TIDMCEY
RNS Number : 5852Q
Centamin PLC
19 October 2023
19 October 2023
Centamin plc
("Centamin", "Group" or "the Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 30 September 2023 ("Q3")
MARTIN HORGAN, CEO, commented: "We maintain our commitment to
safety and are pleased to announce zero lost time injuries in the
quarter. Operationally, the decision to complete the plant
maintenance demonstrates our commitment to the long-term
stewardship of Sukari and due to our operational flexibility 2023
production guidance is maintained.
Today's results reflect another period of disciplined cost
management, putting us on target for the lower half of our 2023
cost guidance range. Our financial strength and the savings made
against our 2023 budget have also given us the flexibility to
accelerate some key 2024 capital expenditures into 2023 without
impacting guidance."
HIGHLIGHTS
Strong cost performance
-- Zero lost time injuries : There were no lost time injuries Q3
resulting in a lost time injury frequency ("LTIFR") of zero. The
total recordable injury frequency rate ("TRIFR") was 3.83 per one
million hours worked
-- Gold production of 101,370 ounces - as published on 12
October 2023 - bringing the total gold production for the nine
months of the year ("YTD") from the Sukari Gold Mine ("Sukari") to
321,931 oz and is on track for the lower end of the 2023 guidance
range
-- Revenue of US$200.4 million (YTD: US$626m), generated from
gold sales of 103,807 oz (YTD:323koz) at an average realised gold
price of US$1,927/oz sold (YTD: US$1,933/oz)
-- Cash costs of US$882/oz produced (YTD: US$859/oz) targeting
the lower half of the 2023 guidance range
-- All-in sustaining costs ("AISC") of US$1,266/oz sold (YTD:
US$1,240/oz) targeting the lower half of the 2023 guidance
range
-- Capital expenditure ("capex") of US$59.1 million (YTD
US$166m) reflecting capital cost savings from lower fuel costs and
optimisation of the open pit fleet maintenance strategy in line
with the new Sukari life of mine plan
-- Sukari 30MW(AC) solar plant has been operating at nameplate
levels for twelve months as of September, successfully displacing
22 million litres of diesel fuel with renewable power to reduce
greenhouse gas ("GHG") emissions by approximately 59,000 tonnes of
CO(2) -e
-- Delivered the Sukari new life of mine plan on 12 October 2023
demonstrating the potential for increased long-term gold
production, lower operational costs, reduced operational risk and
significantly reduced carbon emissions (link to RNS here )
-- New Egyptian mining regulatory framework agreed in principle
establishing a clear, competitive exploitation structure for the
development of new mining concessions. This framework will apply to
commercial discoveries made on Centamin's highly prospective
3,000km(2) Eastern Desert Exploration blocks ("EDX") (link to RNS
here )
-- Strong and flexible balance sheet with available cash and
liquid assets of US$126 million (at 30 September 2023) after the
distribution of US$23 million to shareholders as an interim
dividend, and total liquidity of US$276 million including the
undrawn US$150 million sustainability linked revolving credit
facility
2023 OUTLOOK
Annual guidance on track
-- Gold production guidance range of 450,000 to 480,000 oz per
annum and targeting the lower end
-- Cash cost guidance range of US$840-990/oz produced and AISC
guidance range of US$1,250-1,400/oz sold, now targeting the lower
half
-- Capex guidance is maintained at US$273 million with further detail below
-- Exploration spend is results-driven. 2023 exploration
expenditure budget is US$30 million, including US$23 million for
the pre-development study work on the Doropo Gold Project
KEY DELIVERABLES
-- Group Mineral Resource and Reserve update (Q4 2023)
-- Group Exploration Update (Q4 2023)
-- Doropo Gold Project definitive feasibility study (mid-2024)
WEBCAST AND CONFERENCE CALL
The Company will host a webcast and conference call today,
Thursday, 19 October 2023 at 08.30 BST to discuss the results,
followed by an opportunity to ask questions.
Webcast link :
https://www.investis-live.com/centamin/6515595de7d60c12002cfe2b/fgsw
Dial-in telephone numbers :
United Kingdom (and all other locations) +44 (0) 204 587 0498
United States +1 646 664 1960
Participation access code: 686280
PRINT-FRILY VERSION of the announcement:
www.centamin.com/media/companynews .
