and storing the minerals. All expenditures incurred from the time the
development decision is made until when the asset is ready for its intended use are capitalized.
Proceeds from mineral sales are offset against costs capitalized prior to a mine being capable of
operating at levels intended by management and is not included in revenue from mining operations.

Borrowing costs are capitalized to qualifying assets and are included in construction-in-progress.
Qualifying assets are assets that take a substantial period of time to prepare for the Company’s
intended use, which includes projects that are in the exploration and evaluation, pre-development
and development stages. Borrowing costs attributable to the acquisition, construction or production
of qualifying assets are added to the cost of those assets until such time as the assets are
substantially ready for their intended use. All other borrowing costs are expensed as finance costs
in the period in which they are incurred. Where the funds used to finance a qualifying asset form
part of a general borrowing, the amount capitalized is calculated using a weighted average of rates
applicable to the relevant borrowings during the period.

Construction-in-progress is not depreciated. When an asset becomes available for use, its costs are
transferred from construction-in-progress into the appropriate asset classification such as mineral
properties, building, plant and equipment. Depreciation commences once the asset is complete and
available for use.

Mineral properties

The cost of mineral properties includes the fair value attributable to proven and probable mineral
reserves and mineral resources acquired, development costs, capitalized exploration and
evaluation costs and capitalized borrowing costs. These costs incurred are directly attributable to

CENTERRA GOLD INC. ANNUAL REPORT 202073Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

bringing a mineral property to the state where it is capable of operating in the manner intended by
management (“commercial production”). In determining whether a mine has achieved commercial
production, the criteria considered include the following:

Substantial completion of the construction activities;

-
- Ability to produce minerals in saleable form (within specifications);
- Completion of a reasonable period of testing of mine plant and equipment; and
- Ability to sustain ongoing production of minerals.

After a mine property has been brought into commercial production, costs are expensed as incurred
or capitalized to inventory. Once in commercial production, sales are recognized as revenues and
production costs as a component of cost of sales, instead of being deducted from or added to the
capitalized construction cost of the mine and amortization of capitalized costs in property, plant
and equipment commences.

Mineral properties are depreciated on a units-of-production basis over the estimated economic life
of the mine to which they relate.

Deferred stripping costs

In open pit mining operations, it is necessary to remove overburden and other waste materials to
access ore from which minerals can be extracted economically. The process of mining overburden
and waste materials to access ore from which minerals can be extracted economically is referred
to as stripping. Stripping costs incurred in the production phase are accounted for as costs of the
inventory produced during the period that the stripping costs are incurred, unless these costs are
expected to provide a future economic benefit to an identifiable component of the ore body.
Components of the ore body are based on the distinct development phases identified by the mine
planning engineers when determining the optimal development plan for the open pit.

Stripping costs incurred in the production phase provide a future economic benefit when:

It is probable that the future economic benefit associated with the stripping activity will
flow to the Company;

- The Company can identify the component of the ore body for which access has been

improved; and

- The costs relating to the stripping activity associated with that component can be measured

reliably by the Company.

Where a mine operates several open pits that are regarded as separate operations for the purpose
of mine planning, stripping costs are accounted for separately by reference to the ore from each
separate pit. A “component” is a specific section of the ore body that is made more accessible by
the stripping activity and is typically a subset of the larger ore body that is distinguished by a
separate useful economic life.

CENTERRA GOLD INC. ANNUAL REPORT 202074Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

When the costs of the stripping activity asset and the inventory produced are not separately
identifiable, the Company allocates the production stripping costs between the inventory produced
and the stripping activity asset by using an allocation basis that is based on a relevant production
measure. This production measure is calculated for the identified component of the ore body and
is used as a benchmark to identify the extent to which the additional activity of creating a future
benefit has taken place. The benchmark used divides the total tonnage mined (ore and waste) for
the component or pit for the period by the quantity of minerals contained in the ore mined for the
component or pit.

Capitalized stripping costs are depleted on a units-of-production basis over the proven and
probable reserves that become more accessible as a result of the stripping activity.

h. Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease by
assessing if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. The Company uses the following criteria to assess whether a
contract conveys the right to control the use of an identified asset:

- The contract involves the use of an explicitly or implicitly identified lease;
- The Company has the right to obtain substantially all of the economic benefits from use of

the asset throughout the period of use; and

- The Company has the right to direct the use of the asset.

If a contract is assessed to contain a lease, a lease liability and right-of-use (“ROU”) asset is
recognized at the commencement date of the lease (i.e. the date the underlying asset is available
for use).

ROU assets are measured at cost less any accumulated depreciation and impairment losses and
adjusted for any remeasurements of the lease liability. Such costs include the initial amount of
lease obligations recognized, initial direct costs incurred, and lease payments made at or before
the commencement date less any lease incentives received.

Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the
lease term, the ROU assets are depreciated on a straight-line basis over the shorter of the estimated
useful life and the lease term. ROU assets are subject to impairment.

At the commencement date, the lease liability is measured at the present value of lease payments
to settle the lease contract, discounted using the interest rate implicit in the lease agreement or, if
that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the
Company uses its incremental borrowing rate as the discount rate. The lease payments include
fixed payments, variable lease payments that depend on an index or a rate, amounts expected to

CENTERRA GOLD INC. ANNUAL REPORT 202075Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

be paid under residual value guarantees and the exercise price of a purchase option reasonably
certain to be exercised by the Company.

After the commencement date, the lease liability is increased by the interest cost on the lease
liability and decreased by lease payments made. It is remeasured if there is a modification, a change
in the lease term, a change in the fixed lease payments, changes based on an index or rate or a
change in the assessment to purchase the underlying asset.

i. Goodwill

Goodwill represents the difference between the cost of a business acquisition and the fair value of
the identifiable net assets acquired.

Upon acquisition, goodwill is allocated to the cash-generating units (“CGU”) expected to benefit
from the related business combination. A CGU, in accordance with IAS 36, Impairment of Assets,
is identified as the smallest identifiable group of assets that generates cash inflows, which are
largely independent of the cash flows from other assets. Subsequent to initial measurement,
goodwill is measured at cost less accumulated impairment losses and is not amortized.

The Company evaluates, on at least an annual basis on September 1, the carrying amount of a CGU
to which goodwill is allocated, for potential impairment. In addition, the Company assesses for
indicators of impairment at each reporting period end and, if an indicator of impairment is
identified, goodwill is tested for impairment at that time. If the carrying value of the CGU to which
goodwill is assigned exceeds its recoverable amount, an impairment loss is recognized. Goodwill
impairment losses are recorded in the Statement of Earnings and are not subsequently reversed.

Impairment

Long-lived assets, including goodwill, are reviewed for impairment indicators at each reporting
period. If an indicator of impairment exists, the Company calculates the recoverable amount of the
asset to determine if any impairment loss is required. The recoverable amount is the greater of
value-in-use (“VIU”) and fair value less costs of disposal (“FVLCD”) of an asset or CGU. An
impairment loss is recognized for any excess of the carrying amount of the CGU over its
recoverable amount. Impairment losses are recorded in the Statement of Earnings in the period in
which they occur.

If the CGU includes goodwill, the Company first applies the impairment loss to reduce goodwill
and then any further excess is applied to the CGU’s other long-lived assets based on their carrying
amounts on a pro-rata basis. Assumptions, such as gold price, copper price, molybdenum price,
exchange rates, discount rate, and expenditures underlying the estimate of recoverable value are
subject to risks and uncertainties.

CENTERRA GOLD INC. ANNUAL REPORT 202076Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

The best evidence of FVLCD is the value obtained from an active market or binding sale
agreement. Where neither exists, FVLCD is based on the best information available to reflect the
amount the Company could receive for the CGU in an arm’s length transaction, which the
Company typically estimates using discounted cash flow methods based on detailed mine and/or
production plans.

CGUs with previous impairment charges to long-lived assets, other than goodwill, are monitored
for potential indicators of impairment reversal. Any impairment charge that is taken on a long-
lived asset, other than goodwill, is reversed if there are subsequent changes in the estimates or
significant assumptions that were used to recognize the impairment loss that result in an increase
in the recoverable amount of the CGU. If an indicator of impairment reversal has been identified,
the recoverable amount of the long-lived asset is calculated in order to determine if any impairment
reversal is required. This reversal is recognized in earnings and is limited to the carrying value that
would have been determined, net of any depreciation, depletion and amortization, where
applicable, had no impairment charge been recognized in prior years. Impairment reversals are
recorded in the Statement of Earnings in the period in which they occur.

k. Provision for reclamation

Provisions for reclamation arise from the acquisition, development and construction of mining
properties and plant and equipment that are subject to government controls and regulations that
protect the environment on the closure and reclamation of mining properties. Provisions for
reclamation are recognized at the time that an environmental disturbance occurs or a new legal or
constructive obligation is determined. The major parts of the carrying amount of provisions relate
to tailings facilities and heap leach pad closure and rehabilitation, demolition of buildings and
mine facilities, ongoing water treatment and ongoing care and maintenance of closed mines. Costs
included in the provision encompass all closure and rehabilitation activity expected to occur
progressively over the life of the operation at the time of closure and post-closure in connection
with disturbances as at the reporting date. Estimated costs included in the determination of the
provision reflect the risks and probabilities of alternative estimates of cash flows required to settle
the obligation at each particular operation. Provisions for reclamation are measured at the expected
value of future cash flows, which exclude the effect of inflation, discounted to their present value
using a pre-tax risk-free discount rate.

Each reporting period, provisions for reclamation are remeasured to reflect any changes to
significant assumptions, including changes in discount rates, foreign exchange rates and the timing
or amounts of the costs to be incurred. For operating sites, when the provision for reclamation is
recognized or adjusted for an operating asset, the corresponding cost is capitalized to the related
item of property, plant and equipment, except where a reduction in the obligation is greater than
the amount capitalized, in which case the capitalized costs are reduced to nil and the remaining
adjustment is included in the Statement of Earnings. Reclamation provisions that result from

CENTERRA GOLD INC. ANNUAL REPORT 202077Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

disturbance in the land to extract ore in the current period are included in the cost of inventories.
When the provision for reclamation is recognized or adjusted for closed sites, the cost is included
in other operating expenses in the Statement of Earnings.

The provisions are adjusted each period to reflect the passage of time and are recorded in finance
costs in the period incurred. Upon settlement of the provision for reclamation, the Company
records a gain or loss if the actual cost differs from the carrying amount of the provision. Settlement
gains or losses are recorded in the Statement of Earnings.

l. Litigation and other provisions

Provisions are recorded when a legal or constructive obligation exists as a result of past events
where it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation, and a reliable estimate of the amount of the obligation can be made. The
amount recognized as a provision is the best estimate of the amount required to settle the present
obligation estimated at the end of each reporting period, taking into account the risks and
uncertainties surrounding the obligation. A provision is measured using the present value of cash
flows estimated to settle the present obligation, discounted using a pre-tax risk-free discount rate
consistent with the time period of expected cash flows. The increase in provision due to the passage
of time is recognized as a finance cost in the Statement of Earnings.

Contingent liabilities may exist as of the date the financial statements are issued, which may result
in a loss to the Company, but which will only be resolved when one or more future events occur
or fail to occur. In assessing loss contingencies, the Company, with assistance from its legal
counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as
the perceived merits of the amount of relief sought or expected to be sought.

If the assessment of a contingency suggests that a loss is probable, and the amount can be reliably
estimated, then a loss is recorded. When a contingent loss is not probable, but is reasonably
possible, or is probable but the amount of loss cannot be reliably estimated, then details of the
contingent loss are disclosed. Loss contingencies considered remote are generally not disclosed.
Legal fees incurred in connection with pending legal proceedings are expensed as incurred.

m. Debt

Debt is initially recognized at fair value, net of financing costs incurred. Debt is subsequently
measured at amortized cost. Any difference between the amounts received and the redemption
value of the debt is recognized in the Statement of Earnings over the period to maturity using the
effective interest method.

