TIDMCEY
RNS Number : 8122W
Centamin PLC
20 April 2023
20 April 2023
Centamin plc
("Centamin", "Group" or "the Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 31 March 2023
MARTIN HORGAN, CEO, commented: "These results reflect a good
start to the year, with the Sukari team delivering another
consistent performance in line with our operational plan, as well
as making great progress on our key capital projects. Our mining
operations continue to benefit from both increased flexibility in
the open pit, as a result of the accelerated waste-mining strategy
and operational productivity gains, as well as improved
productivity and performance from the underground mine, following
the transition to owner mining in 2022.
We reiterate our 2023 guidance and look forward to reporting
later in the year on several additional projects which will deliver
growth and underpin returns. These include connecting Sukari to the
grid which will reduce carbon emissions and save costs, publishing
an optimised Sukari life of mine plan, commencing drill testing on
our Egyptian Eastern Desert blocks and completing the PFS at our
advanced Doropo Project in Côte d'Ivoire."
HIGHLIGHTS
Operational performance delivered in line with the mine plan
-- The lost time injury frequency rate ("LTIFR") for the three
months to 31 March 2023 ("Q1") was 0.31 per one million hours
worked, reflecting one lost time injury. The total recordable
injury frequency rate ("TRIFR") was 2.77 per one million hours
worked
-- Q1 gold production from the Sukari Gold Mine ("Sukari") was 105,875 ounces ("oz")
-- Q1 revenue of US$205 million, an 18% increase from Q1 2022,
generated from gold sales of 107,661 oz at an average realised gold
price of US$1,902/oz sold
-- Q1 cash costs of US$937/oz produced and all-in sustaining
costs ("AISC") of US$1,348/oz sold
-- Q1 capital expenditure of US$54 million including the final
stages of the underground paste-fill plant construction ahead of
commissioning in Q2, and
-- Robust balance sheet with cash and liquid assets of US$155
million, as at 31 March 2023 and US$150 million undrawn revolving
credit facility.
2023 OUTLOOK
Guidance unchanged and on track
-- Gold production guidance range of 450,000 to 480,000 oz per
annum weighted towards H2 (45:55)
-- Cash cost guidance range of US$840-990/oz produced and AISC
guidance range of US$1,250-1,400/oz sold
-- Adjusted capex guidance is US$225 million, weighted towards
H1 (55:45), which excludes US$48 million of sustaining deferred
stripping reclassified from operating costs, and
-- Exploration spend is budgeted at US$30 million, including
US$23 million for the pre-development study work on the Doropo
Project.
KEY MILESTONES
-- 25 April 2023: Publication of the 2022 Sustainability Report
-- June 2023: Doropo Project (Côte d'Ivoire) complete pre-feasibility study
-- H2 2023: Sukari Gold Mine (Egypt) update Life of Mine Plan
(NI 43-101), including underground expansion
WEBCAST AND CONFERENCE CALL
The Company will host a webcast and conference call today,
Thursday, 20 April 2023 at 08.30 BST to discuss the results,
followed by an opportunity to ask questions.
