TIDMCEY

RNS Number : 3267H

Centamin PLC

31 July 2019

FOR IMMEDIATE RELEASE

31 July 2019

Centamin plc

("Centamin" or "the Company")

(LSE:CEY, TSX:CEE)

Interim Results

for the six months ended 30 June 2019

Financial highlights

-- Gross revenue(1) for the six months ended 30 June 2019 ("H1") was US$292.4 million from gold sales of 224,129 ounces at an average realised gold price of US$1,305 per ounce;

-- Cash cost of production was US$692 per ounce produced, within annual guidance of US$675-725 per ounce; All-in sustaining cost ("AISC") was US$940 per ounce sold, within annual guidance of US$890-950 per ounce;

-- EBITDA(2,3) of US$117.1 million, a 41% EBITDA margin, and profit before tax of US$59.6 million, offers competitive profit margins;

-- Adjusted Group free cash flow(3,4) generated US$35.7 million, after profit share with our partner, the Egyptian state; Total direct financial payments in Egypt, by way of profit share and royalties, US$ 48.1 million;

-- Total Group sustaining, development and growth capital and exploration expenditure of US$58.4 million, in line with annual guidance;

-- Strong and flexible balance sheet with no debt, no hedging and cash and liquid assets(3) of US$326.6 million, as at 30 June 2019, after payment in May of US$34.7 million for the 2018 final dividend; and

-- The Board declares an interim dividend of US$46.2 million (4.0 US cents per share), bringing cumulative dividends paid to shareholders to approximately US$500 million.

Outlook

-- Centamin maintains annual guidance for 2019: gold production of 490,000-520,000 ounces, at cash cost(2,3) of US$675-725 per ounce produced and AISC(2,3) of US$890-950 per ounce sold; Production and free cash flow(3,4) expected to be stronger in the second half ("H2") predominantly driven by improved grades from the open pit; Costs to trend downwards in line with the expected increased production in H2; and

-- Centamin baseline outlook for production in 2020 and 2021 of 510,000-540,000 ounces per annum, at cash cost of US$630-680 per ounce produced and AISC of US$870-920 per ounce sold; Baseline outlook excludes any upside from plant and open pit optimisation, underground grade improvement, Cleopatra stoping, and regional exploration; Full details of these baseline estimates and upside drivers can be found in the Operation Review.

Andrew Pardey, CEO commented: "Six months into our tenth year of commercial production, Centamin continues to make good progress delivering on its corporate strategy. The Company is a high margin gold producer, delivering reliable stakeholder returns through strong free cash flow generation.

In-line with the Company's well-established strategy of returning surplus cash to shareholders, the Centamin Board of Directors are pleased to declare an interim dividend of US$46.2 million, bringing total returns to shareholders in dividends since 2014 to c.US$500 million. The Board's decision to increase the interim dividend was based on the Company's strong financial position, assessment of near and medium-term capital allocation and confidence in future cash flow generation.

[1] Gross revenue from gold sales includes US$4.7 million in pre-production gold sales from Cleopatra development ore.

2 Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments following the removal of fuel subsidies in January 2012 (refer to note 2.4 of the financial statements for further details).

3 Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss and Adjusted free cash flow are non-GAAP measures and are defined at the end of the Financial Review section.

4 Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

Looking forward, as the outlook for the business continues to improve, in the second half of 2019 we expect to deliver stronger production and increasing free cash flow. Today, Centamin has provided baseline estimates for Sukari's production and cost guidance through to 2021 on a mining plan that is designed to maximise returns to all of our stakeholders through the delivery of profitable ounces.

We are confident in the delivery of this baseline outlook and are focused on driving further future growth and value enhancing opportunities."

Table 1. Group Financial Summary

 
                                 Quarter on Quarter ("QoQ") comparative      Year on Year ("YoY") comparative 
                 units            Q2 2019       Q2 2018           %        H1 2019       H1 2018          % 
--------------  --------------   ------------  ------------  -----------  ------------  ------------  --------- 
 Gold produced   oz                   117,913        92,803      27%           234,096       217,099      8% 
 Gold sold       oz                   112,764        97,628      16%           224,129       228,672     (2%) 
 Cash cost of 
  production 
  (2,3)          US$'000               87,553        64,630      35%           159,445       135,942     17% 
 Unit cash 
  cost of        US$/oz 
  production      produced                752           714       5%               692           637      9% 
 AISC (2,3)      US$'000              109,319       102,211       7%           207,361       209,150     (1%) 
 Unit AISC       US$/oz sold              982         1,073      (8%)              940           930      1% 
 Average 
  realised 
  gold price     US$/oz                 1,307         1,298       1%             1,305         1,316     (1%) 
--------------  --------------   ------------  ------------  -----------  ------------  ------------  --------- 
 Gross 
  revenue(1)     US$'000              147,329       127,023      16%           292,406       301,099     (3%) 
 Revenue         US$'000              145,671       123,929      18%           288,136       296,391     (3%) 
 EBITDA (2,3)    US$'000               52,651        45,774      15%           117,109       129,728    (10%) 
 Profit before 
  tax            US$'000               25,725        21,977      17%            59,627        80,376    (26%) 
 Basic EPS (2)   US cents                0.54          0.97     (44%)             1.71          3.57    (52%) 
 Capital 
  expenditure    US$'000               22,759        28,798     (21%)           47,987        53,877    (11%) 
 Operating 
  cash flow      US$'000               57,459        37,247      54%           116,376       122,662     (5%) 
 Adjusted free 
  cash flow 
  (3,4)          US$'000               19,117         1,594     1,099%          35,708        36,075     (1%) 
--------------  --------------   ------------  ------------  -----------  ------------  ------------  --------- 
 
 

Conference Call and Webcast Presentation

The Company will be hosting a conference call and webcast presentation today, Wednesday, 31 July at 08.30 BST to discuss the results with investors and analysts.

Please find below the required participation details for the call:

Conference call

   Dial-in telephone number:    +44 203 936 2999 
   Participant access code:      629086 

Webcast presentation

Follow this link to join the webcast: https://www.investis-live.com/centamin/5d1b17539add6d1100e71d87/zpzp

A replay of the webcast will be made available on the Company website by the close of business today.

Enquiries

For further information, please visit the website www.centamin.com or contact:

 
  Centamin plc 
   Andrew Pardey, Chief Executive Officer     Buchanan 
   Alexandra Carse, Investor Relations        Bobby Morse 
   alexandra.carse@centamin.je                Chris Judd 
                                              centamin@buchanan.uk.com 
 

______________________________________________________________________________________________________

[1] Gross revenue from gold sales includes US$4.7 million in pre-production gold sales from Cleopatra development ore.

2 Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments following the removal of fuel subsidies in January 2012 (refer to note 2.4 of the financial statements for further details).

3 Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss and Adjusted free cash flow are non-GAAP measures and are defined at the end of the Financial Review section.

4 Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

Disclaimers and forward-looking statements

This announcement contains forward-looking statements which may include, but are not limited to, statements with respect to the future financial or operating performance of the Company, its subsidiaries and its projects (including the Sukari Gold Mine) which include, but are not limited to, estimations on the future price of gold, mineral reserves and resources, the realisation of mineral reserve estimates, the timing and amount of estimated future production, revenues and costs, government regulation of mining and exploration operations, environmental risks, title disputes or claims.

Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "hopes", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking information involves and is subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. The material factors and assumptions used to develop the forward looking statements include, among others, general business, economic, competitive, political and social consideration and assumptions concerning economic evaluations, exchange rates, project parameters and gold and other commodity prices.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein is made as of the date of this announcement, except as may be required by applicable law, and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking information or statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information or statements. Accordingly, readers should not place undue reliance on forward-looking statements.

LEI: 213800PDI9G7OUKLPV84

Company No: 109180

Operational Review

H1 2019 vs H1 2018

The first half of 2019 demonstrated a solid operating performance. Sukari produced 234,096 ounces of gold, in-line with the Company's stated 45:55 production weighted split for the year, and annual production guidance has been maintained at 490,000-520,000 ounces.

In H1, the open pit performed well. Average open pit mined grade increased by 41% YoY to 0.71 g/t and is scheduled to increase quarter on quarter through H2, as mining progresses with Stage 4, the primary source of ore for the next two years, and into the Hapi Zone, host to the original underground. Total open pit material mined increased 12% compared to the corresponding period in 2018 ("YoY"). This was driven by continued stripping of Stage 4 and commenced stripping of Stage 5. At the beginning of 2019, as per the mine plan, we guided a 50% reduction in total annual open pit ore tonnes mined. 6.7Mt of open ore was mined in H1, a 42% reduction YoY, and in line with guidance.

During H1, the underground delivered 580kt of total ore mined at an average grade of 5.53 g/t, a 3% decrease in tonnes and grade YoY. Improvements to grade reconciliation as a result of improving operational efficiencies, namely better dilution controls and increased grade control drilling, resulted in a stronger ounce contribution from stoping in H1. Confined within an area of the Upper Amun, geotechnical issues impacted a secondary access at the end of the period with remedial work currently underway to ensure the area is secure. This work is on schedule to be completed during Q3, permitting access to the planned stopes.

Due to waste material being reclassified as low-grade development ore, more development tonnes were mined and processed than planned in H1. This negatively impacted underground blended grade and plant feed grade but benefitted output as higher grade underground tonnes displaced lower grade open pit tonnes. Underground development is ongoing and throughout H2 similar levels of development ore-to-waste material movement is budgeted as preparation of near-term stoping areas and access to new medium-term production levels are opened. Consistent with what happened in H1, it is possible that some of the waste material could be mineralised and therefore be reclassified as development ore, suitable for processing.

Table 2. Group Operations Summary

 
                            units        H1 2019   H1 2018   % change 
-----------------------  -----------   ---------  --------  --------- 
 Open pit 
 Total material mined         kt          41,243    36,911        12% 
 Ore mined                    kt           6,741    11,579      (42%) 
 Ore grade mined            g/t Au          0.71      0.50        41% 
 Strip ratio               waste/ore        5.12      2.19       134% 
-----------------------  ------------  ---------  --------  --------- 
 Underground 
 Ore mined                    kt             580       601       (3%) 
 Ore grade mined            g/t Au          5.53      5.70       (3%) 
-----------------------  ------------  ---------  --------  --------- 
 Processing 
 Ore processed                kt           6,607     6,240         6% 
 Feed grade                 g/t Au          1.22      1.15         6% 
 Gold recovery                 %            88.4      88.6       (0%) 
-----------------------  ------------  ---------  --------  --------- 
 Total gold production        oz         234,096   217,099         8% 
-----------------------  ------------  ---------  --------  --------- 
 

Our organic growth pipeline progressed steadily throughout H1 with intensive exploration at Sukari as well as drilling programmes targeting resource extensions at Doropo and ABC Projects in Côte d'Ivoire. Sukari exploration is focused on underground resource conversion and extensional drilling, Cleopatra exploration, Horus Deeps drilling and Regional exploration. As part of our ongoing underground reserve replacement strategy, we target replacement in excess of underground production each year. The drilling results returned in H1 provide confidence that we will be able to meet or exceed this target. Quarter on quarter results returned from the Osiris structure and Ptah, both proximal to existing infrastructure, present attractive near-term upside with an updated Mineral Resource and Reserve Statements expected in the first quarter 2020.The Horus Deeps, located 400m vertical below the current decline infrastructure, has returned excellent high-grade results, supporting the long-term potential of the underground. Further drilling scheduled for H2, combined with geo-seismic 3D surveys will provide greater interpretation of the true underground capabilities.

There remains a strong focus on workplace development to ensure the right leadership team is in place which is suitable for our culture and equipped to deliver on our strategy. Core to our culture is health and safety. We target a zero-harm rate through prioritising discussion of health and safety and promoting conscious thought around safety measures to ensure that this remains at the forefront of our decision making across the Group. In H1, the Group Lost Time Injury Frequency Rate ("LTIFR") was 0.42 per 200,000 workplace hours, with seven Loss Time Injuries recorded in the period.

During H1, we welcomed Dr. Sally Eyre as a Non-Executive Director and Jeremy Langford as Chief Operating Officer. Throughout the remainder of 2019, we expect to make further top-tier board and site management appointments, in line with the Board Succession Programme, and as the Group strengthens core technical competencies.

Centamin is a low cost, highly cash generative business which offers sector leading dividend returns to shareholders, balanced with active investment to drive future growth. The Company has a strong balance sheet with US$327 million cash and liquid assets as at 30 June 2019, with no debt, hedging or streaming instruments, thereby offering shareholders pure exposure to the gold price. The Company continues to seek value opportunities in organic growth and strategic acquisitions that would support the corporate strategy and business objectives.

Looking forward, as the outlook for the business continues to improve, we remain focused on delivering results against our promises and driving superior returns.

Near-Term Outlook

Centamin has completed a thorough operational review of the Sukari Gold Mine and reiterates its production guidance for 2019 of 490,000-520,000 ounce. The operational focus is to maximise value by producing the most profitable ounces, grow operating margins and maximise free cash flow generation. The strategy combines increased innovation, delivery of new systems and technologies, minimising working capital spend and further improvements in productivity, thereby reducing the cost base.

For years 2020 and 2021, the Company guides to baseline gold production of 510,000-540,000 ounces, at cash costs of production of US$630-680 per ounce produced, and AISC of US$870-920 per ounce sold. The baseline estimates underpin the solid foundation of the business model, and do not include the impact of near-term upside drivers that are expected to contribute to production increases and cost reductions over and above current baseline estimates.

BASELINE ESTIMATES

The baseline estimates are calculated on the following annual operating assumptions:

 
               Baseline Assumption           Upside (not included in Baseline 
                                              Estimates) 
------------  ----------------------------  ------------------------------------------ 
 
 PROCESSING    12.5Mt pa throughput          Plant optimisation continues with 
                                              a focus on profitable ounces. 
 OPEN PIT      78-82Mt pa total              Upside from ongoing optimisation 
                material moved                work. 
                In-line with current 
                mining rate, includes 
                Stage 4 mining in 
                the higher grade 
                Hapi Zone, scheduled 
                through to end of 
                2021 
 UNDERGROUND   1.1-1.25Mt pa ore             Upside potential from improved grade 
  AMUN/PTAH     mining                        within Amun and/or Ptah underground 
                                              operations. Total underground capacity 
                                              is 1.5Mt including waste movement. 
 UNDERGROUND   Development ore only          Upside potential from commencing 
  CLEOPATRA                                   stoping in the near-term. 
 DUMP LEACH    Nil ounce contribution        Marginal upside potential from Stage 
                From current low-cost         5 transitional and oxide material 
                dump leach operations         delivered to the dump leach in 2020 
                                              and 2021. 
 REGIONAL      Nil additional sources        Upside potential from the regional 
                of high-grade ore             surface exploration programme, including 
                                              seismic and surface drilling programme 
                                              at V Shear and Quartz Ridge. 
 SOLAR         Forecast 2021 commissioning   Up to 40MW(AC) solar plant feasibility 
                                              underway subject to Board approval 
                                              process, to follow in 2019. Significant 
                                              cost reduction upside potential. 
 