CENTERRA GOLD INC. ANNUAL REPORT 202078Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

n. Share-based compensation

Stock Option plan

Stock options are equity-settled share-based compensation awards. The fair value of stock options
at the grant date is estimated using the Black-Scholes option pricing model. Compensation expense
is recognized over the stock option vesting period based on the number of units estimated to vest.
This expense is recognized as share-based compensation expense with a corresponding increase
in contributed surplus. When options are exercised, the proceeds received by the Company,
together with the amount in contributed surplus, are credited to common shares.

Performance Share Unit Plan

Under Centerra’s Performance Share Unit (“PSU”) Plan, PSUs can be granted to employees and
officers of the Company. A PSU represents the right to receive the cash equivalent of a common
share or, at the Company’s option, a common share purchased on the open market. PSUs are
accounted for under the liability method using the Monte Carlo simulation option pricing model
and vest over three years whereby 50% vest on December 31 of the year following the grant year
(“end of year 2”) and the remaining 50% vest on December 31 of the subsequent year (“end of
year 3”). Under this method, the fair value of the PSUs is recognized over the vesting period. The
liability is adjusted to fair value at each reporting period and any resulting adjustment to the
accrued obligation is recognized as an expense or, if negative, a recovery. The cash paid on
exercise of these PSUs is recorded as a reduction of the accrued obligation.

The number of units that vest is determined by multiplying the number of units granted to the
participant by the adjustment factor, which ranges from 0 to 2.0. Therefore, the number of units
that will vest and be paid out may be higher or lower than the number of units originally granted
to a participant. The adjustment factor is based on Centerra’s total return performance relative to
the total return index value (“TRIV”) from the S&P/TSX Global Gold CAD$ Index during the
applicable period. Should Centerra’s performance compared to TRIV fall below an adjustment
factor of 0.75, payout under this plan is at the discretion of the Board of Directors. For PSUs
granted in 2018 and prior, the fair value of the units is determined using the sixty-one trading days
volume weighted average share price. For PSUs granted in 2019 and subsequently, the total return
performance and fair value are calculated based on the five-trading day volume weighted average
share price preceding the vesting date.

Deferred Share Unit Plan

Centerra has a Deferred Share Unit (“DSU”) Plan for directors of the Company to receive all or a
portion of their annual compensation as deferred share units. DSUs are settled in cash and are
accounted for under the liability method. The DSUs cannot be converted to shares by the unit

CENTERRA GOLD INC. ANNUAL REPORT 202079Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

holder or by the Company. The DSUs vest immediately upon granting and can be redeemed only
after a director no longer holds any position with the Company, but no later than December 15 of
the following year in which the director ceased to hold all positions in the Company. A liability is
recorded at grant date equal to the fair value of the DSUs. The liability is adjusted to fair value at
each reporting period and any resulting adjustment to the accrued obligation is recognized as an
expense or, if negative, a recovery. The cash paid on exercise of these deferred share units is
recorded as a reduction of the accrued obligation.

Restricted Share Unit Plan

There are three types of Restricted Share Units (“RSUs”): the Executive RSUs, the Director RSUs,
and the Discretionary RSUs.

Executive RSUs are equity-settled share-based compensation awards. Effective in 2017, prior to
the end of the first quarter of any fiscal year (or for U.S. persons, prior to the commencement of
the fiscal year), Executive RSU holders may elect to receive a portion of their annual incentive
payments for that year as Executive RSUs. The Company will match 50% of the Executive RSUs
granted to Executive RSU holders. Executive RSUs vest 50% as of the first anniversary of their
grant dates and the remaining 50% vest as of the second anniversary of their grant dates. The fair
value of the Executive RSUs at the grant date is the portion of the annual incentive payment elected
by these employees to be received as RSUs, plus the 50% of the RSUs granted to such individuals
that is matched by the Company. Compensation expense is recognized over the vesting period
based on the number of units to vest. The expense is recognized as share-based compensation
expense with a corresponding increase in contributed surplus. When the Executive RSUs are
exercised (at the executive’s election any time following the vesting period), the proceeds received
by the Company are reclassed from contributed surplus to common shares.

The Director RSUs can be settled in cash or equity at the option of the holders. The Director RSUs
vest immediately upon grant and are redeemed on a date chosen by the participant (subject to
certain restrictions as set out in the plan). The Director RSUs granted are accounted for under the
liability method whereby a liability is recorded at grant date equal to the fair value of the Director
RSU.

The Discretionary RSUs can be settled in cash or equity at the option of the holders and are granted
by the Board of Directors to certain employees of the Company. Discretionary RSUs vest 25% as
of the second anniversary of their grant dates, and 75% as of the third anniversary of their grant
dates. The Discretionary RSUs are accounted for under the liability method whereby a liability is
recorded at grant date equal to the fair value of the Discretionary RSU. Under this method, the fair
value of the Discretionary RSUs are recognized over the vesting period. The liability is adjusted
to fair value at each reporting period and any resulting adjustment to the accrued obligation is
recognized as an expense or, if negative, a recovery.

CENTERRA GOLD INC. ANNUAL REPORT 202080Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Employee Share Purchase Plan

Centerra has an Employee Share Purchase Plan (“ESPP”) for employees of the Company. Under
the ESPP, employees may elect to purchase the Company’s shares through a payroll deduction.
Each year, employees may elect to contribute up to 10% of their base salary and the Company will
match 25% of the contribution. Such contributions are then used to acquire Centerra shares on a
quarterly basis. Shares purchased have no vesting requirement and may be issued from treasury or
acquired on the open market. The Company records an expense equal to the match provided.

Dividends

When dividends are paid, participants under the PSU, DSU and RSU plans are allocated additional
units equal in value to the dividend paid per common share based on the number of units held by
the participant on the record date. For PSUs issued prior to 2019, the number of units issued is
based on the sixty-one trading day volume weighted average share price.

o. Revenue recognition

The Company sells its products pursuant to sales contracts entered into with its customers.
Revenue associated with the sale of finished gold, concentrates and molybdenum products is
recognized when control is transferred to the customer. For finished gold and molybdenum
products sales, typically, the transfer of control occurs when the customer has taken delivery and
the consideration is received, or to be received. For concentrate sales, the transfer of control is
based on terms of the sales contracts, generally upon the loading of the ocean vessel or based on
negotiated terms which allows for the transfer of control to happen earlier in the sale process.

Revenues from finished gold sales from Kumtor are based on the London Bullion Market
Association (“LBMA”) PM spot price less discounts stipulated in the agreement with Kyrgyzaltyn
JSC (“Kyrgyzaltyn”). Payment is due within 12 days from the date of shipment, when control of
the finished gold is transferred to the customer.

Revenues from finished gold sales from the Öksüt Mine are based on the LBMA AM spot price
stipulated in the agreement with The Central Bank of the Republic of Turkey (“Central Bank”).
Gold dore is sent to the refinery and control is transferred to the customer when gold bars are
poured. The Central Bank has the right of first refusal on the purchase of the gold produced. If
Central Bank exercises this right, the finished gold is delivered and held at the Central Bank and
sold to third party customers through the Central Bank. In both cases, payment is received on the
same day of the sale, when control of the finished gold is transferred to the Central Bank.

Revenues from the Company’s concentrate sales are based on a provisional forward sales price,
which is subject to adjustments at the time of final pricing. Revenues from concentrate sales are

CENTERRA GOLD INC. ANNUAL REPORT 202081Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

recorded net of treatment and refining charges and the impact of derivative contracts accounted
for as hedges of the contained metal.

In 2016, in connection with the acquisition of Thompson Creek Metals Inc., the Company assumed
the streaming arrangement with Royal Gold Inc. (“Royal Gold”) associated with the Mount
Milligan Mine. Under the terms of the streaming agreement with the Mount Milligan Mine, the
Company delivers to Royal Gold 35% of gold ounces produced and 18.75% of copper produced.
Royal Gold pays US$435 per ounce of gold delivered and 15% of the spot price per metric tonne
of copper delivered, which is recorded to revenue. Royal Gold also has a security interest over all
of the Mount Milligan Mine assets.

Gains and losses related to the Company's forward commodity contracts to economically hedge
the Company's commodity price exposure under the Gold and Copper Stream Arrangement, are
recorded at fair value each period. To satisfy its obligations under the Gold and Copper Stream
Arrangement the Company purchases refined gold and London Metal Exchange (“LME”) copper
warrants and arranges for delivery to Royal Gold. Revenue from and costs for refined physical
gold and LME copper warrants delivered under the Gold and Copper Stream Arrangement and
gains and losses related to the Company's forward commodity contracts to economically hedge the
Company's exposure under the Gold and Copper Stream Arrangement are netted and recorded to
revenue.

Provisional prices are finalized in a specified future month (generally one to four months after
delivery to the customer) based on spot copper prices on the LME or spot gold prices on the
LBMA. The Company receives market prices based on prices in the specified future month, which
results in mark-to-market price fluctuations on the related receivable. To the extent final prices are
higher or lower than what was recorded on a provisional basis, an increase or decrease to revenues
is recorded each reporting period reflecting the estimated forward prices at the date of final pricing.
For changes in metal quantities upon receipt of final assay, the provisional sales quantities are
adjusted as well. Any such adjustments generally are not material to the transaction price.

The Company's molybdenum sales contracts specify the point in the delivery process at which
time control transfers to the customer (shipping point or destination). Shipping and handling fees
are accounted for on a gross basis under the terms of the contracts. The Company recognizes tolling
and calcining revenue under contractual arrangements as the services are performed on a per-unit
basis.

p. Exploration, evaluation and pre-development expenditures

Exploration and evaluation expenditures are the costs incurred on the initial search for mineral
deposits with economic potential or in the process of obtaining more information about existing
mineral deposits. Evaluation expenditures are the costs incurred to establish the technical and

CENTERRA GOLD INC. ANNUAL REPORT 202082Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

commercial viability of developing mineral deposits identified through exploration activities or by
acquisition.

All exploration and evaluation expenditures of the Company within an area of interest are
expensed until management and the Board of Directors conclude that the technical feasibility and
commercial viability of extracting a mineral resource are demonstrable and that future economic
benefits are probable. In making this determination, the extent of exploration, as well as the degree
of confidence in the mineral resource is considered. Once a project has been established as
commercially viable and technically feasible, and approval is received from the Board of Directors,
further expenditures are capitalized as development costs.

Exploration and evaluation assets acquired are initially recognized at cost as exploration rights
within property, plant and equipment.

q. Earnings per share

Basic earnings per share is computed by dividing the net earnings for a given period by the
weighted average number of common shares outstanding during that same period. Diluted earnings
per share reflects the potential dilution that could occur if holders with rights to convert instruments
to common shares exercise these rights.

The weighted average number of common shares used to determine diluted earnings per share
includes an adjustment, using the treasury stock method, for stock options outstanding. Under the
treasury stock method:

- The exercise of stock options and restricted share units is assumed to occur at the beginning

of the period;

- The proceeds from the exercise of stock options and restricted share units plus the future
period compensation expense on units granted are assumed to be used to purchase common
shares of the Company at the average market price during the period; and

- The incremental number of common shares (the difference between the number of shares
assumed issued and the number of shares assumed purchased) is included in the
denominator of the diluted earnings per share computation.

Equity instruments that could potentially be dilutive in the future, but do not currently have a
dilutive effect are excluded from the calculation of diluted earnings per share.