RESULTS SUMMARY
Q3 2023 Q3 2022 % <DELTA> Q2 2023 % <DELTA> YTD
=============================== ======== ======== ========== ======== ========== ========
SAFETY
LTIFR (1m hours) 0.00 0.00 0% 0.00 0% 0.10
TRIFR (1m hours) 3.83 1.69 127% 3.40 13% 3.43
===============================
OPEN PIT
Total material mined (kt) 31,655 35,647 (11%) 32,303 (2%) 96,956
Ore mined (kt) 4,501 2,814 60% 3,609 25% 11,383
Ore grade mined (g/t Au) 0.74 1.04 (28%) 0.90 (17%) 0.83
===============================
UNDERGROUND
Ore mined (kt) 245 210 16% 222 10% 703
Ore grade mined (g/t Au) 4.61 6.2 (26%) 4.40 5% 4.35
===============================
PROCESSING
Ore processed (kt) 2,786 3,230 (14%) 3,076 (9%) 8.868
Feed grade (g/t Au) 1.25 1.37 (9%) 1.26 (1%) 1.24
Gold recovery (%) 88.5 87.9 1% 88.3 0% 88.5
Gold production (oz) 101,370 127,512 (21%) 114,687 (12%) 321,931
===============================
COST & SALES
Gold sold (oz) 103,807 126,610 (18%) 111,693 (7%) 323,160
Cash cost (US$'000) 89,399 103,447 (14%) 87,995 2% 276,555
Cash costs (US$/oz produced) 882 811 9% 767 15% 859
AISC (US$'000) 131,395 163,156 (19%) 124,299 6% 400,855
AISC (US$/oz sold) 1,266 1,289 (2%) 1,113 14% 1,240
Realised gold price (US$/oz) 1,927 1,720 12% 1,969 (2%) 1,933
FINANCIALS
Revenue (US$000) 200,404 218,115 (8%) 220,386 (9%) 626,016
EBITDA (US$000) 99,005 100,630 (2%) 114,683 (14%) 292,420
Profit before-tax (US$'000) 56,497 60,656 (7%) 70,434 (20%) 171,301
Capital expenditure (US$'000) 59,089 74,892 (21%) 54,419 9% 166,144
Free cash flow (US$'000) 12,422 10,666 16% 14,027 (11%) 34,903
------------------------------- -------- -------- ---------- -------- ---------- --------
HEALTH AND SAFETY
We remain focussed on the protection of our workforce and the
local communities where we operate. Our safety performance
continues to be strong; while noting that our ultimate ambition is
to create a zero-harm workplace. We had no lost time injuries in Q3
2023 across the Group. Notwithstanding, there has been an increase
in low consequence, minor injuries. Proactive measures have been
taken to understand these injuries, identify trends, and implement
mitigations.
In Q3, the Group LTIFR was zero for Q3 and 0.10 per one million
hours worked year to date ("YTD") and the Company is on track to
meet the annual LTIFR target of 0.34. The Group TRIFR was 3.83 per
one million hours worked, bringing YTD to 3.43, which is tracking
ahead of the annual TRIFR target of 2.78.
Sukari Gold mine, egypt
(Q3 2023 vs Q3 2022)
Production
Sukari gold production for Q3 totalled 101,370 oz (YTD:
321,931), a 21% decrease YoY. As announced on 12 October 2023, a
potential issue was identified on SAG mill 1 ("SAG1") following
routine mill relining and the decision was taken to undertake
pre-emptive repairs. However, the build-up of high-grade material
on the ROM pad and increased operational flexibility in the mine
plan means that 2023 annual production guidance remains on track at
the lower end of guidance.
Open Pit Mining
Total material moved (waste and ore) of 31.7Mt, a 11% decrease
YoY, driven by lower waste mined and a focus on Sukari hill which
increased ore tonnes mined.
Total open pit waste material mined for the quarter was 27.2Mt,
at 17% decrease YoY. This includes 9.4Mt of contracted
waste-stripping as part of the accelerated waste-stripping
programme, with a similar performance expected in Q4. The strip
ratio for the quarter was 6:1 (waste:ore).
During Q3, open pit ore was mined from multiple working areas,
with contributions from Stage 5 North, East, West and Stage 7.
Total open pit ore mined for the quarter was 4.5Mt, a 60% increase
YoY, at an average mined grade of 0.74 grams of gold per tonne
("g/t Au"), a 28% decrease YoY. This was driven by a greater
conversion of waste to ore from Stage 7 of the open pit, which
resulted in more than scheduled low grade ore mined and less waste
mined. Grades are expected to improve moderately throughout the
year averaging approximately 0.8g/t for 2023.
