TIDMCEY
RNS Number : 6202H
Centamin PLC
05 August 2021
5 August 2021
Centamin plc
("Centamin" or "the Company")
LSE: CEY / TSX: CEE
INTERIM report
for the six months ended 30 June 2021
MARTIN HORGAN, CEO, commented : " Centamin has delivered a
strong performance against plans in the first half ("H1") of the
year, driven by our continued focus on cost control, operating
efficiencies and productivity gains. We remain on track to meet
full year cost and production guidance and our key capital projects
continue to progress on schedule. The Company is financially robust
with US$312 million in cash and liquid assets, providing the
flexibility to invest in the long-term future of our flagship
asset, Sukari, and continue to develop our active growth pipeline
in Egypt and Côte d'Ivoire."
financial HIGHLIGHTS
-- Revenue for the six months ended 30 June 2021 ("H1") was
US$367.4 million from gold sales of 203,802 ounces ("oz") at an
average realised gold price of US$1,799/oz
-- Operations, supply chain and gold shipments have not been
materially impacted by the COVID-19 pandemic. Related COVID-19
costs were US$6.5 million and within budget
-- Cash cost of production was US$807/oz produced and all-in
sustaining costs ("AISC") were US$1,186/oz sold
-- EBITDA was US$190.4 million with a 52% EBITDA margin
-- Profit before tax was US$116.8 million and net profit after
tax attributable to shareholders was US$59.5 million, for a basic
EPS of 5.16 US cents
-- Capital expenditure was US$78.3 million as good progress was
made on key capital projects such as the solar plant, second
tailings storage facility, paste-fill plant, workforce
accommodation and facility upgrades
-- The Board has declared an interim dividend of 4.0 US cents
per share (US$46.3 million), to be paid to shareholders on 30
September 2021
-- Better than budgeted Group free cash flow of US$16.2 million,
after US$56.7 million was distributed in profit share and royalties
to our partner, the Arab Republic of Egypt
-- Strong and flexible balance sheet with available cash and
liquid assets of US$312.1 million, as at 30 June 2021 and after
payment of the 2020 final dividend of US$34.5 million on 15 June
2021.
OUTLOOK
On track to meet full year guidance
-- 2021 gold production and cost guidance maintained: 400,000 to
430,000 oz at cash costs of US$800-900/oz produced and AISC of
US$1,150- 1,250/oz sold
-- Unchanged 2021 capex guidance of US$225 million and
exploration expenditure of US$17 million
-- Doropo (C ô te d'Ivoire) pre-feasibility study ("PFS") for is
underway and scheduled for completion by H2 2022
-- Recently agreed exploration licence terms for a total
3,164km(2) land package in Egypt's Arabian Nubian Shield subject to
final legal formalities expected to be completed in Q3
-- Process continues in assessing the strategic opportunities
for non-core asset Batie West (Burkina Faso), including possible
disposal.
MILESTONES
-- 23 September 2021 Geology Capital Markets Event: Our approach
to unlocking value from the portfolio
-- 30 September 2021 Payment of 2021 Interim Dividend (Ex-div date 2 September)
-- 19 October 2021 Q3 2021 Report
-- Q4 2021 Sukari Life of Asset (Phase 2) optimisation results
GROUP FINANCIAL SUMMARY
Year on Year ("YoY") comparative
============================================= ================= =====================================
units H1 2021 H1 2020 %
============================================= ================= ============ ============ =========
Gold produced oz 204,275 256,084 (20%)
Gold sold oz 203,802 270,529 (25%)
Cash cost US$'000 164,774 164,286 0%
Unit cash cost US$/oz produced 807 642 26%
AISC US$'000 241,705 243,225 (1%)
Unit AISC US$/oz sold 1,186 899 32%
Average realised gold price US$/oz 1,799 1,657 9%
============================================= ================= ============ ============ =========
Revenue US$'000 367,404 448,754 (18%)
EBITDA US$'000 190,427 256,172 (26%)
Profit before tax US$'000 116,794 192,549 (39%)
Profit after tax attributable to the parent US$'000 59,484 74,816 (20%)
Basic EPS US cents 5.16 6.49 (21%)
============================================= ================= ============ ============ =========
Operating cash flow US$'000 141,764 254,330 (44%)
Capital expenditure US$'000 78,312 51,731 51%
Free cash flow US$'000 16,195 101,610 (84%)
============================================= ================= ============ ============ =========
WEBCAST PRESENTATION AND CONFERENCE CALL
The Company will host a webcast presentation and conference call
today, Thursday, 5 August 2021 at 9.30 BST to discuss the results,
followed by an opportunity to ask questions. The 2021 Interim
Results presentation should be taken in conjunction with this
announcement and can be found on the website:
www.centamin.com/investors/presentations-webcasts/ .
A replay will be made available on the Company website.
Webcast link :
https://www.investis-live.com/centamin/60ded8e70ed69a0a00290d6e/nvms
Conference call d ial-in telephone numbers:
United Kingdom +44 (0) 203 936 2999
United States +1 646 664 1960
South Africa +27 (0) 87 550 8441
All other locations +44 (0) 203 936 2999
Participation access code: 835947
PRINT-FRILY VERSION of the half-year results :
www.centamin.com/media/press-releases/2020
FOR MORE INFORMATION
Please visit the website www.centamin.com or contact:
Centamin plc Buchanan
Alexandra Barter-Carse, Corporate Communications Bobby Morse / Kelsey Traynor
+44 (0) 7700 713 738 + 44 (0) 20 7466 5000
investor@centaminplc.com i nvestor@centaminplc.com centamin@buchanan.uk.com
NOTES
Guidance
The Company actively monitors the developments of the COVID-19
pandemic and guidance may be impacted if the workforce or operation
are disrupted.
Financials
Half year financial data points included within this report are
unaudited. Full year financial data points included within this
report are audited
Non-GAAP measures
This statement includes certain financial performance measures
which are not GAAP measures as defined under International
Financial Reporting Standards (IFRS). These include Cash costs of
production, AISC, adjusted EBITDA, Cash and liquid assets, and Free
cash flow. Management believes these measures provide valuable
additional information for users of the financial statements to
understand the underlying trading performance. Definitions and
explanation of the measures used along with reconciliation to the
nearest IFRS measures are detailed in the Company's 2020 Annual
Report https://www.centamin.com/investors/results-reports/ .
Profit after tax attributable to the parent
Centamin profit after the profit share split with the Arab
Republic of Egypt.
Royalties
Royalties are accrued and paid six months in arrears.
Cash and liquid assets
Cash and liquid assets include cash, bullion on hand, gold sales
receivables and financial assets at fair value through profit or
loss.
Movements in inventory
Movement in inventory on ounces produced is the movement in
mining stockpiles and ore in circuit while the movement in
inventory on ounces sold is the net movement in mining stockpiles,
ore in circuit and gold in safe inventory.
Gold produced
Gold produced is gold poured and does not include
gold-in-circuit at period end.
Forward-looking Statements
This announcement (including information incorporated by
reference) contains "forward-looking statements" and
"forward-looking information" under applicable securities laws
(collectively, "forward-looking statements"), including statements
with respect to future financial or operating performance.
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. In addition, there are a number of factors that could
cause actual results, performance, achievements or developments to
differ materially from those expressed or implied by such
forward-looking statements; the risks and uncertainties
associated with the ongoing impacts of COVID-19 or other
pandemic, general business, economic, competitive, political and
social uncertainties; the results of exploration activities and
feasibility studies; assumptions in economic evaluations which
prove to be inaccurate; currency fluctuations; changes in project
parameters; future prices of gold and other metals; possible
variations of ore grade or recovery rates; accidents, labour
disputes and other risks of the mining industry; climatic
conditions; political instability; decisions and regulatory changes
enacted by governmental authorities; delays in obtaining approvals
or financing or completing development or construction activities;
and discovery of archaeological ruins. There can be no assurance
that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information or statements, particularly in
light of the current economic climate and the significant
volatility, uncertainty and disruption caused by the outbreak of
COVID-19. Forward-looking statements contained herein are made as
of the date of this announcement and the Company disclaims any
obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise.
Accordingly, readers should not place undue reliance on
forward-looking statements.
LEI: 213800PDI9G7OUKLPV84
Company No: 109180
CEO's Review
(H1 2021 vs H1 2020)
I am delighted to be able to update you on the Company's
substantial progress made in the first half of this year ("H1"). It
has been a period of delivery - delivery towards our stated goals
and plans which we outlined at the Company's capital markets event
in December 2020.
Sukari has delivered a strong financial and operating
performance in H1, driven in part by our continued focus on
improving operating efficiencies and productivity. Gold production
was 204,275 ounces at AISC of US$1,186/oz. Although this
represented a 20% decrease in production and 32% increase in costs
per ounce sold compared to the corresponding six months in 2020
("YoY"), these results align with the Life of Asset Phase 1 reset
in December, and both metrics are tracking ahead of schedule for
2021 and we remain on track to meet full year guidance.
Our top priority will always be to protect the health and
wellbeing of our workforce and safeguard our assets and local
communities. Our COVID-19 protocols remain in place and thus far
Centamin has not experienced any material disruptions to
production, sales or supply chain at Sukari or the exploration
projects in West Africa. Operating safely is paramount to our
day-to-day conduct and where we target a zero-harm workplace, we
reported a 38% improvement in LTIFR in H1.
Furthermore, H1 marked significant progress on our strategic
objectives, including the completion of our West African portfolio
review which identified Doropo in Côte d'Ivoire as Centamin's next
potential mine and we secured 3,164km(2) of new exploration ground
in Egypt's Arabian Nubian Shield. Employees remain pivotal to our
success and the launch of our Centamin Capability Framework is a
key initiative designed to attract talent and develop our workforce
to deliver continued operational improvements.
At Centamin, we are building a culture of continuous
improvement. The outperformance within the open pit is a great
example of this. In H1, amongst several initiatives, we commenced
the Sukari accelerated waste-stripping programme to improve
operating flexibility and provide improved confidence in production
delivery. During H1 we performed excellently, delivering record
material moved from our owner operator fleet, with the team
outperforming the scheduled tonnes moved by 5Mt for a record 48Mt
total material moved for H1. A total 2Mt was contributed by Capital
Ltd, our waste contract-miner, who also outperformed their budget
having mobilised equipment and personnel significantly ahead of
schedule and delivering productivity ahead of schedule. Driven by a
focus on operational performance, this sustainable outcome will
help deliver our vision to reset Sukari more quickly than planned
and at a reduced cost to the business.
These initiatives, underpinned by the resilience of our balance
sheet, are aimed at unlocking greater value from Sukari, define and
develop both near- and medium-term growth and diversification
opportunities across the portfolio and ultimately deliver tangible
returns to our stakeholders.
I would like to congratulate and thank everyone who works for
and with Centamin - you are our most important asset. Despite the
continued headwinds caused by the COVID-19 pandemic our team has
been able to deliver these fantastic results. A flexible and
adaptable approach implemented by our strengthened team will enable
us to maintain our momentum into the second half of 2021 and beyond
as we strive to deliver our vision for Centamin as a diversified
multi-asset producer.
Value maxIMISATION AT sukari
Favourable gold pricing and our ongoing cost control programme,
drove better than expected revenue, EBITDA and free cash flow
generation. The average realised gold price increased 9% to
US$1799/oz. Fuel prices have increased 23% in H1 but remain below
our budgeted forecast for the year and we have not seen significant
cost inflation emerge throughout the first half. We are proactively
managing our productivity and cost base through several initiatives
as part of our programme to remove US$100 million in costs over the
period of 2020 to 2023.
In December 2020, following completion of the Life of Asset
Phase 1, we announced a three-year reset plan for Sukari, including
reduced production volumes and elevated capital expenditure in the
short term to achieve long term sustainability and consistency of
gold production. During H1, all our key capital projects progressed
on or ahead of schedule:
-- Life of Asset ("LOA") Phase 2 (on track): Following
completion of the Life of Asset ("LOA") Phase 1 in December 2020,
the LOA Phase 2 is on track for completion in Q4. The work
programmes progressed throughout H1, with the intention of
identifying potential opportunities for further improvements across
the Sukari operations over the long-term. Excellent progress was
made geologically with the reinterpretation of the Sukari orebody.
This comprehensive relogging programme will underpin the LOA Phase
2, identifying growth opportunities and enabling more robust mine
planning and operational delivery going forward.