Income taxes

Tax expense is comprised of current and deferred tax. Current tax and deferred tax are recognized
in the Statements of Earnings except to the extent that they relate to a business combination, or to
items recognized directly in equity or in other comprehensive income.

CENTERRA GOLD INC. ANNUAL REPORT 202083Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Current tax is the expected tax payable or receivable on the taxable income or loss for the year,
using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax
payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the tax bases of such assets and liabilities
measured using tax rates and laws that are substantively enacted at the reporting date and effective
for the reporting period when the temporary differences are expected to reverse. The measurement
of deferred tax reflects the tax consequences that would result the way the Company, at the end of
the reporting period, intends to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is not recognized for:

- Temporary differences on the initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting nor taxable profit or loss;
- Temporary differences related to investments in subsidiaries, associates and jointly
controlled entities to the extent that the group is able to control the timing of the reversal
of the temporary differences and it is probable that such temporary differences will not
reverse in the foreseeable future; and

- Taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current
tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which
they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realized.

s. Derivative instruments and hedge accounting

The Company may hold derivative instruments to manage its risk exposure to fluctuations of
commodity prices, including the Company’s products (for example, gold or copper) and
consumables (for example, diesel fuel) and fluctuations in other currencies compared to the USD.

Derivative instruments are recognized initially at fair value. Subsequent to initial recognition, non-
derivative financial instruments are classified and measured as described below.

CENTERRA GOLD INC. ANNUAL REPORT 202084Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Hedges

The Company applies hedge accounting to the following derivative instruments:

Strategic copper contracts which hedge a portion of the copper components of its future
concentrate sales, that is not subject to the streaming arrangement with Royal Gold, at the
Mount Milligan Mine (“strategic copper contracts”);
Fuel hedge contracts to hedge a portion of its estimated future diesel fuel purchases at its
Kumtor and Mount Milligan operations (“fuel hedge contracts”); and
Foreign exchange contracts to hedge a portion of its future Canadian denominated
expenditures (“foreign exchange contracts”).

The Company formally documents all relationships between hedging instruments and hedged
items, as well as its risk management objectives and strategies for undertaking hedge transactions.
This process includes linking all derivative hedging instruments to forecasted transactions. Hedge
effectiveness is assessed based on the degree to which the cash flows from the derivative contracts
are expected to offset the cash flows of the underlying transaction being hedged.

The Company’s strategic copper contracts, fuel hedge contracts and foreign exchange contracts
are designated as a cash flow hedging instrument, where the effective portion of changes in fair
value are recognized in other comprehensive income. The amounts accumulated in other
comprehensive income are reclassified to the Statements of Earnings, consistent with the
classification of the underlying hedged transaction, when the underlying hedged transaction,
identified at contract inception, is recognized.

Any ineffective portion of a hedge relationship is recognized immediately in the Statements of
Earnings as other expenses (income). When derivative contracts designated as cash flow hedges
are terminated, expired, settled or no longer qualify for hedge accounting, hedge accounting is
discontinued prospectively. Amounts historically recorded in other comprehensive income remain
in other comprehensive income until the underlying hedged transaction is recognized. If the
forecasted transaction is no longer expected to occur, then the amounts accumulated in other
comprehensive income are reclassified to the Statements of Earnings as other income or expense
immediately.

Gains or losses arising subsequent to the derivative contracts not qualifying for hedge accounting
are recognized in the period in which they arise in the Statements of Earnings as other income,
net.

Non-hedges

All derivative instruments not designated in a hedge relationship are classified as financial
instruments at fair value through profit or loss.

CENTERRA GOLD INC. ANNUAL REPORT 202085Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Changes in fair value of non-hedge derivatives at each reporting date are included in other
expenses (income) in the Statements of Earnings, while the spot and forward contracts associated
with the Royal Gold deliverables are included in revenue.

t. Transaction costs

Transaction costs associated with financial instruments carried at fair value through profit or loss,
are expensed as incurred, while transaction costs associated with all other financial instruments
are included in the initial carrying amount of the asset or liability. The amortization of debt
financing fees is calculated on an amortized cost basis over the term of the instrument.

4. Critical accounting estimates and judgments

The preparation of consolidated financial statements in accordance with IFRS requires
management to make judgments, estimates and assumptions that affect the amounts reported in
the consolidated financial statements and the application of the Company’s accounting policies,
which are described in note 3. Management believes that the estimates used in the preparation of
the consolidated financial statements are reasonable; however, actual results could differ from
those estimates. The key areas of significant judgments, estimates and assumptions are discussed
below.

Impairment

Significant judgment is required in assessing indicators of impairment or reversals of impairment.
For each long-term asset or CGU (excluding goodwill, which is assessed for impairment annually
regardless of indicators and is not eligible for impairment reversals), the Company completes an
evaluation at each reporting period of potential indicators of impairment or reversals of
impairment. The Company considers both external and internal sources of information in assessing
whether there are any indications that long-term assets or CGUs may be impaired. When
completing an impairment test, the Company calculates the estimated recoverable amount of
CGUs, which requires management to make estimates and assumptions related to items such as
future production levels, operating and capital costs, long-term commodity prices, foreign
exchange rates, discount rates, proven and probable reserves and resources, exploration potential
and closures and environmental rehabilitation costs. Changes in these estimates which decrease
the estimated recoverable amount of a CGU could affect the carrying amounts of assets and result
in an impairment charge or reversal. While management believes that estimates of future cash
flows are reasonable, different assumptions regarding such cash flows could materially affect the
recoverable amount of a CGU.

CENTERRA GOLD INC. ANNUAL REPORT 202086Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

ii.

Provision for reclamation

Provisions for reclamation require the use of estimates of the future costs the Company will incur
to complete the reclamation and remediation work required to comply with existing laws and
regulations at each mine site, as well as the timing of the reclamation activities and estimated
discount rate. The Company assesses and revises its reclamation provision on an annual basis or
when new material information becomes available. Adjustments to the estimated amount and
timing of future reclamation cash flows are a normal occurrence in light of the significant
judgments and estimates involved. The principal factors that can cause expected cash flows to
change are the construction of new processing facilities, changes in the quantities of material in
reserves and resources with a corresponding change in the life of mine plan, changing ore
characteristics that impact required environmental protection measures and related costs, changes
in water quality that impact the extent of water treatment required and changes in laws and
regulations governing the protection of the environment.

Actual costs incurred may differ from those amounts estimated. Increases in future costs could
materially impact the amounts charged to operations for reclamation and remediation. The
provision represents management’s best estimate of the present value of the future reclamation and
remediation costs based on environmental disturbances as at the reporting date. A change in any
or a combination of the key assumptions used to determine the provisions could have a material
impact on the carrying value of the provisions. Changes to the estimated future reclamation costs
for operating sites are recognized in the Statements of Financial Position by adjusting both the
retirement asset and provision. Such changes will impact earnings as these amounts are depleted
and accreted over the life of the mine.

iii.

Deferred income taxes

The Company operates in a number of tax jurisdictions and is therefore required to estimate its
income taxes in each of these tax jurisdictions in preparing its financial statements. In calculating
the income taxes, the Company considers factors such as tax rates in the different jurisdictions,
non-deductible expenses, changes in tax law and management’s expectations of future results. The
Company estimates deferred income taxes based on temporary differences between the income
and losses reported in its financial statements and its taxable income and losses as determined
under the applicable tax laws. The tax effects of these temporary differences are recorded as
deferred tax assets or liabilities in the Statement of Financial Position. The Company does not
recognize deferred tax assets where management does not expect such assets to be realized based
upon current forecasts. If actual results differ from these estimates, adjustments are made in
subsequent periods.

CENTERRA GOLD INC. ANNUAL REPORT 202087Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

iv. Mineral reserves and resources estimation

The Company estimates its mineral reserves and resources based on information compiled by
qualified persons as defined in accordance with the National Instrument 43-101, Standards of
Disclosure for Mineral Projects (“NI 43-101”). The estimation of mineral reserves requires
judgment to interpret available geological data, select an appropriate mining method and establish
an extraction schedule. It also requires assumptions on future commodity prices, exchange rates,
production costs, recovery rates, and in some instances, the renewal of mining licenses. There are
numerous uncertainties inherent in estimating mineral reserves and resources and assumptions that
are valid at the time of estimation which may change significantly when new information becomes
available. Changes in such assumptions and estimates may result in the mineral reserves and
resources being revised.

Estimates of mineral reserves and resources impact the following items in the financial statements:
- Useful lives of assets depreciated on a straight-line basis, where those lives are limited to

the life of the mine;

- Depreciation and depletion charge of assets using the units-of-production method;
- Estimate of recoverable value of CGUs for impairment tests of non-current assets;
- Estimated timing and costs of reclamation activities; and
- Expected future economic benefit of expenditures, including stripping and development
activities recognized in the Statement of Financial Position as either part of mine properties
or inventories.

There are assets that are depleted using the units-of-production method where the calculation of
the units-of-production rate of property, plant and equipment to be depleted could be impacted to
the extent that actual production in the future is different from current forecast production based
on proven and probable ore reserves. This would generally arise when there are significant changes
in any of the factors or assumptions used in estimating mineral reserves and resources.

Derivative financial instruments

Judgment is required to determine if an effective hedging relationship exists throughout the
financial reporting period for derivative financial instruments classified as either a fair value or
cash flow hedge. Management assesses the relationships on an ongoing basis to determine if hedge
accounting is appropriate. The Company monitors on a regular basis its hedge position for its risk
exposure to fluctuations in commodity prices, including prices for gold, copper and fuel. For
derivative contracts, valuations are based on forward rates considering the market price, rate of
interest and volatility, and take into account the credit risk of the financial instrument. Refer to
note 28 for a sensitivity analyses based on changes in commodity prices.

CENTERRA GOLD INC. ANNUAL REPORT 202088Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

vi.

Litigation and contingency

On an ongoing basis, the Company is subject to various claims and other legal disputes as
described in note 25, the outcomes of which cannot be assessed with a high degree of certainty. A
provision is recognized where, based on the Company’s legal views and advice, it is considered
probable that an outflow of resources will be required to settle a present obligation that can be
measured reliably. By their nature, these provisions and contingencies will only be resolved when
one or more future events occur or fail to occur. The assessment of such provisions and
contingencies inherently involves the exercise of significant judgment of the potential outcome of
future events. Disclosure of other contingent liabilities is made unless the possibility that a loss
may occur is considered remote.

5. Divestitures

Greenstone Partnership

On December 15, 2020, the Company entered into an agreement with an affiliate of the Orion
Mine Finance Group (“Orion”) and Premier Gold Mines Limited (“Premier”) to sell the
Company’s 50% interest in the Greenstone Partnership for cash consideration of $210 million
(including adjustments). The Company is entitled to receive further contingent payments of up to
$75 million (assuming a gold price of $1,500) based on the successful construction and operation
of the mine, which will be recorded upon achieving the applicable milestones.

On January 19, 2021, the Company completed the sale of its 50% interest in the Greenstone
Partnership. As a result of the closing of this transaction, the Company expects to recognize a gain
of approximately $72 million in the first quarter of 2021, with no further commitments
outstanding. At December 31, 2020, the assets and liabilities held-for-sale include the following:

Cash and cash equivalents
Amounts receivable
Property, plant and equipment

Assets held-for-sale

Accounts payable and accrued liabilities
Lease obligations

Liabilities held-for-sale

2020
188
175
139,642
140,005
(2,125)
(130)
(2,255)

$
$

CENTERRA GOLD INC. ANNUAL REPORT 202089Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

6. Amounts receivable

Gold and copper concentrate sales receivable (a)
Molybdenum sales receivable
Consumption and income tax receivable (b)
Other receivables
Total amounts receivable

2019
39,310
28,718
5,124
5,870
79,022
(a) Includes $0.5 million (2019 - $nil) of amounts receivables from final priced gold and copper
concentrate sales, and $18.6 million of amounts receivable (December 31, 2019 - $39.3 million)
from provisionally priced gold and copper concentrate sales.