During the quarter, the low-grade stockpiles increased by 363kt
to 17.8Mt at an average grade of 0.45g/t Au.
Underground Mining
Total material mined (waste and ore) was 359kt, a 34% increase
YoY, reflecting the ramp up in mining rates following the
transition to owner-mining in H1 2022. Total ore mined was 245kt at
an average combined (stoping and development) grade of 4.61g/t Au.
This represented a 16% increase in ore tonnes YoY and a -26%
increase in grade YoY.
The underground ore was made up of 161kt of ore mined from
stopes, at an average grade of 5.31g/t Au, and 83kt of ore mined
from development, at an average grade of 3.24g/t Au.
Processing
The plant processed 2.8Mt of ore, a 14% decrease YoY, at an
average feed grade of 1.25 g/t Au, a 9% decrease YoY due to the
pre-emptive repairs. The work was successfully completed and SAG1
has been fully operational since 1 October 2023.
The metallurgical gold recovery rate was 88.5% for the quarter,
a 1% increase YoY.
Sukari Mining Concession ("SMC") Exploration
Brownfield exploration across the 160km(2) Sukari Concession
amounted to US$3.7 million in the quarter. This is capitalised and
captured within the 2023 capex guidance.
Work focused on the development of additional Mineral Resources
within the SMC that can be converted to Mineral Reserves and
incorporated into the mine plan. In Q3, a total of 10,864 metres
were drilled across a number of targets, including at V Shear East,
Wadi Alam, Quartz Ridge and ARC prospects.
Capital Expenditure
Key capital projects progressed well during Q3, with activities
focussed around underground development, tailings storage facility
2, equipment rebuilds and the contracted waste-stripping
programme.
The total capex in Q3 was US$59.1 million and after removing the
impact of the waste mining accounting treatment, adjusted capex was
US$56.5 million.
Q3 2023 YTD
(US$m) (US$m)
============================================================================ ========= =========
Underground exploration 2.6 8.0
Underground mine development 9.6 25.6
Rebuilds, underground transition and other sustaining capex 12.3 31.3
Sustaining element of waste stripping capitalised [1] 2.6 12.6
============================================================================ ========= =========
Sustaining CAPEX 27.1 77.4
============================================================================ ========= =========
Underground paste-fill plant, North dump leach & tailings storage facility 8.8 19.5
Contract waste stripping capitalised 19.1 63.4
Other non-sustaining capex 4.1 5.8
============================================================================ ========= =========
Non-sustaining CAPEX 32.0 88.7
========= =========
TOTAL CAPEX 59.1 166.1
============================================================================ ========= =========
Less:
Sustaining element of waste stripping capitalised(1) (2.6) (12.6)
ADJUSTED CAPEX (after reclassification) 56.5 153.5
============================================================================ ========= =========
The 2023 capital expenditure guidance remains unchanged at
US$273 million. This includes a lower deferred sustaining stripping
cost of US$25 million, predominantly driven by a conversion of
waste to ore which has reduced the strip ratio and reclassified
some sustaining capex to operating expenditure.
However, forecasted annual capital cost savings of US$24
million, partially offset by ongoing outperformance on the
contracted waste-stripping programme, has meant that the Company
can accelerate certain key capital projects, previously scheduled
for 2024, into 2023 without the need to revise guidance:
Forecasted 2023 capital savings of approximately US$24 million,
primarily from:
-- Lower overall open pit mining costs resulting from fuel savings
-- Optimised open pit fleet management strategy, as per the new Sukari life of mine plan
Partially offset by:
-- 2023 contracted waste-stripping outperformance is expected to
result in 21% more tonnes moved than scheduled, but due to lower
fuel prices, only result in a 6% additional capital cost
Accelerated capital spend into 2023:
-- US$12.5 million towards the Sukari grid power connection, and
-- US$6.6 million spend towards new open pit 785C truck purchases
SALES AND COSTS
Gold sales for the quarter were 103,807 oz, a 18% decrease YoY.
The average realised gold price for the quarter was US$1,927/oz, up
12% YoY. Revenues generated of US$200.4 million, 8% lower YoY,
driven by lower production volumes and subsequent gold sales.