-- Waste Stripping Programme (outperformed): The waste stripping
programme is key to improving medium to long term operating
flexibility in the open pit. A record total of 41Mt of waste
material was moved in the open pit, 7Mt more than scheduled. This
is testament to the owner-operator team at Sukari delivering
improved operating efficiencies including better fleet utilisation,
better blasting and fragmentation, and further supported by the
quick mobilisation and ramp up from Capital Ltd, our
contract-miner.
-- 36MW Sukari Solar Project (on track): Construction has
commenced on this flagship project which forms a key component of
our greenhouse gas reduction and cost saving strategy. Project
preparation works were completed, including the appointment of EPC
contractors, juwi AG and Giza Systems, as was the design work and
construction of the new high voltage switchgear. Project
construction will commence in Q3, ahead of completion in H1
2022.
-- Second Tailings Storage Facility ("TSF2) (outperformed): TSF2
was commissioned in February with a staged build programme to
ensure a two-year dam capacity is maintained.
-- Workforce Accommodation & Facilities (on track): New
workforce accommodation and facilities, including 360 new rooms
constructed and 75% occupied. The new AstroTurf football pitch and
gymnasium are under construction ahead of completion in H2.
-- Underground Paste Backfill Plant (on track): Preparatory
works were well advanced in H1 ahead construction commencing at the
end of H2 2021 and commissioning in H2 2022.
Growth & diversification
Building a strong active growth pipeline is central to our
strategy, while maintaining our capital allocation discipline. The
positive preliminary economic study at Doropo, exploration
potential at the earlier stage ABC and now more than 3,000km(2) of
highly prospective ground in Egypt's Arabian Nubian Shield,
demonstrate the quality and potential of our portfolio.
-- Egyptian Bid Round: Subject to final legal formalities which
are expected to be completed in Q3, Centamin has agreed exploration
terms with the Egyptian Ministry of Petroleum & Natural
Resources and the Egyptian Mineral Resource Authority ("EMRA") for
three blocks (incorporating 19 licenses) covering 3,164 km(2) . We
look forward to working closely with our partners at EMRA and the
Egyptian government as we and other leading gold miners seek to
assist Egypt in establishing a competitive framework for the fiscal
terms of the exploitation phase that would follow any commercial
discoveries.
-- Doropo Project, Côte d'Ivoire: The positive preliminary
economic assessment has prioritised the Doropo Project as having
the potential scale and economic returns to become Centamin's
second mine. Our highly experienced team has proven expertise at
delivering successful gold projects in West Africa. The PFS is
underway and scheduled for completion mid-2022.
-- Sukari Concession Exploration has been focussed on the
identification and ranking of targets across the Sukari 160km(2)
license area. Work has included desktop data reviews, field
mapping, and soil and rock chip sampling ahead of a 10,000 metre
Sukari Concession drill programme to commence in Q4. In addition,
good progress was made arranging the logistics to fly an airborne
geophysics survey including VTEM and ZTEM, at the end of 2021.
-- Batie West, Burkina Faso: The West African strategic review
demonstrated that while there is a viable project at Batie West it
does not meet Centamin's investment criteria, and as a result, the
Board approved the assessment of third-party development options
for its exploration programme in Burkina Faso. A process has been
initiated to locate potential partners or a buyer(s) for the Batie
West project and as such the associated assets and liabilities were
consequently presented as held for sale in the statement of
financial position and discontinued operations in the statement of
comprehensive income in the 30 June 2021 financial statements.
Stakeholder returns
Fundamental to Centamin's success, and delivery of our Purpose
to create opportunities for people through mining, is the
establishment of broad socio-economic partnerships with our
stakeholders, good governance, ethical conduct, and transparency. U
nder the terms of the Sukari Concession Agreement, the Arab
Republic of Egypt earned US$57 million in profit share and royalty
payments. I am grateful for the open engagement and collaborative
partnership we've built with our Egyptian government partners. We
share a vision to responsibly develop Egypt's nascent gold
industry, which has significant potential within the Arabian Nubian
Shield as one of the last known but significantly underexplored
gold provinces globally.
Workforce Development
Our most important stakeholder group are our people. In 2020, we
started developing the Centamin Capability Framework, focussed on
the development of our team, which includes succession planning and
training needs analysis to ensure we are attracting the best
talent, developing the required skills and empowering the workforce
with the knowledge and tools to deliver operational excellence.
Several components of the Centamin Capability Framework were
implemented in H1:
-- Leadership Development Programme: aligned with our target to
reach 77% of Sukari leadership roles held by Egyptian nationals,
Centamin have partnered with the Future Institute of Australia to
provide accredited and bespoke leadership training up to 140
Egyptian employees, identified current and future leaders at
Sukari.
-- Employee Development Pathway : a bespoke internal framework
to develop our entry level workforce to proficient level, with
clear performance criteria and competency-based assessment to
maximise career progression and identify skills gap.
-- Vocational Education & Training ("VET"): As part of a
wider programme and in partnership with Fortress Learning in
Australia, 20 Sukari trainers (expatriates and nationals) have
completed the Certificate IV Training and Assessment course and
received the Australian accredited qualification, enabling them to
train other trainers internally.
Local Economic Partnerships
Centamin is always looking for opportunities to prioritise and
support local businesses within our countries of operation. Over
60% of the Sukari goods and services are procured within Egypt,
including more recently the contractual appointment of Giza Systems
on the solar; UCF-Egypt for the recycled grinding media; and Aresco
for the fabrication of the high-performance truck trays.
Interim Dividend
For 2021, the Board reiterates its intention to recommend a
minimum dividend of US$105 million. Today, the Board declares a 4.0
US cent interim dividend to be paid on 30 September, leaving an
approximate 5.0 US cent final dividend to be proposed with the 2021
full year results. This reflects the Company's confidence in the
outlook for the year, and progress delivering on the reset
plans.
OUTLOOK
The first half has been a great period of delivery. I'd like to
thank our employees and partners for their dedication to ensuring
business continuity. Thanks to these efforts, the Company is on
track to achieve full year production and cost guidance.
Centamin is an established long life, cash generative business
which offers sector leading dividend returns to shareholders,
balanced with active investment to drive future growth through a
series of identified opportunities in Egypt and West Africa. The
Company has a strong balance sheet with US$312 million of available
cash and liquid assets as at 30 June 2021, with no debt, hedging or
streaming instruments, thereby offering shareholders pure exposure
to the gold price.
We look forward to delivering continued operating results,
taking advantage of a promising gold price environment and expect
continued strong progress with our capital projects and exploration
programmes in the second half.
Martin Horgan
CEO
5 August 2021
FINANCIAL REVIEW
( H1 2021 vs H1 2020 )
The unaudited interim condensed consolidated financial
statements have been prepared in accordance with IAS 34 "Interim
Financial Reporting" (IAS 34) as adopted by the European Union and
the requirements of the Disclosure and Transparency Rule sourcebook
(DTR) of the Financial Conduct Authority (FCA) in the United
Kingdom as applicable to interim financial reporting. The unaudited
interim condensed consolidated financial statements are not
affected by seasonality.
Consolidated Statement of Comprehensive Income
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
Revenue US$'000 367,404 448,754 828,737
--------- --------- ------------- ------------- -----------
Revenue from gold sales for the period de creased by 18 % YoY to
US$ 367 million (H1 2020: US$ 449 million), with a 9 % in crease in
the average realised gold sales price to US$ 1,799 per ounce (H1
2020: US$1,657 per ounce) offset by a 25 % de crease in gold sold
to 203,802 ounces (H1 2020: 270,529 ounces).
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
Cost of sales US$'000 (227,327) (232,693) (449,441)
--------------- --------- ------------- ------------- -----------
Cost of sales represents the cost of mining, processing,
refining, transport, site administration, depreciation,
amortisation and movement in production inventories. Cost of sales
was down 2 % YoY to US$ 227 million, mainly as a result of:
-- 10 % in crease in total mine production costs from US$ 164
million to US$ 181 million (+ve), due to:
-- a 9 % in crease in open pit mining costs (+ve);
-- a 46 % in crease in underground mining costs (+ve);
-- a 60 % in crease in finance and administration costs (+ve)
related to in creased medical supply costs mainly due to COVID-19
;
-- offset by a 5 % de crease in processing costs (-ve); and
-- 12 % in crease in depreciation and amortisation charges YoY
from US$ 66 million to US$ 73 million (+ve) due to:
-- US$ 83 million in additions to property, plant and equipment
(excl. capital work in progress) due to increased capital
expenditure which increased the associated depreciation and
amortisation charges;
-- offset by lower production.
-- Mining inventory increased by US$27 million over H1 2021
mainly due to the increase in low grade ore stockpiles, which
reduced cost of sales by US$27 million as these costs were
capitalised to the balance sheet. This resulted in a US$30 million
swing compared to H1 2020 (-ve).
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
---------------------------------------- --------- ------------- ------------- -----------
Exploration and evaluation expenditure US$'000 (2,933) (8,435) (14,588)
---------------------------------------- --------- ------------- ------------- -----------
Exploration and evaluation costs comprise expenditure incurred
for exploration activities in Côte d'Ivoire only. Exploration and
evaluation costs related to Burkina Faso have been disclosed as
part of the Loss for the period from discontinued operations.
Exploration spend in both regions for H1 2021 has decreased
compared to prior years due to reviews being performed of work done
to date.
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
------------------------------------------ --------- ------------- ------------- -----------
Greenfield exploration
Burkina Faso US$'000 1,916 1,730 2,803
Côte d'Ivoire US$'000 2,933 8,435 14,588
------------------------------------------ --------- ------------- ------------- -----------
Total greenfield exploration expenditure US$'000 4,849 10,165 17,391
------------------------------------------ --------- ------------- ------------- -----------
Like for like, exploration and evaluation costs de creased by
US$ 5 million or 65 %. The spend going forward should increase in
line with the following:
On 27 May 2021, the Board announced that the Doropo Project
showed strong development potential with the completion of a
positive preliminary economic assessment ("PEA") and had approved
US$14 million spend to advance the project to Pre-feasibility Study
("PFS") stage by mid-2022. They also announced that the ABC Project
continues to deliver strong priority greenfield target generation
along the 60km Lolosso Gold Corridor ("LGC") and that the Board has
approved a further US$3 million exploration programme for the Kona
and FarakoNafana permits for the period to June 2022.
The Board also announced its approval of the assessment of
third-party development options for its exploration programme in
Burkina Faso and the Group initiated an active programme to locate
a buyer for the Batie West project as it does not currently meet
Centamin's investment criteria. The associated assets and
liabilities have consequently been presented as held for sale in
the statement of financial position and discontinued operations in
the statement of comprehensive income in the 30 June 2021 financial
statements.
Adjusted EBITDA was US$190million, a decrease of 26% YoY, mostly
driven by the 18% decrease in revenue and an increase in cash costs
per ounce sold in the half year. The EBITDA margin decreased by 9%,
to 52%. Profit after tax was US$115 million, down 40% YoY. Basic
earnings per share was 5.16 US cents, a decrease of 21% YoY.
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
----------------------- --------- ------------- ------------- -----------
Other operating costs US$'000 (22,310) (20,768) (56,699)
----------------------- --------- ------------- ------------- -----------
Other operating costs comprise expenditure incurred for
communications, consultants, Directors' fees, stock exchange
listing fees, share registry fees, employee entitlements, general
office administration expenses, foreign exchange losses and the 3%
production royalty payable to the Arab Republic of Egypt ("ARE").
Other operating costs increased by US$2 million or 9% YoY to US$22
million, mainly as a result of:
-- US$2 million decrease in royalty paid to the government of
the ARE (in line with the decrease in gold sales revenue) (-ve);
offset by
-- US$1 million decrease in the prepayments written off (-ve); and
-- US$5 million increase in corporate costs mainly due to the
increase in share based payment expenses and salaries and wages
(+ve).
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
--------------------------------- --------- ------------- ------------- -----------
Dividend paid - non-controlling
interest in SGM US$'000 (45,700) (101,025) (174,275)
--------------------------------- --------- ------------- ------------- -----------
Dividends paid to the non-controlling interest in SGM being
EMRA, pursuant to the provisions of the Concession Agreement, are
recognised as a non-controlling interest 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 are reconciled against
SGM's audited financial statements. Any variation between payments
made during the period (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
distributions. SGM's June 2020 financial statements are currently
being audited.
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
US cents US cents US cents
per share per share per share
--------------------------------- ---- ------------- ------------- ------------
Earnings per share attributable
to owners of the parent:
Basic (US cents per share) 5.160 6.490 13.531
--------------------------------------- ------------- ------------- ------------
Basic earnings per share attributable to owners of the parent of
5 US cents for H1 2021 decreased when compared with H1 2020 of 6 US
cents. The decrease was driven by the factors outlined above.