2020
22,985
21,606
19,636
1,881
66,108

(b) Includes the current portion of value-added tax receivable of $16.1 million (December 31, 2019 -

$3 million) at the Öksüt Mine. The long-term portion is included in other assets (note 10).

7. Inventories

Stockpiles of ore (a)
Gold in-circuit
Gold doré
Copper and gold concentrate
Molybdenum inventory (b)
Total inventories (net of provisions)
Supplies (net of provision) (c)
Total inventories (d)

2019
427,644
20,681
19,814
29,577
67,019
564,735
209,325
774,060
(a) Includes ore in stockpiles not scheduled for processing within the next 12 months, but available on-

2020
239,219
19,450
24,953
32,201
57,238
373,061
207,526
580,587

demand of $119.2 million (December 31, 2019 - $188.7 million).

(b) Net of an inventory impairment charge of $nil related to the inventory on hand (December 31, 2019

- $4.2 million).

million).

(d) Inventories of $882.3 million (December 31, 2019 - $907.9 million) were recognized as an expense

during the year and included in cost of sales.

CENTERRA GOLD INC. ANNUAL REPORT 202090Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

8. Other current assets and other current liabilities

Other current assets

Short-term derivative assets (a)
Prepaid insurance expenses
Deposits for consumable supplies
Marketable securities
Alternative Minimum Tax receivable
Other

Total other current assets

Other current liabilities

2020

20,158 $
8,932
7,976
3,485
-
410
40,961 $

2019

1,534
7,726
12,557
1,780
11,404
1,868
36,869

Current portion of lease obligations (note 14)
Short-term derivative liabilities (a)
Current portion of provision for reclamation (note 13)
Other

4,303
192
154
43
4,692
(a) Relates to the diesel, foreign exchange and strategic copper hedging contracts entered into in the

4,575 $
9,537
1,095
115
15,322 $

Total other current liabilities

period (note 28).

CENTERRA GOLD INC. ANNUAL REPORT 202091Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

9. Property, plant and equipment

The following is a summary of the carrying value of property, plant and equipment (“PP&E”):

Buildings,
Plant and

Mineral

Equipment (a) Properties (b)

Capitalized
Stripping
Costs

Construction
in
Progress

Total

Cost
January 1, 2019
IFRS 16 adoption
Additions
Disposals
Reclassification
Balance December 31, 2019 $
Additions
Disposal
Reclamation revaluation
Foreign currency translation
Transfers (c)
Reclassified to assets held-
for-sale (note 5)
Balance December 31, 2020 $

1,628,045 $
20,381
14,941
(5,476)
82,964
1,740,855 $
7,866
(6,911)
-
-
299,232

577,670 $

-
43,598
(449)
6,256
627,075 $
37,365
-
1,999
831
23,058

486,346 $

-
97,152
-
-

583,498 $
200,498
-
-
-
-

153,818 $ 2,845,879
20,381
-
365,639
209,948
(5,925)
-
-
(89,220)
274,546 $ 3,225,974
396,273
150,544
(6,911)
-
1,999
-
831
-
-
(322,290)

(625)
2,040,417 $

(139,436)

550,892 $

783,996 $

(140,061)
102,800 $ 3,478,105

Accumulated depreciation and other charges
January 1, 2019
693,490 $
IFRS 16 adoption
(545)
Charge for the year
139,256
Disposals
(3,751)
Impairment (note 19)
169,451
Balance December 31, 2019 $
997,901 $
Charge for the year
156,015
Disposals
(4,303)
Impairment (d)
-
Reclassified to assets held-
for-sale (note 5)
Balance December 31, 2020 $

(419)
1,149,194 $

103,260 $

-
18,030
-
44,979
166,269 $
24,045
-
7,389

143,615 $

-
248,673
-
-

392,288 $
52,853
-
-

197,703 $

445,141 $

940,365
- $
(545)
-
405,959
-
-
(3,751)
214,430
-
- $ 1,556,458
232,913
-
(4,303)
-
7,389
-

(419)
-
- $ 1,792,038

Net book value
Balance January 1, 2020
$
Balance December 31, 2020 $

742,954 $
891,223 $

460,806 $
353,189 $

191,210 $
338,855 $

274,546 $ 1,669,516
102,800 $ 1,686,067

(a) Includes costs of $26.8 million (December 31, 2019 - $37.8 million) and accumulated depreciation
of $8.2 million (December 31, 2019 - $13.1 million) related to mobile equipment and buildings
under right-of-use assets.

(b) Includes revenue earned from sales at Öksüt net of related costs of $6.9 million for 6,654 ounces

of gold sold prior to the mine achieving commercial production on May 31, 2020.

CENTERRA GOLD INC. ANNUAL REPORT 202092Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

achieved and assets were considered available for use.

(d) Relates to miscellaneous exploration and evaluation properties that were written down to their

recoverable amounts.

10. Other assets and other liabilities

Other assets

Prepayments for property, plant and equipment
Long-term derivative assets (a)
Value-added tax receivable (b)
Restricted cash (c)
Alternative Minimum Tax receivable (d)
Other assets

Total other assets

Other liabilities

2020

8,763 $
8,339
7,734
2,740
-
2,442
30,018 $

2019

2,395
-
14,347
27,986
11,404
2,338
58,470

Long-term portion of lease obligations (note 14)
Post-retirement benefits
Long-term derivative liabilities (a)

18,336
3,875
-
22,211
(a) Relates to the diesel, foreign exchange and strategic copper hedge contracts entered into in the

14,340 $
4,060
3,141
21,541 $

Total other liabilities

period (note 28).

(b) Relates to the Öksüt Mine.
(c) As part of the repayment and cancellation of the OMAS finance facility in January 2020 (note 12),
$25 million in restricted cash funds were released. As at December 31, 2020, the remaining
restricted cash relates to certain permits at the Öksüt Mine.

(d) Current (note 8) and long-term portions were received in the second and third quarters of 2020,

respectively.

CENTERRA GOLD INC. ANNUAL REPORT 202093Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

11. Accounts payable and accrued liabilities

Trade creditors and accruals
Amount due to Royal Gold (a)
Liability for share-based compensation (note 23)
Provision for Kyrgyz Republic settlement (b)
Total accounts payable and accrued liabilities

2019
166,184
38,190
25,965
8,000
238,339
(a) Royal Gold holds a streaming interest in the production at the Mount Milligan Mine. As a result,
when a trade receivable is recorded in relation to a third-party customer gold and copper concentrate
delivery, a corresponding liability to Royal Gold is recorded.

2020
155,646
48,874
28,184
-
232,704

(b) As part of the completion of the Strategic Agreement with the Kyrgyz Government in August 2019,
the Company’s obligations included a payment of $5.0 million to a Nature Development Fund for
the purpose of financing environmental conservation projects and nature preservation in the Kyrgyz
Republic and $3.0 million to a Cancer Care Fund for the purpose of funding cancer treatment,
research, support and outreach in the Kyrgyz Republic. Payments to the Nature Development Fund
and Cancer Care Fund were made in the third and fourth quarters of 2020, respectively.

12. Debt

Principal
Balance December 31, 2019
Drawdown
Repayment
Balance December 31, 2020

Deferred costs
Balance December 31, 2019
Amortization
Balance December 31, 2020

Debt (net of deferred financing costs)
Balance December 31, 2019
Balance December 31, 2020

Corporate Revolving Facility

Corporate
Revolving
Facility

OMAS
Facility

Total

$
$

- $

250,000
(250,000)

- $

77,472 $
-
(77,472)

- $

77,472
250,000
(327,472)
-

(1,430) $
1,430

- $

(6,035) $
6,035

- $

(7,465)
7,465
-

(1,430) $
- $

71,437 $
- $

70,007
-

On February 1, 2018, the Company entered into a $500 million four-year senior secured revolving
credit facility (the “2018 Corporate Facility”) with a lending syndicate led by the Bank of Nova

CENTERRA GOLD INC. ANNUAL REPORT 202094Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Scotia and National Bank of Canada. The credit facility had an interest rate of London Interbank
Offered Rate (“LIBOR”), plus a margin that ranges from 2.25% to 3.75%.

On December 31, 2020, the Company entered into a new $400 million four-year revolving credit
facility with a $200 million accordion feature (the “2020 Corporate Facility”). The interest rate
payable on any outstanding borrowings under the 2020 Corporate Facility is LIBOR, plus 2.25%
to 3.25% and the maturity date of the facility is December 31, 2024. The 2020 Corporate Facility
replaced the Company’s 2018 Corporate Facility. As at December 31, 2020, the 2020 Corporate
Facility was undrawn (December 31, 2019 - $nil).

As a result of the new facility, the Company expensed $0.9 million of previously capitalized
deferred costs associated with the 2018 Corporate Facility, as well as $2.4 million in transaction
costs associated with the 2020 Corporate Facility in the Statement of Earnings.

OMAS Facility

In the first quarter of 2020, the Company repaid and cancelled its $150 million five-year project
financing facility with UniCredit Bank AG and European Bank for Reconstruction and
Development (the “OMAS Facility”). The purpose of the OMAS Facility was to assist in financing
the construction of the Company’s Öksüt Mine.

As a condition of the OMAS Facility, the Company deposited $25 million into a restricted account,
including $15 million, which was restricted until the Öksüt Project mining lease was extended and
$10 million, which was restricted during the construction phase. As part of the repayment and
cancellation of the OMAS Facility, the total amount of $25 million in restricted cash funds were
released.

CENTERRA GOLD INC. ANNUAL REPORT 202095Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

13. Provision for reclamation

The Company completed its regularly scheduled update to its closure costs estimates in December
2020. The following table reconciles the beginning and ending carrying amounts of the Company’s
reclamation provision. The settlement of the obligation is estimated to occur through to 2129.

Non-operating sites (a)
Balance, beginning of year

Reclassification of Öksüt Mine
Changes in estimate (b)
Changes in discount rate (b)
Accretion
Liabilities settled
Foreign exchange revaluation (b)

Balance, end of year

Operating sites (a)
Balance, beginning of year

Reclassification of Öksüt Mine
Changes in estimate (c)
Changes in discount rate
Accretion
Foreign exchange revaluation

Balance, end of year

2020

180,404 $
(2,600)
7,961
46,593
2,252
(245)
2,177
236,542 $

84,799 $
2,600
24,433
2,007
1,000
863
115,702 $

2019

137,900
-
4,385
34,682
2,476
(604)
1,565
180,404

74,545
-
2,961
4,690
1,909
694
84,799

Current portion of reclamation provision
Long-term portion of reclamation provision
Total provision for reclamation

154
265,049
265,203
a) Non-operating sites include Endako, Thompson Creek Mine, and Kemess. Operating sites include
Kumtor, Mount Milligan and Öksüt. Öksüt was reclassified to an operating site as of January 1,
2020.

1,095
351,149
352,244 $

b) $53.4 million recorded in other operating expenses in the Statement of earnings related to closed

sites, Thompson Creek Mine and Endako (note 20).
Includes an increase in the cost estimate of $23.1 million at the Öksüt Mine.

Regulatory authorities in certain jurisdictions require that security be provided to cover the
estimated reclamation and remediation obligations. As at December 31, 2020, the Company has
provided the regulatory authorities with $160.4 million (December 31, 2019 - $139.3 million) in
reclamation bonds and letters of credit for mine closure obligations.