Shareholder Returns

2019 INTERIM DIVID

Consistent with Centamin's strategy of returning surplus cash to shareholders, the Board of Directors declares to pay an enhanced interim dividend of 4.0 US cents per ordinary shares (totalling approximately US$46.2 million) to shareholders.

In accordance with Listing Rule 9.7A.2, below is the Interim Dividend timetable:

London Stock Exchange ("LSE") and Toronto Stock Exchange ("TSX")

   EX-DIV DATE:                                                       29 August 2019 
   RECORD DATE:                                                    30 August 2019 
   LAST DAY FOR CURRENCY ELECTIONS:         6 September 2019 
   FX RATE DATE:                                                     9 September 2019 
   PAYMENT DATE:                                                   27 September 2019 

The Interim Dividend will be paid on 27 September 2019 to shareholders on the register on the Record Date of 30 August 2019. The Final Dividend will be paid in US Dollars ("USD"), with an option for shareholders to elect to receive the dividend in Pounds Sterling ("GBP"). Currency elections should be made no later than 6 September 2019 with further details of how to do so on the Company's website http://www.centamin.com/investors/shareholder-services/dividend-information. Payments in GBP will be based on the USD/GBP exchange rate on 9 September 2019 and the rate applied will be published on the website on the 9 September 2019.

The Company's total issued share capital is 1,155,955,384 ordinary shares.

The dates set out above are based on the Directors' current expectations and may be subject to change. If any of the dates should change, the revised dates will be announced by press release and will be available at www.centamin.com.

As a Jersey incorporated company, there is no requirement for Centamin plc to make any withholding or deduction on account of Jersey tax in respect of the dividend.

Financial Review

The unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting" (IAS 34) as adopted by the European Union and the requirements of the Disclosure and Transparency Rule sourcebook (DTR) of the Financial Conduct Authority (FCA) in the United Kingdom as applicable to interim financial reporting. These unaudited interim condensed consolidated financial statements are not affected by seasonality.

In conjunction with the operational performance, we are pleased with the financial performance of H1. Generation of competitive EBITDA and profit margins as well as significant free cash flow. Further good progress was made delivering against our financial strategy, particularly regarding cost management and driving cost saving initiatives in a rising cost environment.

At the beginning of 2019, we guided an 11% increase in cash costs per ounce and a 5% increase in AISC per ounce, driven by increased lower grade volumes mined and processed and anticipated inflationary pressures within the supply chain. Both cash cost of production and AISC are tracking on budget and thereby within our guidance range of US$675-725 per ounce produced and US$890-950 per sold for 2019. Cash cost in H1 increased by 9% to US$692 per ounce produced YoY, driven by a 12% increase in mined and 6% increase in processed tonnes offset predominantly by an 8% increase in gold ounces produced (excluding Cleopatra) and net increases in low-grade stockpiles. AISC of US$940 per ounce sold increased 1% YoY, mainly due to a 2% decrease in gold ounces sold (excluding Cleopatra), increased production costs offset by lower sustaining capital costs.

Ongoing efficiency and productivity initiatives, including training, system upgrades and integration of new technology have offset some of the YoY costs. For example, improved open pit load and haul productivity has reduced the per tonne costs by US$0.02/tonne, while other opportunities remain to be realised over time.

We anticipate a stronger production profile in H2 and we expect cash costs and AISC to trend downwards towards the lower end of our guidance range.

Stringent cost and capital allocation management has delivered another six months of meaningful cash generated from operations of US$116.4 million. Group capital expenditure, including sustaining capex, non-sustaining capex and exploration expenditure was US$58 million, in line with full year guidance.

The Group generated free cash flow(2,3) of US$35.7 million, after profit share payments of US$39.4 million, unchanged YoY, to our longstanding Egyptian partners, Egyptian Mineral Resource Authority ("EMRA"), and royalty payments of US$8.8 million, a 2% reduction YoY. We expect stronger production and consequently improved free cash flow generation for the second half.

The Company is on track to achieve full year production and cost guidance and looks forward to benefitting from improved operational conditions within a promising gold price environment, and maximising value through growing operating margins to drive free cash flow generation and shareholder returns.

 
                                                      Full Year 
                            H1 2019                        2018 
                                           H1 2018 
                        (Unaudited)    (Unaudited)    (Audited) 
 Revenue    US$'000         288,136        296,391      603,248 
---------  ---------  -------------  -------------  ----------- 
 

In H1, net revenue from gold and silver sales was US$288.1 million, a 3% decrease YoY, excluding US$4.7 million generated in pre-production revenue from Cleopatra development in mineralisation (offset against the balance sheet).

Gold sales of 224,129 ounces, a 2% decrease YoY, was 4% below gold produced due to timing of the closing weekly gold shipment at the end of the period.

Despite the recent gold price strengthening, volatility earlier in H1 meant average realised gold price was US$1,305 per ounce, approximately a 1% decrease YoY.

The Group's revenues and the majority of the operating cost exposures are denominated in US dollars. Second to US dollar exposure is Australian dollar exposure, accounting for 15% of Group operating cost, predominantly due to contractor and service agreements.

(1) Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments following the removal of fuel subsidies in January 2012 (refer to note 2.4 of the financial statements for further details).

(2) Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss and Adjusted free cash flow are non-GAAP measures and are defined at the end of the Financial Review section.

3 Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

 
                                                            Full Year 
                                  H1 2019                        2018 
                                                 H1 2018 
                              (Unaudited)    (Unaudited)    (Audited) 
 Cost of sales    US$'000       (210,046)      (191,879)    (406,538) 
---------------  ---------  -------------  -------------  ----------- 
 

Cost of sales represents the cost of mining, processing, refining, transport, site administration, depreciation, amortisation and movement in production inventories. Total cost of sales were US$210.0 million, up 9% YoY, and inclusive of US$14.0 million categorised as fuel pre-payments (refer to Note 2.4 of the financial statements for further information).

Total mine production costs increased 11% YoY to US$173.8 million, primarily driven by volume-based increase in tonnes mined and processed of 12% and 6%, respectively.

Depreciation and amortisation charges were US$60.4 million, a 17% increase, due to mine development within capital work in progress being capitalised to mine development properties during the period. Higher mining volumes impacted unit of production amortisation charges and US$29.1million of additions (excl. capital work in progress) increased the associated amortisation charges.

Cost of sales were offset by a positive movement in inventory adjustment of US$24.1 million compared to positive movement in inventory adjustment of US$16.3 million in the six months ended 30 June 2018 reflecting the increase in mining inventory over H1.

 
                                                                    Full Year 
                                          H1 2019                        2018 
                                                         H1 2018 
                                      (Unaudited)    (Unaudited)    (Audited) 
-----------------------  ---------  -------------  -------------  ----------- 
 Other operating costs    US$'000        (11,320)       (14,574)     (27,866) 
-----------------------  ---------  -------------  -------------  ----------- 
 

Other operating costs comprise expenditure incurred for communications, consultants, directors' fees, stock exchange listing fees, share registry fees, employee entitlements, general office administration expenses, the unwinding of the restoration and rehabilitation provision, foreign exchange movements and the 3% production royalty payable to the ARE. Other operating costs decreased by US$3.3 million or 22% YoY to US$11.3 million. This was predominantly as a result of a US$2.5 million decrease in corporate and other costs due to reversals of share-based payment awards following forfeiture or failure to satisfy vesting conditions.

 
                                                             Full Year 
                                   H1 2019                        2018 
                                                  H1 2018 
                               (Unaudited)    (Unaudited)    (Audited) 
----------------  ---------  -------------  -------------  ----------- 
 Finance income    US$'000           3,207          2,246        4,815 
----------------  ---------  -------------  -------------  ----------- 
 

Finance income comprises interest income applicable on the Company's available cash and term deposit amounts. The movements in finance income are in line with the movements in the Company's available cash and term deposit amounts.

 
                                                                               Full Year 
                                                     H1 2019                        2018 
                                                                    H1 2018 
                                                 (Unaudited)    (Unaudited)    (Audited) 
----------------------------------  ---------  -------------  -------------  ----------- 
 Profit for the period before tax    US$'000          59,627         80,376      152,702 
----------------------------------  ---------  -------------  -------------  ----------- 
 

As a result of the factors outlined above, Centamin recorded a profit before tax for the six months ended 30 June 2019 of US$59.6 million, a 26% decrease YoY.

 
                                                                              Full Year 
                                                    H1 2019                        2018 
                                                                   H1 2018 
                                                (Unaudited)    (Unaudited)    (Audited) 
---------------------------------  ---------  -------------  -------------  ----------- 
 Dividend paid - non-controlling 
  interest in SGM                   US$'000        (39,375)       (39,266)     (76,391) 
---------------------------------  ---------  -------------  -------------  ----------- 
 

During the six months ended 30 June 2019, US$39.4 million was paid as dividends to the non-controlling interest ("NCI") in Sukari Gold Mine ("SGM"), our Egyptian state partners, EMRA.

Dividends paid to EMRA, pursuant to the provisions of the Concession Agreement ("CA"), are recognised as NCI attributable to SGM at the base of the income statement of Centamin. EMRA does not own shares in Centamin, therefore Group earnings per share is calculated on the profit attributable to the owners of the parent. The profit share payments during the year will be reconciled against SGM's audited financial statements. Any variation between payments made during the year (which are based on the Company's estimates) and the audited financial statements, may result in a balance due and payable to EMRA or advances to be offset against future payments. SGM's June 2019 financial statements are currently being audited.

(1) Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments following the removal of fuel subsidies in January 2012 (refer to note 2.4 of the financial statements for further details).

(2) Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss and Adjusted free cash flow are non-GAAP measures and are defined at the end of the Financial Review section.

3 Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

Financial Position

Centamin has a strong and flexible financial position with no debt and no hedging. Cash, bullion on hand, gold sales receivables and financial assets at fair value through profit and loss were valued at US$326.6 million as at 30 June 2019 (31 December 2018: US$322.3 million).

 
                                                                                       31 December 
                                                              30 June        30 June          2018 
                                                                 2019           2018     (Audited) 
                                                          (Unaudited)    (Unaudited) 
 Cash and cash equivalents (note 
  2.9(a))                                      US$'000        276,858        282,764       282,627 
 Bullion on hand (valued at the period-end 
  spot price)                                  US$'000         26,610         11,565        11,431 
 Gold and silver sales debtor                  US$'000         13,669          8,926        28,234 
 Financial assets at fair value through        US$'000                             - 
  profit and loss (note 2.6)                                    9,442                            - 
-------------------------------------------  ---------  -------------  -------------  ------------ 
 Cash and cash equivalents, bullion 
  on hand, gold sales receivables 
  and financial assets at fair value 
  through profit and loss                      US$'000        326,579        303,255       322,292 
-------------------------------------------  ---------  -------------  -------------  ------------ 
 

The majority of funds have been invested in international rolling short-term interest money market deposits. The financial assets at fair value through profit and loss at period end relates to an equity interest acquired in a listed public company.

 
                                                           30 June        30 June   31 December 
                                                              2019           2018          2018 
                                                       (Unaudited)    (Unaudited)     (Audited) 
 Current assets 
 Inventories                               US$'000         102,616        113,836        97,550 
 Financial assets at fair value through    US$'000 
  profit and loss                                            9,442              -             - 
 Trade and other receivables               US$'000          18,301         12,328        33,443 
 Prepayments                               US$'000           6,526         11,131         6,696 
 Cash and cash equivalents                 US$'000         276,858        282,764       282,627 
----------------------------------------  ---------  -------------  -------------  ------------ 
 Total current assets                      US$'000         413,743        420,059       420,316 
----------------------------------------  ---------  -------------  -------------  ------------ 
 

Current assets have decreased by US$6.6 million or 2% from US$420.3 million at 31 December 2018 to US$413.7 million at 30 June 2019, as a result of:

   --     US$5.1 million increase (+ve) in inventory driven by: 

o US$5.2 million decrease in collective stores inventory (due to cost reduction and minimisation initiatives) (-ve);

o US$8.9 million increase in overall combined mining stockpiles and gold in circuit levels (+ve); and

o US$1.4 million decrease in the provision for obsolete stores inventory (+ve).

-- US$15.1 million decrease in trade and other receivables (including gold sale receivables) (-ve);

   --     US$0.2 million decrease in prepayments (-ve); 

-- US$9.4 million increase in the financial assets at fair value through profit and loss which relates to an equity interest acquired in a listed public company (+ve); and

-- US$5.8 million decrease in net cash (net of foreign exchange movements) (-ve) driven by the profit for the period less the payment of the 2018 final dividend of US$34.7 million and a US$39.4 million payment to EMRA as distributions to the NCI during the half year.

 
                                                     30 June        30 June   31 December 
                                                        2019           2018          2018 
                                                 (Unaudited)    (Unaudited)     (Audited) 
 Non--current assets 
 Property, plant and equipment       US$'000         815,442        847,502       835,987 
 Exploration and evaluation asset    US$'000          63,521         65,451        59,154 
 Inventories - mining stockpiles     US$'000          47,629              -        32,424 
 Other receivables                   US$'000              91             92            88 
----------------------------------  ---------  -------------  -------------  ------------ 
 Total non--current assets           US$'000         926,683        913,045       927,653 
----------------------------------  ---------  -------------  -------------  ------------ 
 

Non--current assets have decreased by US$1.0 million or 0.1% from US$927.7 million at 31 December 2018 to US$926.7 million, as a result of:

   --     US$40.0 million increase in the cost of property, plant and equipment (+ve); 
   --     US$60.6 million charge for depreciation and amortisation (-ve); 

-- US$4.4 million increase in exploration and evaluation assets, as a result of the drilling programmes in Sukari Hill (+ve); and

   --     US$15.2 million increase in inventory related to mine ROM stockpiles (+ve). 

(1) Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments following the removal of fuel subsidies in January 2012 (refer to note 2.4 of the financial statements for further details).

(2) Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss and Adjusted free cash flow are non-GAAP measures and are defined at the end of the Financial Review section.

3 Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

 
                                              30 June        30 June   31 December 
                                                 2019           2018          2018 
                                          (Unaudited)    (Unaudited)     (Audited) 
 Current liabilities 
 Trade and other payables     US$'000          46,847         34,365        39,246 
 Tax liabilities              US$'000               -              3             3 
 Provisions                   US$'000           8,559          8,001         8,155 
---------------------------  ---------  -------------  -------------  ------------ 
 Total current liabilities    US$'000          55,406         42,369        47,404 
---------------------------  ---------  -------------  -------------  ------------ 
 

Current liabilities have increased by US$8.0 million or 17% from US$47.4 million at 31 December 2018 to US$55.4 million, as a result of:

   --     US$5.7 million increase in trade payables (+ve); 
   --     US$1.9 million increase in accruals (+ve); 
   --     US$0.4 million increase in current provisions (+ve). 
 
