CA - Centerra Gold jumps after Mount Mulligan update stock buyback plan

Centerra Gold ( NYSE: CGAU ) +7.5% in early trading Tuesday after saying it is extending the life of its Mount Milligan mine and unveiling plans to buy back stock .

Centerra ( CGAU ) said it extended the mine life for the British Columbia mine by more than four years, with plans to continue open pit mining and milling operations to 2033, and raised proven and probable gold mineral reserves to 2.9M contained oz from 1.8M oz previously as well as copper mineral reserves to 996M contained lbs from 736M lbs previously.

Mount Milligan's after-tax net present value is estimated at $486M at a 5% discount rate, and net cash flow over the life of mine is estimated at $640M.

Centerra ( CGAU ) said "significant exploration potential exists at the Mount Milligan mine peripheral to the current open pit."

The company also said it will proceed with a normal course issuer bid to purchase for cancellation up to an aggregate of ~15.6M common shares, representing 7.1% of total issued and outstanding shares or 10% of the public float.

Centerra Gold ( CGAU ) offers "the most extreme discount in a mid-tier gold producer I've ever seen," SomaBull writes in an analysis published on Seeking Alpha .

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