In 1998, a Reclamation Trust Fund was established to cover the future costs of reclamation, net of
salvage values at the Kumtor Mine. On December 31, 2020, this fund had a balance of $47.1

CENTERRA GOLD INC. ANNUAL REPORT 202096Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

million (December 31, 2019 - $41 million), which includes the accelerated contributions required
by the Strategic Agreement.

14. Leases

The following table is a maturity analysis of the Company’s contractual undiscounted payments
required to meet obligations that have initial or remaining non-cancellable lease terms.

Less than one year
One to three years
More than three years

Total undiscounted lease obligations

2020
5,444 $
9,850
5,607
20,901 $

2019
8,434
19,256
4,052
31,742

The following table sets out the lease obligations included in the Statement of Financial Position:

Current (a)
Non-current (b)

Total lease obligations

(a) Included in other current liabilities (note 8).
(b) Included in other long-term liabilities (note 10).

The lease obligations can be reconciled as follows:

Balance, beginning of year

Lease additions
Accretion expense
Payments
Foreign exchange revaluation

Balance, end of year

2020
4,575 $
14,340
18,915 $

2019
4,303
18,336
22,639

2020
22,639 $
1,196
915
(6,037)
202
18,915 $

2019
25,953
11,119
1,189
(16,962)
1,340
22,639

The amounts recognized in the Statement of Earnings related to lease obligations are as follows:

Interest on lease liabilities
Variable lease payments not included in the

measurement of lease liabilities

Expenses relating to leases of low-value assets

and short-term leases

Total recognized in the Statement of Earnings

2020
915 $

22,721

3,987
27,623 $

2019
1,189

127

109
1,425

CENTERRA GOLD INC. ANNUAL REPORT 202097Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

In addition to the above, as at December 31, 2020, there was $7.6 million of variable lease
payments (December 31, 2019 - $19.2 million) not included in the measurement of lease
liabilities related to the Öksüt Mine that was capitalized to property, plant and equipment prior to
achieving commercial production.

15. Revenue

Total revenue consists of the following:

Gold revenue
Copper revenue
Molybdenum revenue
Total revenue

2020
1,373,124
178,597
136,954
1,688,675

2019
1,021,690
140,866
212,772
1,375,328

The sales quantity and sales pricing adjustments of gold and copper, including the impact of hedge
contracts, are as follows:

Gold
Quantity adjustment
Provisional pricing adjustment
Copper
Quantity adjustment
Provisional pricing adjustment
Total quantity and price adjustment included in revenue $

2020

(1,420)
12,946

(2,798)
12,184
20,913

2019

(219)
3,570

(1,957)
7,694
9,088

CENTERRA GOLD INC. ANNUAL REPORT 202098Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

16. Production costs

December 31, 2020

Direct mining and processing costs
Royalties, levies and taxes
Changes in inventories
Inventory impairment
Feed material purchases
By-product sales (a)
Total production costs

December 31, 2019

Direct mining and processing costs
Royalties, levies and taxes
Changes in inventories
Inventory impairment
Feed material purchases
By-product sales (a)
Total production costs

Gold
283,136 $
21,891
52,820
-
-
(13,026)
344,821 $

Gold
393,820 $
6,707
(29,894)
-
-
(7,535)
363,098 $

Copper Molybdenum Total

91,456 $
5,851
2,110
-
-
(4,706)
94,711 $

41,004 $
840
(3,622)
13,587
103,265
(3,982)
151,092 $

Copper Molybdenum
44,762 $
902
(687)
8,351
170,312
(8,283)
215,357 $

99,410 $
4,656
(3,317)
-
-
(2,572)
98,177 $

415,596
28,582
51,308
13,587
103,265
(21,714)
590,624

Total
537,992
12,265
(33,898)
8,351
170,312
(18,390)
676,632

(a) Includes silver, rhenium and sulfuric acid sales.

17. Standby costs

As a result of the temporary suspension of mining activities at the Kumtor Gold Mine following
the Lysii waste rock dump accident that occurred in December 2019, the Company classified $3.2
million of production costs and $3.5 million of depreciation, depletion and amortization in the first
quarter of 2020 as standby costs (in the fourth quarter of 2019 - $4.2 million of production costs
and $4.9 million of depreciation, depletion and amortization).

18. Corporate administration

Corporate administration
Share-based compensation
Total corporate administration

2020
27,203
18,471
45,674

2019
26,496
18,769
45,265

CENTERRA GOLD INC. ANNUAL REPORT 202099Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

19. Impairment

Goodwill

In October 2016, the Mount Milligan CGU was allocated goodwill of $16.1 million as a result of
the Company’s acquisition of Thompson Creek Metals Company. In accordance with its
accounting policy, the Company reviews and tests the carrying amounts of goodwill on September
1 of each year and when an indicator of impairment is considered to exist.

In the third quarter of 2019, the carrying value of Mount Milligan’s CGU net assets was written
down to its net realizable value, which included the write-off of the entire goodwill amount.

Impairment testing

As part of the Company’s annual budget and life of mine process in 2019, the Company identified
in the third quarter of 2019 that recent cost escalation relating to short and long-term water sourcing
requirements, higher maintenance costs, higher-than-expected labour requirements, and lower mill
throughput estimates, among other things, will continue in the short to medium term. This
combined with lower-than-expected long term gold recoveries and the expectation that Mount
Milligan’s mineral reserves and resources would be materially reduced resulted in a trigger for an
impairment test on Mount Milligan’s long-lived assets.

The impairment test was performed effective September 1, 2019, and used the Fair Value Less
Costs of Disposal (“FVLCD”) methodology for all long-lived assets. The test concluded that the
recoverable amount of the Mount Milligan CGU and higher cost profile was lower than its carrying
value as at September 1, 2019. As a result, the Company recorded an impairment charge of $230.5
million in the Statement of Earnings, including the write-down of goodwill of $16.1 million and
long-lived assets of $214.4 million.

Updated NI 43-101 Technical Report

On March 26, 2020, the Company announced the results of the updated NI 43-101 technical report
on the Mount Milligan Mine as at December 31, 2019. This resulted in a material reduction in
reserves and resources compared to the reserves and resources statement as at December 31, 2018.
The decrease in Mount Milligan’s reserves was considered to be a triggering event for impairment
testing as at December 31, 2019, however no further impairment charge or reversal of impairment
was identified as a result of the test.

The impairment test performed effective September 1, 2020 using the FVLCD methodology for
all long-lived assets concluded no impairment or reversal of impairment was required.

CENTERRA GOLD INC. ANNUAL REPORT 2020100Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

20. Other operating expenses

Reclamation expense (a)
Social development contributions (b)
Selling and marketing (c)
Nature Development Fund contributions
Direct costs related to COVID-19 (d)
Provision for Kyrgyz Republic Settlement
Other
Total other operating expenses
(a)

2020
53,381
15,582
10,090
3,700
3,006
-
1,336
87,095

2019
34,544
3,009
10,613
5,700
-
10,000
5,247
69,113

(b)

(c)

(d)

Relates to the provision for reclamation at closed sites due to changes in the interest rate used to
discount the reclamation costs and changes in the foreign currency exchange rates (note 13).
The Company made a $9.0 million contribution to the Regional Development Fund in the first
quarter of 2020 for regional development in the Kyrgyz Republic.
Primarily includes freight charges associated with the Mount Milligan mine and Langeloth
processing facility.
Primarily includes incremental costs such as medical services and cleaning costs, incurred to
mitigate the spread of COVID-19. For the year ended December 31, 2020, production costs include
$1.7 million of compensation expense for employees who were unable to return to site during the
COVID-19 pandemic.

21. Finance costs

Commitment and transaction fees
Interest expense
Accretion of provision for reclamation
Deferred financing costs amortized
Lease financing expense
Other financing fees
Total finance costs

22. Taxes

a. Revenue based taxes - Kumtor

2020
5,320
3,613
3,253
1,467
921
367
14,941

2019
1,886
5,748
4,385
755
1,189
2,374
16,337

Kumtor pays taxes on revenue generated from the Kumtor Mine, at a rate of 13% of gross revenue,
with an additional contribution of 1% of gross revenue payable to the Issyk-Kul Oblast
Development Fund.

CENTERRA GOLD INC. ANNUAL REPORT 2020101Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

b. Income tax expense (recovery)

Current tax
Deferred tax
Total income tax expense (recovery)

2020
6,228
1,481
7,709

2019
3,719
(10,790)
(7,071)

Income tax expense (recovery) differs from the amount that would arise from applying the
Canadian federal and provincial statutory income tax rates to earnings before income tax as
follows:

Earnings (loss) before income tax
Income tax expense calculated at the combined Canadian
and provincial statutory income tax rate of 26.5%
Increase (decrease) due to:
Difference between Canadian and foreign tax rates
Change in unrecognized deductible temporary differences
Impact of foreign currency movements
Non-deductible costs
British Columbia mining tax
Impact of tax legislation/rate change
Other
Income tax expense (recovery)

c. Deferred income tax

2020
416,247

110,305

(121,540)
6,126
11,076
673
2,323
(1,279)
25
7,709

2019
(100,584)

(26,655)

(66,168)
76,685
359
6,777
1,840
-
91
(7,071)

The following are significant components of deferred income tax assets and liabilities:

Deferred income tax assets
Provisions - asset retirement obligations and other
Tax losses
Total deferred tax assets
Deferred income tax liabilities
Property, plant and equipment
Investments in subsidiaries
Assets held-for-sale
Total deferred tax liabilities
Net deferred tax liabilities

2020

14,573
50,043
64,616

85,689
10,000
8,400
104,089
39,473

$
$

2019

12,957
21,215
34,172

67,905
-
-
67,905
33,733

CENTERRA GOLD INC. ANNUAL REPORT 2020102Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

The Company has not recognized deferred tax assets in respect to the following deductible
temporary differences:

Non-capital losses (expiring 2028 – 2040)
Net operating losses restricted due to changes in ownership
Deductible temporary differences (a)
Capital losses
Total deductible temporary differences

2019
464,895
75,909
849,469
138,282
1,528,555
a) The deductible temporary differences consist of $758,530 for Canada, $137,200 for the U.S and

2020
632,128
75,721
921,457
9,480
1,638,786

$25,727 for Turkey.

The Company also has not recognized deferred tax assets with respect to British Columbia mining
tax for deductible temporary differences of $817.2 million (December 31, 2019 - $844.5 million)
or mining tax credits of $28.7 million (December 31, 2019 - $23.0 million).

23. Shareholders' equity

a. Share Capital

Centerra is authorized to issue an unlimited number of common shares, class A non-voting shares
and preference shares with no par value.

Balance at January 1, 2019
Shares issued on exercise of stock options
Shares issued on redemption of restricted share units
Shares issued under the employee share purchase plan
Balance at December 31, 2019
Shares issued on exercise of stock options
Shares issued on redemption of restricted share units
Shares issued under the employee share purchase plan
Balance at December 31, 2020

Number of
common shares

Amount

291,999,949 $
1,505,768
14,849
169,890
293,690,456 $
1,490,465
126,820
520,165
295,827,906 $

949,328
9,960
101
1,015
960,404
10,641
1,096
2,981
975,122

CENTERRA GOLD INC. ANNUAL REPORT 2020103Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

b. Earnings (loss) per share

Basic and diluted earnings per share computation:

Net earnings (loss)
Basic weighted average number of common shares

Dilutive impact of stock options
Dilutive impact related to the RSU plan

Diluted weighted average number of common shares
Basic earnings (loss) per share
Diluted earnings (loss) per share

2020
408,538 $
294,718
1,500
1,193
297,411

1.39 $
1.37 $

2019
(93,513)
292,951
1,104
-
294,055
(0.32)
(0.32)

$
$

For the years ended December 31, 2020 and 2019, certain potentially anti-dilutive securities,
including stock options were excluded from the calculation of diluted earnings per share due to
the exercise prices being greater than the average market price of the Company’s common shares
for the period.