                                                   30 June        30 June   31 December 
                                                      2019           2018          2018 
                                               (Unaudited)    (Unaudited)     (Audited) 
 Non--current liabilities 
 Provisions                        US$'000          13,954         11,648        13,748 
--------------------------------  ---------  -------------  -------------  ------------ 
 Total non--current liabilities    US$'000          13,954         11,648        13,748 
--------------------------------  ---------  -------------  -------------  ------------ 
 

Non--current liabilities have increased by US$0.3 million from US$13.7 million at 31 December 2018 to US$14.0 million as a result of an increase in the rehabilitation provision.

 
                                         30 June        30 June   31 December 
                                            2019           2018          2018 
                                     (Unaudited)    (Unaudited)     (Audited) 
 Equity 
 Issued capital          US$'000         672,105        670,589       670,589 
 Share option reserve    US$'000           2,886          4,178         5,688 
 Accumulated profits     US$'000         596,075        604,320       610,540 
----------------------  ---------  -------------  -------------  ------------ 
 Total equity            US$'000       1,271,066      1,279,087     1,286,817 
----------------------  ---------  -------------  -------------  ------------ 
 

There has been a 1,232,400 increase in the number of issued shares over the period due to share-based payment awards vesting.

Share option reserves reported have decreased by US$2.8 million to US$2.9 million as result of the vesting of the 2016 RSP awards on 4 June 2019 and by the reversal of the 2016 RSP awards that didn't meet the vesting conditions offset by the recognition of the share--based payment expenses for the period and new share-based payment awards granted in 2019.

Accumulated profits decreased by US$14.4 million to US$596.1 million. The key driving factors in this 2% YoY decrease in accumulated profits were US$74.0 million of stakeholder distribution by way of profit share with our Egyptian state partners, EMRA, and payment of 2018 final dividend, offset by profits after tax of US$59.6 million.

Cash flow

 
                                                                                         Full Year 
                                                               H1 2019                        2018 
                                                                              H1 2018 
                                                           (Unaudited)    (Unaudited)    (Audited) 
--------------------------------------------  ---------  -------------  -------------  ----------- 
 Cash flows from operating activities 
 Cash generated in operating activities        US$'000         116,424        123,161      223,791 
 Income tax paid                               US$'000            (48)          (499)        (387) 
 Net cash generated by operating activities    US$'000         116,376        122,662      223,404 
--------------------------------------------  ---------  -------------  -------------  ----------- 
 

Net cash flows generated by operating activities comprise receipts from gold and silver sales and interest income, offset by operating and corporate administration costs. Cash flows from operating activities decreased by US$6.3 million to US$116.4 million for the six months ended 30 June 2019 compared to US$122.7 million for the six months ended 30 June 2018, primarily attributable to the decrease in revenue, driven by a decrease in ounces sold at a lower average realised price, as well as an increase in costs as explained above.

(1) Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments following the removal of fuel subsidies in January 2012 (refer to note 2.4 of the financial statements for further details).

(2) Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss and Adjusted free cash flow are non-GAAP measures and are defined at the end of the Financial Review section.

3 Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

 
                                                                                    Full Year 
                                                          H1 2019                        2018 
                                                                         H1 2018 
                                                      (Unaudited)    (Unaudited)    (Audited) 
---------------------------------------  ---------  -------------  -------------  ----------- 
 Cash flows from investing activities 
 Acquisition of financial assets at       US$'000 
  fair value through profit and loss                      (9,364)              -            - 
 Acquisition of property, plant and 
  equipment                               US$'000        (40,133)       (48,001)     (83,454) 
 Brownfield exploration and evaluation 
  expenditure                             US$'000         (4,367)        (1,566)      (4,946) 
 Finance income                           US$'000           3,207          2,246        4,815 
---------------------------------------  ---------  -------------  -------------  ----------- 
 Net cash used in investing activities    US$'000        (50,657)       (47,321)     (83,585) 
---------------------------------------  ---------  -------------  -------------  ----------- 
 

Net cash flows used in investing activities comprise exploration expenditure and capital development expenditures including the acquisition of financial and mineral assets. Cash outflows have increased by US$3.3 million for the six months ended 30 June 2019 to US$50.7 million from US$47.3 million in the six months ended 30 June 2018. The primary use of the funds in the period was for purchase of property, plant and equipment, investment in underground development at the Sukari site in Egypt and the acquisition of an equity interest in a listed public company.

 
                                                                                       Full Year 
                                                             H1 2019                        2018 
                                                                            H1 2018 
                                                         (Unaudited)    (Unaudited)    (Audited) 
------------------------------------------  ---------  -------------  -------------  ----------- 
 Cash flows from financing activities 
 Dividend paid - non-controlling interest 
  in SGM                                     US$'000        (39,375)       (39,266)     (76,391) 
 Dividend paid - owners of the parent        US$'000        (34,672)      (115,629)    (144,567) 
 Net cash used in financing activities       US$'000        (74,047)      (154,895)    (220,958) 
------------------------------------------  ---------  -------------  -------------  ----------- 
 

Net cash flows used in financing activities decreased by US$80.8 million in the half year to US$74.1 million (from US$154.9 million for 30 June 2018) due to US$80.9 million decrease in dividends being paid in 2019, and a US$0.1 million increase in payments to the NCI in SGM, being EMRA.

Free cash flow - Egypt

 
                                                                                         Full Year 
                                                               H1 2019                        2018 
                                                                              H1 2018 
                                                           (Unaudited)    (Unaudited)    (Audited) 
--------------------------------------------  ---------  -------------  -------------  ----------- 
 Net cash generated by operating activities    US$'000         131,572        141,377      255,488 
 Less: 
 Net cash used in investing activities         US$'000        (43,698)       (49,338)     (88,098) 
--------------------------------------------  ---------  -------------  -------------  ----------- 
 Free cash flow                                US$'000          87,874         92,039      167,390 
 Dividend paid - non-controlling interest 
  in SGM                                       US$'000        (39,375)       (39,266)     (76,391) 
 Dividend paid - controlling interest 
  in SGM                                       US$'000        (48,125)       (48,480)     (93,855) 
 Net increase/(decrease) in cash and 
  cash equivalents                             US$'000             374          4,293      (2,856) 
--------------------------------------------  ---------  -------------  -------------  ----------- 
 Dividend paid - non-controlling interest 
  in SGM                                          %                 45             43           46 
 Dividend paid - controlling interest 
  in SGM                                          %                 55             53           56 
--------------------------------------------  ---------  -------------  -------------  ----------- 
 

Free cash flows generated from Egypt decreased by US$4.2 million in the half year to US$87.9 million (from US$92.0 million for 30 June 2018) due to US$9.8 million decrease in cash flows from operating activities in 2019, and a US$5.6 million decrease in payments to the owners of SGM in 2019, see the statement of cash flows by operating segment in note 2.1 of the interim financial statements for 30 June 2019 for further information.

 
                                                                                      Full Year 
                                                            H1 2019                        2018 
                                                                           H1 2018 
                                                        (Unaudited)    (Unaudited)    (Audited) 
-----------------------------------------  ---------  -------------  -------------  ----------- 
 Effect of foreign exchange rate changes    US$'000           2,559          2,638        4,086 
-----------------------------------------  ---------  -------------  -------------  ----------- 
 

Effects of exchange rate changes have decreased by US$0.1 million as a result of movements of the currencies used across the operations in the year.

(1) Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments following the removal of fuel subsidies in January 2012 (refer to note 2.4 of the financial statements for further details).

(2) Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss and Adjusted free cash flow are non-GAAP measures and are defined at the end of the Financial Review section.

3 Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

Capital expenditure

The following table provides a breakdown of the total capital expenditure of the group:

 
                                                                                        Full Year 
                                                              H1 2019                        2018 
                                                                             H1 2018 
                                                          (Unaudited)    (Unaudited)    (Audited) 
-------------------------------------------  ---------  -------------  -------------  ----------- 
 Underground exploration                      US$'000           3,214          3,383        6,048 
 Underground mine development                 US$'000          18,503         19,150       37,161 
 Other sustaining capital expenditure         US$'000          21,540         28,851       45,982 
-------------------------------------------  ---------  -------------  -------------  ----------- 
 Total sustaining capital expenditure         US$'000          43,257         51,384       89,191 
-------------------------------------------  ---------  -------------  -------------  ----------- 
 Non-sustaining exploration capitalised(1)    US$'000           4,730          2,493        7,587 
-------------------------------------------  ---------  -------------  -------------  ----------- 
 

(1) Includes US$4.7 million of Sukari expenditure relating to Cleopatra in non-sustaining capital expenditure before the offset of net pre-production gold sales.

Cumulative exploration expenditure capitalised for Cleopatra at Sukari is US$19.9 million (project to date) offset by pre-production net revenues of US$17.1 million (refer to notes 2.1 and 2.2 to the financial statements for further details) resulting in US$2.8 million remaining on the statement of financial position at 30 June 2019.

Exploration expenditure

The following table provides a breakdown of the total exploration expenditure of the group:

 
                                                                                       Full Year 
                                                             H1 2019                        2018 
                                                                            H1 2018 
                                                         (Unaudited)    (Unaudited)    (Audited) 
------------------------------------------  ---------  -------------  -------------  ----------- 
 Greenfield exploration 
 Burkina Faso                                US$'000           1,892          3,664        5,223 
 Côte d'Ivoire                          US$'000           8,561          8,168       15,783 
------------------------------------------  ---------  -------------  -------------  ----------- 
 Total greenfield exploration expenditure    US$'000          10,453         11,832       21,006 
 
 Brownfield exploration 
 Sukari Tenement                             US$'000           3,214          3,383        6,048 
 Cleopatra(1)                                US$'000           4,730          2,493        7,587 
 Total brownfield exploration expenditure    US$'000           7,944          5,876       13,635 
 
 Total exploration expenditure               US$'000          18,397         17,708       34,641 
------------------------------------------  ---------  -------------  -------------  ----------- 
 

(1) Cleopatra expenditure before the offset of net pre-production gold sales.

Furthermore, exploration and evaluation expenditure comprised expenditure incurred for exploration activities in Côte d'Ivoire and Burkina Faso. Exploration and evaluation costs decreased by US$1.4 million, or 12% YoY, to US$10.5 million.

Exploration and evaluation assets - impairment considerations

In consideration of the requirements of IFRS 6, management is not aware of any information that would otherwise suggest that an impairment trigger has occurred which would require a full impairment test to be carried out at 30 June 2019.

Foreign Exchange

 
                                                                         Full Year 
                                               H1 2019                        2018 
                                                              H1 2018 
                                           (Unaudited)    (Unaudited)    (Audited) 
----------------------------  ---------  -------------  -------------  ----------- 
 Foreign exchange gain, net    US$'000           2,846          2,934        6,372 
----------------------------  ---------  -------------  -------------  ----------- 
 

Foreign exchange gains, net have decreased YoY from a US$2.9 million gain to a US$2.8 million gain, resulting in a US$0.1 million decrease on the six months ended 30 June 2019.

(1) Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments following the removal of fuel subsidies in January 2012 (refer to note 2.4 of the financial statements for further details).

(2) Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss and Adjusted free cash flow are non-GAAP measures and are defined at the end of the Financial Review section.

3 Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

Non--GAAP financial measures

Four non--GAAP financial measures are used in this report:

1) EBITDA and adjusted EBITDA

EBITDA is a non--GAAP financial measure, which excludes the following from profit before tax:

   --     Finance costs; 
   --     Finance income; and 
   --     Depreciation and amortisation. 

Management believes that EBITDA is a valuable indicator of the group's ability to generate liquidity by producing operating cash flow to fund working capital needs and fund capital expenditures. EBITDA is also frequently used by investors and analysts for valuation purposes whereby EBITDA is multiplied by a factor or "EBITDA multiple" that is based on an observed or inferred relationship between EBITDA and market values to determine the approximate total enterprise value of a company. EBITDA is intended to provide additional information to investors and analysts and does not have any standardised definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA excludes the impact of cash cost of production and income of financing activities and taxes, and therefore is not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA differently. The following table provides a reconciliation of EBITDA to profit for the period before tax.

Reconciliation of profit before tax to EBITDA and adjusted EBITDA:

 
                                                                                   Full Year 
                                                         H1 2019                        2018 
                                                                        H1 2018 
                                                     (Unaudited)    (Unaudited)    (Audited) 
--------------------------------------  ---------  -------------  -------------  ----------- 
 Profit for the period before tax(1)     US$'000          59,627         80,376      152,702 
 Finance income                          US$'000         (3,207)        (2,246)      (4,815) 
 Interest expense                        US$'000              77              -            - 
 Depreciation and amortisation(1)        US$'000          60,612         51,598      110,047 
--------------------------------------  ---------  -------------  -------------  ----------- 
 EBITDA(1)                               US$'000         117,109        129,728      257,934 
 Add back: 
 Impairments of non-current assets(2)    US$'000               -              -            - 
--------------------------------------  ---------  -------------  -------------  ----------- 
 Adjusted EBITDA                         US$'000         117,109        129,728      257,934 
--------------------------------------  ---------  -------------  -------------  ----------- 
 

(1) Profit before tax, depreciation and amortisation and EBITDA includes a charge to reflect the removal of fuel subsidies (refer to note 2.4 to the financial statements for further details).

(2) Adjustments made to normalise earnings, for example impairments on non-current assets (i.e. net realisable value, stockpiles, exploration and evaluation assets etc.)

2) Cash cost of production per ounce produced and sold and all-in sustaining costs per ounce sold calculation

Cash cost of production and AISC are non-GAAP financial measures. Cash cost of production per ounce is a measure of the average cost of producing an ounce of gold, calculated by dividing the operating costs in a period by the total gold production over the same period. Operating costs represent total operating costs less administrative expenses, royalties, depreciation and amortisation. Management uses this measure internally to better assess performance trends for the Company as a whole. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use such non-GAAP information to evaluate the Company's performance and ability to generate cash flow. The Company believes that these measures provide an alternative reflection of the group's performance for the current period and are an alternative indication of its expected performance in future periods. Cash cost of production is intended to provide additional information, does not have any standardised meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. This measure is not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently.

During June 2013 the World Gold Council ("WGC"), an industry body, published a Guidance Note on the 'all in sustaining costs' metric, which gold mining companies can use to supplement their overall non-GAAP disclosure. AISC is an extension of the existing 'cash cost' metric and incorporates all costs related to sustaining production and, in particular, recognising the sustaining capital expenditure associated with developing and maintaining gold mines. In addition, this metric includes the cost associated with developing and maintaining gold mines. In addition, this metric includes the cost associated with corporate office structures that support these operations, the community and rehabilitation costs attendant with responsible mining and any exploration and evaluation costs associated with sustaining current operations. AISC US$/oz is arrived at by dividing the dollar value of the sum of these cost metrics, by the ounces of gold sold (as compared to using ounces produced which is used in the cash cost of production calculation).