Webcast link :
https://www.investis-live.com/centamin/642e8f6bccbbd1120079c6fa/wtee
Dial-in telephone numbers :
United Kingdom (and all other locations) +44 (0) 203 936 2999
United States +1 646 664 1960
Participation access code: 589260
PRINT-FRILY VERSION of the quarterly results:
www.centamin.com/investors/results-reports/
RESULTS SUMMARY
YoY comparative QoQ comparative
============================== ====================
Q1 2023 Q1 2022 % <DELTA> Q4 2022 % <DELTA>
============================== ======== ======== ========== ======== ==========
SAFETY
LTIFR (1m hours) 0.31 0.00 100% 0.00 100%
TRIFR (1m hours) 2.77 3.23 (14%) 2.95 (6%)
=============================== ======== ======== ========== ======== ==========
OPEN PIT
Total material mined (kt) 32,998 31,001 6% 36,401 (9%)
Ore mined (kt) 3,273 2,970 10% 3,146 4%
Ore grade mined (g/t Au) 0.87 0.92 (6%) 0.93 (6%)
=============================== ======== ======== ========== ======== ==========
UNDERGROUND
Ore mined (kt) 236 154 53% 233 1%
Ore grade mined (g/t Au) 4.02 3.55 13% 4.25 (5%)
=============================== ======== ======== ========== ======== ==========
PROCESSING
Ore processed (kt) 3,006 2,954 2% 3,045 (1%)
Feed grade (g/t Au) 1.20 1.07 12% 1.23 (3%)
Gold recovery (%) 88.8 88.1 1% 88.6 0%
Gold production (oz) 105,875 93,109 14% 109,564 (3%)
=============================== ======== ======== ========== ======== ==========
COST & SALES
Gold sold (oz) 107,661 92,559 16% 108,441 (1%)
Cash costs (US$/oz produced) 937 1,006 (7%) 997 (6%)
AISC (US$/oz sold) 1,348 1,558 (13%) 1,445 (7%)
Realised gold price (US$/oz) 1,902 1,883 1% 1,735 10%
Revenue (US$m) 205.2 174.6 18% 188.5 9%
Adj CAPEX (US$m) 49.0 59.4 (18%) 64.8 (24%)
Free cash flow (US$m) 8.1 (21.4) 138% (2.9) 379%
=============================== ======== ======== ========== ======== ==========
HEALTH AND SAFETY
Operational safety remains a key focus across the Group. In Q1,
there was one lost time injury ("LTI") resulting in an LTIFR of
0.31 per 1,000,000 site-based hours worked, compared to the
corresponding 0.00 in the first quarter in 2022 ("YoY"). The TRIFR
for Q1 was 2.77 per one million site-based hours worked, down from
3.23 YoY. Both lagging safety indicators are tracking better than
the Company's annual targets.
Sukari Gold mine, egypt
(Q1 2023 vs Q1 2022)
Production
Sukari gold production for the quarter was 105,875 oz, a 14%
increase YoY, and in line with the mine plan. The higher production
volumes YoY were driven by increased underground productivity as
mining rates ramped up following the transition to owner mining in
the Sukari underground during H1 2022.
Open Pit Mining
Total material moved (waste and ore) of 33.0Mt, a 6% increase
YoY, driven by ongoing improvements in operating efficiencies and
productivity within the owner-operated fleet.
Total open pit waste material mined for the quarter was 29.7Mt,
at 6% increase YoY. This includes 10.9Mt of contracted
waste-stripping as part of the accelerated stripping programme,
delivering improved mining flexibility within the open pit. The
strip ratio for the quarter was 9.1:1 (waste:ore).
During Q1, open pit ore was mined from multiple working areas,
with contributions from Stage 5 North, East, West and Stage 7. As
per the mine plan, total open pit ore mined for the quarter was
3.3Mt, a 10% increase YoY, at an average mined grade of 0.87 grams
of gold per tonne ("g/t Au"), a 6% decrease YoY, driven by greater
contributions from lower grade areas of the pit. Grades are
expected to improve moderately throughout the year averaging
approximately 0.9g/t for 2023.
During the quarter, the low-grade stockpiles increased from
18.7Mt to 18.9Mt at 0.46g/t Au.
Underground Mining
Total material mined (waste and ore) was 345kt, a 61% increase
YoY, reflecting the ramp in mining rates following the transition
to owner-mining in H1 2022. Total ore mined was 236kt at an average
combined (stoping and development) grade of 4.02g/t Au. This
represented a 53% increase in ore tonnes YoY and a 13% increase in
grade YoY.
The underground ore was made up of 144kt of ore mined from
stopes, at an average grade of 4.86g/t Au, and 92kt of ore mined
from development, at an average grade of 2.69g/t Au.
Underground performance continued to improve as equipment was
delivered and commissioned.
Processing
The plant processed 3.0Mt of ore, a 2% increase YoY, at an
average feed grade of 1.20 g/t Au, a 12% increase YoY reflecting a
greater contribution of underground ore delivered to the plant.
The metallurgical gold recovery rate was 88.8% for the quarter,
a 1% increase YoY.
There were several key maintenance projects scheduled for the
quarter, including mill relining and work on the mill motors. All
plant maintenance was completed successfully with no unplanned
disruption to throughput.