Anti-dilutive securities, excluded from the calculation, are summarized below:

Stock options
Restricted share units

c. Share-based compensation

2020
583
-
583

2019
1,699
1,106
2,805

The impact of share-based compensation as of and for the years ended December 31, 2020 and
2019 is summarized as follows:

2020

2019

Expense

Liability

Expense

Liability

2,078 $

16,883
1,632
1,380
21,973 $

- $

22,316
3,780
2,088
28,184 $

1,940 $

12,302
1,166
4,497
19,905 $

-
14,444
2,108
9,413
25,965

Stock options
Performance share units
Deferred share units
Restricted share units

Stock options

Under the Company’s Stock Option plan, options to purchase common shares of the Company
may be granted to officers and employees. The exercise price of options granted under this plan is
not less than the weighted average common share price for the five trading days prior to the date

CENTERRA GOLD INC. ANNUAL REPORT 2020104Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

of grant. Options granted vest over three years and expire after eight years from the date granted.
The Black-Scholes model is used to estimate the fair value of stock options granted.

Centerra’s stock options transactions during the year ended December 31, 2020 and 2019 were as
follows:

2020

2019

Number of
Options

Weighted
Average
Exercise Price
(Cdn$)

Number of
Options
6,090,810 $
1,309,918
(1,522,480)
(1,505,768)

Balance, January 1
Granted
Forfeited
Exercised (a)
Balance, December 31
(a) The weighted average market price of shares issued for options exercised in the year ended December

4,372,480 $
750,642
(297,258)
(1,490,465)

7.31
12.41
(7.24)
(7.03)
7.97

7.56
6.85
(7.95)
(6.06)
7.31

3,335,399 $

4,372,480 $

31, 2020 was Cdn$15.00 (December 31, 2019 - Cdn$8.93).

The expiry dates on the options outstanding as at December 31, 2020, range between 2021 and
2028. There were 1,377,696 options vested at December 31, 2020 (December 31, 2019 -2,211,986
units).

Performance Share Unit plan

Centerra’s PSU plan transactions during the years ended December 31, 2020 and 2019 were as
follows:

Number of units
Balance, January 1
Granted
Exercised
Cancelled
Balance, December 31

2020
1,918,784
695,048
(538,752)
(212,813)
1,862,267

2019
2,008,200
1,050,801
(1,081,787)
(58,430)
1,918,784

As at December 31, 2020, there were 748,579 vested units (December 31, 2019 - 529,477 units)
for a total liability of $13.6 million (December 31, 2019 - $10.4 million).

CENTERRA GOLD INC. ANNUAL REPORT 2020105Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Deferred Share Unit plan

Centerra’s DSU plan transactions during the years ended December 31, 2020 and 2019 were as
follows:

Number of units
Balance, January 1
Granted
Exercised
Balance, December 31

2020
276,844
42,902
-
319,746

2019
225,861
50,983
-
276,844

Given that DSUs vest immediately upon granting, all DSUs outstanding as at December 31, 2020
are vested with a liability of $3.8 million (December 31, 2019 - $2.1 million).

Restricted Share Unit plan

Centerra’s RSU plan transactions during the years ended December 31, 2020 and 2019 were as
follows:

Number of units
Balance, January 1
Granted
Redeemed
Balance, December 31

2020
1,244,943
351,194
(644,666)
951,471

2019
753,599
627,104
(135,760)
1,244,943

As at December 31, 2020, the number of units outstanding had a related liability of $2.1 million
(December 31, 2019 - $9.4 million).

d. Dividends

Dividends are declared and paid in Canadian dollars. The details of the dividends declared for the
year ended December 31, 2020 are as follows:

Date Declared

Record Date

Payment Date

March 25, 2020
April 30, 2020
July 30, 2020

April 7, 2020
May 21, 2020

April 22, 2020
June 4, 2020

August 14, 2020 August 28, 2020
November 3, 2020 November 20, 2020 December 4, 2020

Dividend per
Share (Cdn$)
0.04
0.04
0.05
0.05

Amount

$ 8,285
$ 8,708
$ 11,276
$ 11,488
$ 39,757

CENTERRA GOLD INC. ANNUAL REPORT 2020106Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Subsequent to year end, on February 23, 2021, the Board approved a quarterly dividend of
Cdn$0.05 per common share, payable on April 6, 2021 to shareholders of record on March 16,
2021.

24. Supplemental disclosure

a. Changes in working capital

Decrease (increase) in amounts receivable
Decrease (increase) in inventory - ore and metals
Increase in inventory - supplies
Decrease in prepaid expenses
(Decrease) increase in trade creditors and accruals
Increase (decrease) in revenue-based tax payable
(Decrease) increase in other taxes payable
Changes in working capital

2020
46,694
56,049
(2,978)
4,835
(5,832)
4,330
(25,739)
77,359

b. Other adjustments included in cash flow from operations

Gain on marketable securities
Loss on disposal of equipment
Settlement of derivatives
Inventory impairment
Impairment on miscellaneous properties (note 9)
Income tax expense (recovery)
Income tax refund (paid)
Kyrgyz Republic settlement payment
Total other adjustments

2020
(6,076) $
3,163
4,484
13,588
7,389
7,709
18,490
(8,000)
40,747 $

2019
(35,835)
(49,103)
(18,810)
1,341
38,125
(210)
178
(64,314)

2019
(482)
1,450
(378)
8,352
-
(7,071)
(4,090)
(52,600)
(54,819)

CENTERRA GOLD INC. ANNUAL REPORT 2020107Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

c. Changes in liabilities arising from financing activities

Balance at January 1, 2019
Changes due to:
Additions
Repayments
Amortization of deferred financing costs
Interest expense
Interest paid
Other (b)

Debt

Lease
obligations (a)

Interest
payable

184,266 $

25,953 $

593

302,804
(417,987)
924
-
-
-
70,007 $

11,119
(16,962)
-
1,189
-
1,340
22,639 $

-
-
-
5,748
(7,260)
991
72

Balance at December 31, 2019
Changes due to:
Additions
Repayments
Amortization of deferred financing costs
Interest expense
Interest paid
Other (b)

-
-
-
3,613
(3,685)
-
-
(a) Current portion of lease obligations included in other current liabilities (note 8). Long-term portion

250,000
(327,472)
7,465
-
-
-
- $

1,196
(6,037)
-
915
-
202
18,915 $

Balance at December 31, 2020

of lease obligations included in other liabilities (note 10).

(b) Includes foreign exchange revaluation and amounts reclassed to liabilities held-for-sale (note 5).

25. Commitments and contingencies

Commitments

a. Contracts

As at December 31, 2020, the Company has entered into contracts to purchase capital equipment
and operational supplies totalling $55.9 million (Kumtor - $51.4 million, Öksüt - $3.5 million, and
Mount Milligan - $1.0 million).

b. Molybdenum purchases

In the normal course of operations, the Company enters into agreements for the purchase of
molybdenum. As of December 31, 2020, the Company had commitments to purchase
approximately 10.9 million pounds of molybdenum as unroasted molybdenum concentrate
primarily priced at the time of purchase at a set discount to the market price for roasted
molybdenum concentrate.

CENTERRA GOLD INC. ANNUAL REPORT 2020108Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

c. Regional Social Fund Contributions

In view of, among other things, the urgent need for regional development in the Kyrgyz Republic,
Kumtor Gold Company determined that additional contributions to the previously established
Kyrgyz Republic Social Partnership for the Regional Fund were appropriate. Accordingly, it made
a further $9 million contribution to the Regional Fund in March 2020 and intends to make further
contributions of $2.2 million each quarter the mine operates normally, up to a total of $22.0
million. No subsequent contributions were made since March 2020.

Contingencies

Various legal, tax and environmental matters are outstanding from time to time due to the nature
of the Company’s operations. While the final outcome with respect to actions outstanding or
pending at December 31, 2020 cannot be predicted with certainty, it is management’s opinion that
it is more likely than not that these actions will not result in the outflow of resources to settle the
obligation; therefore no amounts have been accrued.

Canada

Mount Milligan Mine

As previously disclosed, in the first quarter of 2020, the Company received a notice of civil claim
from H.R.S. Resources Corp. (“H.R.S.”), the holder of a 2% production royalty at Mount Milligan.
H.R.S. claims that since November 2016 (when the royalty became payable) the Company has
incorrectly calculated amounts payable under the production royalty agreement and has therefore
underpaid amounts owing to H.R.S. The Company disputes the claim and believes it has correctly
calculated the royalty payments in accordance with the agreement. The Company believes that the
potential exposure in relation to this claim, over what the Company has accrued, is not material.

26. Related party transactions

a. Kyrgyzaltyn

The sole customer of gold doré from the Kumtor Mine, Kyrgyzaltyn, is a shareholder of the
Company and is a state-owned entity of the Kyrgyz Republic. Gold produced by the Kumtor Mine
is purchased at the mine site by Kyrgyzaltyn, for processing at its refinery in the Kyrgyz Republic
pursuant to the Restated Gold and Silver Sales Agreement (“Sales Agreement”) between Kumtor
Gold Company, Kyrgyzaltyn and the Government of the Kyrgyz Republic. Amounts receivable
from Kyrgyzaltyn arise from the sale of gold to Kyrgyzaltyn. Kyrgyzaltyn is required to pay for
gold delivered within 12 days from the date of shipment. Default interest is accrued on any unpaid
balance after the permitted payment period of 12 days. The obligations of Kyrgyzaltyn are partially

CENTERRA GOLD INC. ANNUAL REPORT 2020109Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

secured by a pledge of 2,850,000 shares of the Company owned by Kyrgyzaltyn. Revenues from
the Kumtor Mine are subject to a management fee of $1.00 per ounce based on sales volumes,
payable to Kyrgyzaltyn.

The breakdown of the sales transactions and expenses with Kyrgyzaltyn, and the management fees
paid and accrued by Kumtor to Kyrgyzaltyn according to the terms of the Sales Agreement are as
follows:

2020

2019

995,111
(6,164)
988,947

836,689
(5,141)
831,548

Revenue
Gross gold and silver sales to Kyrgyzaltyn (a)
Deduct: refinery and financing charges
Net revenue received from Kyrgyzaltyn
Expenses
Contracting services provided by Kyrgyzaltyn (b)
Management fees payable to Kyrgyzaltyn
Expenses paid to Kyrgyzaltyn

1,146
600
1,746
(a) As at December 31, 2020, there is no amount receivable (December 31, 2019 - $0.1 million) from

658
569
1,227

Kyrgyzaltyn from gold sales.

(b) As at December 31, 2020, there is $0.9 million (December 31, 2019 - $1.2 million) payable to

Kyrgyzaltyn.

b. Transactions with directors and key management

The Company transacts with key management personnel and directors, who have authority and
responsibility to plan, direct and control the activities of the Company, for services rendered in
their capacity as directors and employees.

Key management personnel are defined as the executive officers of the Company including the
President and Chief Executive Officer, Vice President and Chief Financial Officer, Vice President
and Chief Operating Officer, Vice President and General Counsel, Vice President Business
Development & Exploration, and Vice President and Chief Human Resources Officer.