On 14 November 2018 the World Gold Council published an updated Guidance Note on 'all-in sustaining costs' and 'all-in costs' metrics. Per their press release, it is expected that companies may choose to use the updated guidance from 1 January 2019 or on commencement of their financial year if later. The Group have applied the updated guidance from 1 January 2019 with no impact on our results or comparatives.

Reconciliation of cash cost of production per ounce produced:

 
                                                                                               Full Year 
                                                               H1 2019                              2018 
                                                                                 H1 2018 
                                                        (Unaudited)(1)    (Unaudited)(1)    (Audited)(1) 
 Mine production costs (note 2.2)           US$'000            173,760           156,739         328,090 
 Less: Refinery and transport               US$'000              (677)             (737)         (1,508) 
 Movement of inventory(2)                   US$'000           (13,638)          (20,060)        (37,188) 
-----------------------------------------  ---------  ----------------  ----------------  -------------- 
 Cash cost of production - gold 
  produced                                  US$'000            159,445           135,942         289,394 
-----------------------------------------  ---------  ----------------  ----------------  -------------- 
 
 Gold produced - total (oz.) (excluding 
  Cleopatra)                                   oz              230,474           213,284         463,459 
 Cash cost of production per ounce 
  produced                                   US$/oz                692               637             624 
-----------------------------------------  ---------  ----------------  ----------------  -------------- 
 
 

(1) Mine production costs, cash cost of production, cash cost of production per ounce, AISC and AISC per ounce sold includes prepayments recorded since Q4 2012 to reflect the removal of fuel subsidies (refer to note 2.4 to the financial statements for further details).

(2) The movement in inventory on ounces produced is only the movement in mining stockpiles and ore in circuit while the movement in ounces sold is the net movement in mining stockpiles, ore in circuit and gold in safe inventory.

A reconciliation has been included below to show the cash cost of production metric should gold sold ounces be used as a denominator.

Reconciliation of cash cost of production per ounce sold:

 
                                                                                           Full Year 
                                                           H1 2019                              2018 
                                                                             H1 2018 
                                                    (Unaudited)(1)    (Unaudited)(1)    (Audited)(1) 
------------------------------------  ----------  ----------------  ----------------  -------------- 
 Mine production costs (note 2.2)       US$'000            173,760           156,739         328,090 
 Royalties paid                         US$'000              8,765             9,027          18,396 
 Movement of inventory(2)               US$'000           (24,128)          (16,308)        (31,296) 
-------------------------------------  ---------  ----------------  ----------------  -------------- 
 Cash cost of production - gold 
  sold                                  US$'000            158,397           149,458         315,190 
-------------------------------------  ---------  ----------------  ----------------  -------------- 
 
 Gold sold - total (oz.) (excluding 
  Cleopatra)                               oz              220,507           224,858         475,362 
 Cash cost of production per ounce 
  sold                                   US$/oz                718               665             663 
-------------------------------------  ---------  ----------------  ----------------  -------------- 
 
 

(1) Mine production costs, cash cost of production, cash cost of production per ounce, AISC and AISC per ounce sold includes prepayments recorded since Q4 2012 to reflect the removal of fuel subsidies (refer to note 2.4 to the financial statements for further details).

(2) The movement in inventory on ounces produced is only the movement in mining stockpiles and ore in circuit while the movement in ounces sold is the net movement in mining stockpiles, ore in circuit and gold in safe inventory.

Reconciliation of AISC per ounce sold:

 
                                                                                             Full Year 
                                                             H1 2019                              2018 
                                                                               H1 2018 
                                                      (Unaudited)(1)    (Unaudited)(1)    (Audited)(1) 
--------------------------------------  ----------  ----------------  ----------------  -------------- 
 Mine production costs (note 2.2)         US$'000            173,760           156,739         328,090 
 Movement in inventory                    US$'000           (24,128)          (16,308)        (31,296) 
 Royalties                                US$'000              8,765             9,027          18,396 
 Corporate administration costs           US$'000              5,941             8,463          15,909 
 Rehabilitation costs                     US$'000                205               435             870 
 Sustaining underground development 
  and exploration                         US$'000             21,717            22,533          43,209 
 Other sustaining capital expenditure     US$'000             21,540            28,851          45,982 
 By--product credit                       US$'000              (439)             (590)         (1,044) 
---------------------------------------  ---------  ----------------  ----------------  -------------- 
 All--in sustaining costs(2)              US$'000            207,361           209,150         420,116 
---------------------------------------  ---------  ----------------  ----------------  -------------- 
 
 Gold sold - total (oz.) (excluding 
  Cleopatra)                                 oz              220,507           224,858         475,362 
 AISC per ounce sold                       US$/oz                940               930             884 
---------------------------------------  ---------  ----------------  ----------------  -------------- 
 
 

(1) Mine production costs, cash cost of production, cash cost of production per ounce, AISC and AISC per ounce sold includes prepayments recorded since Q4 2012 to reflect the removal of fuel subsidies (refer to note 2.4 to the financial statements for further details).

   (2)    Includes refinery and transport. 

3) Cash and cash equivalents, bullion on hand, gold sales receivables and financial assets at fair value through profit and loss

Cash and cash equivalents, bullion on hand, gold sales receivables and financial assets at fair value through profit and loss is a non-GAAP financial measure of the available cash and liquid assets at a point in time. Management uses this measure internally to better assess performance trends for the Company as a whole. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use such non-GAAP information to evaluate the Company's performance and ability to generate cash flow. The Company believes that these measures provide an alternative reflection of the group's performance for the current period and are an alternative indication of its expected performance in future periods. Cash and cash equivalents, bullion on hand, gold sales receivables and financial assets at fair value through profit and loss is intended to provide additional information, does not have any standardised meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. This measure is not necessarily indicative of cash and cash equivalents as determined under GAAP. This is a non--GAAP financial measure and other companies may calculate these measures differently.

Reconciliation to cash and cash equivalents, bullion on hand, gold sales receivables and financial assets at fair value through profit and loss:

 
                                                                                       31 December 
                                                              30 June        30 June          2018 
                                                                 2019           2018     (Audited) 
                                                          (Unaudited)    (Unaudited) 
 Cash and cash equivalents (note 
  2.9(a))                                      US$'000        276,858        282,764       282,627 
 Bullion on hand (valued at the period-end 
  spot price)                                  US$'000         26,610         11,565        11,431 
 Gold and silver sales debtor                  US$'000         13,669          8,926        28,234 
 Financial assets at fair value through        US$'000                             - 
  profit and loss (note 2.6)                                    9,442                            - 
-------------------------------------------  ---------  -------------  -------------  ------------ 
 Cash and cash equivalents, bullion 
  on hand, gold sales receivables 
  and financial assets at fair value 
  through profit and loss                      US$'000        326,579        303,255       322,292 
-------------------------------------------  ---------  -------------  -------------  ------------ 
 

4) Free cash flow and adjusted free cash flow

Free cash flow is a non-GAAP financial measure of the available cash after distributions to the NCI in SGM, being EMRA, that the group has at its disposal to use for capital reinvestment and to distribute to shareholders of the parent as dividends in accordance with the Company's dividend policy. Management uses this measure internally to better assess performance trends for the Company as a whole. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use such non-GAAP information to evaluate the Company's performance and ability to generate cash flow. The Company believes that these measures provide an alternative reflection of the group's performance for the current period and are an alternative indication of its expected performance in future periods. Free cash flow is intended to provide additional information, does not have any standardised meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. This measure is not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. This is a non-GAAP financial measure and other companies may calculate these measures differently.

 
                                                                                    Full Year 
                                                          H1 2019                        2018 
                                                                         H1 2018 
                                                      (Unaudited)    (Unaudited)    (Audited) 
 Net cash generated by operating 
  activities                               US$'000        116,376        122,662      223,404 
 Less: 
 Net cash used in investing activities     US$'000       (50,657)       (47,321)     (83,584) 
 Dividend paid - non-controlling 
  interest in SGM                          US$'000       (39,375)       (39,266)     (76,391) 
---------------------------------------  ---------  -------------  -------------  ----------- 
 Free cash flow                            US$'000         26,344         36,075       63,429 
 Add back: 
 Acquisitions of financial assets          US$'000                                          - 
  at fair value through profit and 
  loss(1)                                                   9,364              - 
---------------------------------------  ---------  -------------  -------------  ----------- 
 Adjusted free cash flow                   US$'000         35,708         36,075       63,429 
---------------------------------------  ---------  -------------  -------------  ----------- 
 

(1) Adjustments made to free cash flow, for example acquisitions of financial assets at fair value through profit and loss, which are completed through specific allocated available cash reserve.

Principal Risks

MANAGING RISK

The management of risks through identification, monitoring and mitigation allows the Group to improve its decision-making process, deliver on its objectives and improve its performance as a mining company.

The Board has overall responsibility for establishing a robust risk management framework that allows for the assessment and management of material strategic and operational risks. In addition, the Board is responsible for articulating the Group's risk appetite against the principal risks. The Board reviews existing and emerging risks in the context of both opportunities and potential threats. This is then applied when challenging the strategic objectives of the Company that underpin the business model.

Due in part to the nature of the business as an operating mining company, the headline principal risks, whilst fundamental to the ongoing operation, remain largely constant. The Audit and Risk Committee and Board regularly review the principal risks as well as the wider operational, corporate and general business risks. Management consider the business reports and risk registers as well as full details and corrective actions of all high-level incidents, leading indicators hazard identification and any resulting procedural changes.

There have been no changes in the Company's risks and uncertainties during the half year ended 30 June 2019 from those described on pages 38 to 49 of the 2018 Annual Report, available on the Company website at www.centamin.com/investors/reports/2018, and the Company does not anticipate any changes in the Company's risks and uncertainties during the next six months to 31 December 2019.

Of the emerging risks published in the 2018 Annual Report, the Company has since published on its website the latest details on its Tailings Storage Facility in the prescribed information table communicated to all mining companies at the request of the Church of England Pensions Board and the Swedish Council on Ethics. This can be found at https://www.centamin.com/production/sukari/tailings-storage-facility.

The key principal risks relate to the following:

Strategic risks

   --      Loss of revenue due to single project dependency 
   --      Sukari Project relationship with our Egyptian state partners EMRA 
   --      Jurisdictional taxation exposure 

External risks

   --      Gold price 
   --      Political risk - Sukari 
   --      Political risk - West Africa 
   --      Litigation 

Operational risks

   --      Failure to achieve exploration development success 
   --      Reserve and resource estimates 
   --      Failure to achieve production estimates 

Centamin takes a number of measures to mitigate risks associated with its underlying operational and exploration activity which are monitored and evaluated regularly. Due to the nature of these inherent risks, it is not possible to give absolute assurance that mitigating actions will be wholly effective. The Company is exposed to changes in the economic environment through its operations in Egypt, as well as its operations in West Africa (Burkina Faso and Côte d'Ivoire). Relationships with governments and the maintenance of exploration permits and licence areas remain key risks and a key focus for all exploration, development and operational projects.

One of the Company's main objectives is to achieve a target of zero injuries and for every employee to be safe every day. The control environment and operating practices in place at the mining and exploration operations helps reduce the likelihood of harm to employees. Centamin is committed to attracting, energising, developing and training its workforce to ensure they are highly skilled and motivated.

Centamin recognises the value of being a socially responsible employer and the importance of engaging with the wider community in the areas in which it operates. By investing in the community and engaging in projects that directly and positively impact local people, Centamin can foster a cooperative working environment.

Legal Developments in Egypt

CONCESSION AGREEMENT APPEAL

All material has been submitted by the Company to the courts. The appeal has been stayed pending the decision on Law No. 32 as referred to below. Consequently, there will be no further hearings on the Concession Agreement Appeal until a judgment is given on the Law No. 32 Appeal in the Supreme Constitutional Court. Note. The Law No. 32 Appeal is independent from the Group and neither Pharaoh Gold Mine ("PGM") nor SGM are a party.

The Law No. 32 Appeal is awaiting the State Commissioner to submit their report to the Supreme Constitutional Court. There is no visibility at present on when this report will be submitted.

Law No. 32 is legislation, enforced and ratified by Parliament in 2014. The law is designed to protect and encourage foreign investment in the Arab Republic of Egypt ("ARE") by restricting the capacity for third parties to challenge contractual agreements between the Egyptian government and an investor.

DIESEL FUEL OIL CASE

All required documentation has been submitted by the Company to the courts. EGPC, the counterparty, has the opportunity to submit the requested documentation before the Court can deliver a judgment.

Andrew Pardey

Chief Executive Officer

31 July 2019

Set out below are the unaudited consolidated Financial Statements for the Group, including notes thereto, for the six months ended 30 June 2019.

DIRECTORS' RESPONSIBILITY STATEMENT

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE SIX MONTHSED 30 JUNE 2019 FINANCIAL REPORT

We confirm that to the best of our knowledge:

(a) the condensed set of interim consolidated financial statements for the six months ended 30 June 2019 has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union;

(b) the condensed set of interim consolidated financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole as required by DTR 4.2.4;

(c) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

The board of directors that served during all or part of the six month period ended on 30 June 2019 and their respective responsibilities can be found on pages 84 to 95 of the 2018 annual report of Centamin plc.

By order of the Board,

Chief Executive Officer Chief Financial Officer

   Andrew Pardey                                                                      Ross Jerrard 
   31 July 2019                                                                           31 July 2019 

UNAUDITED INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE SIX MONTHSED

30 JUNE 2019

Independent review report to Centamin plc

Report on the interim financial statements

Our conclusion

We have reviewed Centamin plc's unaudited interim condensed consolidated financial statements (the "interim financial statements") in the interim results of Centamin plc for the six month period ended 30 June 2019. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

-- the unaudited interim condensed consolidated statement of financial position as at 30 June 2019;

-- the unaudited interim condensed consolidated statement of comprehensive income for the six month period then ended;

-- the unaudited interim condensed consolidated statement of cash flows for the six month period then ended;

-- the unaudited interim condensed consolidated statement of changes in equity for the six month period then ended; and

   --      the explanatory notes to the interim financial statements. 

The interim financial statements included in the interim results for the six month period ended 30 June 2019 have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

As disclosed in note 4.4 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The interim results for the six month period ended 30 June 2019, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim results for the six month period ended 30 June 2019 in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim financial statements in the interim results for the six month period ended 30 June 2019 based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim results for the six month period ended 30 June 2019 and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

Other matter

We have not audited nor reviewed the unaudited interim condensed consolidated statement of comprehensive income for the quarters ended 31 March 2019 and 30 June 2019; the unaudited interim condensed consolidated statement of cash flows for the quarters ended 31 March 2019 and 30 June 2019; or any notes to the financial statements presenting information for the quarters ended 31 March 2019 and 30 June 2019.

