TIDMCEY
RNS Number : 1667H
Centamin PLC
26 July 2023
26 July 2023
Centamin plc
("Centamin" or "the Company" of "the Group")
LSE: CEY / TSX: CEE
INTERIM report
for the six months ended 30 June 2023 ("H1 2023")
IMPROVED results driven by strong operating PERFORMANCE
and stringent cost management
MARTIN HORGAN, CEO, commented : " This marks Centamin's third
consecutive six month period of improved EBITDA, driven by our
focus on operating performance and cost management, whilst also
benefiting from an improved gold price. This has enabled us both to
continue investing in our portfolio and to distribute returns to
our stakeholders. Our operational track record and strong balance
sheet put Centamin in a robust position to deliver the next stage
of growth including further optimisation at Sukari and continued
development of the Doropo project."
OPERATIONAL HIGHLIGHTS
-- Group safety performance on track to meet safety targets:
zero LTIs in Q2, resulting in a lost time injury frequency rate
("LTIFR") of 0.15 H1 2023 with a total recordable injury frequency
rate ("TRIFR") of 2.94
-- Production of 220,561 ounces ("oz") for H1 2023 from the
Sukari Gold Mine ("Sukari") in Egypt and on track to meet 2023
guidance
-- Cash costs of US$849/oz produced and all-in sustaining costs
("AISC") of US$1,228/oz sold and on track to meet 2023 guidance
-- Decarbonisation roadmap published with interim target of 30%
reduction in scope 1 and 2 GHG emissions by 2030. Grid power
connection tender submissions are under evaluation and solar
expansion study work is underway
-- Doropo Gold Project in Côte d'Ivoire pre-feasibility ("PFS")
study complete: robust economics with a post-tax net present value
using an 8% discount rate ("NPV(8%) ") of US$497 million and
internal rate of return ("IRR") of 41% at US$1,900/oz gold price
with further upside opportunities, DFS expected mid-2024 ( full
announcement )
-- New Egyptian mining framework agreed in principle with the
Egyptian government for the Company's Eastern Desert Exploration
licences ("EDX Blocks") creating a clear, competitive regulatory
structure for development of new mining projects (full
announcement)
-- Commenced drilling on 3,000km(2) highly prospective EDX
Blocks with 3,100 metres completed of a 10,000 metre drill
programme focussing on seven priority targets identified on the
Nugrus block (adjacent to Sukari)
FINANCIAL HIGHLIGHTS
-- Revenue generation of US$426 million from gold sales of
219,353 oz at an average realised gold price of US$1,936/oz, with
equivalent to US$28 million in gold inventory to be shipped
-- Increased EBITDA margin of 45% with EBITDA up 26% to US$193 million (H1 2022: US$ 153m)
-- Basic EPS of 7.86 US cents and net profit after tax
attributable to shareholders of US$91 million
-- Capital expenditure ("capex") of US$108 million with key
capital projects advanced as scheduled and on track to meet 2023
guidance
-- Group operating cash flow of US$172 million from Sukari
-- Group free cash flow of US$19 million after US$88 million was
received in profit share and cost recovery and US$59 million was
distributed to our Egyptian government partners in profit share and
royalties
-- Gold price protection programme implemented for the twelve
months to June 2024, with the purchase of put options for 240,000
ounces of gold at a strike price of US$1,900/oz
-- Strong and flexible balance sheet with available cash and
liquid assets of US$161 million (at 30 June 2023), after payment of
the 2022 final dividend of US$29 million, and total liquidity of
US$311 million reflecting the undrawn sustainability-linked
revolving credit facility
-- Interim dividend declared of 2.0 US cents per share, equating
to a distribution of approximately US$23 million, to be paid to
shareholders on 29 September 2023 (ex-dividend date of 31 August
2023)
2023 OUTLOOK
Guidance unchanged and on track
-- Gold production guidance range of 450,000 to 480,000 oz per annum targeting the midpoint
-- 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, which excludes
US$48 million of sustaining deferred stripping costs
-- Exploration spend is results-driven. 2023 exploration
expenditure budget is US$30 million, including US$23 million for
the pre-development study work on the Doropo Gold Project
KEY H2 2023 DELIVERABLES
-- Sukari updated Life of Mine Plan (NI 43-101), including underground expansion
-- Sukari Gold Mine grid power connection study and project timeline
-- Group Mineral Resource and Reserve update
-- Group exploration activities report
GROUP RESULTS SUMMARY [1]
Quarter on quarter ("QoQ") comparative Year on Year ("YoY") comparative
================================== =========================================== =====================================
