Centerra Gold Downgraded by BMO Capital Amid Operational Concerns

Centerra Gold (CGAU) shares declined 5.5% after BMO Capital downgraded the stock to "Market Perform" and reduced the price target to CAD 10 due to operational issues at Mt. Milligan and rising costs at Oksut mine. The consensus remains positive with an "Outperform" recommendation, and the one-year average price target is set at $12.00, suggesting a 68.90% potential upside.

Centerra Gold Inc. (CGAU) experienced a significant drop in its stock price, declining by 5.5% on July 2, 2025, following a downgrade by BMO Capital. The financial institution revised its rating of CGAU to "Market Perform" and reduced its price target to CAD 10, citing operational issues at Mount Milligan and rising costs at the Öksüt mine [1].

The downgrade comes despite the overall consensus remaining positive, with an "Outperform" recommendation from analysts. The one-year average price target for CGAU is set at $12.00, indicating a potential 68.90% upside. This discrepancy underscores the mixed sentiment surrounding the company's recent financial performance and future prospects.

Centerra Gold reported its second-quarter 2025 results, highlighting net earnings of $68.6 million and consolidated gold production of 63,311 ounces. The company generated $98.4 million in operating cash flow before working capital and maintained strong liquidity of $922.3 million. Key operational highlights include gold sales of 61,335 ounces at an average realized price of $2,793/oz and copper sales of 12.1 million pounds at $3.62/lb [1].

However, operational challenges at Mount Milligan and increased costs at Öksüt mine have led to adjustments in the company's 2025 guidance. Centerra has updated its gold production and cost guidance for Mount Milligan due to mining in lower grade zones and higher royalty costs at Öksüt. The company has also increased its share buybacks to $27 million in the second quarter, up 80% compared to last quarter [1].

The company is advancing the Goldfield Project with attractive economics, including an after-tax NPV of $245 million and IRR of 30%. First production from Goldfield is expected by the end of 2028, which would grow Centerra's near-term gold production profile and generate robust cash flow [1].

Despite these challenges, Centerra remains committed to shareholder returns and strategic growth initiatives. The company's robust financial position and strong liquidity position have enabled it to maintain its capital allocation strategy and continue to advance its project development pipeline.

References:
[1] https://www.stocktitan.net/news/CGAU/centerra-gold-reports-second-quarter-2025-results-reinforced-balance-io4oywry3ydm.html