PricewaterhouseCoopers LLP

Chartered Accountants

London

31 July 2019

Unaudited interim condensed consolidated statement of comprehensive income

for the six months ended 30 June 2019

 
                                                        Half year          Half year     Year ended 
                                                            ended           ended 30    31 December 
                                                          30 June               June 
                                                             2019                              2018 
                                                      (Unaudited)   2018 (Unaudited)      (Audited) 
                                             Notes        US$'000            US$'000        US$'000 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Revenue                                      2.1         288,136            296,391        603,248 
 Cost of sales                                2.2       (210,046)          (191,879)      (406,538) 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Gross profit                                              78,090            104,512        196,710 
 Profit on financial assets at 
  fair value through profit and 
  loss (net of tax)                                            78                  -              - 
 Other income                                                  25                 24             49 
 Finance income                               2.2           3,207              2,246          4,815 
 Other operating costs                        2.2        (11,320)           (14,574)       (27,866) 
 Exploration and evaluation expenditure                  (10,453)           (11,832)       (21,006) 
 Profit for the period before tax                          59,627             80,376        152,702 
 Tax                                                         (45)               (10)           (53) 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Profit for the period after tax                           59,582             80,366        152,649 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Profit for the period after tax 
  attributable to: 
 - the owners of the parent                                19,667             41,100         74,845 
 - non-controlling interest in 
  SGM                                         2.3          39,915             39,266         77,804 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Other comprehensive expense 
 Items that may be reclassified 
  subsequently to profit or loss: 
 Loss on financial assets at fair 
  value through other comprehensive 
  income (net of tax)                                           -              (125)          (125) 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Other comprehensive expense for 
  the period                                                    -              (125)          (125) 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Total comprehensive income for 
  the period                                               59,582             80,241        152,524 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Total comprehensive income attributable 
  to: 
 - the owners of the parent                                19,667             40,975         74,720 
 - non-controlling interest in 
  SGM                                         2.3          39,915             39,141         77,679 
------------------------------------------  ------  -------------  -----------------  ------------- 
 Earnings per share attributable 
  to owners of the parent: 
 Basic (US cents per share)                   4.4           1.707              3.572          6.497 
 Diluted (US cents per share)                 4.4           1.698              3.548          6.444 
------------------------------------------  ------  -------------  -----------------  ------------- 
 
 

The above unaudited interim condensed consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Unaudited interim condensed consolidated statement of financial position

as at 30 June 2019

 
                                                         30 June        30 June   31 December 
                                                            2019           2018          2018 
                                                     (Unaudited)    (Unaudited)     (Audited) 
                                           Notes         US$'000        US$'000       US$'000 
----------------------------------------  -------  -------------  -------------  ------------ 
 Non--current assets 
 Property, plant and equipment              2.5          815,442        847,502       835,987 
 Exploration and evaluation asset                         63,521         65,451        59,154 
 Inventories - mining stockpiles                          47,629              -        32,424 
 Other receivables                                            91             92            88 
----------------------------------------  -------  -------------  -------------  ------------ 
 Total non--current assets                               926,683        913,045       927,653 
----------------------------------------  -------  -------------  -------------  ------------ 
 Current assets 
 Inventories                                             102,616        113,836        97,550 
 Financial assets at fair value through 
  profit and loss                           2.6            9,442              -             - 
 Trade and other receivables                              18,301         12,328        33,443 
 Prepayments                                2.4            6,526         11,131         6,696 
 Cash and cash equivalents                 2.9(a)        276,858        282,764       282,627 
----------------------------------------  -------  -------------  -------------  ------------ 
 Total current assets                                    413,743        420,059       420,316 
----------------------------------------  -------  -------------  -------------  ------------ 
 Total assets                                          1,340,426      1,333,104     1,347,969 
----------------------------------------  -------  -------------  -------------  ------------ 
 Non--current liabilities 
 Provisions                                 2.7           13,954         11,648        13,748 
----------------------------------------  -------  -------------  -------------  ------------ 
 Total non--current liabilities                           13,954         11,648        13,748 
----------------------------------------  -------  -------------  -------------  ------------ 
 Current liabilities 
 Trade and other payables                                 46,847         34,365        39,246 
 Tax liabilities                                               -              3             3 
 Provisions                                 2.7            8,559          8,001         8,155 
----------------------------------------  -------  -------------  -------------  ------------ 
 Total current liabilities                                55,406         42,369        47,404 
----------------------------------------  -------  -------------  -------------  ------------ 
 Total liabilities                                        69,360         54,017        61,152 
----------------------------------------  -------  -------------  -------------  ------------ 
 Net assets                                            1,271,066      1,279,087     1,286,817 
----------------------------------------  -------  -------------  -------------  ------------ 
 Equity 
 Issued capital                                          672,105        670,589       670,589 
 Share option reserve                       2.8            2,886          4,178         5,688 
 Accumulated profits                                     596,075        604,320       610,540 
----------------------------------------  -------  -------------  -------------  ------------ 
 Total equity attributable to: 
 - owners of the parent                                1,270,796      1,280,770     1,287,087 
 - non-controlling interest in SGM                           270        (1,683)         (270) 
 Total equity                                          1,271,066      1,279,087     1,286,817 
----------------------------------------  -------  -------------  -------------  ------------ 
 

The above unaudited interim condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.

The unaudited interim condensed consolidated financial statements were approved by the board of directors on 31 July 2019 and signed on its behalf by:

   Andrew Pardey                                     Ross Jerrard 
   Chief executive officer                          Chief financial officer 
   31 July 2019                                           31 July 2019 

Unaudited interim condensed consolidated statement of changes in equity

for the six months ended 30 June 2019

 
                                                  Share 
                                  Issued         option    Accumulated                  Non-controlling          Total 
                                 capital        reserve        profits          Total         interests         equity 
                             (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)       (Unaudited)    (Unaudited) 
                    Notes        US$'000        US$'000        US$'000        US$'000           US$'000        US$'000 
-----------------  ------  -------------  -------------  -------------  -------------  ----------------  ------------- 
 Balance as at 1 
  January 2019                   670,589          5,688        610,810      1,287,087             (270)      1,286,817 
 Profit for the 
  period after 
  tax                                  -              -         19,667         19,667            39,915         59,582 
 Other 
 comprehensive 
 income for the 
 period                                -              -              -              -                 -              - 
-----------------  ------  -------------  -------------  -------------  -------------  ----------------  ------------- 
 Total 
  comprehensive 
  income for the 
  period                               -              -         19,667         19,667            39,915         59,582 
 Recognition of 
  share based 
  payments                             -        (1,286)              -        (1,286)                 -        (1,286) 
 Transfer of 
  share 
  based payments                   1,516        (1,516)              -              -                 -              - 
 Dividend paid - 
  non-controlling 
  interest in SGM     2.3              -              -              -              -          (39,375)       (39,375) 
 Dividend paid - 
  owners of the 
  parent                               -              -       (34,672)       (34,672)                 -       (34,672) 
 Balance as at 30 
  June 2019                      672,105          2,886        595,805      1,270,796               270      1,271,066 
-----------------  ------  -------------  -------------  -------------  -------------  ----------------  ------------- 
 
 
                                                  Share 
                                  Issued         option    Accumulated                  Non-controlling          Total 
                                 capital        reserve        profits          Total         interests         equity 
                             (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)       (Unaudited)    (Unaudited) 
                    Notes        US$'000        US$'000        US$'000        US$'000           US$'000        US$'000 
-----------------  ------  -------------  -------------  -------------  -------------  ----------------  ------------- 
 Balance as at 1 
  January 2018                   668,732          4,323        785,604      1,458,659           (1,683)      1,456,976 
 Impact of change 
  in accounting 
  policy                               -              -      (104,947)      (104,947)                 -      (104,947) 
-----------------  ------  -------------  -------------  -------------  -------------  ----------------  ------------- 
 Restated balance 
  as at 1 January 
  2018                           668,732          4,323        680,657      1,353,712           (1,683)      1,352,029 
 Profit for the 
  period after 
  tax                                  -              -         41,100         41,100            39,266         80,366 
 Other 
  comprehensive 
  expense for the 
  period                               -              -          (125)          (125)                 -          (125) 
-----------------  ------  -------------  -------------  -------------  -------------  ----------------  ------------- 
 Total 
  comprehensive 
  income for the 
  period                               -              -         40,975         40,975            39,266         80,241 
 Recognition of 
  share based 
  payments                             -          1,712              -          1,712                 -          1,712 
 Transfer of 
  share 
  based payments                   1,857        (1,857)              -              -                 -              - 
 Dividend paid - 
  non-controlling 
  interest in SGM     2.3              -              -              -              -          (39,266)       (39,266) 
 Dividend paid - 
  owners of the 
  parent                               -              -      (115,629)      (115,629)                 -      (115,629) 
 Balance as at 30 
  June 2018                      670,589          4,178        606,003      1,280,770           (1,683)      1,279,087 
-----------------  ------  -------------  -------------  -------------  -------------  ----------------  ------------- 
 

The change in accounting policy occurred at 30 June 2018 and relates to exploration and evaluation assets, see note 1.2.1 of the 31 December 2018 annual report for details.

 
                                                     Share 
                                       Issued       option   Accumulated                Non-controlling        Total 
                                      capital      reserve       profits        Total         interests       equity 
                                    (Audited)    (Audited)     (Audited)    (Audited)         (Audited)    (Audited) 
                           Notes      US$'000      US$'000       US$'000      US$'000           US$'000      US$'000 
------------------------  ------  -----------  -----------  ------------  -----------  ----------------  ----------- 
 Balance as at 1 
  January 2018                        668,732        4,323       785,604    1,458,659           (1,683)    1,456,976 
 Impact of change 
  in accounting policy                      -            -     (104,947)    (104,947)                 -    (104,947) 
 Restated balance 
  as at 1 January 
  2018                                668,732        4,323       680,657    1,353,712           (1,683)    1,352,029 
 Profit for the period 
  after tax                                 -            -        74,845       74,845            77,804      152,649 
 Other comprehensive 
  expense for the 
  period                                    -            -         (125)        (125)                 -        (125) 
------------------------  ------  -----------  -----------  ------------  -----------  ----------------  ----------- 
 Total comprehensive 
  income for the period                     -            -        74,720       74,720            77,804      152,524 
 Recognition of share 
  based payments                            -        3,222             -        3,222                 -        3,222 
 Transfer of share 
  based payments                        1,857      (1,857)             -            -                 -            - 
 Dividend paid - 
  non-controlling 
  interest in SGM            2.3            -            -             -            -          (76,391)     (76,391) 
 Dividend paid - 
  owners of the parent                      -            -     (144,567)    (144,567)                 -    (144,567) 
 Balance as at 31 
  December 2018                       670,589        5,688       610,810    1,287,087             (270)    1,286,817 
------------------------  ------  -----------  -----------  ------------  -----------  ----------------  ----------- 
 

The change in accounting policy occurred at 30 June 2018 and relates to exploration and evaluation assets, see note 1.2.1 of the 31 December 2018 annual report for details.

The above unaudited interim condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Unaudited interim condensed consolidated statement of cash flows

for the quarter and six months ended 30 June 2019

 
                                                           Half year      Half year     Year ended 
                                                            ended 30       ended 30    31 December 
                                                                June           June 
                                                                               2018           2018 
                                                    2019 (Unaudited)    (Unaudited)      (Audited) 
                                           Notes             US$'000        US$'000        US$'000 
----------------------------------------  -------  -----------------  -------------  ------------- 
 Cash flows from operating activities 
 Cash generated in operating activities    2.9(b)            116,424        123,161        223,791 
 Income tax paid                                                (48)          (499)          (387) 
 Net cash generated by operating 
  activities                                                 116,376        122,662        223,404 
----------------------------------------  -------  -----------------  -------------  ------------- 
 Cash flows from investing activities 
 Acquisition of financial assets 
  at fair value through profit and 
  loss                                      2.6              (9,364)              -              - 
 Acquisition of property, plant 
  and equipment                                             (40,133)       (48,001)       (83,454) 
 Brownfield exploration and evaluation 
  expenditure                                                (4,367)        (1,566)        (4,946) 
 Finance income                             2.2                3,207          2,246          4,815 
----------------------------------------  -------  -----------------  -------------  ------------- 
 Net cash used in investing activities                      (50,657)       (47,321)       (83,585) 
----------------------------------------  -------  -----------------  -------------  ------------- 
 Cash flows from financing activities 
 Dividend paid - non-controlling 
  interest in SGM                           2.3             (39,375)       (39,266)       (76,391) 
 Dividend paid - owners of the 
  parent                                                    (34,672)      (115,629)      (144,567) 
 Net cash used in financing activities                      (74,047)      (154,895)      (220,958) 
----------------------------------------  -------  -----------------  -------------  ------------- 
 Net decrease in cash and cash 
  equivalents                                                (8,328)       (79,554)       (81,139) 
 Cash and cash equivalents at the 
  beginning of the period                                    282,627        359,680        359,680 
 Effect of foreign exchange rate 
  changes                                                      2,559          2,638          4,086 
----------------------------------------  -------  -----------------  -------------  ------------- 
 Cash and cash equivalents at the 
  end of the period                        2.9(a)            276,858        282,764        282,627 
----------------------------------------  -------  -----------------  -------------  ------------- 
 

The above unaudited interim condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.

   1        Current reporting period amendments 
   1.1        Changes in policies and estimates 

The financial position and performance of the Group was particularly affected by the following events and transactions during the reporting period:

   --      Adoption of the following new and revised accounting standards: 

o IFRS 16 'Leases' has been applied since 1 January 2019, the impact of which has been disclosed.

For further information, see note 1.1.1 below:

1.1.1 IFRS 16 Leases

Nature of change

IFRS 16 was issued in January 2016. It has resulted in almost all leases being recognised on the balance sheet by lessees, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short term and low-value leases.

Impact

In the year ended 31 December 2018 the Group set up a project team which reviewed all the Group's leasing arrangements in light of the new lease accounting rules in IFRS 16. The standard affects primarily the accounting for the Group's operating leases.

The team performed an impact assessment of IFRS 16 on the Group's contracts and financial statements. All active contracts were assessed under the requirements of IFRS 16 to determine whether they had arrangements that contained a lease. Under IAS 17 'Leases' and IFRIC 4 'Determining whether an arrangement contains a lease' contracts were initially assessed on the date of their inception to determine whether or not they should be accounted for under those standards. If, on initial assessment, they didn't meet the requirements of IAS 17 or IFRIC 4, but on reassessment do meet the requirements of IFRS 16, they have been excluded from this assessment by application of paragraph C3(b) of IFRS 16. Management have elected to apply the paragraph C3(b) and therefore paragraph C4 of IFRS 16 as a practical expedient to not apply this standard to all the Group's existing contracts.

Mandatory application date and date of adoption by Group

The Group has applied the standard from its mandatory adoption date of 1 January 2019. The Group has applied the simplified transition approach and has not restated comparative amounts for the year or period prior to the current reporting period. Right-of-use assets for property leases have been measured on transition as if the new rules had always been applied. All other right-of-use assets will continue to be measured at the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease expenses).