During the years ended December 31, 2020 and 2019, remuneration to directors and key
management personnel were as follows:

Compensation of directors

Fees earned and other compensation
Share-based compensation
Total compensation

2020
820
3,011
3,831

2019
1,259
2,465
3,724

CENTERRA GOLD INC. ANNUAL REPORT 2020110Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Compensation of key management personnel

Salaries and benefits
Share-based compensation
Total compensation

2020
6,354
9,264
15,618

2019
4,311
7,756
12,067

In 2020, the Company incurred an amount of $94 for services rendered by a family member of
one of Centerra’s key management personnel. This person was acting as a consultant.

27. Capital management

The Company’s primary objective with respect to its capital management is to provide returns for
shareholders by ensuring that it has sufficient cash resources to maintain its ongoing operations,
pursue and support growth opportunities, continue the development and exploration of its mineral
properties and satisfy debt repayment requirements and other obligations. The Company’s capital
structure consists of debt, lease obligations and shareholders’ equity.

The Company manages its capital structure and makes adjustments in light of changes in its
economic and operating environment and the risk characteristics of the Company’s assets. For
effective capital management, the Company implemented planning, budgeting and forecasting
processes to help determine the funds required to ensure the Company has the appropriate liquidity
to meet its operating and growth objectives. The Company ensures that there is access to sufficient
funds to meet its short-term business, operating and financing requirements, taking into account
its anticipated cash flows from operations and its holdings of cash and cash equivalents.

28. Financial instruments

The Company’s financial instruments include cash and cash equivalents, short-term investments,
restricted cash and short-term investments, amounts receivable (including embedded derivatives),
derivative instruments, long-term receivables, tax receivables, accounts payable and accrued
liabilities (including amounts due to Royal Gold), debt, and revenue-based taxes payable.

a. Derivative Instruments

The Company uses derivative instruments as part of its risk management program to mitigate
exposures to various market risks including commodity prices, foreign exchange rates and the
diesel fuel prices. As of December 31, 2020, the Company had five counterparties (December 31,
2019 - five) to its derivative positions. The Company’s derivative counterparties are also syndicate
members of the Company’s corporate facility, mitigating credit risk, and on an ongoing basis, the
Company monitors its derivative position exposures.

CENTERRA GOLD INC. ANNUAL REPORT 2020111Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Hedges

The derivative instruments outstanding as at December 31, 2020 that are accounted for as hedges
are summarized below:

Instrument

Unit

2021

2022

Type Position (a)

Average Strike Price

Total

Fuel hedge contracts

Brent Crude Oil zero-cost collars
Brent Crude Oil swap contracts
ULSD zero-cost collars
ULSD swap contracts
Foreign exchange contracts

Barrels $40/$46
Barrels $42
Barrels $53/$59
Barrels $55

$44/$51
$47
$54/$64
$59

Fixed
Fixed
Fixed
Fixed

176,678
251,335
184,470
302,505

USD/Cdn$ zero cost-collars
USD/Cdn$ forward contracts

Cdn$
Cdn$

$1.33/$1.40 $1.32/$1.38 Fixed
Fixed
$1.32
$1.38

366,800,000
148,000,000

Strategic copper contracts
Copper forward contracts

Pounds $3.37

N/A

Fixed

59,800,000

(a) Total amounts expressed in the units identified.

Fuel Hedge Contracts

The Company applies hedge accounting to derivative instruments which hedge a portion of its
estimated future diesel fuel purchases at its Kumtor and Mount Milligan operations to manage the
risk associated with changes in diesel fuel prices to the cost of operations at the Kumtor and Mount
Milligan mines. The fuel hedge contracts are expected to settle by the end of 2022.

Foreign Exchange Contracts

The Company also applies hedge accounting to the foreign exchange contracts it entered into after
April 1, 2020 to hedge a portion of its future Canadian denominated expenditures. The foreign
exchange contracts are expected to settle by the end of 2022.

Strategic Copper Contracts

In the fourth quarter of 2020, the Company commenced a copper hedging program, entering into
forward contracts to secure the copper price for a majority of Mount Milligan’s copper sales until
the end of 2021.

CENTERRA GOLD INC. ANNUAL REPORT 2020112Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

The table below includes the effective portion of changes in the fair value of these derivatives
recognized in OCI and the amounts reclassed to the Statement of Earnings.

Effective portion of changes in fair value
Reclassified to Statement of Earnings
Gain (loss) included in OCI (a)

(a) Includes tax of $4.3 million (December 31, 2019 - $nil).

Non-Hedges

2020
9,915 $
1,598
11,513 $

2019
363
(758)
(395)

All derivative instruments not designated in a hedge relationship are classified as financial
instruments at fair value through profit or loss, including the gold and copper forward contracts
for gold ounces and copper pounds payable to Royal Gold (the “RGLD deliverables”) and foreign
exchange contracts that were entered into before April 1, 2020. Changes in fair value of non-hedge
derivatives at each reporting date are included in the Statement of Earnings as non-hedge derivative
gains or losses, with the exception of spot and forward contracts associated with the RGLD
deliverables, which are included in revenue. As at December 31, 2020, all foreign exchange
contracts that were entered into before April 1, 2020 were settled.

For the RGLD deliverables, the Company delivers physical gold and copper warrants to Royal
Gold based on a percentage of the gold ounces and copper pounds included in each final sale of
concentrate to third party customers, including offtakers and traders (“MTM Customers”) within
two days of receiving a final payment. If the final payment from a MTM Customer is not received
within five months of the provisional payment date, then the Company will deliver an estimated
amount of gold ounces and copper warrants based on information that is available from the MTM
Customer at that time.

The Company receives payment from MTM Customers in cash, thus requiring the purchase of
physical gold and copper warrants in order to satisfy the obligation to pay Royal Gold. In order to
hedge its gold and copper price risk that arises when physical purchase and concentrate sales
pricing periods do not match, the Company has entered into certain forward gold and copper
purchase and sales contracts pursuant to which it purchases gold and copper at an average price
during a quotational period and sells gold and copper at a spot price. These contracts are treated as
derivatives, not designated as hedging instruments. The Company records its forward commodity
contracts at fair value using a market approach based on observable quoted market prices.

CENTERRA GOLD INC. ANNUAL REPORT 2020113Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

The non-hedge derivative instruments outstanding as at December 31, 2020 are expected to settle
by May 2021. The non-hedge derivative instruments outstanding as at December 31, 2020 are
summarized as follows:

Instrument

Unit

RGLD deliverables

Average
Strike Price

Gold forward contracts
Copper forward contracts

Ounces
Pounds
(a) Total amounts expressed in the units identified.

N/A
N/A

Type

Float
Float

Total
Position (a)

17,570
4,200,000

The following table is a sensitivity analysis of what the fair value gain (loss) would be due to an
increase or a decrease of 10% in the price of the derivative instrument:

RGLD deliverables
Strategic copper contracts
Fuel hedge contracts
Foreign exchange contracts

b. Provisionally-priced contracts

Fair value - December
31, 2020
1,411
(9,480)
5,873
20,617

$
$
$
$

Increase of
10%
5,311
(30,009)
3,445
57,914

Decrease of
10%
(2,863)
12,611
(4,286)
(9,646)

$
$
$
$

Certain gold-copper concentrate sales contracts provide for provisional pricing. These sales
contain an embedded derivative related to the provisional pricing mechanism and are marked to
market at the end of each reporting period. As at December 31, 2020 the Company’s trade
receivables with embedded derivatives had a fair value of $12.4 million (December 31, 2019 -
$33.5 million), representing 13.8 million pounds of copper and 25,672 ounces of gold (December
31, 2019 - 13.3 million pounds of copper and 33,161 ounces of gold).

c. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. All financial instruments
for which fair value is measured or disclosed in the consolidated financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest-level input
that is significant to the fair value measurement as a whole:

Level 1: observable inputs such as quoted prices in active markets;

Level 2: inputs, other than the quoted market prices in active markets, which are observable,
either directly and/or indirectly; and

CENTERRA GOLD INC. ANNUAL REPORT 2020114Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Level 3: unobservable inputs for the asset or liability in which little or no market data exists,
which therefore require an entity to develop its own assumptions.

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level
3 inputs.

For items that are recognized at fair value on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by reassessing their classification at the
end of each reporting period. At December 31, 2020, there were no financial assets and liabilities
measured and recognized at fair value on a non-recurring basis.

During the year ended December 31, 2020, there were no transfers between Level 1 and Level 2
fair value measurements, and no transfers into or out of Level 3 fair value measurements.

The fair values of cash, amounts receivable that are not provisionally priced, restricted cash, and
accounts payable and accrued liabilities approximate their carrying amounts due to the short term
to maturity of these financial instruments.

The levels in the fair value hierarchy into which the Company’s financial assets and liabilities that
are measured and recognized on the Consolidated Statement of Financial Position at fair value on
a recurring basis were categorized as follows:

December 31, 2020

Financial assets
Provisionally-priced receivables
Derivative financial instruments

Financial liabilities
Derivative financial instruments
Share-based compensation liability

Level 1

Level 2

Level 3

-
-
- $

12,415
28,497
40,912 $

- $

28,184
28,184

16,494 $

-
16,494

Total fair
value

-
-
- $

- $
-
- $

12,415
28,497
40,912

16,494
28,184
44,678

CENTERRA GOLD INC. ANNUAL REPORT 2020115

Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

December 31, 2019

Financial assets
Provisionally-priced receivables
Derivative financial instruments

Financial liabilities
Debt
Derivative financial instruments
Share-based compensation liability

Valuation Techniques

Cash and cash equivalents

Level 1

Level 2

Level 3

Total fair
value

- $
-
- $

33,489 $
1,526
35,015 $

70,007 $

-
25,965
95,972

- $

183
-
183

- $
-
- $

- $
-
-
- $

33,489
1,526
35,015

70,007
183
25,965
96,155

The fair value of our cash equivalents is classified within Level 1 of the fair value hierarchy
because they are valued using quoted market prices in active markets.

Provisionally-priced receivables

The fair value of receivables arising from copper and gold sales contracts that contain provisional
pricing mechanisms are determined using the appropriate quoted forward price from the exchange
that is the principal active market for the particular metal. As such, these receivables, which meet
the definition of an embedded derivative are classified within Level 2 of the fair value hierarchy.

Derivative financial instruments

The fair value of gold, copper, diesel and currency derivative instruments, classified within Level
2, are determined using derivative pricing models that utilize a variety of inputs that are a
combination of quoted prices and market-corroborated inputs. The fair value of the Company’s
derivative contracts includes an adjustment for credit risk.

Other assets and liabilities (including debt)

The recorded value of restricted cash and short-term investments, amounts receivable, taxes
receivable, long-term receivables, accounts payable and accrued liabilities, lease obligation and
debt approximate their relative fair values. In accordance with IFRS 9, Langeloth’s receivables are
provided for based on lifetime expected credit losses, which are established by considering
historical credit loss experience with each customer.

CENTERRA GOLD INC. ANNUAL REPORT 2020116

Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

29. Financial risk exposure and risk management

The Company is exposed in varying degrees to certain financial risks by virtue of its activities.
The overall financial risk management program focuses on preservation of capital and protecting
current and future Company assets and cash flows by reducing exposure to risks posed by the
uncertainties and volatilities of financial markets. We manage our financial risks in accordance
with our financial risk management policy overseen by the Company’s Audit Committee.

The Company is exposed to the following types of risk and manages them as follows:

a. Currency risk

The Company’s operations are located in various geographic locations, exposing the Company to
potential foreign exchange risk in its financial position and cash flows. As the Company operates
in an international environment, some of the Company’s financial instruments and transactions are
denominated in currencies other than the U.S. dollar, including the Canadian dollar, Kyrgyz Som,
European Euro and Turkish Lira. The operating results and financial position of the Company are
reported in U.S. dollars in the Company’s consolidated financial statements. The fluctuation of the
U.S. dollar in relation to other currencies will consequently have an impact upon the profitability
of the Company and may also affect the value of the Company’s assets.