Consolidated Statement of Financial Position
Centamin has a strong and flexible financial position with no
debt or hedging and cash, bullion on hand, gold and silver sales
debtor and financial assets at fair value through profit or loss of
US$312 million as at 30 June 2021 (31 December 2020: US$310
million).
31 December
30 June 30 June 2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Cash and cash equivalents (note
2.7(a)) US$'000 274,047 320,806 291,281
Bullion on hand (valued at the
period-end spot price) US$'000 6,190 8,767 5,747
Gold and silver sales debtor US$'000 31,905 37,102 12,492
Financial assets at fair value
through profit and loss US$'000 - - -
------------------------------------ --------- ------------- ------------- ------------
Cash and cash equivalents, bullion
on hand, gold and silver sales
debtor and financial assets at
fair value through profit and
loss US$'000 312,142 366,675 309,520
------------------------------------ --------- ------------- ------------- ------------
The majority of funds have been invested in international
rolling short-term interest money market deposits.
31 December
30 June 30 June 2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Current assets
Inventories - mining stockpiles
and consumables US$'000 113,345 100,971 118,705
Financial assets at fair value
through profit and loss US$'000 - - -
Trade and other receivables US$'000 32,820 41,589 18,424
Prepayments US$'000 10,200 8,583 8,908
Cash and cash equivalents US$'000 274,038 320,806 291,281
Assets classified as held for US$'000 36,977 - -
sale
--------------------------------- --------- ------------- ------------- ------------
Total current assets US$'000 467,380 471,949 437,318
--------------------------------- --------- ------------- ------------- ------------
Current assets have increased by US$30 million or 7% from 31
December 2020 as a result of:
-- US$5 million decrease (-ve) in inventory driven by:
-- US$8 million decrease in stores inventory (-ve);
-- US$3 million increase in mining stockpiles (+ve); and
-- No movement in the provision for obsolete stores inventory (flat).
-- US$14 million increase in trade and other receivables
(including gold and silver sales debtor) (+ve);
-- US$1 million increase in prepayments (+ve);
-- US$17 million decrease in net cash (net of foreign exchange
movements) (-ve) driven by the profit for the year less the payment
of the 2020 final dividend of US$34 million and a US$46 million
payment to EMRA as distributions to the NCI; and
-- US$37 million increase in assets classified as held for sale, see above (+ve).
31 December
30 June 30 June 2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Non -- current assets
Property, plant and equipment US$'000 828,115 796,375 829,884
Exploration and evaluation
asset US$'000 35,629 63,667 63,701
Inventories - mining stockpiles US$'000 88,391 53,468 64,870
Other receivables US$'000 77 95 103
--------------------------------- --------- ------------- ------------- ------------
Total non -- current assets US$'000 952,212 913,605 958,558
--------------------------------- --------- ------------- ------------- ------------
Non-current assets have decreased by US$6 million or 1% from 31
December 2020 as a result of:
-- US$67 million net increase in the cost of property, plant and
equipment, driven by significant capital projects including the
construction of TSF2, camp upgrades, work commencing on the solar
plant and continuous process plant optimisation (+ve);
-- US$73 million net charge for depreciation and amortisation (-ve);
-- US$28 million decrease in exploration and evaluation assets,
as a result of the drilling programmes in Sukari Hill offset by
transfers to assets classified as held for sale(-ve); and
-- US$24 million increase in inventory related to mine Run of Mine ("ROM") stockpiles (+ve).
31 December
30 June 30 June 2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Current liabilities
Trade and other payables US$'000 54,703 50,667 64,488
Tax liabilities US$'000 219 251 267
Provisions US$'000 7,135 9,465 7,480
Liabilities directly associated
with assets classified as
held for sale 2.7(c) 679 - -
--------------------------------- -------- ------------- ------------- ------------
Total current liabilities US$'000 62,736 60,383 72,235
--------------------------------- -------- ------------- ------------- ------------
Current liabilities have decreased by US$10 million or 13% from
31 December 2020 as a result of a US$10 million decrease in trade
payables due to timing differences (-ve).
31 December
30 June 30 June 2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Non-current liabilities
Provisions US$'000 30,408 14,750 32,752
Other payables US$'000 - - 1,437
Total non-current liabilities US$'000 30,408 14,750 34,189
------------------------------- --------- ------------- ------------- ------------
Non-current liabilities have de creased by US$ 4 million from
US$ 34 million at 31 December 2020 to US$ 30 million at 30 June
2021, mainly as a result of the utilisation of the provision for
cost recovery items after payment of the first US$3 million
instalment.
31 December
30 June 30 June 2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Equity
Issued capital US$'000 670,830 672,105 668,807
Share option reserve US$'000 3,613 2,105 3,343
Accumulated profits US$'000 652,005 636,211 617,302
---------------------- --------- ------------- ------------- ------------
Total equity US$'000 1,326,448 1,310,421 1,289,452
---------------------- --------- ------------- ------------- ------------
Accumulated profits increased by US$37 million from 31 December
2021, as a result of:
-- US$115 million profit for the year after tax (+ve); offset by
-- US$46 million profit share paid to EMRA in the year (-ve); and
-- US$34 million 2020 final dividend paid (-ve).
Consolidated Statement of Cash Flows
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
-------------------------------------- --------- ------------- ------------- -----------
Cash flows from operating activities
Cash generated in operating
activities US$'000 141,764 254,330 452,972
Income tax paid US$'000 - - (10)
Net cash generated by operating
activities US$'000 141,764 254,330 452,962
-------------------------------------- --------- ------------- ------------- -----------
Net cash flows generated by operating activities comprise
receipts from gold and silver sales and interest income, offset by
operating and corporate administration costs.
Group cash costs of production were US$ 807 per ounce produced,
up 26 % YoY, predominantly due to a 10 % in crease in mine
production costs and a 20% reduction in gold produced. Group all in
sustaining costs ("AISC") were US$ 1,186 per ounce sold, up 32 %
YoY due to in creased costs offset by the movement in inventory and
decreased gold ounces sold. Both cash cost of production and AISC
are tracking on budget and thereby within our guidance range of
US$800-900 per ounce produced and US$1,150-1,250 per ounce sold for
2021.
Lower gold sales partly offset by a stronger gold price has
decreased net cash generated by operating activities YoY (44%) to
US$142 million.
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
---------------------------------------- --------- ------------- ------------- -----------
Cash flows from investing activities
Disposal of financial assets at
fair value through profit and
loss US$'000 - 7,414 7,414
Acquisition of property, plant
and equipment US$'000 (72,774) (47,525) (127,096)
Brownfield exploration and evaluation
expenditure US$'000 (7,136) (5,611) (11,717)
Finance income US$'000 41 1,441 1,554
--------------------------------------- ---------- ------------- ------------- -----------
Net cash used in investing activities US$'000 (79,869) (44,281) (129,845)
--------------------------------------- ---------- ------------- ------------- -----------
Net cash flows used in investing activities comprise exploration
expenditure and capital development expenditure. The primary use of
the funds in the period was for the purchase of property, plant and
equipment and investment in underground development at the Sukari
site in Egypt. Group capital expenditure, including sustaining and
non-sustaining capital, was US$78 million. This was lower than
budgeted due to payments for certain capital projects being
rescheduled to later in the year.
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
--------------------------------------- --------- ------------- ------------- -----------
Cash flows from financing activities
Own shares acquired US$'000 - - (3,298)
Dividend paid - non-controlling
interest in SGM US$'000 (45,700) (101,025) (174,275)
Dividend paid - owners of the
parent US$'000 (34,461) (69,240) (138,725)
Net cash used in financing activities US$'000 (80,161) (170,265) (316,298)
--------------------------------------- --------- ------------- ------------- -----------
After distribution of profit share payments to Company's
partner, the Egyptian government[1], the Group generated free cash
flow(1,3) of US$16 million, down 84% YoY driven by decreased gold
sales, increased capital expenditure and higher costs offset by a
higher gold price in the period. Profit share payments of US$46
million, down 55% YoY, and royalty payments of US$11 million, down
18% YoY, were made in H1. Under the terms of the Concession
Agreement with our Egyptian partners, EMRA, on 1 July 2020, the
profit share mechanism changed to 50:50, from 55:45 in favour of
Centamin, and will remain at this level for the remainder of the
tenure.
Capital expenditure
The following table provides a breakdown of the total capital
expenditure of the Group:
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
------------------------------------------- --------- ------------- ------------- -----------
Underground exploration US$'000 6,416 5,527 11,599
Underground mine development US$'000 17,891 18,464 39,197
Other sustaining capital expenditure US$'000 30,969 21,271 52,433
------------------------------------------- --------- ------------- ------------- -----------
Total sustaining capital expenditure US$'000 55,276 45,262 103,229
------------------------------------------- --------- ------------- ------------- -----------
Non-sustaining exploration expenditure(1) US$'000 720 84 118
Other non-sustaining capital
expenditure(2) US$'000 22,316 6,385 35,049
------------------------------------------- --------- ------------- ------------- -----------
Total gross capital expenditure US$'000 78,312 51,731 138,396
------------------------------------------- --------- ------------- ------------- -----------
(1) Comparative figures includes Sukari expenditure relating to
Cleopatra in non-sustaining capital expenditure before the offset
of net pre-production gold sales.
(2) Non-sustaining capital expenditure included the construction
of TSF 2, camp upgrades, the Capital waste stripping contract and
work commencing on the solar plant. Non-sustaining costs are
primarily those costs incurred at 'new operations' and costs
related to 'major projects at existing operations' where these
projects will materially benefit the operation.
Cumulative exploration expenditure capitalised for Cleopatra at
Sukari is US$23 million (project to date) offset by pre-production
net revenues of US$18 million in prior periods (refer to notes 2.1
and 2.2 to the financial statements for further details) resulting
in US$5 million remaining on the statement of financial position at
30 June 2021.
Exploration expenditure
The following table provides a breakdown of the total
exploration expenditure of the Group:
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
------------------------------------------ --------- ------------- ------------- -----------
Greenfield exploration
Burkina Faso US$'000 1,916 1,730 2,803
Côte d'Ivoire US$'000 2,933 8,435 14,588
------------------------------------------ --------- ------------- ------------- -----------
Total greenfield exploration expenditure US$'000 4,849 10,165 17,391
Brownfield exploration
Sukari Tenement US$'000 7,136 5,603 11,709
Cleopatra(1) US$'000 - 8 8
Total brownfield exploration expenditure US$'000 7,136 5,611 11,717
Total exploration expenditure US$'000 11,985 15,776 29,108
------------------------------------------ --------- ------------- ------------- -----------
(1) Cleopatra expenditure before the offset of net
pre-production gold sales.
Exploration and evaluation assets - impairment
considerations
In consideration of the requirements of the International
Financial Reporting Standards ("IFRS") 6, an impairment test has
been performed. The trigger for the impairment assessment was the
reclassification of the Burkina Faso associated assets and
liabilities which have been presented as held for sale in the 30
June 2021 financial statements. On review, no impairment was
required.
Non -- GAAP financial measures
Four non -- GAAP financial measures are used in this report.
Summarised definitions for each are provided below, for the full
definitions see the financial review section of the 2020 Annual
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.
Reconciliation of profit before tax to EBITDA and adjusted
EBITDA:
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
---------------------------------- --------- ------------- ------------- -----------
Profit for the period before
tax(1) US$'000 116,794 192,549 317,441
Finance income US$'000 (41) (1,441) (1,554)
Interest expense US$'000 257 266 558
Depreciation and amortisation(1) US$'000 73,417 65,758 124,512
---------------------------------- --------- ------------- ------------- -----------
EBITDA(1) US$'000 190,427 257,132 440,957
Add back: (2)
Profit on financial assets
at fair value through profit
or loss US$'000 - (960) (960)
Impairments of non-current - -
assets US$'000 -
---------------------------------- --------- ------------- ------------- -----------
Adjusted EBITDA US$'000 190,427 256,172 439,997
---------------------------------- --------- ------------- ------------- -----------
(1) Profit before tax, depreciation and amortisation and EBITDA
includes a charge to reflect the removal of fuel subsidies.
(2) Adjustments made to normalise earnings, for example profit
on financial assets at fair value through profit or loss,
impairments of property, plant and equipment, non-current mining
stockpiles and exploration and evaluation assets.
2. Cash cost of production per ounce produced and sold and
all-in sustaining costs ("AISC") 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 sustaining administrative expenses, royalties, depreciation
and amortisation.