Sukari Mining Concession ("SMC") Exploration
Brownfield exploration across the 160km(2) Sukari Concession
amounted to US$3.8 million in the quarter. This is capitalised and
captured within the 2023 capex guidance.
Work focused on the development of additional Mineral Resources
within the SMC that can be converted to Mineral Reserves and
incorporated into the mine plan in the shortest timeframe. The
focus is on re-evaluation of old prospects and new targets which
have been developed over the last two years through systematic soil
sampling and geological mapping programmes.
Highlights during the quarter include:
-- 1,613 metres of second phase exploration drilling at the new V-Shear East prospect
-- 2,842 metres follow-up drilling on Wadi Alam targets initially identified in 2021
-- Re-logging and modelling of the updated Quartz Ridge prospect
continued during the quarter, additional drilling is planned to
commence in Q2, and
-- Continued soil and geochemical sampling of newly identified
drill targets (ARC, SE Corner and Sami South) to prepare them for
drilling. Approximately 7,000 metres of drilling has been planned
to test the newly defined drill targets.
Capital Expenditure
As part of the reinvestment programme at Sukari, key capital
projects progressed as scheduled during Q1, including the
underground paste-fill plant, underground infrastructure and
equipment upgrades, plant optimisation and the contracted
waste-stripping programme. The underground paste-fill plant
progressed well with wet commissioning starting during the quarter;
the first paste is expected in Q2. The trial stopes have been
identified in historically mined areas as to not impact current
mining production. The current underground backfilling system of
cemented rock fill ("CRF") and waste rock fill will continue in
parallel to the paste-plant commissioning, ensuring a smooth
transition.
Earthworks on the north dump leach commenced with leach pad
preparation underway.
The gross capex in Q1 was US$53.8 million and after removing the
impact of the waste mining accounting treatment, adjusted capex was
US$48.9 million. The Q1 capex was lower than budgeted due to
delayed timing of actual cash spend, which are likely to be
incurred in Q2. The capex guidance for the year remains
unchanged.
Q1 2023
(US$m)
======================================================= =========
Underground exploration 3
Underground mine development 8
Rebuilds, underground transition and other sustaining
capex 10
Sustaining element of waste stripping capitalised[1] 5
======================================================= =========
Sustaining expenditure capitalised 26
======================================================= =========
North dump leach, tailings storage facility 2
& underground paste-fill plant 4
Contract waste stripping capitalised 21
Other non-sustaining capex 3
======================================================= =========
Non-sustaining expenditure capitalised 28
=========
Total expenditure capitalised 54
======================================================= =========
Less:
Sustaining element of waste stripping capitalised(1) (5)
Capitalised Right of Use Assets -
======================================================= =========
ADJUSTED CAPEX (after reclassification) 49
======================================================= =========
SALES AND COSTS
Gold sales for the quarter were 107,661 oz, a 16% increase YoY.
The average realised gold price for the quarter was US$1,902/oz, up
1% YoY. Revenues generated of US$205.2 million, increased by 18%
YoY, driven by higher production volumes and subsequent sales.
Cash costs of production were US$99.2 million for the quarter, a
6% increase YoY, due to higher input costs such as fuel and
consumables. Unit cash costs of production were US$937/oz produced,
a 7% decrease YoY, reflecting higher production volumes.
Total all-in sustaining costs ("AISC") were US$145.2 million for
the quarter, a 1% increase YoY. Unit AISC of US$1,348/oz sold, a
13% decrease in YoY costs, reflecting the higher gold sales.
EXPLORATION PROJECTS
The total greenfield exploration spend for the quarter was
US$10.8 million.
Doropo Project, Cote d'Ivoire
The update provided in November 2022 highlighted the opportunity
to simplify the processing flowsheet, which had included a full
flotation and regrind circuit as part of the 2021 preliminary
economic assessment. The work completed over Q1 focussed on
finalising the comminution and metallurgical test work comparing
whole ore leach versus flotation.
The PFS is expected to be completed in June 2023.