The Company utilizes hedging strategies to minimize our exposure to the Canadian dollar. Based
on Canadian dollar denominated liabilities as at December 31, 2020 and net of the impact of
hedging strategies, a 10% strengthening of the U.S. dollar against the Canadian dollar would have
resulted in a $2.2 million gain, while a 10% weakening of the U.S. dollar against the Canadian
dollar would have resulted in a $0.5 million loss.

b. Interest rate risk

Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations
in interest rates. Financial assets and financial liabilities with variable interest rates expose the
Company to risk of changes in cash flows. The Company’s cash and cash equivalents include
highly liquid investments that earn interest at market rates. As at December 31, 2020, the majority
of the cash and current and non-current restricted cash and short-term investments were comprised
of interest-bearing assets. Based on amounts as at December 31, 2020, a 100-basis point change
in interest rates would result in a $5.5 million adjustment to interest income (December 31, 2019
- $0.7 million adjustment to interest income). The Company’s policy limits the investment of
excess funds to term deposits, certificates of deposits, commercial paper, treasury bills and
sovereign notes issued by government or governmental agencies with an “AA-” rating from
Standard & Poor (“S&P”) or greater, and banker’s acceptances issued by financial institutions and
corporations with an “A-” rating from S&P or greater.

CENTERRA GOLD INC. ANNUAL REPORT 2020117Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Additionally, no amounts were drawn from the Company’s debt as at December 31, 2020 and as
a result, no impact to the changes in interest rates.

c. Credit risk

Credit risk is the risk of a financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligation. Credit risk arises principally from the
Company’s receivables from customers and on cash and cash equivalents and restricted cash.

The Company’s exposure to credit risk, in respect of the Company’s receivables, is influenced
mainly by the individual characteristics of each customer. Kyrgyzaltyn is the sole customer of gold
doré from the Kumtor mine and is a shareholder of Centerra. Gold-copper concentrate from Mount
Milligan is sold to multi-national off-takers through transactions with limited credit risk.

To partially mitigate exposure to potential credit risk related to Kumtor sales, the Company has an
agreement in place whereby Kyrgyzaltyn has pledged 2,850,000 Centerra common shares it owns
as security against unsettled gold shipments, in the event of default on payment (note 26). Based
on movements in Centerra’s share price and the value of individual or unsettled gold shipments
over the course of the year, the maximum exposure during the year, reflecting the shortfall in the
value of the security as compared to the value of any unsettled shipments, was approximately $70
million (December 31, 2019 - $49.2 million).

The Company manages counterparty risk through maintaining diversification limits for its eligible
counterparties. Eligible counterparties are eligible provided they meet the minimum credit rating
and profile requirements, including but not limited to market capitalization and experience in
capital markets. The Company manages its cash holdings amongst these eligible counterparties
based on assigned limits to these groups and evaluates the cash balances on a monthly basis to
ensure compliance within these limits.

d. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
fall due. The Company finances its operations through a combination of operating cash flows,
short and long-term debt and, from to time, through the issuance of equity. The Company primarily
uses funds generated from operating activities to fund operational expenses, sustaining and
development capital spending, and interest and principal payments on its loans and borrowings.
The Company continuously monitors and reviews its actual and forecasted cash flows and manages
liquidity risk by maintaining adequate cash and cash equivalents, by utilizing debt and by
monitoring developments in the capital markets.

CENTERRA GOLD INC. ANNUAL REPORT 2020118Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

As at December 31, 2020, the Company has cash of $545.2 million compared to $42.7 million at
December 31, 2019. In addition, the Company has $400 million in undrawn borrowing facilities
available at December 31, 2020.

The Company believes its cash on hand, available cash from the Company’s existing credit
facilities, and cash flow from the Company’s operations will be sufficient to fund its anticipated
operating cash requirements and development expenditures through at least the end of 2021.

A maturity analysis of the Company’s financial liabilities, contractual obligations, other fixed
operating and capital commitments, excluding asset retirement obligations, is set out below:

Year ended December 31, 2020

(Millions of U.S. Dollars)
Accounts payable and accrued
liabilities
Reclamation trust fund
Capital equipment
Operational supplies
Undiscounted lease liabilities
Derivative liabilities
Total contractual obligations

Year ended December 31, 2019

(Millions of U.S. Dollars)
Accounts payable and accrued
liabilities
Debt
Reclamation trust fund
Capital equipment
Operational supplies
Project development
Undiscounted lease liabilities
Derivative liabilities
Total contractual obligations

e. Commodity price risk

Total

Due in
<1 Year 1-3 Years 4-5 Years 5 Years

Due in Due after

Due in

$ 232.7 $ 232.7 $

22.0
30.3
25.6
20.5
11.0
$ 342.1

6.0
29.6
25.6
5.4
8.2
$ 307.5

16.0
0.7
-
9.7
2.8
$ 29.2

-
-
-
5.4
-
5.4

-
-
-
-
-
-

Total

Due in
Due in Due after
<1 Year 1-3 Years 4-5 Years 5 Years

Due in

238.3 $

- $

77.5
28.1
0.4
26.6
13.6
31.7
0.2
416.4 $

-
6.0
0.4
26.6
13.6
8.4
0.2
293.5 $

-
18.0
-
-
-
19.3
-
37.3 $

77.5
4.1
-
-
-
4.0
-
85.6 $

-
-
-
-
-
-
-
-

The profitability of the Company’s operations and mineral resource properties relates primarily to
the market price and outlook of gold and copper. Changes in the price of certain raw materials can
also significantly affect the Company’s cash flows.

CENTERRA GOLD INC. ANNUAL REPORT 2020119Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Gold and copper prices historically have fluctuated widely and are affected by numerous factors
outside of the Company's control, including but not limited to, industrial, residential and retail
demand, forward sales by producers and speculators, levels of worldwide production, short-term
changes in supply and demand due to speculative or hedging activities, macro-economic variables,
geopolitical events and certain other factors related specifically to gold (including central bank
reserves management).

To the extent that the price of gold and copper increase over time, the fair value of the Company’s
mineral assets increase, and cash flows will improve; conversely, declines in the price of gold will
reduce the fair value of mineral assets and cash flows. A protracted period of depressed prices
could impair the Company’s operations and development opportunities, and significantly erode
shareholder value. To the extent there are adverse changes to the price of certain raw materials
(e.g. diesel fuel), the Company’s profitability and cash flows may be impacted. The Company
enters into hedge contracts to mitigate price risk both for gold and copper price movements on the
Royal Gold stream, strategic copper contracts to secure the copper price for a majority of Mount
Milligan’s sales not subject to the Royal Gold stream, and fuel hedge contracts to mitigate
commodity price risk (see note 28).

Based on amounts as at December 31, 2020 and net of the impact of hedges in place, a 10%
movement (both increase and decrease) in gold prices would have an impact of $118 million
gain/loss on net earnings. Similarly, a 10% movement (both increase and decrease) in copper
prices would have an impact of $18.1 million gain/loss on net earnings.

30. Segmented information

In accordance with IFRS 8, Operating Segments, the Company’s operations are segmented into
three mine sites and one business unit. The remaining operating segments, including
development projects and Corporate, have been grouped into an “other” category and are not
reported on individually.

The three mine sites include the Kumtor Gold Mine, the Mount Milligan Mine and the Öksüt
Mine. The business unit consists of the Molybdenum segment, which include the operations of
the Langeloth processing facility and care and maintenance activities of the Endako and
Thompson Creek mines. The Corporate and other segment includes the head office located in
Toronto, the Greenstone Gold Property (ownership in the project was sold in January 2021), the
Kemess Project and other international exploration projects.

The following table reconciles segment operating profit to the consolidated operating profit in
the Statements of Earnings:

CENTERRA GOLD INC. ANNUAL REPORT 2020120l
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CENTERRA GOLD INC. ANNUAL REPORT 2020

122

Centerra Gold Inc.
Notes to the Consolidated Financial Statements
For the years ended 2020 and 2019
(Expressed in thousands of United States Dollars, except where otherwise indicated)

Geographical Information

The following table details the Company’s revenue by the location of its customers and
information about the Company’s non-current assets by location of the assets.

(Millions of U.S. Dollars)
Kyrgyz Republic
South Korea
Turkey
Japan
United States
India
China
Philippines
Canada
Netherlands
Other
Total

Customer Information

Revenue
Year ended December 31,
2019
827.5 $
181.0
-
100.4
174.3
-
63.4
-
2.6
22.9
3.2
1,375.3 $

2020
981.6 $
233.5
186.5
103.6
78.6
35.4
34.4
17.8
7.9
5.8
3.6
1,688.7 $

Non-current assets
As at December 31,

2020
611.0 $
-
221.7
-
81.7
-
-
-
841.0
-
7.8
1,763.2 $

2019
458.7
-
208.4
-
94.8
-
-
-
998.9
-
8.2
1,769.0

The following table presents sales to the top individual customers for the years ended December
31, 2020 and 2019. The following four customers represent 78% (2019 - 75%) of the Company’s
sales revenue:

Customer Region

1
2
3
4

Kyrgyz Republic
Turkey
Asia - Gold-Copper
Asia - Gold-Copper

2020
981,621
125,870
125,154
89,810
1,322,455

2019
827,538
-
90,504
118,224
1,036,266

CENTERRA GOLD INC. ANNUAL REPORT 2020123CCORPORATE
INFORMATION

DIRECTORS

MANAGEMENT 1

TRANSFER AGENT

AUDITORS

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

STOCK EXCHANGE
LISTING

Toronto Stock Exchange
Symbol: CG

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

Michael S. Parrett
Chair

Bruce V. Walter
Vice-Chair

Tengiz Bolturuk

Richard W. Connor

Dushen Kasenov

Maksat Kobonbaev

Jacques Perron

Scott G. Perry

Sheryl K. Pressler

Paul N. Wright

Susan L. Yurkovich

OFFICERS

Scott G. Perry

President and
Chief Executive Officer

Daniel R. Desjardins

Vice President and
Chief Operating Officer

Claudia D’Orazio

Vice President and
Chief Human Resources Officer

Darren J. Millman

Vice President and
Chief Financial Officer

Dennis C. Kwong

Vice President,

Business Development
and Exploration

Yousef Rehman

Vice President, General Counsel
and Corporate Secretary

Kevin D’Souza

Vice President, Security,

Sustainability and Environment

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

AST Trust Company (Canada)
P.O. Box 700
Station B
Montreal, QC
Canada H3B 3K3

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

Cam Duquette

Vice President, Health and Safety

José Nacif-Drah

Vice President,

Global Information Technology

John W. Pearson
Vice President, Investor Relations

Julie Robertson

Vice President,
Finance and Capital Projects

Malcolm Stallman

Vice President, Exploration

Cathy Taylor
Vice President, Risk and Insurance

Mark A. Wilson
President, Base Metals Division

Deon Badenhorst

President, Kumtor Gold Company

David A. Bickford

Vice President, Operations, Turkey

Chuck Hennessey

Vice President, Operations, BC

Tom Ondrejko

Vice President,

US Molybdenum Operations

Ron Hampton

Project Director, Kemess Mine

Greg Herbert
Site Manager, Endako Mine

Jim Kopp

Site Manager,
Thompson Creek Mine

Jason Nonack

Operations Manager,

1) As of March 16, 2021.

Langeloth Metallurgical Company

DELIVER ON RESULTS

Centerra Gold Inc. Annual Report 2020

Printed in Canada

CENTERRA GOLD INC.
Suite 1500
1 University Avenue
Toronto, Ontario
Canada M5J 2P1

T 416.204.1953
F 416.204.1954