Reconciliation of cash cost of production per ounce
produced:
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Audited)
(Unaudited)(1) (1) (1)
Mine production costs (note
2.2) US$'000 180,714 164,265 339,012
Less: Refinery and transport US$'000 (1,145) (1,147) (2,322)
Movement of inventory(2) US$'000 (14,795) 1,168 (11,502)
-------------------------------- --------- ---------------- ------------- -----------
Cash cost of production - gold
produced US$'000 164,774 164,286 325,188
-------------------------------- --------- ---------------- ------------- -----------
Gold produced - total (oz.)
(excluding Cleopatra) oz 204,275 256,084 452,320
Cash cost of production per
ounce produced US$/oz 807 642 719
-------------------------------- --------- ---------------- ------------- -----------
(1) Mine production costs, cash cost of production, cash cost of
production per ounce, AISC and AISC per ounce sold includes
prepayments recorded since Q4 2012 to reflect the removal of fuel
subsidies.
(2) The movement in inventory on ounces produced is only the
movement in mining stockpiles and ore in circuit while the movement
in ounces sold is the net movement in mining stockpiles, ore in
circuit and gold in safe inventory.
A reconciliation has been included below to show the cash cost
of production metric should gold sold ounces be used as a
denominator.
Reconciliation of cash cost of production per ounce sold:
Full Year
H1 2021 2020
H1 2020
(Unaudited)
(Unaudited)(1) (1) (Audited)(1)
------------------------------------- --------- ---------------- ------------- --------------
Mine production costs (note
2.2) US$'000 180,714 164,265 339,012
Royalties US$'000 10,988 13,428 24,792
Movement of inventory(2) US$'000 (15,401) 15,740 4,181
------------------------------------ ---------- ---------------- ------------- --------------
Cash cost of production - gold
sold US$'000 176,301 193,433 367,985
------------------------------------ ---------- ---------------- ------------- --------------
Gold sold - total (oz.) (excluding
Cleopatra) oz 203,802 270,529 468,681
Cash cost of production per
ounce sold US$/oz 865 715 785
------------------------------------ ---------- ---------------- ------------- --------------
(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.
(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.
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Audited)
(Unaudited)(1) (1) (1)
------------------------------------------ --------- ---------------- ------------- -----------
Movement in inventory
Movement in inventory - cash
(above) US$'000 (15,401) 15,740 4,181
Effect of depreciation and amortisation
- non-cash US$'000 (11,205) (12,897) 9,523
Movement in inventory - cash
& non-cash (note 2.2) US$'000 (26,606) 2,843 13,704
----------------------------------------- ---------- ---------------- ------------- -----------
Reconciliation of AISC per ounce sold:
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Audited)
(Unaudited)(1) (1) (1)
-------------------------------------- --------- ---------------- ------------- -----------
Mine production costs (note 2.2) US$'000 180,714 164,265 339,012
Movement in inventory US$'000 (15,401) 15,740 4,181
Royalties US$'000 10,988 13,428 24,792
Sustaining corporate administration
costs US$'000 10,709 4,935 15,029
Rehabilitation costs US$'000 138 175 350
Sustaining underground development
and exploration US$'000 24,307 23,992 50,796
Other sustaining capital expenditure US$'000 30,969 21,271 52,433
By -- product credit US$'000 (719) (581) (1,115)
-------------------------------------- --------- ---------------- ------------- -----------
All -- in sustaining costs(2) US$'000 241,705 243,225 485,478
-------------------------------------- --------- ---------------- ------------- -----------
Gold sold - total (oz.) (excluding
Cleopatra) oz 203,802 270,529 468,681
AISC per ounce sold US$/oz 1,186 899 1,036
-------------------------------------- --------- ---------------- ------------- -----------
(1) Mine production costs, cash cost of production, cash cost of
production per ounce, AISC and AISC per ounce sold includes
prepayments recorded since Q4 2012 to reflect the removal of fuel
subsidies.
(2) Includes refinery and transport.
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Audited)
(Unaudited)(1) (1) (1)
----------------------------------- --------- ---------------- ------------- -----------
Corporate costs
Sustaining corporate costs US$'000 10,709 4,935 15,029
Non-sustaining corporate costs(1) US$'000 - 550 2,550
----------------------------------- --------- ---------------- ------------- -----------
Corporate costs (sub-total) (note
2.2) US$'000 10,709 5,485 17,579
----------------------------------- --------- ---------------- ------------- -----------
(1) Please note that non-sustaining corporate costs in the
comparative results relate to expenses and/or accruals recognised
for work performed by the Group's advisors on the successful
defence of the third party all-share acquisition attempt of
Centamin plc. This is not a normal cost incurred in the day to day
operations of running the Group and as such has been excluded from
our Non-GAAP reporting measures.
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 and silver
sales debtor and financial assets at fair value through profit or
loss is a non-GAAP financial measure. Cash and cash equivalents,
bullion on hand, gold and silver sales debtor and financial assets
at fair value through profit or loss is a measure of the available
cash and liquid assets at a point in time.
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 2020
2021 2020 (Audited)
(Unaudited) (Unaudited)
Cash and cash equivalents (note
2.7(a)) US$'000 274,047 320,806 291,281
Bullion on hand (valued at the
period-end spot price) US$'000 6,190 8,767 5,747
Gold and silver sales debtor US$'000 31,905 37,102 12,492
Financial assets at fair value
through profit and loss US$'000 - - -
------------------------------------ --------- ------------- ------------- ------------
Cash and cash equivalents, bullion
on hand, gold and silver sales
debtor and financial assets
at fair value through profit
and loss US$'000 312,142 366,675 309,520
------------------------------------ --------- ------------- ------------- ------------
4. Free cash flow and adjusted free cash flow
Free cash flow is a non-GAAP financial measure. Free cash flow
is a measure of the available cash after distributions to the NCI
in SGM, being EMRA, that the Group has at its disposal to use for
capital reinvestment and to distribute to shareholders of the
parent as dividends in accordance with the Company's dividend
policy.
Full Year
H1 2021 2020
H1 2020
(Unaudited) (Unaudited) (Audited)
Net cash generated by operating
activities US$'000 141,764 254,330 452,972
Less:
Net cash used in investing
activities US$'000 (79,869) (44,281) (129,845)
Dividend paid - non-controlling
interest in SGM US$'000 (45,700) (101,025) (174,275)
---------------------------------- --------- ------------- ------------- -----------
Free cash flow US$'000 16,195 109,024 148,852
Add back:
Net (disposals)/acquisitions
of financial assets at fair
value through profit or loss(1) US$'000 - (7,414) (7,414)
---------------------------------- --------- ------------- ------------- -----------
Adjusted free cash flow US$'000 16,195 101,610 141,438
---------------------------------- --------- ------------- ------------- -----------
1) Adjustments made to free cash flow, for example acquisitions
and disposals of financial assets at fair value through profit or
loss, which are completed through specific allocated available cash
reserves.
governanCe
Share Plan Awards
Granted 30 April 2021
-- The Company granted 5,945,000 conditional awards of ordinary
shares of nil par value to 36 employees of the Group under the
shareholder approved Performance Share Plan. Performance conditions
and further details of the scheme can be found in the 2020 Annual
Report ( www.centamin.com ).
-- The Company granted 1,467,000 conditional awards of ordinary
shares of nil par value to 130 employees under the management
Deferred Bonus Share Plan. These shares vest annually over a
three-year period in equal tranches to individuals still employed
by the Company.
Legal developments in egypt
There have been no material developments in the current period.
For further detail please refer to Note 5.1 of the 2020 Annual
Report on the Company's website.
PRINCIPAL RISKS AND Uncertainties
RISK MANAGEMENT
Centamin recognises that nothing is without risk. A successful
and sustainable business needs an effective risk management
framework as its foundation, which outlines the Company approach
and process for management of risk. The framework should be
supported by a strong culture of risk awareness that encourages
openness and integrity, alongside a clearly defined appetite for
risk. This enables the Board to consider risks and opportunities to
improve our decision-making process, deliver on our objectives and
improve our performance as a responsible mining company.
The Board has overall responsibility for establishing a robust
risk management framework that allows for the assessment and
management of material external, strategic and operational risks
with further detail on the framework given in the 2020 Annual
Report. 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.
The 2020 Annual Report included several updates to the principal
risks, driven by changes to the Company's governance structure and
senior management, progress against the corporate strategy and
external factors, such as COVID-19. Any 'new' principal risks were
elevated from the emerging risks disclosed in the 2019 Annual
Report or the 2020 Half-year Report. The remaining principal risks
were refreshed, not removed, to reflect the broader considerations
of the business moving forward and the emerging risks were also
refreshed. The Company continues to monitor the impact of the
COVID-19 Pandemic, as highlighted in the 2020 Annual Report under
Co-Existing with COVID-19.
Centamin takes several 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 Directors confirm that a robust assessment of the principal,
new and emerging risks impacting the Company has been undertaken
which identified external, strategic and operational risks on a
sliding scale depending on the level of influence over which the
Company may have on the factors which can impact the risk. For
further detail please refer to the Risk Review within the 2020
Annual Report and 2020 Sustainability Report, published on the
Company's website: www.centamin.com . We have also given further
detail on the scenarios we have considered in our going concern
analysis disclosed in note 4.2 of the unaudited interim
consolidated financial statements below.
PRINCIPAL RISKS
The principal risks and uncertainties facing the Group remain
unchanged from those which are set out in detail within the
Strategic Report section of the 2020 Annual Report. The principal
risks are listed below :
External risks
-- Political
-- Legal and Regulatory Compliance
-- Litigation
-- Infectious Disease Outbreak
-- Gold Price
Strategic risks
-- Single Project Dependency
-- Concession Governance and Management
-- Licence to Operate
-- Future of our Workforce
-- Evolving environmental expectations
Operational risks
-- Safety, Health and Wellbeing
-- Exploration
-- Geological Understanding
-- Operational Performance and Planning
EMERGING RISKS
Below we have outlined a list of emerging risks, these remain
unchanged from those which are set out within the Strategic Report
section of the 2020 Annual Report :
-- Climate related risk
-- Financial
-- Cyber security
-- Corporate development
-- Security - West Africa
-- Capital allocation and project execution
Set out below are the unaudited consolidated Financial
Statements for the Group, including notes thereto, for the six
months ended 30 June 2021.
________________________________________________________________________________________________
DIRECTORS' RESPONSIBILITY STATEMENT
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE SIX
MONTHSED 30 JUNE 2021 FINANCIAL REPORT
The directors confirm that to the best of their knowledge:
a) the condensed set of interim consolidated financial
statements for the six months ended 30 June 2021 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 2021 and their respective
responsibilities can be found on pages 92 to 109 of the 2020 annual
report of Centamin plc.
By order of the Board,
Chief Executive Officer Chief Financial Officer
Martin Horgan Ross Jerrard
5 August 2021 5 August 2021
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE SIX MONTHSED
30 JUNE 2021
Independent review report to Centamin plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Centamin plc's condensed consolidated interim
financial statements (the "interim financial statements") in the
interim results of Centamin plc for the 6 month period ended 30
June 2021 (the "period").