Cash costs of production were US$89.4 million for the quarter, a
14% improvement YoY, due to lower input costs such as fuel and
consumables. Unit cash costs of production were US$882/oz produced,
a 9% increase YoY due to lower production volumes.
Total all-in sustaining costs ("AISC") were US$131.4 million for
the quarter, a 19% improvement YoY, reflecting lower sustaining
capital expenditure. Unit AISC of US$1,266/oz sold, a 2%
improvement YoY.
EXPLORATION PROJECTS
The total greenfield exploration spend for the quarter was
US$5.5 million (YTD: US$24.5m).
Doropo Project, Côte d'Ivoire
During Q3, fieldwork continued at Doropo, including infill
drilling within the main resource cluster and testing regional
deposits outside the existing project resource. Total spend in the
quarter amounted to US$3.7 million (YTD: US$19.6m):
-- 997 metres of core infill and twin hole drilling at the Vako,
Sanbayoro and Attire prospects
-- 24,938 metres of reverse circulation pulp samples were
analysed using an X-ray fluorescence ("XRF") machine
The DFS and ESIA work continued and is expected to be completed
by June 2024.
Eastern Desert Exploration ("EDX"), Egypt
During Q3, the focus was on advancing our maiden drill programme
on the Nugrus block, adjacent to the Sukari mining concession. The
initial 10,000 metre drill programme was increased to 15,000 metres
with the identification of additional drill targets:
-- 10,910 metres of exploration drilling was completed in Q3
-- Drilling focussed on eight targets which were identified
through an comprehensive fieldwork programme
-- The programme is scheduled for completion in October and
assay results are expected to be received in Q4 2023
Regional fieldwork work continued across all three concession
blocks, including soil and rock chip sampling on the Nugrus block,
planning of the Najd block BLEG sampling programme is underway, and
at the Um Rus we prepared to undertake soil surveys during Q4.
FINANCIAL POSITION
Free Cash Flow
Under the terms of the Sukari Concession Agreement, the Egyptian
government earned US$6 million (YTD: US$18.7m) in royalty payments
and received US$23.0 million (YTD: US$69.0m) in profit share
payments during the quarter. After Sukari profit share
distribution, Group exploration expenditure and corporate investing
activities, the free cash flow for the quarter was US$12.4 million
(YTD: US$34.9m).
Balance Sheet
Centamin is in a strong financial position, with cash and liquid
assets to US$125.7 million as at 30 September 2023. The Company has
a US$150 million senior secured sustainability-linked revolving
credit facility ("RCF") which is available and undrawn.
Liquidity
30 September 2023
(US$m)
=========================================================== ===================
Cash on hand 78.5
Bullion on hand 22.9
Gold sales receivable 13.6
=========================================================== ===================
Financial assets at fair value through profit or loss* 10.6
=========================================================== ===================
TOTAL CASH & LIQUID ASSETS 125.7
=========================================================== ===================
Sustainability-linked revolving credit facility (undrawn) 150.0
=========================================================== ===================
TOTAL LIQUIDITY 275.7
=========================================================== ===================
* The financial assets at fair value through profit or loss
relate to the open gold put options purchased by the Company in
FY2022 as part of the gold price protection programme
About Centamin
Centamin is an established gold producer, with a premium listing
on the London Stock Exchange and a secondary listing on the Toronto
Stock Exchange. The Company's flagship asset is the Sukari Gold
Mine ("Sukari"), Egypt's largest and first modern gold mine, as
well as one of the world's largest producing mines. Since
production began in 2009 Sukari has produced over 5 million ounces
of gold, and today has 6.0Moz in gold Mineral Reserves. Through its
large portfolio of exploration assets in Egypt and Côte d'Ivoire,
Centamin is advancing an active pipeline of future growth
prospects, including the Doropo project in Côte d'Ivoire, and has
over 3,000km(2) of highly prospective exploration ground in Egypt's
Nubian Shield.
Centamin recognises its responsibility to deliver operational
and financial performance and create lasting mutual benefit for all
stakeholders through good corporate citizenship, including but not
limited to in 2022, achieving new safety records; commissioning of
the largest hybrid solar farm for a gold mine; sustaining a +95%
Egyptian workforce; and, a +60% Egyptian supply chain at
Sukari.
