06. Centerra Gold Inc. (NYSE:CGAU)
Number of Hedge Fund Holders: 17
Forward P/E Ratio as of September 29: 10.67
Centerra Gold Inc. (NYSE:CGAU)is a mining company that explores and develops gold, copper, and molybdenum properties primarily in North America and Turkey. Its key assets include the 100%-owned Mount Milligan gold-copper mine in British Columbia, Canada, and the Öksüt gold mine in Turkey. As of Q2 2024, 17 hedge funds have positions in the stock, a slight increase from 16 in the previous quarter, indicating growing interest among institutional investors.
In its Q2 2024 earnings report, Centerra Gold Inc. (NYSE:CGAU) posted robust financial results, demonstrating its solid operational performance and ability to generate cash flows. The company reported adjusted net earnings of $47 million or $0.23 per share. Sales during the quarter included 83,258 ounces of gold and 11.7 million pounds of copper. The average realized price for gold was $2,097 per ounce, while copper fetched $3.79 per pound, reflecting favorable market conditions. Mount Milligan, a cornerstone asset for the company, produced over 38,000 ounces of gold and 13 million pounds of copper in Q2 2024. Although sales were lower than the previous quarter due to shipment timing, management expects stronger sales in the second half of the year, contributing approximately 60% of annual sales.
Operationally, Centerra Gold Inc. (NYSE:CGAU) has made strategic progress at Mount Milligan with the implementation of a site-wide optimization program and a preliminary economic assessment to extend the mine’s life. The company has also advanced permitting work at the Thompson Creek mine, which will support further mining activities. The Öksüt mine in Turkey produced over 51,000 ounces of gold in Q2 2024, with expectations for stronger production in the latter half of the year.
Centerra Gold Inc.’s (NYSE:CGAU) financial health remains strong, with a cash balance of $592 million, providing total liquidity of $992 million. The company continues to prioritize returning capital to shareholders through share buybacks and dividends, repurchasing 1.4 million shares for $10 million in Q2. With stable operations, strategic growth initiatives, and a commitment to shareholder returns, Centerra Gold Inc. (NYSE:CGAU) presents a compelling investment opportunity for those seeking exposure to the gold and copper sectors.
Heartland Value Fund stated the following regarding Centerra Gold Inc. (NYSE:CGAU) in its fourth quarter 2023 investor letter:
“Early last year, we highlighted Centerra Gold Inc. (NYSE:CGAU), a producer of gold and copper. With the recent pivot by the Federal Reserve to an easy money policy, we thought an update of this underappreciated hard asset was timely.
Centerra continues to make progress in increasing production while lowering costs. During the third quarter, the Oksut mine restarted, resulting in earnings per share of $0.20 while throwing off cash flow in excess of $100 million. Centerra remains debt free with cash soaring to $492 million, or $2.28 per share. A new management team is focused on optimizing a diverse portfolio of assets, including a strategy to boost the value of its molybdenum business for eventual sale. With an admirable balance sheet, Centerra has the resources to fund an aggressive exploration program in North America, pay a 3.3% dividend, and embark on an 8.5% repurchase of shares outstanding.
Trading below stated book value, approximately 60% of NAV, and less than 3X EV/EBITDA, we believe Centerra remains an outstanding small cap value.”