Eastern Desert Exploration ("EDX") (Egypt)
Systematic fieldwork continued during Q1 aimed at identifying
potential commercial scale targets for drill testing alongside
preparation work for identified drill targets. Fieldwork consisted
of regional-scale screening using bulk leach extractable gold
("BLEG") sampling and identification of mineralised corridors with
soil sampling and chip channel sampling.
Five drill targets have been identified in the Nugrus block
following closer spaced geological soil sampling and mapping. In
the quarter, drone surveys were flown over two of the targets to
collect detailed topographic data as part of the drill programme
design and planning. The aim is to commence drill testing the
targets later in Q2, with initial assay results expected from
Q4.
FINANCIAL POSITION
Free Cash Flow
Under the terms of the Sukari Concession Agreement, the Egyptian
government earned US$6.1 million in royalty payments and received
US$13.5 million in profit share payments during the quarter
reflecting higher gold price. After Sukari profit share
distribution, Group exploration expenditure and corporate investing
activities, the free cash flow for the quarter was US$8.1
million.
Balance Sheet
Centamin is in a strong financial position, with cash and liquid
assets to US$155 million as at 31 March 2023. The Company has a
US$150 million senior secured sustainability-linked revolving
credit facility ("RCF") which is available and undrawn.
31 March 2023
(US$m)
===================================================================== ===============
Cash on hand 115
Liquid assets, including bullion on hand and gold sales receivables 40
Total cash and liquid assets 155
===================================================================== ===============
Sustainability-linked revolving credit facility 150
===================================================================== ===============
TOTAL BALANCE SHEET LIQUIDITY 305
===================================================================== ===============
CORPORATE
During the quarter, the Company issued several corporate
announcements:
-- Legal Update: Favourable Egyptian Constitutional Court Ruling
upholding Egyptian Law No. 32 of 2014 as constitutional giving
Centamin the right to request the Supreme Administrative Court
("SAC") to rule that the 2011 challenge to the Concession Agreement
is now legally inadmissible on the basis that the original
complainant had no capacity to bring the claim as he was not a
party to the Concession Agreement ( full announcement )
-- Final Dividend proposal of 2.5 US cents per share (US$29m),
which is subject to shareholder approval at the AGM ( Dividend
Declaration announcement )
-- Centamin decarbonisation roadmap to 2030 targeting a 30%
reduction in operational Scope 1 and 2 greenhouse gas emissions and
excluding several further abatement opportunities which remain
under review ( full announcement )
-- 2022 Annual Report and Accounts ( 2022 Annual Report homepage ), and
-- Published the Notice of Annual General Meeting , to be held
on 23 May 2023 at Dukes Hotel in London ( for more details ).
About Centamin
Centamin is an established gold producer, with premium listings
on the London Stock Exchange and Toronto Stock Exchange. The
Company's flagship asset is the Sukari Gold Mine ("Sukari"),
Egypt's largest and first modern gold mine, as well as one of the
world's largest producing mines. Since production began in 2009
Sukari has produced over 5 million ounces of gold, and today has
6.0Moz in gold Mineral Reserves. Through its large portfolio of
exploration assets in Egypt and Côte d'Ivoire, Centamin is
advancing an active pipeline of future growth prospects, including
the Doropo project in Côte d'Ivoire, and has over 3,000km(2) of
highly prospective exploration ground in Egypt's Nubian Shield.
Centamin recognises its responsibility to deliver operational
and financial performance and create lasting mutual benefit for all
stakeholders through good corporate citizenship, including but not
limited to in 2022, achieving new safety, commissioning of the
largest hybrid solar farm for a gold mine, sustaining a +95%
Egyptian workforce and a +60% Egyptian supply chain at Sukari.
FOR MORE INFORMATION please visit the website www.centamin.com
or contact:
Centamin plc FTI Consulting
Alexandra Barter-Carse, Head of Corporate Ben Brewerton / Sara Powell
Communications / Nick Hennis
investor@centaminplc.com +442037271000
centamin@fticonsulting.com
NOTES
Guidance
The Company actively monitors the global geopolitical
uncertainties and macroeconomics, such as global inflation, and
guidance may be impacted if the supply chain, workforce or
operation are disrupted.
