Centerra Gold: Mount Milligan And Öksüt Could Drive The Next Rerating

2026-05-06 05:29:20 ET

Investment Thesis

I am rating Centerra Gold ( CGAU ) a Strong Buy for a couple of reasons. Let me start by saying that CGAU is not a perfect story, and I do not want to pretend that mining is suddenly a clean chessboard where every piece moves as planned. It rarely does. The main reason I think CGAU deserves a Strong Buy rating is because, when I look at the company's current cash generation, its net cash position, its production base, and valuation, I see a company where investors are being paid to wait while management tries to convert asset depth into a strong earnings machine. To put this into perspective, Centerra released their 1Q 2026 earnings report and delivered outstanding numbers. The strongest part of my thesis is CGAU's funding model. This is because, in my view, many mining companies look cheap on paper because the market knows the next project will consume the balance sheet. But for CGAU, it is different. It is because the company is using cash flow from Mount Milligan and Öksüt to push forward Mount Milligan, Kemess, Thompson Creek, Goldfield, and Öksüt optimization to work. As a result, this changes the risk profile of the company. This is because it implies that I am buying a producing mine where existing assets are carrying the burden of future growth....

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