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Mount Milligan water risk rises

Canadian gold producer Centerra Gold (TSX:CG) has warned it might have to reduce output at its central British Columbia-based Mount Milligan copper-gold mine in the fourth quarter if it cannot secure new water sources.
Mount Milligan water risk rises Mount Milligan water risk rises Mount Milligan water risk rises Mount Milligan water risk rises Mount Milligan water risk rises

Centerra facing reduced output at Mount Milligan in BC due to water shortage

Henry Lazenby

The Toronto-headquartered company has lodged an application with the BC Environmental Assessment Office to vary its environmental certificate, which will give the miner additional access to short and long-term water sources through 2020. The permit amendment will also provide for the creation of a longer-term water supply plan covering subsequent years.

However, approval is not guaranteed, raising the spectre of a fresh round of production cuts such as that seen at the end of 2017, when production was partially curtailed for more than two months after an abnormally dry spring and summer left the mine with limited water supplies in its tailings storage facility.

The company, with a market valuation of C$1.88 billion, said it was consulting with regulatory agencies and indigenous groups and expected the process to be completed by the fourth quarter.

Centerra's TSX-quoted equity has dipped 15% since last Wednesday, closing Monday at C$6.40.