TIDMCEY
RNS Number : 7657Z
Centamin PLC
14 January 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION
FOR IMMEDIATE RELEASE
14 January 2020
Centamin plc
("Centamin" or "the Company")
(LSE:CEY, TSX:CEE)
CENTAMIN CORPORATE UPDATE AND DIVID DECLARATION
-- Centamin has strengthened its leadership team with recent Board and senior management changes
-- Strong focus on operational improvement driving positive
financial performance - Q4 production figures represent one of the
strongest quarterly results from Sukari
-- Centamin proposes a final dividend of 6.0 US cents per
share([1]) , bringing total proposed dividends for 2019 to 10.0 US
cents per share, representing US$115.6 million in cash returns to
shareholders
-- Strong balance sheet with no debt, and cash and liquid assets
of US$348.9 million as at 31 December 2019([2],[3])
-- Following a comprehensive and reciprocal due diligence
process, the Board has unanimously concluded that the possible
offer from Endeavour Mining Corporation ("Endeavour") materially
undervalued Centamin and its prospects. The Board notes that
Endeavour has withdrawn its possible offer.
Jim Rutherford, Deputy Non-Executive Chairman commented:
"Centamin has taken significant steps to reshape its leadership
team to improve operational performance. Our robust operating
performance in Q4 2019 and the work this new team has undertaken in
a short period of time gives us great confidence in our direction,
underlined by an increased final dividend for 2019.
After a period of constructive engagement, Centamin and
Endeavour have not reached agreement on value and have therefore
terminated discussions. We are highly confident in our growth
strategy, which includes but is not limited to value-accretive
diversification. The Company continues to assess opportunities and
we look forward to continued proactive engagement with our
stakeholders."
Strategic and Operational Progress
The Board is highly confident in Centamin's strategy of
maximising the value of its asset base and promoting further growth
both organically and through accretive mergers and acquisitions
which create value for shareholders. This strategy is supported
by:
-- The Sukari Gold Mine ("Sukari") is a world-class asset with a
long-life orebody and has a strong track record of resource
conversion to reserves. The Company's management continues to
undertake considerable exploration to extend its 11.0 million ounce
resource base([4]) , maximising the full potential across the
160km(2) tenement area. Centamin's West Africa projects offer
further potential diversification and growth with the Doropo, ABC
and Batie West projects having combined Measured and Indicated
resources of over 5 million ounces([5]) .
-- The recently announced Board and senior management changes
represent further steps in reshaping and strengthening the
Company's leadership team, with a focus on operational performance
and driving value creation opportunities. In Q4 2019, Ross Jerrard
assumed the role of interim CEO; while Jim Rutherford joined the
Board as Deputy Non-Executive Chairman. Additionally, Centamin has
made a number of changes to senior operational personnel at Sukari
and in senior corporate positions, including the appointment of
Jeremy Langford as Chief Operating Officer in Q2 2019 and more
recently the appointment of the Sukari General Manager, Operations
Director and numerous heads of department. The external recruitment
process for a permanent CEO is progressing well with a shortlist of
candidates being interviewed by the Nomination Committee.
-- The new operational leadership team has initiated a
comprehensive mine review at Sukari to identify further
opportunities to maximise value. Initiatives in progress include
mining optimisation, implementing processing cost control
opportunities, and design approval of a second tailings
facility.
-- The changes in operational leadership are beginning to be
reflected in improved operating performance at Sukari. On 9 January
2020, the Company announced preliminary production results from
Sukari for the three months ended 31 December 2019 ("Q4") of
148,387 ounces (a 51% improvement on the previous quarter)
resulting in full year 2019 production of 480,529 ounces.
-- The Q4 production result represents one of the strongest
quarterly results from Sukari and demonstrates the operational
improvement made to date. The Board's expectation for 2020
production is unchanged at 510,000-540,000 ounces. Centamin will
provide a further update in its Q4 2019 release on 30 January
2020.
Final Dividend
Reflecting improved operating performance, the Board is today
recommending a final dividend for the year ended 31 December 2019
of 6.0 US cents per share (US$69.4 million), bringing the proposed
total dividend for 2019 to 10.0 US cents per share (US$115.6
million) and the cumulative dividend returned to shareholders since
2014 to US$568 million([6]) . This dividend will be subject to
shareholder approval at the 2020 Annual General Meeting, which will
be held prior to the ex-div date and record date.
The amount to be returned has been determined by the Board based
on the dividend policy, current financial strength of the Company,
confidence in meaningful future cash flow generation and a review
of near and medium-term capital allocation.