As at 31 December 2018 the reporting date, the Group had non-cancellable operating lease commitments of US$3.2 million, see note 5.2 of the 2018 annual report. Of these commitments, approximately US$1.1 million related to low value leases which are and will be recognised on a straight-line basis as an expense in profit or loss.

For the remaining lease commitments, the Group recognised right-of-use assets of approximately US$1.6 million on 1 January 2019, lease liabilities of US$1.6 million (after adjustments for prepayments and accrued lease payments recognised as at 31 December 2018). Overall net assets have changed, and net current assets are US$0.3 million lower due to the presentation of a portion of the liability as a current liability.

Due to these IFRS 16 adjustments at 1 January 2019 and the consequential transactions in the half year not being material, the full disclosure of the impact of the new standard has been excluded from these results.

   2        How numbers are calculated 

2.1 Segment reporting

The Group is engaged in the business of exploration for and mining of precious metals, which represents three operating segments, two in the business of exploration and one in mining of precious metals. The Board is the Group's chief operating decision-maker within the meaning of IFRS 8 'Operating segments'. Management has determined the operating segments based on the information reviewed by the Board for the purposes of allocating resources and assessing performance.

The Board considers the business from a geographic perspective and a mining of precious metals versus exploration for precious metals perspective. Geographically, management considers separately the performance in Egypt, Burkina Faso, Côte d'Ivoire and Corporate (which includes Jersey, United Kingdom and Australia). From a mining of precious metals versus exploration for precious metals perspective, management separately considers the Egyptian mining of precious metals from the West African exploration for precious metals in these geographies. The Egyptian mining operations derive its revenue from sale of gold while the West African entities are currently only engaged in precious metal exploration and do not produce any revenue.

The Board assesses the performance of the operating segments based on profits and expenditure incurred as well as exploration expenditure in each region. Egypt is the only operating segment mining precious metals and therefore has revenue and cost of sales whilst the remaining operating segments do not. All operating segments are reviewed by the Board as presented and are key to the monitoring of ongoing performance and assessing plans of the Company.

Non--current assets other than financial instruments by country:

 
                              30 June       30 June  31 December 
                     2019 (Unaudited)          2018         2018 
                                        (Unaudited)    (Audited) 
                              US$'000       US$'000      US$'000 
-------------------  ----------------  ------------  ----------- 
Egypt                         889,574       876,417      891,131 
Burkina Faso                   35,896        36,023       35,959 
Côte d'Ivoire                617           584          543 
Corporate                         596            21           20 
                              926,683       913,045      927,653 
-------------------  ----------------  ------------  ----------- 
 

Statement of financial position by operating segment:

 
30 June 2019                            Total      Egypt  Burkina  Côte  Corporate 
                                                             Faso   d'Ivoire 
(Unaudited)                           US$'000    US$'000  US$'000    US$'000    US$'000 
----------------------------------  ---------  ---------  -------  ---------  --------- 
Statement of financial 
 position 
Total assets                        1,340,426  1,022,161   36,903      1,062    280,300 
Total liabilities                    (69,360)   (63,164)    (449)    (1,715)    (4,032) 
----------------------------------  ---------  ---------  -------  ---------  --------- 
Net assets/total equity/(deficit)   1,271,066    958,997   36,454      (653)    276,268 
----------------------------------  ---------  ---------  -------  ---------  --------- 
 
30 June 2018                            Total      Egypt  Burkina  Côte  Corporate 
                                                             Faso   d'Ivoire 
(Unaudited)                           US$'000    US$'000  US$'000    US$'000    US$'000 
----------------------------------  ---------  ---------  -------  ---------  --------- 
Statement of financial 
 position 
Total assets                        1,333,104  1,021,477   37,556      1,707    272,364 
Total liabilities                    (54,017)   (51,219)    (261)      (861)    (1,676) 
----------------------------------  ---------  ---------  -------  ---------  --------- 
Net assets/total equity             1,279,087    970,258   37,295        846    270,688 
----------------------------------  ---------  ---------  -------  ---------  --------- 
 
 
31 December 2018              Total      Egypt  Burkina  Côte  Corporate 
                                                   Faso   d'Ivoire 
(Audited)                   US$'000    US$'000  US$'000    US$'000    US$'000 
------------------------  ---------  ---------  -------  ---------  --------- 
Statement of financial 
 position 
Total assets              1,347,969  1,032,284   36,876        909    277,900 
Total liabilities          (61,152)   (57,843)    (477)       (85)    (2,747) 
------------------------  ---------  ---------  -------  ---------  --------- 
Net assets/total equity   1,286,817    974,441   36,399        824    275,153 
------------------------  ---------  ---------  -------  ---------  --------- 
 

2.1 Segment reporting (continued)

Statement of comprehensive income by operating segment:

 
Half year ended 30                   Total      Egypt  Burkina  Côte  Corporate 
 June 2019                                                Faso   d'Ivoire 
(Unaudited)                        US$'000    US$'000  US$'000    US$'000    US$'000 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Statement of comprehensive 
 income 
Gold sales (Including 
 pre-production gold 
 sales related to Cleopatra)       292,406    292,406        -          -          - 
Less: Pre-production 
 gold sales related 
 to Cleopatra - transferred 
 to exploration and 
 evaluation asset                  (4,709)    (4,709)        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Gold sales (Excluding 
 pre-production gold 
 sales related to Cleopatra)       287,697    287,697        -          -          - 
Silver sales                           439        439        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Revenue                            288,136    288,136        -          -          - 
Cost of sales                    (210,046)  (210,046)        -          -          - 
Gross profit                        78,090     78,090        -          -          - 
Financial assets at 
 fair value through 
 profit and loss                        78          -        -          -         78 
Other income                            25         25        -          -          - 
Finance income                       3,207         21        -          -      3,186 
Other operating costs             (11,320)    (5,260)     (24)      (396)    (5,640) 
Exploration and evaluation 
 costs                            (10,453)          -  (1,892)    (8,561)          - 
Profit/(loss) for the 
 period before tax                  59,627     72,876  (1,916)    (8,957)    (2,376) 
Tax                                   (45)       (45)        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Profit/(loss) for the 
 period after tax                   59,582     72,831  (1,916)    (8,957)    (2,376) 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Profit/(loss) for the 
 period after tax attributable 
 to: 
- owners of the parent 
 (1)                                19,667     32,916  (1,916)    (8,957)    (2,376) 
- non-controlling interest 
 in SGM (1)                         39,915     39,915        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
 

(1) Please note that the cost recovery model on which profit share is based under the Concession Agreement is different to the accounting results presented above due to various adjustments and as such the share of profit disclosed above is not reflective of the 55%:45% split that occurs in practice, refer to the statement of cash flows by operating segment (below and the free cash flow - Egypt note in the financial review section for further information.)

All gold and silver sales during the year were made to a single customer in North America.

 
Half year ended 30                   Total      Egypt  Burkina  Côte  Corporate 
 June 2018                                                Faso   d'Ivoire 
(Unaudited)                        US$'000    US$'000  US$'000    US$'000    US$'000 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Statement of comprehensive 
 income 
Gold sales (Including 
 pre-production gold 
 sales related to Cleopatra)       301,099    301,099        -          -          - 
Less: Pre-production 
 gold sales related 
 to Cleopatra - transferred 
 to exploration and 
 evaluation asset                  (5,298)    (5,298)        -          -          - 
Gold sales (Excluding 
 pre-production gold 
 sales related to Cleopatra)       295,801    295,801        -          -          - 
Silver sales                           590        590        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Revenue                            296,391    296,391        -          -          - 
Cost of sales                    (191,879)  (191,879)        -          -          - 
Gross profit                       104,512    104,512        -          -          - 
Other income                            24         24        -          -          - 
Finance income                       2,246         22        -          -      2,224 
Other operating costs             (14,574)    (7,310)    (139)      (449)    (6,676) 
Exploration and evaluation 
 costs                            (11,832)          -  (3,664)    (8,168)          - 
Profit/(loss) for the 
 period before tax                  80,376     97,248  (3,803)    (8,617)    (4,452) 
Tax                                   (10)       (10)        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Profit/(loss) for the 
 period after tax                   80,366     97,238  (3,803)    (8,617)    (4,452) 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Profit/(loss) for the 
 period after tax attributable 
 to: 
- owners of the parent              41,100     57,972  (3,803)    (8,617)    (4,452) 
- non-controlling interest 
 in SGM                             39,266     39,266        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
 

All gold and silver sales during the year were made to a single customer in North America.

2.1 Segment reporting (continued)

Statement of comprehensive income by operating segment (continued):

 
Year ended 31 December               Total      Egypt  Burkina  Côte  Corporate 
 2018                                                     Faso   d'Ivoire 
(Audited)                          US$'000    US$'000  US$'000    US$'000    US$'000 
-------------------------------  ---------  ---------  -------  ---------  --------- 
                                     Total      Egypt  Burkina  Côte  Corporate 
                                                          Faso   d'Ivoire 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Statement of comprehensive 
 income 
Gold sales (Including 
 pre-production gold 
 sales related to Cleopatra)       613,727    613,727        -          -          - 
Less: Pre-production 
 gold sales related 
 to Cleopatra - transferred 
 to exploration and 
 evaluation asset                 (11,523)   (11,523)        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Gold sales (Excluding 
 pre-production gold 
 sales related to Cleopatra)       602,204    602,204        -          -          - 
Silver sales                         1,044      1,044        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Revenue                            603,248    603,248        -          -          - 
Cost of sales                    (406,538)  (406,538)        -          -          - 
Gross profit                       196,710    196,710        -          -          - 
Other income                            49         49        -          -          - 
Finance income                       4,815         44        -          -      4,771 
Other operating costs             (27,866)   (13,433)    (481)      (644)   (13,308) 
Exploration and evaluation 
 costs                            (21,006)          -  (5,223)   (15,783)          - 
Profit/(loss) for the 
 period before tax                 152,702    183,370  (5,704)   (16,427)    (8,537) 
Tax                                   (53)       (53)        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Profit/(loss) for the 
 period after tax                  152,649    183,317  (5,704)   (16,427)    (8,537) 
-------------------------------  ---------  ---------  -------  ---------  --------- 
Profit/(loss) for the 
 period after tax attributable 
 to: 
- owners of the parent              74,845    105,513  (5,704)   (16,427)    (8,537) 
- non-controlling interest 
 in SGM                             77,804     77,804        -          -          - 
-------------------------------  ---------  ---------  -------  ---------  --------- 
 

All gold and silver sales during the year were made to a single customer in North America.

Statement of cash flows by operating segment:

 
Half year ended 30                   Total     Egypt     Burkina   Côte   Corporate 
 June 2019                                                  Faso    d'Ivoire 
(Unaudited)                        US$'000   US$'000  US$'000(1)  US$'000(1)  US$'000(1) 
--------------------------------  --------  --------  ----------  ----------  ---------- 
                                     Total     Egypt     Burkina   Côte   Corporate 
                                                            Faso    d'Ivoire 
--------------------------------  --------  --------  ----------  ----------  ---------- 
Statement of cash flows 
Net cash generated 
 by operating activities           116,376   131,572       (137)         467    (15,526) 
Net cash used in investing 
 activities                       (50,657)  (43,698)           -       (160)     (6,799) 
Net cash used in financing 
 activities 
Dividend paid - non-controlling 
 interest in SGM                  (39,375)  (39,375)           -           -           - 
Dividend paid - controlling 
 interest in SGM                         -  (48,125)           -           -      48,125 
Dividend paid - owners 
 of the parent                    (34,672)         -           -           -    (34,672) 
--------------------------------  --------  --------  ----------  ----------  ---------- 
Net increase/(decrease) 
 in cash and cash equivalents      (8,328)       374       (137)         307     (8,872) 
Cash and cash equivalents 
 at the beginning of 
 the period                        282,627     3,714          28         241     278,644 
Effect of foreign exchange 
 rate changes                        2,559     2,078         143       (296)         634 
--------------------------------  --------  --------  ----------  ----------  ---------- 
Cash and cash equivalents 
 at the end of the period          276,858     6,166          34         252     270,406 
--------------------------------  --------  --------  ----------  ----------  ---------- 
 

(1) Please note that the cash generated by operating activities for Burkina Faso and Cote d'Ivoire are affected by the movements in working capital, specifically intercompany loans, with its direct parent entity Centamin West Africa Holdings Limited which is included within the corporate segment.

Statement of cash flows by operating segment (continued):

 
Half year ended 30                    Total     Egypt     Burkina   Côte   Corporate 
 June 2018                                                   Faso    d'Ivoire 
(Unaudited)                         US$'000   US$'000  US$'000(1)  US$'000(1)  US$'000(1) 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
                                      Total     Egypt     Burkina   Côte   Corporate 
                                                             Faso    d'Ivoire 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
Statement of cash flows 
Net cash generated 
 by operating activities            122,662   141,377        (48)       1,195    (19,862) 
Net cash used in investing 
 activities                        (47,321)  (49,338)           -       (205)       2,222 
Net cash used in financing 
 activities 
Dividend paid - non-controlling 
 interest in SGM                   (39,266)  (39,266)           -           -           - 
Dividend paid - controlling 
 interest in SGM                          -  (48,480)           -           -      48,480 
Dividend paid - owners 
 of the parent                    (115,629)         -           -           -   (115,629) 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
Net increase/(decrease) 
 in cash and cash equivalents      (79,554)     4,293        (48)         990    (84,789) 
Cash and cash equivalents 
 at the beginning of 
 the period                         359,680     1,614         132         335     357,599 
Effect of foreign exchange 
 rate changes                         2,638     2,556          56       (371)         397 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
Cash and cash equivalents 
 at the end of the period           282,764     8,463         140         954     273,207 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
 

(1) Please note that the cash generated by operating activities for Burkina Faso and Cote d'Ivoire are affected by the movements in working capital, specifically intercompany loans, with its direct parent entity Centamin West Africa Holdings Limited which is included within the corporate segment.

 
Year ended 31 December                Total     Egypt     Burkina   Côte   Corporate 
 2018                                                        Faso    d'Ivoire 
(Audited)                           US$'000   US$'000  US$'000(1)  US$'000(1)  US$'000(1) 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
                                      Total     Egypt     Burkina   Côte   Corporate 
                                                             Faso    d'Ivoire 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
Statement of cash flows 
Net cash generated 
 by operating activities            223,404   255,488       (304)         628    (32,408) 
Net cash used in investing 
 activities                        (83,585)  (88,098)         (2)       (248)       4,763 
Net cash used in financing 
 activities 
Dividend paid - non-controlling 
 interest in SGM                   (76,391)  (76,391)           -           -           - 
Dividend paid - controlling 
 interest in SGM                          -  (93,855)           -           -      93,855 
Dividend paid - owners 
 of the parent                    (144,567)         -           -           -   (144,567) 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
Net increase/(decrease) 
 in cash and cash equivalents      (81,139)   (2,856)       (306)         380    (78,357) 
Cash and cash equivalents 
 at the beginning of 
 the period                         359,680     1,614         132         335     357,599 
Effect of foreign exchange 
 rate changes                         4,086     4,955         202       (474)       (597) 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
Cash and cash equivalents 
 at the end of the period           282,627     3,713          28         241     278,645 
--------------------------------  ---------  --------  ----------  ----------  ---------- 
 

(1) Please note that the cash generated by operating activities for Burkina Faso and Cote d'Ivoire are affected by the movements in working capital, specifically intercompany loans, with its direct parent entity Centamin West Africa Holdings Limited which is included within the corporate segment.