Financials
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 EBITDA and
adjusted EBITDA, Cash costs of production, AISC, Cash and liquid
assets, Free cash flow and adjusted Free cash flow. Management
believes these measures provide valuable additional information for
users of the financial statements to understand the underlying
trading performance. An explanation of the measures used along with
reconciliation to the nearest IFRS measures is provided in the
Financial Review.
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 and gold
sales receivables.
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.
Dividend
All dividends are subject to final Board approval and final
dividends are subject to shareholder approval at the Company's
annual general meeting.
Qualified Person
Information of a scientific or technical nature in this document
was prepared under the supervision of Craig Barker, an employee of
the Company and a Qualified Person, as such term is defined by
National Instrument 43-101 Standards of Disclosure for Mineral
Projects of the Canadian Securities Administrators.
The Qualified Person has verified the data disclosed, including
sampling, analytical, and test data underlying the information or
opinions contained in this announcement in accordance with
standards appropriate to their qualifications.
Forward-looking Statements
This announcement (including information incorporated by
reference) contains "forward-looking statements" and
"forward-looking information" under applicable securities laws
(collectively, "forward-looking statements"), including statements
with respect to future financial or operating performance. Such
statements include "future-oriented financial information" or
"financial outlook" with respect to prospective financial
performance, financial position, EBITDA, cash flows and other
financial metrics that are based on assumptions about future
economic conditions and courses of action. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expects",
"expected", "budgeted", "forecasts" and "anticipates" and include
production outlook, operating schedules, production profiles,
expansion and expansion plans, efficiency gains, production and
cost guidance, capital expenditure outlook, exploration spend and
other mine plans. Although Centamin believes that the expectations
reflected in such forward-looking statements are reasonable,
Centamin can give no assurance that such expectations will prove to
be correct. Forward-looking statements are prospective in nature
and are not based on historical facts, but rather on current
expectations and projections of the management of Centamin about
future events and are therefore subject to known and unknown risks
and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements. In addition, there are a number of
factors that could cause actual results, performance, achievements
or developments to differ materially from those expressed or
implied by such forward-looking statements; the risks and
uncertainties associated with direct or indirect impacts of
COVID-19 or other pandemic, general business, economic,
competitive, political and social uncertainties; the results of
exploration activities and feasibility studies; assumptions in
economic evaluations which prove to be inaccurate; currency
fluctuations; changes in project parameters; future prices of gold
and other metals; possible variations of ore grade or recovery
rates; accidents, labour disputes and other risks of the mining
industry; climatic conditions; political instability; decisions and
regulatory changes enacted by governmental authorities; delays in
obtaining approvals or financing or completing development or
construction activities; and discovery of archaeological ruins.
Financial outlook and future-ordinated financial information
contained in this news release is based on assumptions about future
events, including economic conditions and proposed courses of
action, based on management's assessment of the relevant
information currently available. Readers are cautioned that any
such financial outlook or future-ordinated financial information
contained or referenced herein may not be appropriate and should
not be used for purposes other than those for which it is disclosed
herein. The Company and its management believe that the prospective
financial information has been prepared on a reasonable basis,
reflecting management's best estimates and judgments at the date
hereof, and represent, to the best of management's knowledge and
opinion, the Company's expected course of action. However, because
this information is highly subjective, it should not be relied on
as necessarily indicative of future results. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information or
statements, particularly in light of the current economic climate
and the significant volatility, the risks and uncertainties
associated with the direct and indirect impacts of COVID-19.
Forward-looking statements contained herein are made as of the date
of this announcement and the Company disclaims any obligation to
update any forward-looking statement, whether as a result of new
information, future events or results or otherwise. Accordingly,
readers should not place undue reliance on forward-looking
statements.
LEI: 213800PDI9G7OUKLPV84
Company No: 109180
[1] Reclassified from operating expenditure , from 2021, the
Company implemented a more granular methodology to the accounting
and classification of waste-stripping costs, in line with IFRS
accounting standards. As such, there is an accounting
reclassification of open pit waste mining costs, resulting in a
reduction in total cash costs with a corresponding equal increase
in the sustaining expenditure and therefore AISC, with no impact on
net cash flow.
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