Q2 2023 Q1 2023 % H1 2023 H1 2022 %
================================== ============= ============= ============= ============= ============ ========
SAFETY
LTIFR (1m hours) 0.00 0.31 ( 100%) 0.15 0.16 (6%)
TRIFR (1m hours) 3.40 2.77 23% 2.94 2.91 1%
================================== ============= ============= ============= ============= ============ ========
OPERATIONAL
Open pit material mined (kt) 32,303 32,998 ( 2%) 65,301 64,372 1%
Open pit ore mined (kt) 3,609 3,273 10% 6,882 5,736 20%
Open pit ore mined grade (g/t Au) 0.90 0.87 4% 0.88 0.99 (11%)
Underground ore mined (kt) 222 236 ( 6%) 458 385 19%
Underground ore mined grade (g/t
Au) 4.40 4.02 9% 4.21 4.26 (1%)
Ore processed (kt) 3,076 3,006 2% 6,082 5,839 4%
Feed grade (g/t Au) 1.26 1.20 5% 1.23 1.22 1%
Gold recovery (%) 88.3 88.8 ( 1%) 88.5 88.2 0%
Gold produced (oz) 114,687 105,875 8% 220,562 203,898 8%
================================== ============= ============= ============= ============= ============ ========
COSTS & SALES
Gold sold (oz) 111,693 107,661 4% 219,354 203,587 8%
Cash cost (US$'000) 87,995 99,162 ( 11%) 187,157 189,856 (1%)
Unit cash cost (US$/oz produced) 767 937 ( 18%) 849 931 (9%)
AISC (US$'000) 124,299 145,157 ( 14%) 269,456 294,406 (8%)
Unit AISC (US$/oz sold) 1,113 1,348 ( 17%) 1,228 1,446 (15%)
Avg realised gold price (US$/oz) 1,969 1,902 3% 1,936 1,872 3%
================================== ============= ============= ============= ============= ============ ========
FINANCIALS
Revenue (US$'000) 220,386 205,226 7% 425,612 381,786 11%
EBITDA (US$'000) 114,727 78,688 46% 193,415 153,116 26%
Profit before-tax (US$'000) 70,478 44,326 59% 114,804 84,747 35%
Profit post-tax attrib to
shareholders (US$'000) n/a n/a - 90,968 84,737 7%
Basic EPS (US cents ) n/a n/a - 7.86 7.35 7%
Operating cash flow (US$'000) 96,427 75,340 28% 171,767 128,674 33%
Capital expenditure (US$'000) 54,419 53,842 1% 108,261 138,686 (22%)
Free cash flow (US$'000) 10,861 8,501 28% 19,362 (22,694) 185%
================================== ============= ============= ============= ============= ============ ========
WEBCAST PRESENTATION
The Company will host a webcast presentation today, Wednesday,
26 July 2023, at 08.30 BST to discuss the results, followed by an
opportunity to ask questions.
Webcast link :
https://www.investis-live.com/centamin/64632d444170900d004d0607/lubo
PRINT-FRILY VERSION of the announcement: www.centamin.com/
media/company-news .
About Centamin
Centamin is an established gold producer, with a premium listing
on the London Stock Exchange and a secondary listing on the Toronto
Stock Exchange. The Company's flagship asset is the Sukari Gold
Mine ("Sukari"), Egypt's largest and first modern gold mine, as
well as one of the world's largest producing mines. Since
production began in 2009 Sukari has produced over 5 million ounces
of gold, and today has 6.0Moz in gold Mineral Reserves. Through its
large portfolio of exploration assets in Egypt and Côte d'Ivoire,
Centamin is advancing an active pipeline of future growth
prospects, including the Doropo project in Côte d'Ivoire, and has
over 3,000km(2) of highly prospective exploration ground in Egypt's
Nubian Shield.
Centamin recognises its responsibility to deliver operational
and financial performance and create lasting mutual benefit for all
stakeholders through good corporate citizenship, including but not
limited to in 2022, achieving new safety records; commissioning of
the largest hybrid solar farm for a gold mine; sustaining a +95%
Egyptian workforce; and, a +60% Egyptian supply chain at
Sukari.
FOR MORE INFORMATION please visit the website www.centamin.com
or contact:
Centamin plc FTI Consulting
Alexandra Barter-Carse, Head of Corporate Ben Brewerton / Sara Powell
Communications / Nick Hennis
investor@centaminplc.com +442037271000
centamin@fticonsulting.com
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
operations are disrupted.
Non-GAAP measures
This statement includes certain financial performance measures
which are not GAAP measures as defined under International
Financial Reporting Standards (IFRS). These include EBITDA and
adjusted EBITDA, Cash costs of production, AISC, Cash and liquid
assets, Free cash flow and adjusted Free cash flow. Management
believes these measures provide valuable additional information for
users of the financial statements to understand the underlying
trading performance. 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 owners of the parent
("shareholders")
Centamin's profit after the profit share split with the Egyptian
Mineral Resource Authority ("EMRA"), the Company's Egyptian
government partner.