Exploration expenditure by operating segment

The following table provides a breakdown of the total exploration expenditure of the group by operating segment:

 
                                                      Half year     Half year    Year ended 
                                                          ended         ended   31 December 
                                                        30 June       30 June 
                                                           2019          2018          2018 
                                                    (Unaudited)   (Unaudited)     (Audited) 
                                                        US$'000       US$'000       US$'000 
-------------------------------------------------  ------------  ------------  ------------ 
Burkina Faso                                              1,892         3,664         5,223 
Côte d'Ivoire                                        8,561         8,168        15,783 
Egypt (Sukari tenement including Cleopatra 
 excluding pre-production gold sales adjustment)          7,944         5,876        13,635 
Total exploration expenditure                            18,397        17,708        34,641 
-------------------------------------------------  ------------  ------------  ------------ 
 

2.2 Profit before tax

Profit for the period has been arrived at after crediting/(charging) the following gains/(losses) and income/(expenses):

 
                           Half year     Half year    Year ended 
                            ended 30         ended   31 December 
                                June       30 June 
                                              2018          2018 
                    2019 (Unaudited)   (Unaudited)     (Audited) 
                             US$'000       US$'000       US$'000 
------------------  ----------------  ------------  ------------ 
Finance income 
Interest received              3,207         2,246         4,815 
------------------  ----------------  ------------  ------------ 
 
 
                                                   Half year     Half year    Year ended 
                                                    ended 30         ended   31 December 
                                                        June       30 June 
                                                                      2018          2018 
                                            2019 (Unaudited)   (Unaudited)     (Audited) 
                                                     US$'000       US$'000       US$'000 
------------------------------------------  ----------------  ------------  ------------ 
Expenses 
Cost of sales 
Mine production costs (Including costs 
 related to gold produced from Cleopatra)          (174,893)     (157,727)     (330,924) 
Mine production costs related to gold 
 produced from Cleopatra - offset against 
 exploration and evaluation asset                      1,133           988         2,834 
------------------------------------------  ----------------  ------------  ------------ 
Mine production costs                              (173,760)     (156,739)     (328,090) 
Movement in inventory                                 24,128        16,308        31,296 
Depreciation and amortisation                       (60,414)      (51,448)     (109,744) 
------------------------------------------  ----------------  ------------  ------------ 
                                                   (210,046)     (191,879)     (406,538) 
------------------------------------------  ----------------  ------------  ------------ 
 
 
Other operating costs 
Corporate costs                                       (5,941)   (8,463)  (15,909) 
Other provisions                                            -     (283)        58 
Net movement on provision for stock obsolescence          949       920     1,353 
Office related depreciation                             (198)     (150)     (301) 
Royalty - attributable to the ARE government          (8,765)   (9,027)  (18,396) 
Foreign exchange gain, net                              2,846     2,934     6,372 
Finance charges                                         (151)      (70)     (142) 
Gain/(loss) on disposal of asset                          145         -      (31) 
Provision for restoration and rehabilitation 
 - unwinding of discount                                (205)     (435)     (870) 
--------------------------------------------------  ---------  --------  -------- 
                                                     (11,320)  (14,574)  (27,866) 
--------------------------------------------------  ---------  --------  -------- 
 
 

2.3 Non-controlling interest in SGM

EMRA is a 50% shareholder in SGM and is entitled to a share of 50% of SGM's net production surplus which can be defined as 'revenue less payment of the fixed royalty to the Arab Republic of Egypt ("ARE") and recoverable costs'. However, in accordance with the terms of the CA, in the first and second years in which there is a profit share, PGM will be entitled to an additional 10% of net production surplus and an additional 5% in the third and fourth years.

Earnings attributable to the NCI in SGM (i.e. EMRA) are pursuant to the provisions of the CA and are recognised as profit attributable to the NCI in SGM in the attribution of profit section of the statement of comprehensive income of the Group. The profit share payments during the year will be reconciled against SGM's audited financial statements. The SGM financial statements for the year ended 30 June 2019 have not been signed off at the date of this report and are in the process of being audited.

Certain terms of the CA and amounts in the cost recovery model may also vary depending on interpretation and management and the

Board making various judgements and estimates that can affect the amounts recognised in the financial statements.

2.3 Non-controlling interest in SGM (continued)

   a)      Statement of comprehensive income and statement of financial position impact 
 
                                                           Half year     Half year    Year ended 
                                                            ended 30         ended   31 December 
                                                                June       30 June 
                                                                              2018          2018 
                                                    2019 (Unaudited)   (Unaudited)     (Audited) 
                                                             US$'000       US$'000       US$'000 
-------------------------------------------------  -----------------  ------------  ------------ 
Statement of comprehensive income 
Profit for the year after tax attributable 
 to the non-controlling interest in SGM(1)                    39,915        39,266        77,804 
--------------------------------------------------  ----------------  ------------  ------------ 
Statement of financial position 
Total equity attributable to the non-controlling 
 interest in SGM(1) (opening)                                  (270)       (1,683)       (1,683) 
Profit for the year after tax attributable 
 to the non-controlling interest in SGM(1)                    39,915        39,266        77,804 
Dividend paid - non-controlling interest 
 in SGM                                                     (39,375)      (39,266)      (76,391) 
--------------------------------------------------  ----------------  ------------  ------------ 
Total equity attributable to the non-controlling 
 interest in SGM(1) (closing)                                    270       (1,683)         (270) 
--------------------------------------------------  ----------------  ------------  ------------ 
 
 

(1) Profit share commenced during the third quarter of 2016. The first two years was a 60:40 split of net production surplus to PGM and EMRA respectively. From 1 July 2018 this changed to a 55:45 split for the next two-year period until 30 June 2020, after which all net production surpluses will be split 50:50.

Any variation between payments made during the year (which are based on the Company's estimates) and the SGM audited financial statements, may result in a balance due and payable to EMRA or advances to be offset against future distributions. This will be reflected as an amount attributable to the NCI in SGM on the statement of financial position and statement of changes in equity.

   b)      Statement of cash flow impact 
 
                                                  Half year     Half year    Year ended 
                                                   ended 30         ended   31 December 
                                                       June       30 June 
                                                                     2018          2018 
                                           2019 (Unaudited)   (Unaudited)     (Audited) 
                                                    US$'000       US$'000       US$'000 
-----------------------------------------  ----------------  ------------  ------------ 
Statement of cash flows 
Dividend paid - non-controlling interest 
 in SGM(1)                                         (39,375)      (39,266)      (76,391) 
-----------------------------------------  ----------------  ------------  ------------ 
 

(1) Profit share commenced during the third quarter of 2016. The first two years was a 60:40 split of net production surplus to PGM and EMRA respectively. From 1 July 2018 this changed to a 55:45 split for the next two-year period until 30 June 2020, after which all net production surpluses will be split 50:50.

EMRA and PGM benefit from advance distributions of profit share which are made on a weekly or fortnightly basis and proportionately in accordance with the terms of the CA. Future distributions will take into account ongoing cash flows, historical costs that are still to be recovered and any future capital expenditure. All profit share payments will be reconciled against SGM's audited June financial statements for current and future periods.

2.4 Prepayments

 
                        30 June       30 June  31 December 
                           2019          2018         2018 
                    (Unaudited)   (Unaudited)    (Audited) 
                        US$'000       US$'000      US$'000 
-----------------  ------------  ------------  ----------- 
Current 
Prepayments               4,916        12,048        5,149 
Fuel prepayments          1,610         (917)        1,547 
-----------------  ------------  ------------  ----------- 
                          6,526        11,131        6,696 
-----------------  ------------  ------------  ----------- 
 

Diesel Fuel Oil ("DFO") dispute

As more fully described in note 5.1 of the 2018 annual report and financial statements, the Group is currently involved in court action concerning the price at which it is supplied with DFO. Since January 2012, the Group has had to pay for DFO at the international price rather than the subsidised price which it believes it is entitled to. It is seeking recovery of the funds advanced since 2012 through court action. However, management recognises the practical difficulties associated with reclaiming funds from the Egyptian government and for this reason has fully provided against the prepayment of US$348.5 million to 30 June 2019, of which US$21.5 million was provided for during 2019.

In order to allow a better understanding of the interim financial statements presented within the interim results, and specifically the Group's underlying business performance, the effect of the Diesel Fuel Oil dispute is shown below.

2.4 Prepayments (continued)

Movement in fuel prepayments

 
                                            Half year     Half year    Year ended 
                                             ended 30      ended 30   31 December 
                                                 June          June 
                                                 2019          2018          2018 
                                          (Unaudited)   (Unaudited)     (Audited) 
                                              US$'000       US$'000       US$'000 
---------------------------------------  ------------  ------------  ------------ 
Balance at the beginning of the period          1,547         2,247         2,247 
Fuel prepayment recognised                     21,533        24,043        49,711 
Less: Provision charged to: 
Mine production costs                        (19,549)      (23,550)      (45,017) 
Property, plant and equipment                 (2,232)       (3,152)       (5,175) 
Inventories                                       311         (505)         (219) 
Balance at the end of the period                1,610         (917)         1,547 
---------------------------------------  ------------  ------------  ------------ 
 

Cumulative fuel prepayment and provision recognised

 
                                     30 June       30 June  31 December 
                                        2019          2018         2018 
                                 (Unaudited)   (Unaudited)    (Audited) 
                                     US$'000       US$'000      US$'000 
------------------------------  ------------  ------------  ----------- 
Fuel prepayment recognised           348,499       301,297      326,967 
Less: Provision charged to: 
Mine production costs              (321,596)     (280,580)    (302,047) 
Property, plant and equipment       (24,287)      (20,032)     (22,055) 
Inventories                          (1,006)       (1,603)      (1,317) 
------------------------------  ------------  ------------  ----------- 
 

This has resulted in a net charge of US$14.0 million in the profit and loss for the six months ended 30 June 2019.

 
                                        Half year ended 30 June                   Half year ended 30 June 
                                                  2019                                      2018 
                                ----------------------------------------  ---------------------------------------- 
                                      Before                                    Before 
                                  Adjustment    Adjustment         Total    Adjustment    Adjustment         Total 
                                 (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
                                     US$'000       US$'000       US$'000       US$'000       US$'000       US$'000 
------------------------------  ------------  ------------  ------------  ------------  ------------  ------------ 
Expenses 
Cost of sales 
Mine production costs              (154,211)      (19,549)     (173,760)     (133,189)      (23,550)     (156,739) 
Movement in inventory                 18,621         5,507        24,128        17,364       (1,056)        16,308 
Depreciation and amortisation       (60,414)             -      (60,414)      (51,448)             -      (51,448) 
------------------------------  ------------  ------------  ------------  ------------  ------------  ------------ 
                                   (196,004)      (14,042)     (210,046)     (167,273)      (24,606)     (191,879) 
------------------------------  ------------  ------------  ------------  ------------  ------------  ------------ 
 
 
                                       Year ended 31 December 
                                                2018 
                                ------------------------------------ 
                                     Before 
                                 Adjustment  Adjustment        Total 
                                  (Audited)   (Audited)    (Audited) 
                                    US$'000     US$'000      US$'000 
------------------------------  -----------  ----------  ----------- 
Expenses 
Cost of sales 
Mine production costs             (283,073)    (45,017)    (328,090) 
Movement in inventory                35,821     (4,525)       31,296 
Depreciation and amortisation     (109,744)           -    (109,744) 
------------------------------  -----------  ----------  ----------- 
                                  (356,996)    (49,542)    (406,538) 
------------------------------  -----------  ----------  ----------- 
 
 

2.5 Property, plant and equipment

 
                                                                                   Mine   Capital 
Half year ended 30 June            Office                 Plant     Mining  development      work 
 2019 (Unaudited)                                           and                                in 
                                equipment  Buildings  equipment  equipment   properties  progress      Total 
                                  US$'000    US$'000    US$'000    US$'000      US$'000   US$'000    US$'000 
------------------------------  ---------  ---------  ---------  ---------  -----------  --------  --------- 
Cost 
Balance at 31 December 
 2018                               7,307      2,347    604,158    309,788      517,629    23,482  1,464,711 
Transfers from capital 
 work in progress                     287          2      2,634      2,672       14,283  (19,878)          - 
Additions                              78      1,228        414      7,533            -    30,880     40,133 
Disposals                               -       (67)          -       (22)            -         -       (89) 
Balance at 30 June 2019             7,672      3,510    607,206    319,971      531,912    34,484  1,504,755 
------------------------------  ---------  ---------  ---------  ---------  -----------  --------  --------- 
Accumulated depreciation 
 and amortisation 
Balance at 31 December 
 2018                             (6,384)      (695)  (185,075)  (205,103)    (231,467)         -  (628,724) 
Depreciation and amortisation       (315)      (200)   (14,236)   (22,388)     (23,473)         -   (60,612) 
Disposals                               -          1          -         22            -         -         23 
Balance at 30 June 2019           (6,699)      (894)  (199,311)  (227,469)    (254,940)         -  (689,313) 
------------------------------  ---------  ---------  ---------  ---------  -----------  --------  --------- 
Year ended 31 December 
 2018 (Audited) 
 Cost 
Balance at 31 December 
 2017                               6,796      2,051    591,101    274,976      457,113    37,998  1,370,035 
Additions                              72          -        126      9,496            -    73,760     83,454 
Increase in rehabilitation 
 asset                                  -          -          -          -        1,854         -      1,854 
Transfers from capital 
 work in progress                     440        296     13,080     25,476       48,984  (88,276)          - 
Transfers from exploration 
 and evaluation asset                   -          -          -          -        9,678         -      9,678 
Disposals                             (1)          -      (149)      (160)            -         -      (310) 
Balance at 31 December 
 2018                               7,307      2,347    604,158    309,788      517,629    23,482  1,464,711 
------------------------------  ---------  ---------  ---------  ---------  -----------  --------  --------- 
Accumulated depreciation 
 and amortisation 
Balance at 31 December 
 2017                             (5,890)      (548)  (156,921)  (163,902)    (191,675)         -  (518,936) 
Depreciation and amortisation       (495)      (147)   (28,252)   (41,361)     (39,792)         -  (110,047) 
Disposals                               1          -         98        160            -         -        259 
------------------------------  ---------  ---------  ---------  ---------  -----------  --------  --------- 
Balance at 31 December 
 2018                             (6,384)      (695)  (185,075)  (205,103)    (231,467)         -  (628,724) 
------------------------------  ---------  ---------  ---------  ---------  -----------  --------  --------- 
Net book value 
As at 31 December 2018                923      1,652    419,083    104,685      286,162    23,482    835,987 
------------------------------  ---------  ---------  ---------  ---------  -----------  --------  --------- 
As at 30 June 2019                    973      2,616    407,895     92,502      276,972    34,484    815,442 
------------------------------  ---------  ---------  ---------  ---------  -----------  --------  --------- 
 
 

In 2018 the production downgrade and corresponding devaluation of the share price of the Company was considered and it was concluded that this was an impairment indicator. An impairment review was performed in 2018, refer to note 1.1.2 of the 2018 annual report, however no impairment resulted from the review. No impairment review has been performed in 2019 as no impairment indicators were identified in the period.