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 2021;
-- the unaudited interim condensed consolidated statement of
comprehensive income for the period then ended;
-- the unaudited interim condensed consolidated statement of
cash flows for the period then ended;
-- the unaudited interim condensed consolidated statement of
changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim results
of Centamin plc 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.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The interim results, 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 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 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 and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
5 August 2021
Unaudited interim condensed consolidated statement of
comprehensive income
for the six months ended 30 June 2021
Half year Half year Year ended
ended ended 30 31 December
30 June June
2021 2020
2020 (Unaudited) (Audited)
(Unaudited) (1) (1)
Notes US$'000 US$'000 US$'000
--------------------------------------------- ------- ------------- ----------------- -------------
Revenue 2.1 367,404 448,754 828,737
Cost of sales 2.2 (227,327) (232,693) (449,441)
--------------------------------------------- ------- ------------- ----------------- -------------
Gross profit 140,077 216,061 379,296
Exploration and evaluation expenditure (2,933) (8,435) (14,588)
Other operating costs 2.2 (22,310) (20,768) (56,699)
Other income 1,919 3,290 6,918
Profit on financial assets at
fair value through profit and
loss - 960 960
Finance income 2.2 41 1,441 1,554
Profit for the period before tax 116,794 192,549 317,441
Tax 48 (24) (50)
--------------------------------------------- ------- ------------- ----------------- -------------
Profit for the period after tax
from continuing operations 116,842 192,525 317,391
Loss for the period from discontinued
operations attributable to
- the owners of the parent 2.8(b) (1,978) (1,401) (2,442)
- non-controlling interest in - - -
SGM
--------------------------------------------- ------- ------------- ----------------- -------------
Total loss for the period from
discontinued operations 2.8(b) (1,978) (1,401) (2,442)
--------------------------------------------- ------- ------------- ----------------- -------------
Profit for the period after tax 114,864 191,124 314,949
--------------------------------------------- ------- ------------- ----------------- -------------
Profit for the period after tax
attributable to:
- the owners of the parent 59,484 74,816 155,979
- non-controlling interest in
SGM 2.3 55,380 116,308 158,970
--------------------------------------------- ------- ------------- ----------------- -------------
Total comprehensive income for
the period 114,864 191,124 314,949
--------------------------------------------- ------- ------------- ----------------- -------------
Total comprehensive income for
the period attributable to:
- the owners of the parent 59,484 74,816 155,979
- non-controlling interest in
SGM 2.3 55,380 116,308 158,970
--------------------------------------------- ------- ------------- ----------------- -------------
Earnings per share attributable
to owners of the parent:
Basic (US cents per share) 5.160 6.490 13.531
Diluted (US cents per share) 5.118 6.454 13.453
Earnings per share attributable
to owners of the parent from continuing
operations:
Basic (US cents per share) 5.331 6.612 13.743
Diluted (US cents per share) 5.288 6.575 13.664
--------------------------------------------- ------- ------------- ----------------- -------------
Earnings per share attributable
to owners of the parent from discontinued
operations:
Basic (US cents per share) (0.171) (0.122) (0.212)
Diluted (US cents per share) (0.170) (0.121) (0.211)
--------------------------------------------- ------- ------------- ----------------- -------------
(1) (The 2020 comparative figures for Exploration and evaluation
expenditure, Other operating costs and Other income have changed
due to amounts relating to discontinued operations being
reclassified.)
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 2021
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
Notes US$'000 US$'000 US$'000
------------------------------------- ------- ------------- ------------- ------------
Non --current assets
Property, plant and equipment 2.4 828,115 796,375 829,884
Exploration and evaluation asset 2.5 35,629 63,667 63,701
Inventories - mining stockpiles 88,391 53,468 64,870
Other receivables 77 95 103
------------------------------------- ------- ------------- ------------- ------------
Total non --current assets 952,212 913,605 958,558
------------------------------------- ------- ------------- ------------- ------------
Current assets
Inventories - mining stockpiles
and consumables 113,345 100,971 118,705
Trade and other receivables 32,820 41,589 18,424
Prepayments 10,200 8,583 8,908
Cash and cash equivalents 2.7(a) 274,038 320,806 291,281
Assets classified as held for sale 2.8(c) 36,977 - -
------------------------------------- ------- ------------- ------------- ------------
Total current assets 467,380 471,949 437,318
------------------------------------- ------- ------------- ------------- ------------
Total assets 1,419,592 1,385,554 1,395,876
------------------------------------- ------- ------------- ------------- ------------
Non --current liabilities
Provisions 2.6 30,408 14,750 32,752
Other payables - - 1,437
------------------------------------- ------- ------------- ------------- ------------
Total non --current liabilities 30,408 14,750 34,189
------------------------------------- ------- ------------- ------------- ------------
Current liabilities
Trade and other payables 54,703 50,667 64,488
Tax liabilities 219 251 267
Provisions 2.6 7,135 9,465 7,480
Liabilities directly associated
with assets classified as held for
sale 2.8(c) 679 - -
------------------------------------- ------- ------------- ------------- ------------
Total current liabilities 62,736 60,383 72,235
------------------------------------- ------- ------------- ------------- ------------
Total liabilities 93,144 75,133 106,424
------------------------------------- ------- ------------- ------------- ------------
Net assets 1,326,448 1,310,421 1,289,452
------------------------------------- ------- ------------- ------------- ------------
Equity
Issued capital 670,830 672,105 668,807
Share option reserve 3,613 2,105 3,343
Accumulated profits 659,521 622,820 634,498
------------------------------------- ------- ------------- ------------- ------------
Total equity attributable to:
- owners of the parent 1,333,964 1,297,029 1,306,648
- non-controlling interest in SGM (7,516) 13,392 (17,196)
Total equity 1,326,448 1,310,421 1,289,452
------------------------------------- ------- ------------- ------------- ------------
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 authorised by the Board of Directors for issue on 5
August 2021 and signed on its behalf by:
Chief Executive Officer Chief Financial Officer
Martin Horgan Ross Jerrard
5 August 2021 5 August 2021
Unaudited interim condensed consolidated statement of changes in
equity
for the six months ended 30 June 2021
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$'000
----------------- ------ ------------- ------------- ------------- ------------- ---------------- -------------
Balance as at 1
January 2021 668,807 3,343 634,498 1,306,648 (17,196) 1,289,452
Profit for the
period after
tax - - 59,484 59,484 55,380 114,864
Total
comprehensive
income for the
period - - 59,484 59,484 55,380 114,864
Net recognition
of share based
payments - 2,293 - 2,293 - 2,293
Transfer of
share
based payments 2,023 (2,023) - - - -
Dividend paid -
non-controlling
interest in SGM 2.3 - - - - (45,700) (45,700)
Dividend paid -
owners of the
parent - - (34,461) (34,461) - (34,461)
Balance as at 30
June 2021 670,830 3,613 659,521 1,333,964 (7,516) 1,326,448
----------------- ------ ------------- ------------- ------------- ------------- ---------------- -------------
Share
Issued option Accumulated Non-controlling Total
capital reserve profits Total interests equity
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------- ------ ------------- ------------- ------------- ------------- ---------------- -------------
Balance as at 1
January 2020 672,105 4,179 617,244 1,293,528 (1,891) 1,291,637
Profit for the
period after
tax - - 74,816 74,816 116,308 191,124
Total
comprehensive
income for the
period - - 74,816 74,816 116,308 191,124
Net recognition
of share based
payments - (2,074) - (2,074) - (2,074)
Dividend paid -
non-controlling
interest in SGM 2.3 - - - - (101,025) (101,025)
Dividend paid -
owners of the
parent - - (69,240) (69,240) - (69,240)
Balance as at 30
June 2020 672,105 2,105 622,820 1,297,029 13,392 1,310,421
----------------- ------ ------------- ------------- ------------- ------------- ---------------- -------------
Share
Issued option Accumulated Non-controlling Total
capital reserve profits Total interests equity
(Audited) (Audited) (Audited) (Audited) (Audited) (Audited)
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------------- ------ ----------- ----------- ------------ ----------- ---------------- -----------
Balance as at 1
January 2020 672,105 4,179 617,244 1,293,528 (1,891) 1,291,637
Profit for the
year after tax - - 155,979 155,979 158,970 314,949
Total comprehensive
income for the
year - - 155,979 155,979 158,970 314,949
Own shares acquired (3,298) - - (3,298) - (3,298)
Net reversal of
share-based payments - (836) - (836) - (836)
Dividend paid -
non-controlling
interest in SGM 2.3 - - - - (174,275) (174,275)
Dividend paid -
owners of the parent - - (138,725) (138,725) - (138,725)
Balance as at 31
December 2020 668,807 3,343 634,498 1,306,648 (17,196) 1,289,452
----------------------- ------ ----------- ----------- ------------ ----------- ---------------- -----------
The above unaudited interim condensed consolidated statement of
changes in equity should be read in conjunction with the
accompanying notes.
Unaudited interim condensed consolidated statement of cash
flows
for the six months ended 30 June 2021
Half year Half year Year ended
ended 30 ended 30 31 December
June June
2020 2020
(Unaudited) (Audited)
2021 (Unaudited) (1) (1)
Notes US$'000 US$'000 US$'000
--------------------------------------- ------- ----------------- ------------- -------------
Cash flows from operating activities
Cash generated from operating
activities 2.7(b) 141,764 254,330 452,972
Income tax refund received - - -
Income tax paid - - (10)
Net cash generated by operating
activities 141,764 254,330 452,962
--------------------------------------- ------- ----------------- ------------- -------------
Cash flows from investing activities
Disposal of financial assets at
fair value through profit and
loss - 7,414 7,414
Acquisition of property, plant
and equipment (72,774) (47,525) (127,096)
Brownfield exploration and evaluation
expenditure (7,136) (5,611) (11,717)
Finance income 2.2 41 1,441 1,554
--------------------------------------- ------- ----------------- ------------- -------------
Net cash used in investing activities (79,869) (44,281) (129,845)
--------------------------------------- ------- ----------------- ------------- -------------
Cash flows from financing activities
Own shares acquired - - (3,298)
Dividend paid - non-controlling
interest in SGM 2.3 (45,700) (101,025) (174,275)
Dividend paid - owners of the
parent (34,461) (69,240) (138,725)
Net cash used in financing activities (80,161) (170,265) (316,298)
--------------------------------------- ------- ----------------- ------------- -------------
Net (decrease)/increase in cash
and cash equivalents from continuing
operations (18,266) 39,784 6,819
Net increase in cash and cash
equivalents from discontinued
operations 2.8(b) 88 345 340
Cash and cash equivalents at the
beginning of the period 291,281 278,229 278,229
Effect of foreign exchange rate
changes 944 2,448 5,893
--------------------------------------- ------- ----------------- ------------- -------------
Cash and cash equivalents at the
end of the period 2.7(a) 274,047 320,806 291,281
--------------------------------------- ------- ----------------- ------------- -------------
(1) The 2020 comparative figures for Cash generated from
operating activities, Acquisition of property, plant and equipment
have changed due to amounts relating to discontinued operations
being reclassified.
The above unaudited interim condensed consolidated statement of
cash flows should be read in conjunction with the accompanying
notes.
Notes to the unaudited interim condensed consolidated financial
statements
for the six months ended 30 June 2021
1 Current reporting period amendments
1.1 Changes in critical judgements and estimates in applying the entities accounting policies
The following are the new critical judgements and estimates that
management have made in the process of applying the Group's
accounting policies that have the most significant effect on the
amounts recognised in the financial statements.
Management has discussed its critical accounting judgements and
estimates and associated disclosures with the Company's Audit and
Risk Committee.
The new critical accounting judgement applied in the period is
as follows:
1.1.1. Judgement: Assets held for sale and discontinued operations
On 27 May 2021, the company announced to the market regarding
the Burkina Faso exploration project, "The Board has approved the
assessment of third-party development options as the project does
not currently meet Centamin's investment criteria". This has met
the criteria of an Asset held for sale and triggered an impairment
review of the E&E asset held on the balance sheet.
IFRS5 'Non-current assets held for sale and discontinued
operations' states an entity shall classify a non -- current asset
(or disposal group) as held for sale if its carrying amount will be
recovered principally through a sale transaction rather than
through continuing use. For this to be the case, the asset (or
disposal group) must be available for immediate sale in its present
condition subject only to terms that are usual and customary for
sales of such assets (or disposal groups) and its sale must be
highly probable.
In general terms, assets (or disposal groups) held for sale are
not depreciated, are measured at the lower of carrying amount and
fair value less costs to sell and are presented separately in the
statement of financial position. Specific disclosures are also
required for discontinued operations and disposals of non-current
assets.
As stated to the market the Board is committed to a transaction
whereby a third-party funds the development of the asset and or a
potential sale of the asset (or disposal group) including the
related holding companies which is likely to lead to a loss of
control, and an active programme to locate a third-party
development partner and or buyer and complete the transaction has
been initiated. The asset (or disposal group) is being actively
marketed for third-party development and or a buyer at a price that
is reasonable in relation to its current fair value and the
potential disposal is expected to qualify for recognition as a
completed transaction within one year from the date of
classification.
The Company is committed to a transaction involving the loss of
control of a subsidiary and has classified all the assets and
liabilities of that subsidiary as held for sale. The Company has
measured the non -- current asset (or disposal group) classified as
held for sale at the lower of its carrying amount and fair value
less costs to sell. See note 2.8 Discontinued operation for further
information.
1.1.2. Estimate: Impairment assessment of Burkina Faso exploration and evaluation assets
IFRS requires management to test for impairment if events or
changes in circumstances indicate that the carrying amount of a
finite life asset may not be recoverable.
Considering the requirements of IFRS5, an impairment test has
been performed. On review, no impairment was required.
In making its assessment as to the possibility of whether any
impairment losses had arisen, management considered the following
as part of its assessment of the recoverable amount:
-- internal sources of information; and
-- external sources of information.