Centamin continues to maintain a robust financial strategy, with
cash and liquid assets of US$348.9 million as at 31 December
2019([2],[3]) (increased from US$289 million as at 30 September
2019([7]) ), with no debt, hedging or streaming in place. This
strong financial discipline provides the flexibility to drive long
term organic growth and pursue strategic M&A that meets our
corporate strategy. The Board fully recognises the value of
diversification and scale, and will continue to actively explore
value-accretive strategic opportunities which are in the interests
of its stakeholders.
Termination of Discussions with Endeavour
On 23 December 2019, Centamin sought approval from the Panel on
Takeovers and Mergers to extend the deadline for Endeavour to
either announce a firm intention to make an offer for Centamin
under Rule 2.7 of the City Code on Takeovers and Mergers or
announce that it did not intend to make an offer for Centamin by
5.00pm GMT on 14 January 2020 (the "PUSU Deadline").
In the period since the PUSU Deadline extension, both parties
have completed a thorough and extensive value-focused due diligence
exercise. This included reciprocal Q&A, expert sessions and
in-person meetings involving board members and senior management
from both companies.
Notwithstanding the committed engagement from both sides, the
Board has unanimously concluded that the possible offer materially
undervalued Centamin and its prospects. The Board also considered
that a further extension of the PUSU Deadline would not result in
any realistic prospect of an offer that would be in the best
interests of Centamin stakeholders as a whole. The Board notes that
Endeavour has withdrawn its possible offer.
The person responsible for the release of this announcement on
behalf of Centamin is Josef El-Raghy, Chairman.
_________________________________________________________________________
For more information, please visit the website www.centamin.com
or contact:
Centamin plc Buchanan Communications
Ross Jerrard, Chief Executive Officer Bobby Morse
Alexandra Carse, Investor Relations Chris Judd
+44 (0) 7700 713 738 + 44 (0)20 7466 5000 Centamin@buchanan.uk.com
Alexandra.carse@centamin.je
BofA Securities BMO Capital Markets
George Close-Brooks Gary Mattan
Geoff Iles Tom Rider
Joshua Maguire Pascal Lussier-Duquette
Charles Pitt Ford Neil Elliot
+44 (0)20 7628 1000 +44 (0)20 7236 1010
_________________________________________________________________________
Dividend Timetable
The dates set out below 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.
London Stock Exchange and Toronto Stock Exchange (T+2)
Ex-Div Date: 21 May 2020
Record Date: 22 May 2020
Last Date For Receipt Of Currency Elections: 26 May 2020
Pay Date: 12 June 2020
The final dividend will be paid in US Dollars ("USD") on the
record date, with an option for shareholders to elect to receive
the dividend in Pounds Sterling ("GBP"). Please visit the Centamin
website: www.centamin.com for further dividend information.
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.
Important Notice
Merrill Lynch International ("BofA Securities"), a subsidiary of
Bank of America Corporation, which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United
Kingdom, is acting exclusively for Centamin in connection with the
matters set out in this announcement and for no one else and will
not be responsible to anyone other than Centamin for providing the
protections afforded to its clients or for providing advice in
relation to the subject matter of this announcement or any other
matters referred to in this announcement.
BMO Capital Markets Limited ("BMO"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting exclusively for Centamin and no one else in connection
with the above and will not be responsible to anyone other than
Centamin for providing the protections offered to clients of BMO
nor for providing advice in relation to the subject matter of this
announcement or any other matters referred to in this
announcement.
Scientific and Technical Information
Information of a scientific or technical nature in this
Announcement pertaining to the Sukari Gold Project mineral reserve
and resource estimates is based on information of a scientific and
technical nature that was included in the Company's annual
financial statements for the year ended December 31, 2018 which is
available under Centamin's profile on SEDAR at www.sedar.com. The
underlying information was prepared by and under the supervision of
Norman Bailie, Centamin's Qualified Person(s) and independent
Qualified Person(s) as below:
-- Open pit mineral reserve Quinton de Klerk of Cube Consulting Pty Ltd;
-- Underground mineral reserve Adrian Ralph of Cube Consulting Pty Ltd;
-- Mineral resource (underground) Mark Zammit of Cube Consulting Pty Ltd;
-- Mineral resource Arnold van der Heydyn of H&S Consultants Pty Ltd; and
-- Resource database and economic assumptions for open-pit
resource Norman Bailie of Centamin plc.