Royalties
Royalties are accrued and paid six months in arrears.
Cash and liquid assets
Cash and liquid assets include cash, bullion on hand and gold
sales receivables.
Liquidity
Liquidity is defined as the sum of cash and cash equivalents and
available credit under the Company's revolving credit facility.
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. 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
TABLE OF CONTENTS
CEO OPERATIONAL REVIEW 6
CFO FINANCIAL REVIEW 9
GOVERNANCE 16
PRINCIPAL RISKS AND UNCERTAINTIES 17
DIRECTORS' RESPONSIBILITY STATEMENT 18
INDEPENT REVIEW REPORT TO CENTAMIN PLC 20
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 22
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 23
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 24
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 25
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS 26
CEO OPERATIONAL Review
(H1 2023 vs H1 2022)
I am pleased to report a strong first half of 2023 due to the
continued operational delivery at Sukari, coupled with a stronger
gold price. We have also advanced numerous projects and work
streams that will deliver the full potential of Centamin's
portfolio. We remain on track to deliver against our 2023 guidance
and all key capital projects are progressing on schedule.
HEALTH & SAFETY
We remain focussed on the protection of our workforce and the
local communities that we work in. Our safety performance continues
to be strong; while noting that our ultimate ambition is to create
a zero-harm workplace.
We had only one lost time injury in H1 2023 at Sukari.
Notwithstanding, there has been an increase in low consequence,
minor injuries. Proactive measures have been taken to understand
these injuries, identify trends, and implement mitigations. These
measures include 'safety stops' focused on awareness sessions and
the implementation of programmes that ensure greater management
oversight and enhance hazard identification education.
The Group LTIFR was 0.15 per one million hours worked and we are
on track to meet our annual target. The Group TRIFR was 2.94 per
one million hours worked, a 1% increase YoY.
SUSTAINABILITY
Centamin published its sixth annual Sustainability Report and
2022 Modern Slavery Statement. The Sustainability Report was
aligned with globally recognised reporting frameworks including GRI
Sustainability Reporting Standards ("GRI"), the Sustainability
Accounting Standards Board ("SASB") for the metals and mining
industry, and the Task Force on Climate-related Financial
Disclosures ("TCFD"). Furthermore, we have strengthened our
third-party verification and assurance processes, around our
greenhouse gas accounting, people and workforce development
frameworks, gender inclusion and diversity, and closure cost
liability.
Tailings management
Our comprehensive and systematic approach to tailings management
continues, with good progress on bringing the governance processes
and management systems in line with the Global Industry Standard on
Tailings Management ("GISTM"). The raising of our second tailings
storage facility ("TSF2") continues to progress ahead of
schedule.
Energy and climate change
In March 2023, we issued our decarbonisation roadmap to 2030
with an interim 30% carbon abatement target. This science-based
target is underpinned by integrating and expanding solar power
generation at Sukari, combined with switching to lower carbon
Egyptian grid power. This will fully replace the current use of
diesel fuel for power generation at Sukari.
The Sukari 30MW(AC) solar plant has now been operating for nine
months and has exceeded project power generation expectations,
showcasing exceptional performance as we operate in the peak
sunlight hours during the summer months. The preliminary technical
work to expand the Sukari solar capacity to 50MW (AC) is complete
and advanced studies are underway including project design and
timeline. The tender process for the Egyptian grid connection was
launched in Q1. All qualifying proposals have been received and are
currently under review by our management team supported by external
technical advisors. The estimated target for grid connection is
2024. These two carbon abatement initiatives will reduce our GHG
carbon emissions by 30% from our 2021 base year by 2023 and deliver
significant cost-savings.
Professional development
In H2 2023, alongside the second year of our Employee
Development Pathway we will also be rolling out the Leadership
Development Pathway at Sukari, targeted at all management and
supervisory roles. We are committed to educate, develop and empower
our workforce with the requisite tools and skills to continue to
deliver operational excellence.
SUKARI GOLD MINE (Egypt)
The Sukari team delivered another solid operational performance
in H1 2023 and we remain on track to meet the midpoint of 2023
production guidance. Total open pit material mined was 65Mt, a 1%
increase YoY. The accelerated waste-stripping programme continues
to yield positive results, increasing operational flexibility with
multiple working areas available in the north, east and west of the
pit. The Centamin fleet mined 36Mt of waste in H1 2023. The waste
mining contractor mined an additional 22Mt, resulting in the total
contracted 120Mt programme being approximately 70% complete, with
scheduled completion mid-2024.
In terms of total open pit ore tonnes, Sukari achieved 7Mt with
an average grade of 0.88g/t Au. This marks a 20% increase in tonnes
and an 11% decrease in grade YoY, reflecting the scheduled
inclusion of low-grade oxide and transitional ore tonnes from Stage
7, which will be placed on the dump leach. Open pit average milled
grade was 0.99 g/t Au for H1 2023, a 2% decrease YoY.