1.1.2.1 Exploration and evaluation assets
In accordance with the requirements of IAS 36 'Impairment of
assets' and IFRS 6 'Exploration for and evaluation of mineral
resources' the assessment compared the recoverable amount of the
Burkina Faso Exploration and Evaluation Asset Cash Generating Units
("E&E CGU") with its carrying value for the half year ended 30
June 2021. The recoverable amount of the E&E CGUs under IFRS5
'Non-current assets held for sale and discontinued operations' is
assessed by reference to the lower of the carrying amount and Fair
Value less Costs to Dispose ("FVLCD"). The FVLCD is derived using
discounted cash flow techniques (NPV of expected future cash flows
of a CGU), which incorporate market participant assumptions. Cost
to dispose is based on management's best estimates of future
selling costs at the time of calculating FVLCD. Costs attributable
to the disposal of the E&E CGUs are not considered significant.
The expected future cash flows utilised in the FVLCD model are
derived from estimates of the consideration from the sale of the
asset of the E&E CGUs and were considered higher than the
carrying amount and therefore no impairment was required.
For purposes of testing for impairment of the E&E CGUs, we
have assessed whether a reasonably possible change in any of the
key assumptions used to estimate the recoverable value would result
in an impairment charge. Sensitivity calculations were performed
based on:
-- a decrease in the future estimated gold price to US$1,250/oz (base case US$1,450/oz); and
-- an increase in the discount rate to 10% (base case 5%).
In isolation, none of the changes set out above would result in
an impairment.
There were no further updates and/or changes to critical
accounting judgements and estimates that management have made in
the year in applying the Group's accounting policies, that have the
most significant effect on the amounts recognised and the
disclosure of such amounts in the financial statements.
1.2 Changes in policies and estimates
There were no further changes in policies and estimates during
the reporting period, however, the Company would like to highlight
its accounting policy regarding mine stripping assets as disclosed
in note 2.4 Property, plant and equipment which have arisen due to
the Capital waste stripping contract.
1.2.1 IFRIC20 'Stripping costs in the production phase of a
surface mine'
The Group adopted its accounting policy on stripping costs in
the production phase of a surface mine effective 1 January 2012.
IFRIC20 provides clarity on how to account for and measure the
removal of mine waste materials which provide access to mineral ore
deposits. This waste removal activity is known as 'stripping'.
There can be two benefits accruing to the entity from the stripping
activity:
-- usable ore that can be used to produce inventory; and
-- improved access to further quantities of material that will be mined in future periods.
IFRIC20 considers when and how to account separately for these
two benefits arising from the stripping activity, as well as how to
measure these benefits both initially and subsequently. The costs
of stripping activity to be accounted for in accordance with the
principles of IAS2 'Inventories' to the extent that the benefit
from the stripping activity is realised in the form of inventory
produced. The costs of stripping activity which provides a benefit
in the form of improved access to ore is recognised as a
non-current 'stripping activity asset' where the following criteria
are met:
1. it is probable that the future economic benefit (improved
access to the ore body) associated with the stripping activity will
flow to the entity;
2. the entity can identify the component of the ore body for
which access has been improved; and
3. the costs relating to the stripping activity associated with
that component can be measured reliably.
When the costs of the stripping activity asset and the inventory
produced are not separately identifiable, production stripping
costs are allocated between the inventory produced and the
stripping activity asset by using an allocation basis that is based
on a relevant production measure. A stripping activity asset is
accounted for as an addition to, or as an enhancement of, an
existing asset and classified as tangible or intangible according
to the nature of the existing asset of which it forms part. A
stripping activity asset is initially measured at cost and
subsequently carried at cost or its revalued amount less
depreciation or amortisation and impairment losses. A stripping
activity asset is depreciated or amortised on a systematic basis,
over the expected useful life of the identified component of the
ore body that becomes more accessible as a result of the stripping
activity. The stripping activity asset is depreciated using a units
of production method based on the total ounces to be produced over
the life of the component of the ore body.
Deferred stripping costs are included in 'Mine Stripping
Assets', within Property, plant and equipment. These form part of
the total investment in the relevant cash-generating unit, which is
reviewed for impairment if events or a change in circumstances
indicate that the carrying value may not be recoverable.
Amortisation of deferred stripping costs is included in operating
costs.
1.3 Standards not affecting the reported results or the financial position
There are no standards that are not yet effective and that would
be expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future
transactions.
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 Burkina Faso operating segment has been
classified as held for sale on the statement of financial position
and a discontinued operation on the statement of comprehensive
income 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 the 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
2021 (Unaudited) 2020 2020
(Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------- ---------------- ------------ -----------
Egypt 951,048 876,799 921,427
Burkina Faso - 35,801 35,766
Côte d'Ivoire 381 494 467
Corporate 783 511 898
952,212 913,605 958,558
------------------- ---------------- ------------ -----------
Additions to non-current assets mainly relate to Egypt and are
disclosed in note 2.4.
Statement of financial position by operating segment:
30 June 2021 Total Egypt Burkina Côte Corporate
Faso d'Ivoire
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000
---------------------------------- --------- --------- ------- --------- ---------
Statement of financial
position
Continuing operations
Total assets 1,382,614 1,114,665 - 695 267,254
Total liabilities (92,464) (91,232) - (169) (1,063)
---------------------------------- --------- --------- ------- --------- ---------
Net assets/total equity/(deficit) 1,290,150 1,023,433 - 526 266,191
---------------------------------- --------- --------- ------- --------- ---------
Asset held for sale
Total assets 36,978 - 36,974 - 4
Total liabilities (680) - (669) - (11)
---------------------------------- --------- --------- ------- --------- ---------
Net assets/total equity/(deficit) 36,298 - 36,305 - (7)
---------------------------------- --------- --------- ------- --------- ---------
Net assets/total equity/(deficit) 1,326,448 1,023,433 36,305 526 266,184
---------------------------------- --------- --------- ------- --------- ---------
30 June 2020 Total Egypt Burkina Côte Corporate
Faso d'Ivoire
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000
---------------------------------- --------- --------- ------- --------- ---------
Statement of financial
position
Total assets 1,385,554 1,030,783 36,903 841 317,027
Total liabilities (75,133) (70,860) (343) (1,512) (2,418)
---------------------------------- --------- --------- ------- --------- ---------
Net assets/total equity/(deficit) 1,310,421 959,923 36,560 (671) 314,609
---------------------------------- --------- --------- ------- --------- ---------
31 December 2020 Total Egypt Burkina Côte Corporate
Faso d'Ivoire
(Audited) US$'000 US$'000 US$'000 US$'000 US$'000
------------------------ --------- ---------- ------- --------- ---------
Statement of financial
position
Total assets 1,395,876 1,077,949 37,001 1,087 279,839
Total liabilities (106,424) (101,096) (635) (390) (4,303)
------------------------ --------- ---------- ------- --------- ---------
Net assets/total equity 1,289,452 976,853 36,366 697 275,536
------------------------ --------- ---------- ------- --------- ---------
2.1 Segment reporting (continued)
Statement of comprehensive income by operating segment:
Half year ended 30 Total Egypt Burkina Côte Corporate
June 2021 Faso d'Ivoire
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------- --------- --------- ------- --------- ---------
Statement of comprehensive
income
Gold sales 366,685 366,685 - - -
Silver sales 719 719 - - -
------------------------------- --------- --------- ------- --------- ---------
Revenue 367,404 367,404 - - -
Cost of sales (227,327) (227,327) - - -
Gross profit 140,077 140,077 - - -
Exploration and evaluation
costs (2,933) - - (2,933) -
Other operating (costs)/income (22,310) (3,280) - (108) (18,922)
Other income 1,919 2,688 - (58) (711)
Finance income 41 (14) - - 55
Profit/(loss) for the
period before tax 116,794 139,471 - (3,099) (19,578)
Tax 48 48 - - -
------------------------------- --------- --------- ------- --------- ---------
Profit/(loss) for the
period after tax from
continuing operations 116,842 139,519 - (3,099) (19,578)
Profit/(loss) for the
period after tax from
discontinued operations (1,978) - (1,970) - (8)
------------------------------- --------- --------- ------- --------- ---------
Profit/(loss) for the
period after tax 114,864 139,519 (1,970) (3,099) (19,586)
------------------------------- --------- --------- ------- --------- ---------
Profit/(loss) for the
period after tax attributable
to:
- owners of the parent
(1) 59,484 84,139 (1,970) (3,099) (19,586)
- non-controlling interest
in SGM (1) 55,380 55,380 - - -
------------------------------- --------- --------- ------- --------- ---------
(1) Please note that the cost recovery model on which profit
share is based under the Concession Agreement ("CA") 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 50%:50% split that occurs in practice, refer to
the statement of cash flows by operating segment below for further
information.
Half year ended 30 Total Egypt Burkina Côte Corporate
June 2020 Faso d'Ivoire
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------- --------- --------- ------- --------- ---------
Statement of comprehensive
income
Gold sales 448,173 448,173 - - -
Silver sales 581 581 - - -
------------------------------- --------- --------- ------- --------- ---------
Revenue 448,754 448,754 - - -
Cost of sales (232,693) (232,693) - - -
Gross profit 216,061 216,061 - - -
Exploration and evaluation
costs (8,435) - - (8,435) -
Other operating (costs)/income (20,768) (14,413) - (93) (6,262)
Other income 3,290 3,430 - 11 (151)
Profit on financial
assets at fair value
through profit and
loss 960 - - - 960
Finance income 1,441 55 - - 1,386
Profit/(loss) for the
period before tax 192,549 205,133 - (8,517) (4,067)
Tax (24) (24) - - -
------------------------------- --------- --------- ------- --------- ---------
Profit/(loss) for the
period after tax from
continuing operations 192,525 205,109 - (8,517) (4,067)
Profit/(loss) for the
period after tax from
discontinued operations (1,401) - (1,401) - -
------------------------------- --------- --------- ------- --------- ---------
Profit/(loss) for the
period after tax 191,124 205,109 (1,401) (8,517) (4,067)
------------------------------- --------- --------- ------- --------- ---------
Profit/(loss) for the
period after tax attributable
to:
- owners of the parent
(1) 74,816 88,801 (1,401) (8,517) (4,067)
- non-controlling interest
in SGM (1) 116,308 116,308 - - -
------------------------------- --------- --------- ------- --------- ---------
(1) Please note that the cost recovery model on which profit
share is based under the CA 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
occurred in practice, refer to the statement of cash flows by
operating segment below for further information.
2.1 Segment reporting (continued)
Statement of comprehensive income by operating segment
(continued):
Year ended 31 December Total Egypt Burkina Côte Corporate
2020 Faso d'Ivoire
(Audited) US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------- ---------- ---------- -------- --------- ---------
Statement of comprehensive
income
Gold sales 827,622 827,622 - - -
Silver sales 1,115 1,115 - - -
------------------------------- ---------- ---------- -------- --------- ---------
Revenue 828,737 828,737 - - -
Cost of sales (449,441) (449,441) - - -
Gross profit 379,296 379,296 - - -
Exploration and evaluation
costs (14,588) - - (14,588) -
Other operating (costs)/income (56,699) (30,760) - (197) (25,742)
Other income 6,918 4,820 - 35 2,063
Profit on financial
assets at fair value
through profit and
loss 960 - - - 960
Finance income 1,554 77 - - 1,477
Profit/(loss) for the
period before tax 317,441 353,433 - (14,750) (21,242)
Tax (50) (50) - - -
------------------------------- ---------- ---------- -------- --------- ---------
Profit/(loss) for the
period after tax from
continuing operations 317,391 353,383 - (14,750) (21,242)
Profit/(loss) for the
period after tax from
discontinued operations (2,442) - (2,442) - -
------------------------------- ---------- ---------- -------- --------- ---------
Profit/(loss) for the
period after tax 314,949 353,383 (2,442) (14,750) (21,242)
------------------------------- ---------- ---------- -------- --------- ---------
Profit/(loss) for the
period after tax attributable
to:
- owners of the parent
(1) 155,979 194,413 (2,442) (14,750) (21,242)
- non-controlling interest
in SGM (1) 158,970 158,970 - - -
------------------------------- ---------- ---------- -------- --------- ---------
(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.