FOR MORE INFORMATION please visit the website www.centamin.com
or contact:
Centamin plc FTI Consulting
Alexandra Barter-Carse, Head of Corporate Ben Brewerton / Sara Powell
Communications / Nick Hennis
investor@centaminplc.com +442037271000
centamin@fticonsulting.com
ENDNOTES
Guidance
The Company actively monitors the global geopolitical
uncertainties and macroeconomics, such as global inflation, and
guidance may be impacted if the supply chain, workforce or
operations are disrupted.
Non-GAAP measures
This statement includes certain financial performance measures
which are not GAAP measures as defined under International
Financial Reporting Standards (IFRS). These include EBITDA and
adjusted EBITDA, Cash costs of production, AISC, Cash and liquid
assets, Free cash flow and adjusted Free cash flow. Management
believes these measures provide valuable additional information for
users of the financial statements to understand the underlying
trading performance.
Royalties
Royalties are accrued and paid six months in arrears.
Cash and liquid assets
Cash and liquid assets include cash, bullion on hand and gold
sales receivables.
Liquidity
Liquidity is defined as the sum of cash and cash equivalents and
available Company credit.
Gold produced
Gold produced is gold poured and does not include
gold-in-circuit at period end.
Forward-looking Statements
This announcement (including information incorporated by
reference) contains "forward-looking statements" and
"forward-looking information" under applicable securities laws
(collectively, "forward-looking statements"), including statements
with respect to future financial or operating performance. Such
statements include "future-oriented financial information" or
"financial outlook" with respect to prospective financial
performance, financial position, EBITDA, cash flows and other
financial metrics that are based on assumptions about future
economic conditions and courses of action. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expects",
"expected", "budgeted", "forecasts" and "anticipates" and include
production outlook, operating schedules, production profiles,
expansion and expansion plans, efficiency gains, production and
cost guidance, capital expenditure outlook, exploration spend and
other mine plans. Although Centamin believes that the expectations
reflected in such forward-looking statements are reasonable,
Centamin can give no assurance that such expectations will prove to
be correct. Forward-looking statements are prospective in nature
and are not based on historical facts, but rather on current
expectations and projections of the management of Centamin about
future events and are therefore subject to known and unknown risks
and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements. In addition, there are a number of
factors that could cause actual results, performance, achievements
or developments to differ materially from those expressed or
implied by such forward-looking statements; the risks and
uncertainties associated with direct or indirect impacts of
COVID-19 or other pandemic, general business, economic,
competitive, political and social uncertainties; the results of
exploration activities and feasibility studies; assumptions in
economic evaluations which prove to be inaccurate; currency
fluctuations; changes in project parameters; future prices of gold
and other metals; possible variations of ore grade or recovery
rates; accidents, labour disputes and other risks of the mining
industry; climatic conditions; political instability; decisions and
regulatory changes enacted by governmental authorities; delays in
obtaining approvals or financing or completing development or
construction activities; and discovery of archaeological ruins.
Financial outlook and future-ordinated financial information
contained in this news release is based on assumptions about future
events, including economic conditions and proposed courses of
action, based on management's assessment of the relevant
information currently available. Readers are cautioned that any
such financial outlook or future-ordinated financial information
contained or referenced herein may not be appropriate and should
not be used for purposes other than those for which it is disclosed
herein. The Company and its management believe that the prospective
financial information has been prepared on a reasonable basis,
reflecting management's best estimates and judgments at the date
hereof, and represent, to the best of management's knowledge and
opinion, the Company's expected course of action. However, because
this information is highly subjective, it should not be relied on
as necessarily indicative of future results. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information or
statements, particularly in light of the current economic climate
and the significant volatility, the risks and uncertainties
associated with the direct and indirect impacts of COVID-19.
Forward-looking statements contained herein are made as of the date
of this announcement and the Company disclaims any obligation to
update any forward-looking statement, whether as a result of new
information, future events or results or otherwise. Accordingly,
readers should not place undue reliance on forward-looking
statements.
LEI: 213800PDI9G7OUKLPV84
Company No: 109180
[1] Reclassified from operating expenditure , from 2021, the
Company implemented a more granular methodology to the accounting
and classification of waste-stripping costs, in line with IFRS
accounting standards. As such, there is an accounting
reclassification of open pit waste mining costs, resulting in a
reduction in total cash costs with a corresponding equal increase
in the sustaining expenditure and therefore AISC, with no impact on
net cash flow.
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END
QRTGPGCCUUPWGQR
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