Please refer to the technical report entitled "Mineral Resource
and Reserve Estimate for the Sukari Gold Project, Egypt" effective
on 30 June 2015 and issued on 23 October 2015 and filed on SEDAR at
www.sedar.com, for further discussion of the extent to which the
estimate of mineral resources/reserves may be materially affected
by any known environmental, permitting, legal, title, taxation,
sociopolitical, or other relevant issues as well as details of the
qualified persons and quality control.
Information of a scientific or technical nature in this
announcement pertaining to the ABC Project mineral resource
estimates is based on information of a scientific and technical
nature that was included in the Company's annual financial
statements for the year ended December 31, 2018 which is available
under the Company's profile on SEDAR at www.sedar.com. The
underlying information was compiled by the Company's geologists,
Pierrick Couderc and Fidele Kakou, under the supervision of the
Company's Qualified Person, Norman Baillie, Group Exploration
Manager, and independent Qualified Person, Rupert Osborn of H&S
Consultants Pty Ltd.
Information of a scientific or technical nature in this
announcement pertaining to the Batie West Project mineral resource
estimates is based on information of a scientific and technical
nature that was included in the Company's annual financial
statements for the year ended December 31, 2018 which is available
under the Company's profile on SEDAR at www.sedar.com.The
underlying information was compiled by Ampella Mining Limited's
Supervising Geologist Adrian Woolford, under the supervision of the
Ampella Mining Limited's Qualified Person, Dean Smith, Database
Manager, and independent Qualified Person, Don Maclean of
Ravensgate Mining Industry Consultants. Please refer to the
technical report entitled "NI 43-101 Technical Report on the
Konkera Gold Project for Ampella Mining Limited" effective on 26
March 2014 and issued on 31 March 2014 and filed under the
Company's profile on SEDAR at www.sedar.com for further information
pertaining to the Batie West Project.
Information of a scientific or technical nature in this
announcement pertaining to the Doropo Project mineral resource
estimates is based on information of a scientific and technical
nature that was included in the Company's quarterly report for the
three months ended 30 September 2019 which is available under
Centamin's profile on SEDAR at www.sedar.com. The underlying
information was compiled by the Company's geologists, Pierrick
Couderc and Fidele Kakou, under the supervision of the Company's
Qualified Person, Norman Baillie, Group Exploration Manager, and
independent Qualified Person, Rupert Osborn of H&S Consultants
Pty Ltd.
A Qualified Person is as defined by the National Instrument
43-101 - Standards of Disclosure For Mineral Projects of the
Canadian Securities Administrators ("NI 43-101"). Named Qualified
Persons have verified the data disclosed, including sampling,
analytical, and test data underlying the information or opinions
contained in this announcement in accordance with standards
appropriate to their qualifications.
All Mineral Reserves and Mineral Resources for the Company have
been estimated in accordance with the standards of the Canadian
Institute of Mining, Metallurgy and Petroleum and NI 43-101. All
Mineral Resources are reported exclusive of Mineral Reserves.
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
Forward-looking Statements
This announcement (including information incorporated by
reference) contains "forward-looking statements" and
"forward-looking information" under applicable securities laws
(collectively, "forward-looking statements"), including statements
relating to the possible offer. Generally, these forward-looking
statements can be identified by the use of forward-looking
terminology such as "believes", "expects", "expected", "budgeted",
"forecasts" and "anticipates". Although Centamin believes that the
expectations reflected in such forward-looking statements are
reasonable, Centamin can give no assurance that such expectations
will prove to be correct. Forward-looking statements are
prospective in nature and are not based on historical facts, but
rather on current expectations and projections of the management of
Centamin about future events, and are therefore subject to known
and unknown risks and uncertainties which could cause actual
results to differ materially from the future results expressed or
implied by the forward-looking statements. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information or
statements. Forward-looking statements contained herein are made as
of the date of this announcement and the Company disclaims any
obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise.
Accordingly, readers should not place undue reliance on
forward-looking statements.
([1]) Subject to shareholder approval. Total issued share
capital of 1,155,955,384 ordinary shares as at 31 December
2019.
([2]) Cash and cash equivalents, bullion on hand, gold sales
receivables and financial assets at fair value through other
comprehensive income.
([3]) Based on unaudited values.
([4]) As per Centamin 2018 Annual Report. Comprises 8.024
million ounces of Measured resources and 2.976 million ounces of
Indicated resources.
([5]) Represents Centamin's West Africa projects with 0.26
million ounces of Measured resources and 4.75 million ounces of
Indicated resources.
([6]) Includes the proposed 2019 final dividend of 6.0 US cents
per share.
([7]) Centamin Q3 2019 Report Presentation.
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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