All gold and silver sales in the tables above 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 2021 Faso d'Ivoire
(Unaudited) US$'000 US$'000 US$'000(1) US$'000(1) US$'000(1)
-------------------------------- -------- -------- ---------- ---------- ----------
Statement of cash flows
Net cash generated
by/(used in) operating
activities 141,764 160,627 - (320) (18,543)
Net cash (used in)
investing activities (79,869) (79,924) - - 55
Net cash (used in)
financing activities -
Dividend paid - non-controlling
interest in SGM (45,700) (45,700) - - -
Dividend paid - controlling
interest in SGM - (45,700) - - 45,700
Dividend paid - owners
of the parent (34,461) - - - (34,461)
-------------------------------- -------- -------- ---------- ---------- ----------
Net (decrease) in cash
and cash equivalents
from continuing operations (18,266) (10,697) - (320) (7,249)
Net increase in cash
and cash equivalents
from discontinued operations 88 - 88 - -
Cash and cash equivalents
at the beginning of
the period 291,281 9,893 5 456 280,927
Effect of foreign exchange
rate changes 944 6,010 (84) (44) (4,936)
-------------------------------- -------- -------- ---------- ---------- ----------
Cash and cash equivalents
at the end of the period 274,047 5,206 7 92 268,742
-------------------------------- -------- -------- ---------- ---------- ----------
(1) Please note that the cash generated by operating activities
for Burkina Faso and Cote d'Ivoire are affected by the movements in
working capital, specifically intercompany loans, with its direct
parent entity Centamin West Africa Holdings Limited which is
included within the corporate segment.
2.1 Segment reporting (continued)
Statement of cash flows by operating segment (continued):
Half year ended 30 Total Egypt Burkina Côte Corporate
June 2020 Faso d'Ivoire
(Unaudited) US$'000 US$'000 US$'000(1) US$'000(1) US$'000(1)
-------------------------------- --------- --------- ---------- ---------- ----------
Statement of cash flows
Net cash generated
by/(used in) operating
activities 254,330 273,551 - (384) (18,837)
Net cash (used in)/generated
by investing activities (44,281) (53,107) - (12) 8,838
Net cash (used in)/generated
by financing activities
Dividend paid - non-controlling
interest in SGM (101,025) (101,025) - - -
Dividend paid - controlling
interest in SGM - (123,475) - - 123,475
Dividend paid - owners
of the parent (69,240) - - - (69,240)
-------------------------------- --------- --------- ---------- ---------- ----------
Net increase/(decrease)
in cash and cash equivalents
from continuing operations 39,784 (4,056) - (396) 44,236
Net increase in cash
and cash equivalents
from discontinued operations 345 - 345 - -
Cash and cash equivalents
at the beginning of
the period 278,229 5,882 16 562 271,769
Effect of foreign exchange
rate changes 2,448 2,253 (351) (26) 572
-------------------------------- --------- --------- ---------- ---------- ----------
Cash and cash equivalents
at the end of the period 320,806 4,079 10 140 316,577
-------------------------------- --------- --------- ---------- ---------- ----------
(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
2020 Faso d'Ivoire
(Audited) US$'000 US$'000 US$'000(1) US$'000(1) US$'000(1)
-------------------------------- ---------- ---------- ---------- ---------- ----------
Statement of cash flows
Net cash generated
by/(used in) operating
activities(1) 452,962 517,341 - (41) (64,338)
Net cash (used in)/generated
by investing activities (129,845) (138,722) - (65) 8,942
Net cash (used in)/generated
by financing activities
Own shares acquired (3,298) - - - (3,298)
Dividend paid - non-controlling
interest in SGM (174,275) (174,275) - - -
Dividend paid - controlling
interest in SGM - (196,725) - - 196,725
Dividend paid - owners
of the parent (138,725) - - - (138,725)
-------------------------------- ---------- ---------- ---------- ---------- ----------
Net increase/(decrease)
in cash and cash equivalents
from continuing operations 6,819 7,619 - (106) (694)
Net increase in cash
and cash equivalents
from discontinued operations 340 - 340 - -
Cash and cash equivalents
at the beginning of
the year 278,229 5,882 16 562 271,769
Effect of foreign exchange
rate changes 5,893 (3,608) (351) - 9,852
-------------------------------- ---------- ---------- ---------- ---------- ----------
Cash and cash equivalents
at the end of the year 291,281 9,893 5 456 280,927
-------------------------------- ---------- ---------- ---------- ---------- ----------
(1) Please note that the cash generated by operating activities
for Burkina Faso and Cote d'Ivoire are affected by the movements in
working capital, specifically intercompany loans, with its direct
parent entity Centamin West Africa Holdings Limited which is
included within the corporate segment.
2.1 Segment reporting (continued)
Exploration expenditure by operating segment
The following table provides a breakdown of the total
exploration expenditure of the Group by operating segment:
Half year Half year Year ended
ended ended 31 December
30 June 30 June
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------------- ------------ ------------ ------------
Burkina Faso (Discontinued operation) 1,916 1,730 2,803
Côte d'Ivoire 2,933 8,435 14,588
Egypt (Sukari tenement including Cleopatra
excluding pre-production gold sales adjustment) 7,136 5,611 11,717
Total exploration expenditure 11,985 15,776 29,108
------------------------------------------------- ------------ ------------ ------------
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
2020 2020
2021 (Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
--------------------------- ---------------- ------------ ------------
Other income
Net foreign exchange gains 1,894 3,265 6,868
Other income 25 25 50
1,919 3,290 6,918
--------------------------- ---------------- ------------ ------------
Finance income
Interest received 41 1,441 1,554
--------------------------- ---------------- ------------ ------------
Expenses
Cost of sales
Mine production costs (180,714) (164,265) (339,012)
Movement in inventory 26,606 (2,843) 13,704
Depreciation and amortisation (73,219) (65,585) (124,133)
------------------------------ --------- --------- ----------
(227,327) (232,693) (449,441)
------------------------------ --------- --------- ----------
Other operating costs
Corporate costs (10,766) (5,847) (17,978)
Other provisions 2 - (10,309)
Net movement on provision for stock obsolescence - - (958)
Inventory written off (14) (24) (29)
Prepayments written off - (986) (986)
Office related depreciation (198) (128) (294)
Royalty - attributable to the ARE government (10,988) (13,428) (24,792)
Bank charges (88) (81) (179)
Finance charges (257) (266) (558)
(Loss)/gain on disposal of asset (1) (8) (616)
(22,310) (20,768) (56,699)
------------------------------------------------- -------- -------- --------
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 ARE and
recoverable costs'.
Earnings attributable to the non-controlling interest in SGM
(i.e. EMRA) are pursuant to the provisions of the CA and are
recognised as profit attributable to the non-controlling interest
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
2020 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.
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
2020 2020
2021 (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) 55,380 116,308 158,970
-------------------------------------------------- ---------------- ------------ ------------
Statement of financial position
Total equity attributable to the non-controlling
interest in SGM(1) (opening) (17,196) (1,891) (1,891)
Profit for the year after tax attributable
to the non-controlling interest in SGM(1) 55,380 116,308 158,970
Dividend paid - non-controlling interest
in SGM (45,700) (101,025) (174,275)
-------------------------------------------------- ---------------- ------------ ------------
Total equity attributable to the non-controlling
interest in SGM(1) (closing) (7,516) 13,392 (17,196)
-------------------------------------------------- ---------------- ------------ ------------
(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
2020 2020
2021 (Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
----------------------------------------- ---------------- ------------ ------------
Statement of cash flows
Dividend paid - non-controlling interest
in SGM(1) (45,700) (101,025) (174,275)
----------------------------------------- ---------------- ------------ ------------
(1) Profit share commenced during the third quarter of 2016. The
first two years was a 60:40 split of net production surplus to PGM
and EMRA respectively. From 1 July 2018 this changed to a 55:45
split for the next two-year period until 30 June 2020, after which
all net production surpluses will be split 50:50.
EMRA and PGM benefit from advance distributions of profit share
which are made on a weekly or fortnightly basis and proportionately
in accordance with the terms of the CA. Future distributions will
take into account ongoing cash flows, historical costs that are
still to be recovered and any future capital expenditure. All
profit share payments will be reconciled against SGM's audited June
financial statements for current and future periods.
2.4 Property, plant and equipment
Mine Mine Capital
Half year ended Office Plant Mining development work
30 June and Stripping in
2021 equipment Buildings equipment equipment properties progress Total
(Unaudited) asset
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------- --------- --------- ---------- ---------- ----------- --------- ---------- ----------
Cost
Balance at 1
January
2021 8,792 5,690 617,465 359,009 662,496 - 44,554 1,698,006
Additions 1 - - - - 11,514 61,260 72,775
Transfers from
capital work
in
progress 436 4,541 6,179 32,122 18,497 - (61,775) -
Transfer to
assets
classified as
held for sale (617) (1,019) (1,040) (923) - - - (3,599)
Disposals (447) (5) (290) - - - (590) (1,332)
Disposals:
IFRS16
right of use
assets - (125) - (142) - - - (267)
Balance at 30
June 2021 8,165 9,082 622,314 390,066 680,993 11,514 43,449 1,765,583
--------------- --------- --------- ---------- ---------- ----------- --------- ---------- ----------
Accumulated
depreciation
and
amortisation
Balance at 1
January
2021 (7,542) (1,641) (242,853) (298,572) (317,514) - - (868,122)
Depreciation
and
amortisation (330) (731) (16,501) (22,630) (33,256) - - (73,448)
Disposals 447 129 290 142 - - - 1,008
Transfer to
assets
classified as
held for sale 614 526 1,031 923 - - - 3,094
Balance at 30
June 2021 (6,811) (1,717) (258,033) (320,137) (350,770) - - (937,468)
--------------- --------- --------- ---------- ---------- ----------- --------- ---------- ----------
Year ended 31
December 2020
(Audited)
Cost
Balance at 1
January
2020 7,789 3,533 613,792 334,119 561,780 - 28,584 1,549,597
Additions 73 203 141 153 - - 126,529 127,099
Additions:
IFRS16
right of use
assets - 1,604 - 47 - - - 1,651
Increase in
rehabilitation
asset - - - - 5,574 - - 5,574
Transfers from
capital work
in
progress 930 480 3,784 25,787 78,988 - (109,969) -
Transfers from
exploration
and
evaluation
asset - - - - 16,154 - - 16,154
Disposals - - (110) (1,097) - - (590) (1,797)
Disposals:
IFRS16
right of use
assets - (130) (142) - - - - (272)
Balance at 31
December 2020 8,792 5,690 617,465 359,009 662,496 - 44,554 1,698,006
--------------- --------- --------- ---------- ---------- ----------- --------- ---------- ----------
Accumulated
depreciation
and
amortisation
Balance at 1
January
2020 (6,974) (1,097) (213,681) (250,519) (272,609) - - (744,880)
Depreciation
and
amortisation (568) (609) (29,303) (49,127) (44,905) - - (124,512)
Disposals - 65 131 1,074 - - - 1,270
--------------- --------- --------- ---------- ---------- ----------- --------- ---------- ----------
Balance at 31
December 2020 (7,542) (1,641) (242,853) (298,572) (317,514) - - (868,122)
--------------- --------- --------- ---------- ---------- ----------- --------- ---------- ----------
Net book value
As at 31
December
2020 1,250 4,049 374,612 60,437 344,982 - 44,554 829,884
--------------- --------- --------- ---------- ---------- ----------- --------- ---------- ----------
As at 30 June
2021 1,354 7,365 364,281 69,929 330,223 11,514 43,449 828,115
--------------- --------- --------- ---------- ---------- ----------- --------- ---------- ----------
Included within the depreciation charge is US$ 0.3 million
within the buildings asset class and US$ 0.0 million related to
plant and equipment in relation to depreciation of ROU assets
(2020: US$ 0.5 million buildings and US$0.1 million plant and
equipment).
An impairment trigger assessment was performed in 2020 on the
Sukari Cash Generating Unit ("CGU"), refer to note 1.3.2 of the
2020 Annual Report, however no impairment triggers were identified
in the assessment. No further impairment triggers were identified
in the current period.
Assets that have been cost recovered under the terms of the CA
in Egypt are included on the statement of financial position under
property, plant and equipment due to the Company having right of
use of these assets. These rights will expire together with the
CA.
2.5 Exploration and evaluation asset
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------ ------------ ------------ -----------
Balance at the beginning of the year 63,701 68,138 68,138
Expenditure for the year 7,136 5,611 11,717
Transfer to property, plant and equipment - (10,082) (16,154)
Transfer to assets classified as held for
sale (35,208) - -
------------------------------------------ ------------ ------------ -----------
Balance at end of the period 35,629 63,667 63,701
------------------------------------------ ------------ ------------ -----------
In consideration of the requirements of the International
Financial Reporting Standards ("IFRS") 5, an impairment test has
been performed. The trigger for the impairment assessment was the
reclassification of the Burkina Faso associated assets and
liabilities which have been presented as held for sale in the 30
June 2021 financial statements. On review, no impairment was
required, refer to note 1.1.2 Estimate: Impairment assessment of
Burkina Faso exploration and evaluation assets for further
information.