Assets that have been cost recovered under the terms of the CA in Egypt are included on the statement of financial position under property, plant and equipment due to the Company having right of use of these assets. These rights will expire together with the CA.

2.6 Financial assets at fair value through profit and loss

 
                                                 30 June       30 June  31 December 
                                                    2019          2018         2018 
                                             (Unaudited)   (Unaudited)    (Audited) 
                                                 US$'000       US$'000      US$'000 
------------------------------------------  ------------  ------------  ----------- 
Balance at the beginning of the period                 -             -            - 
Additions                                          9,364 
Gain on fair value of investment - profit 
 or loss                                             183 
Loss on foreign exchange movement                  (105)             -            - 
Balance at the end of the period                   9,442             -            - 
------------------------------------------  ------------  ------------  ----------- 
 

The financial assets at fair value through profit and loss at period end relates to an equity interest in a listed public company.

2.7 Provisions

 
                                                  30 June       30 June  31 December 
                                                     2019          2018         2018 
                                              (Unaudited)   (Unaudited)    (Audited) 
                                                  US$'000       US$'000      US$'000 
-------------------------------------------  ------------  ------------  ----------- 
Current 
Employee benefits(1)                                1,478           422        1,855 
Fuel                                                    -         7,050            - 
Egypt health insurance(2)                           1,549             -          805 
Other current provisions(3)                         5,532           529        5,495 
                                                    8,559         8,001        8,155 
-------------------------------------------  ------------  ------------  ----------- 
Non--current 
Restoration and rehabilitation(4)                  13,797        11,302       13,591 
Other non-current provisions                          157           346          157 
-------------------------------------------  ------------  ------------  ----------- 
                                                   13,954        11,648       13,748 
-------------------------------------------  ------------  ------------  ----------- 
Movement in restoration and rehabilitation 
 provision 
Balance at beginning of the year                   13,591        10,868       10,868 
Additional provision recognised                         -             -        1,854 
Interest expense - unwinding of discount              206           434          869 
-------------------------------------------  ------------  ------------  ----------- 
Balance at end of the period                       13,797        11,302       13,591 
-------------------------------------------  ------------  ------------  ----------- 
 
   (1)    Employee benefits relate to annual, sick and long service leave entitlements and bonuses. 

(2) Egypt health insurance relates to Law no. 2 of the 2018 Comprehensive Health Insurance Law that requires 0.25% of revenues and an additional 4% of social insurance contributions to be paid by the Egyptian company effective from 1 July 2018.

   (3)    Provision held for in-country disputes including customs, rebates and withholding taxes. 

(4) The provision for restoration and rehabilitation represents the present value of the Directors' best estimate of the future outflow of economic benefits that will be required to decommission infrastructure, restore affected areas by ripping and grading of compacted surfaces to blend with the surroundings, closure of project components to ensure stability and safety at the Group's sites. This has all been discounted by 3.02% (2018: 3.02%) and inflation applied at 2.49% (2018: 2.49%).

2.8 Share option reserve

 
                                              30 June       30 June  31 December 
                                                 2019          2018         2018 
                                          (Unaudited)   (Unaudited)    (Audited) 
                                              US$'000       US$'000      US$'000 
---------------------------------------  ------------  ------------  ----------- 
Share option reserve 
Balance at beginning of the period              5,688         4,323        4,323 
Share--based payments expense                   1,346         1,712        3,520 
Share--based payments expense reversal        (2,632)             -        (298) 
Transfer to issued capital                    (1,516)       (1,857)      (1,857) 
---------------------------------------  ------------  ------------  ----------- 
Balance at the end of the period                2,886         4,178        5,688 
---------------------------------------  ------------  ------------  ----------- 
 

The share option reserve arises on the grant of share options to employees under the employee share option plan. Amounts are transferred out of the reserve and into issued capital when the options and warrants are exercised/vested. Amounts are transferred out of the reserve into accumulated profits when the options and warrants are forfeited and when vesting conditions are not met on the vesting of awards.

2.9 Cash flow information

(a) Reconciliation of cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand and at bank and deposits.

 
                                 30 June       30 June  31 December 
                                    2019          2018         2018 
                             (Unaudited)   (Unaudited)    (Audited) 
                                 US$'000       US$'000      US$'000 
--------------------------  ------------  ------------  ----------- 
Cash and cash equivalents        276,858       282,764      282,627 
--------------------------  ------------  ------------  ----------- 
 

(b) Reconciliation of profit for the year to cash flows from operating activities

 
                                          Half year ended     Half year    Year ended 
                                                  30 June         ended   31 December 
                                                                30 June 
                                                     2019          2018          2018 
                                              (Unaudited)   (Unaudited)     (Audited) 
                                                  US$'000       US$'000       US$'000 
----------------------------------------  ---------------  ------------  ------------ 
Profit for the period before tax                   59,627        80,376       152,702 
Adjusted for: 
Depreciation/amortisation of property, 
 plant and equipment                               60,611        51,598       110,047 
Inventory written off                                 417           297           451 
Inventory obsolescence provision                  (1,366)       (1,217)       (1,804) 
Foreign exchange gain                             (2,844)       (2,934)       (6,373) 
Share--based payments (income)/expense            (1,286)         1,712         3,222 
Finance income                                    (3,207)       (2,246)       (4,815) 
(Gain)/loss on disposal of property, 
 plant and equipment                                (145)             -            31 
Changes in working capital during 
 the period: 
Decrease in trade and other receivables            15,142        22,138         1,023 
Increase in inventories                          (18,905)       (7,410)      (22,959) 
Decrease/(increase) in prepayments                    167       (1,334)         3,105 
Increase/(decrease) in trade and 
 other payables                                     7,603      (17,220)      (12,340) 
Increase/(decrease) in provisions                     610         (599)         1,501 
----------------------------------------  ---------------  ------------  ------------ 
Cash flows generated from operating 
 activities                                       116,424       123,161       223,791 
----------------------------------------  ---------------  ------------  ------------ 
 

(c) Non--cash financing and investing activities

During the period there have been no non--cash financing and investing activities.

   3        Unrecognised items 

3.1 Contingent liabilities

Fuel supply and Concession Agreement court cases

There have been no significant changes in the period ended 30 June 2019, for further information and disclosure on these matters please refer to the 31 December 2018 Annual Report.

3.2 Subsequent events

The Directors declared an interim dividend of 4.0 US cents per share on Centamin plc ordinary shares (totalling approximately US$46.2 million). The interim dividend for the half year period ended 30 June 2019 will be paid on 27 September 2019 to shareholders on the register on the Record Date of 30 August 2019.

Other than the above, there were no other significant events occurring after the reporting date requiring disclosure in the financial statements.

   4        Other information 

4.1 Contributions to Egypt

Gold sales agreement

On 20 December 2016, SGM entered into a contract with the Central Bank of Egypt ("CBE"). The agreement provides that the parties may elect, on a monthly basis, for the CBE to supply SGM with its local Egyptian currency requirements for that month (to a maximum value of EGP50 million). In return, SGM facilitates the purchase of refined gold bullion for the CBE from SGM's refiner, Asahi Refining. This transaction has been entered as SGM requires local currency for its operations in Egypt (it receives its revenue for gold sales in US dollars). Twenty transactions have been entered into at the date of this report, six of which in the six months ended 30 June 2019, pursuant to this agreement, and the values related thereto are as follows:

 
                      30 June       30 June  31 December 
                         2019          2018         2018 
                  (Unaudited)   (Unaudited)    (Audited) 
                      US$'000       US$'000      US$'000 
---------------  ------------  ------------  ----------- 
Gold purchased         17,353        17,028       33,821 
Refining costs             10            10           20 
Freight costs              26            22           48 
---------------  ------------  ------------  ----------- 
                       17,389        17,060       33,889 
---------------  ------------  ------------  ----------- 
 
 
                      30 June       30 June  31 December 
                         2019          2018         2018 
                  (Unaudited)   (Unaudited)    (Audited) 
                           Oz            Oz           Oz 
---------------  ------------  ------------  ----------- 
Gold purchased         13,343        12,892       26,621 
---------------  ------------  ------------  ----------- 
 

At 30 June 2019 the net receivable in EGP owing from the Central Bank of Egypt is US$89,623 (30 June 2018: US$16,169 and 31 December 2018: US$40,618).

4.2 Earnings per share ("EPS") attributable to owners of the parent

 
                                Half year     Half year    Year ended 
                                    ended         ended   31 December 
                                  30 June       30 June 
                                     2019          2018          2018 
                              (Unaudited)   (Unaudited)     (Audited) 
                                 US cents      US cents      US cents 
                                per share     per share     per share 
---------------------------  ------------  ------------  ------------ 
Basic earnings per share            1.707         3.572         6.497 
Diluted earnings per share          1.698         3.548         6.444 
---------------------------  ------------  ------------  ------------ 
 

Basic earnings per share attributable to owners of the parent

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

 
                                               Half year     Half year    Year ended 
                                                   ended         ended   31 December 
                                                 30 June       30 June 
                                                    2019          2018          2018 
                                             (Unaudited)   (unaudited)     (Audited) 
                                                 US$'000       US$'000       US$'000 
------------------------------------------  ------------  ------------  ------------ 
Earnings used in the calculation of basic 
 EPS                                              19,667        41,100        74,845 
------------------------------------------  ------------  ------------  ------------ 
 
 
                                                 Half year      Half year     Year ended 
                                                     ended          ended    31 December 
                                                   30 June        30 June 
                                                      2019           2018           2018 
                                               (Unaudited)    (Unaudited)      (Audited) 
                                                    Number         Number         Number 
-------------------------------------------  -------------  -------------  ------------- 
Weighted average number of ordinary shares 
 for the purpose of basic EPS                1,152,129,402  1,150,661,102  1,151,925,674 
-------------------------------------------  -------------  -------------  ------------- 
 

Diluted earnings per share attributable to owners of the parent

The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:

 
                                                 Half year     Half year    Year ended 
                                                     ended         ended   31 December 
                                                   30 June       30 June 
                                                      2019          2018          2018 
                                               (Unaudited)   (Unaudited)     (Audited) 
                                                   US$'000       US$'000       US$'000 
--------------------------------------------  ------------  ------------  ------------ 
Earnings used in the calculation of diluted 
 EPS                                                19,667        41,100        74,845 
--------------------------------------------  ------------  ------------  ------------ 
 
 
                                                      Half year      Half year     Year ended 
                                                          ended          ended    31 December 
                                                        30 June        30 June 
                                                           2019           2018           2018 
                                                    (Unaudited)    (Unaudited)      (Audited) 
                                                         Number         Number         Number 
------------------------------------------------  -------------  -------------  ------------- 
Weighted average number of ordinary shares 
 for the purpose of basic EPS                     1,152,129,402  1,150,661,102  1,151,925,674 
Shares deemed to be issued for no consideration 
 in respect of employee options                       6,246,287      7,725,168      9,589,301 
------------------------------------------------  -------------  -------------  ------------- 
Weighted average number of ordinary shares 
 used in the calculation of diluted EPS           1,158,375,689  1,158,386,270  1,161,514,975 
------------------------------------------------  -------------  -------------  ------------- 
 

No potential ordinary shares were excluded from the calculation of weighted average number of ordinary shares for the purpose of diluted earnings per share.

4.3 Going concern

These financial statements for the period ended 30 June 2019 have been prepared on a going concern basis, which contemplate the realisation of assets and liquidation of liabilities during the normal course of operations.

As discussed in Note 5.1 of the 2018 annual financial statements, during 2012 the operation of the mine was affected by two legal actions. The first of these followed from a decision taken by Egyptian General Petroleum Corporation ("EGPC") to charge international, not local (subsidised) prices for the supply of Diesel Fuel Oil ("DFO"), and the second arose as a result of a judgment of the Administrative Court in relation to, amongst other matters, the Company's 160km(2) exploitation lease. In relation to the first decision, the Company remains confident that in the event that it is required to continue to pay international prices, the mine at Sukari will remain commercially viable. Similarly, the Company remains confident that the appeal it has lodged in relation to the decision of the Administrative Court will ultimately be successful, although final resolution of it may take some time. On 20 March 2013 the Supreme Administrative Court upheld the Company's application to suspend the decision until the merits of the Company's appeal were considered and ruled on, thus providing assurance that normal operations will be able to continue during this process.

In the unlikely event that the Group is unsuccessful in either or both of its legal actions, and that the operating activities are restricted to a reduced area, it is the directors' belief that the Group will be able to continue as going concern.

The directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for twelve months from the date of approval of this report. Thus they continue to adopt the going concern basis of accounting in preparing these interim condensed consolidated financial statements.

4.4 Summary of significant accounting policies

Basis of preparation

These unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting" (IAS 34) as adopted by the European Union and the requirements of the Disclosure and Transparency Rule sourcebook (DTR) of the Financial Conduct Authority (FCA) in the United Kingdom as applicable to interim financial reporting. These unaudited interim condensed consolidated financial statements are not affected by seasonality.

The unaudited interim condensed consolidated financial statements represent a 'condensed set of financial statements' as referred to in the DTR issued by the FCA. Accordingly, they do not include all of the information required for a full annual financial report and are to be read in conjunction with the Group's financial statements for the year ended 31 December 2018, which were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use by the European Union. The financial statements for the year ended 31 December 2018 have been filed with the Jersey Financial Services Commission. The financial information contained in this report does not constitute statutory accounts under the Companies (Jersey) Law 1991, as amended. The financial information for the year ended 31 December 2018 is based on the statutory accounts for the year ended 31 December 2018. Readers are referred to the auditor's report to the Group financial statements as at 31 December 2018 (available at www.centamin.com).

The accounting policies applied in these interim financial statements are consistent with those used in the annual consolidated financial statements for the year ended 31 December 2018 except for the adoption of new standards and endorsed by the EU which apply for the first time in 2019 as referred to in the 31 December 2018 Annual Report. The new standard, IFRS 16, has been applied by the Group from its mandatory adoption date of 1 January 2019, although its impact was not material. The Group has not early adopted any amendments, standards or interpretations that have been issued but are not yet effective.

The preparation of these interim condensed consolidated financial statements requires the use of certain significant accounting estimates and judgements by management in applying the Group's accounting policies. There have been no changes to the areas involving significant judgement and estimates that have been set out in Note 1 of the Group's annual audited consolidated financial statements for the year ended 31 December 2018.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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