2.6 Provisions
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------- ------------ ------------ -----------
Current
Employee benefits(1) 162 2,192 1,440
Provision for cost recovery items(2) 4,570 - 5,089
Other current provisions(3) 2,831 7,273 951
Transfer to assets classified as held for
sale (428) - -
7,135 9,465 7,480
------------------------------------------- ------------ ------------ -----------
Non --current
Restoration and rehabilitation(4) 20,634 14,747 20,496
Provision for cost recovery items(2) 9,753 - 12,229
Other non-current provisions 24 3 27
Transfer to assets classified as held for
sale (3) - -
------------------------------------------- ------------ ------------ -----------
30,408 14,750 32,752
------------------------------------------- ------------ ------------ -----------
Movement in restoration and rehabilitation
provision
Balance at beginning of the year 20,496 14,572 14,572
Additional provision recognised - - 5,574
Interest expense - unwinding of discount 138 175 350
------------------------------------------- ------------ ------------ -----------
Balance at end of the period 20,634 14,747 20,496
------------------------------------------- ------------ ------------ -----------
(1) Employee benefits relate to annual, sick and long service
leave entitlements and bonuses.
(2) Provision held for in-country cost recovery items relating
to EMRA. The amount is based on the signed agreement proposed to
EMRA in March 2021 to clear all outstanding matters which includes
payment to EMRA of US$17.6 million spread over a 5.5 year period.
This has been discounted to present value. The prior year provision
was based on draft agreement of the matters under discussion which
have been finalised in H1 as part of the signed agreement. The
provision for cost recovery items reduced in the period after
payment of the first US$3 million instalment.
(3) Provision for customs, rebates and withholding taxes.
(4) The next annual review of the provision for restoration and
rehabilitation will be undertaken as at 31 December 2021. In 2020
the provision for restoration and rehabilitation had been
discounted by 1.35% using a US$ applicable rate and inflation
applied at 1.23%. The last annual review undertaken as at 31
December 2020 resulted in a US$5.6 million increase in the
provision.
For prior year key management estimates regarding the unit costs
used in calculating the nominal provision amount, please refer to
note 2.13 Provisions in the 2020 Annual Report.
In 2021, in line with the life of asset review, Centamin will
commence a full review of the restoration and rehabilitation plan
for Sukari which could result in a change in the provision
recognised to date.
2.7 Cash flow information
(a) Reconciliation of cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash
equivalents includes cash on hand and at bank and deposits.
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------ ------------ ------------ -----------
Cash and cash equivalents - per statement
of cash flows 274,047 320,806 291,281
Transfer to assets classified as held for
sale (9) - -
------------------------------------------ ------------ ------------ -----------
Cash and cash equivalents - per statement
of financial position 274,038 320,806 291,281
------------------------------------------ ------------ ------------ -----------
(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
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
--------------------------------------- --------------- ------------ ------------
Profit for the period before tax 116,794 192,549 317,441
Adjusted for:
Profit on financial assets at fair
value through profit or loss - (960) (960)
Depreciation/amortisation of property,
plant and equipment 73,417 65,713 124,427
Inventory written off 14 24 29
Prepayments written off - 986 986
Inventory obsolescence provision - - 958
Foreign exchange gains, net (1,893) (3,264) (6,867)
Share--based payments (credit)/expense 2,357 (2,074) (836)
Finance income (41) (1,441) (1,554)
Loss on disposal of property, plant
and equipment 1 8 616
Changes in working capital during
the period:
(Increase)/decrease in trade and
other receivables (15,558) 5,513 28,841
(Increase)/decrease in inventories (18,171) 7,181 (22,913)
(Increase) in prepayments (1,348) (2,451) (2,804)
(Decrease)/increase in trade and
other payables (11,592) (8,515) 4,295
(Decrease)/increase in provisions (2,216) 1,061 11,313
--------------------------------------- --------------- ------------ ------------
Cash flows generated from operating
activities 141,764 254,330 452,972
--------------------------------------- --------------- ------------ ------------
(c) Non -- cash financing and investing activities
During the period there have been no non -- cash financing and
investing activities.
2.8 Discontinued operation
(a) Description
On 27 May 2021, the Board announced its approval of the
assessment of third-party development options for it's exploration
project in Burkina Faso and the Group initiated an active programme
to locate a third-party development partner and or buyer for the
Batie West project as it does not currently meet Centamin's
investment criteria. The associated assets and liabilities were
consequently presented as held for sale in the 30 June 2021
financial statements. Please refer to note 1.1 Changes in critical
judgements and estimates in applying the entities accounting
policies for further information. In that note, management have
performed an assessment regarding the FVLCD of the E&E CGUs
which was considered higher than the carrying amount and therefore
no impairment was required.
Financial information relating to the discontinued operation for
the period is set out below.
(b) Financial performance and cash flow information
The financial performance and cash flow information presented
are for the six months ended 30 June 2021.
Half year ended Half year Year ended
30 June ended 31 December
30 June
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
--------------------------------------- --------------- ------------ ------------
Exploration and evaluation expenditure (1,916) (1,730) (2,803)
Other operating costs 24 317 307
Other income (86) 12 54
--------------------------------------- --------------- ------------ ------------
Loss for the period before tax (1,978) (1,401) (2,442)
Tax - - -
--------------------------------------- --------------- ------------ ------------
Loss for the period after tax from
discontinued operations (1,978) (1,401) (2,442)
--------------------------------------- --------------- ------------ ------------
Half year ended Half year Year ended
30 June ended 31 December
30 June
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------ --------------- ------------ ------------
Net cash outflow from operating
activities 89 345 343
Net cash used in investing activities (1) - (3)
Net cash inflow from financing activities - - -
------------------------------------------ --------------- ------------ ------------
Net increase in cash and cash equivalents 88 345 340
------------------------------------------ --------------- ------------ ------------
(c) Assets and liabilities of disposal group classified as held
for sale
The following assets and liabilities were reclassified as held
for sale in relation to the discontinued operation as at 30 June
2021:
30 June
2021
(Unaudited)
US$'000
------------------------------------- ---- ---- ---- -------------
Assets classified as held for sale
Property, plant and equipment 505
Exploration and evaluation asset 35,208
Inventories 11
Trade and other receivables 1,160
Prepayments 84
Cash and cash equivalents 9
Total assets of disposal group held
for sale 36,977
------------------------------------------------------- -------------
Liabilities directly associated
with assets classified as held for
sale
Trade and other payables 248
Provisions 431
Total liabilities of disposal group
held for sale 679
------------------------------------------------------- -------------
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 2021, for further information and disclosure on these matters
please refer to the 31 December 2020 Annual Report.
3.2 Subsequent events
The Directors declared an interim dividend of 4 US cents per
share on Centamin plc ordinary shares (totalling approximately US$
46.3 million). The interim dividend for the half year period ended
30 June 2021 will be paid on 30 September 2021 to shareholders on
the register on the Record Date of 3 September 2021.
Other than the above, there were no other significant events
occurring after the reporting date requiring disclosure in the
financial statements.
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). 39 transactions have been entered
into at the date of this report, 5 of which in the six months ended
30 June 2021, pursuant to this agreement, and the values related
thereto are as follows:
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
--------------- ------------ ------------ -----------
Gold purchased 25,271 6,429 29,319
Refining costs 14 3 15
Freight costs 20 8 30
--------------- ------------ ------------ -----------
25,305 6,440 29,364
--------------- ------------ ------------ -----------
30 June 30 June 31 December
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
Oz Oz Oz
--------------- ------------ ------------ -----------
Gold purchased 14,018 4,045 16,262
--------------- ------------ ------------ -----------
At 30 June 2021 the net payable in EGP owing to the Central Bank
of Egypt is US$ 271,740 (30 June 2020: US$ 29,630 net receivable
and 31 December 2020: US$42,987 net receivable).
4.2 Going concern
Under guidelines set out by the FRC and IFRS, the Directors of
UK listed companies are required to consider whether the going
concern basis is the appropriate basis of preparation of financial
statements.
COVID-19
The FRC has released updated guidelines regarding disclosure of
"material uncertainties" to going concern in current circumstances.
Material uncertainties refers to uncertainties related to events or
conditions that may cast significant doubt upon the entity's
ability to continue as a going concern. In other words, if boards
identify possible events or scenarios (other than those with a
remote probability of occurring) that could lead to corporate
failure, then these should be disclosed. When assessing whether
material uncertainties exist, boards should consider both the
uncertainty and the likely success of any realistically possible
response to mitigate this uncertainty.
The economic impact of the COVID-19 pandemic is having an effect
on the Group. However, currently there are no material financial
implications to our operations and Sukari continues to operate with
confirmed cases in isolation close to site where we can provide the
support required. To date there has been no interruption to Gold
sales and this trend is expected to continue assuming further
travel restrictions are not implemented and there are no
operational issues caused by the pandemic. Weekly cash flow
forecasts continue to be performed and distributions to EMRA and
PGM are continuing, however these can be halted should cash be
required locally. To date there has been no significant impact to
critical stock on site but this is continuously being assessed and
backup plans are in place.
Management performed detailed analyses and forecasts to assess
the economic impact of COVID-19 from a going concern and viability
perspective for the year ended 31 December 2020. The Group
continues to benefit from a strong balance sheet with large cash
balances and no debt. As at 30 June 2021 the Group had cash and
cash equivalents of US$ 274 million and therefore it is likely that
the Group will have sufficient liquidity for at least 12 months
after the date of approval of these financial statements. As part
of assessing the Group's ability to continue as a going concern,
management compared the year-to-date performance to budget, results
are not far off budget and there have been no significant changes
to the assessment from the year ended 31 December 2020. At year end
management performed various stress testing scenarios on the
Group's balance sheet to assess the potential downturn this
pandemic could have on its business and based on the performance
year to date believe these scenarios to still be relevant. The
scenarios addressed were:
-- Open pit: 30% reduction in ore and waste;
-- Underground: 30% reduction in stoping and development;
-- Processing: 20% reduction in ore processed;
-- Processing: 50% reduction in ore processed; and
-- A combination of the first three scenarios above.
The sensitivities applied were informed by internal and external
data sources, including a review of the Group's most recent
production levels with reductions in production levels to various
stages of slowdown. In each scenario, sufficient liquidity was
maintained. Consultations regarding the impact of this pandemic
have also been had with both our critical suppliers and
refiner.
Based on a detailed cash flow forecast prepared by management,
in which it included any reasonably possible change in the key
assumptions on which the cash flow forecast is based and assessing
various scenarios related to COVID-19, the Directors have a
reasonable expectation that the Group will have adequate resources
to continue in operational existence for twelve months from 5
August 2021 and that at this point in time there are no material
uncertainties regarding going concern. Key assumptions underpinning
this forecast include:
-- available cash balances;
-- favourable litigation outcomes, there have been no material
developments in the current period. For further detail please refer
to Note 5.1 of the 2020 Annual Report on the Company's website;
-- gold price of US$1,750/oz.; and
-- production volumes in line with annual guidance.
As discussed in Note 5.1 of the 2020 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.
4.2 Going concern (continued)
In the unlikely event that the Group is unsuccessful in either
or both of its legal actions, it is the directors' belief that the
Group will be able to continue as going concern. There have been no
material developments in the current period.
The directors continue to adopt the going concern basis of
accounting in preparing these interim condensed consolidated
financial statements . These interim condensed consolidated
financial statements for the period ended 30 June 2021 have been
prepared on a going concern basis, which contemplate the
realisation of assets and liquidation of liabilities during the
normal course of operations.
4.3 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 2020, 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 2020 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 2020 is based on the
statutory accounts for the year ended 31 December 2020. Readers are
referred to the auditor's report on the Group financial
statements
as at 31 December 2020 (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
2020 except for the adoption of new standards and endorsed by the
EU which apply for the first time in 2021 as referred to in the 31
December 2020 Annual Report. 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, other than
those disclosed in note 1.1 above, that have been set out in Note 1
of the Group's annual audited consolidated financial statements for
the year ended 31 December 2020.
-END-
[1] All profit share payments are made to Egyptian Mineral
Resource Authority ("EMRA"), a department of the Ministry of
Petroleum
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR SSWFMLEFSEIA
(END) Dow Jones Newswires
August 05, 2021 02:00 ET (06:00 GMT)
Centamin (LSE:CEY)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
Centamin (LSE:CEY)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024