The underground mine continues to benefit from the transition to
owner mining, as demonstrated by a 19% increase in ore tonnage
mined YoY. Grades remained consistent YoY, averaging 4.2g/t Au. We
anticipate a slight improvement in average grades during H2 2023.
The key focus within the underground is augmenting the fleet with a
staged replacement of end-of-life equipment, whilst simultaneously
introducing the use of paste-fill into the operating cycle.
The underground paste-fill plant commenced commissioning during
Q2 pouring the first paste into trial stopes, with the excellent
results for both Portland and slag cement strength. As part of the
commissioning phase, we are conducting various performance
monitoring and optimisation programmes such as viscosity modelling
test work as we work to refine the process. It's worth noting that
the trial stopes are located within historically mined areas,
ensuring no disruption to current mining operations. To ensure a
seamless transition, we will continue to utilise the existing
underground backfilling system of cemented rock fill ("CRF") and
waste rock fill in parallel with the commissioning of the paste
plant. This approach mitigates implementation risk while
maintaining ongoing mining operations.
As planned, the plant processed 6Mt of ore at an average feed
grade of 1.23 g/t Au, a 4% increase YoY in tonnes and 1% in grade.
There were several key projects during the period, including mill
relining and work on the mill motors, all of which were completed
successfully with no unplanned disruption to throughput.
The metallurgical gold recovery rate was 88.5%, in line with
budget and flat YoY. Work on the gravity circuit continued to
progress with design reviews nearing completion. The design review
is underway with a detailed design tender and construction decision
by the end of 2023.
Significant progress has been made on the North Dump leach
project, with the installation of the high-density polyethylene
("HDPE") liner completed, and the base layer of mill scats placed
on top of the liner. Ore placement has commenced on the fully
constructed cells. We aim to initiate leaching activities in H2
2023, depending on the percolation rates, this could potentially
result in the first pregnant gold solution being generated at the
end of 2023.
The optimised life of mine plan is on track for completion in
Q4, including the fully-engineered underground expansion. Our team
has recently concluded a comprehensive work programme with external
support, specifically addressing the updated geotechnical
parameters that will assist in determining the criteria for the
revised open pit and underground mine design. Moving ahead, our
focus will be on analysing the initial outputs derived from the
revised input parameters, as well as refining the open pit stage
design, expanded underground and equipment maintenance
strategy.
Doropo GOLD Project ( Côte d'Ivoire)
On 27 June 2023, we published the results from the Doropo
pre-feasibility study ("PFS"), which demonstrated the economic
robustness of the project with a post-tax NPV(8) % of US$497
million and an IRR of 41% at US$1,900/oz gold prices. Importantly,
using a more conservative long-term gold price of US$1,600/oz, the
project meets Centamin's hurdle rates and the definitive
feasibility study ("DFS") and environmental and social impact
assessment ("ESIA") are well underway and expected to be completed
in H1 2024, ahead of the mining licence submission.
Doropo ESIA terms of reference were approved by the Ivorian
government with work commencing immediately afterwards. Baseline
studies and the impact assessment are well advanced supporting the
optimisation of the project design and accompanying stakeholder
engagement.
The project sits in a well-established mining jurisdiction, and
with a maiden Mineral Reserve estimate of 1.87Moz of Probable
reserves, it supports a 10-year life of mine with an average
production rate of 173,000 ounces per annum at all-in sustaining
costs of US$1,017/oz.
We have identified several opportunities for potential reserve
and resource growth and to further optimise the project, which will
be assessed as part of the DFS. Of the US$23 million budgeted for
Doropo in 2023, US$13.2 million was spent on finishing the PFS and
completing the DFS drilling and fieldwork. Further drilling will be
focussed on hydrology, metallurgy, geotechnics and sterilisation as
we continue to progress the DFS. This de-risks the timeline to
completion and further confirms our faith in the potential of
Doropo to support a commercially viable project which will bring
significant investment and job creation to northeastern Côte
d'Ivoire.
EASTERN DESERT EXPLORATION BLOCKS (Egypt)
Model mining exploitation agreement
The Ministry of Petroleum & Natural Resources has been clear
in its vision to create a thriving mining industry for the benefit
of Egypt and its people. Centamin shares this vision and strongly
believes that mining can fulfil its true potential in Egypt through
employment, education and training, and direct financial and
infrastructure investment to support Egypt's target for the mining
industry to contribute 5% of the country's GDP by 2030.
On 20 July 2023 we agreed the framework for the model mining
exploitation agreement ("MMEA") in principle with the Egyptian
Ministry of Petroleum & Natural Resources and the Egyptian
Mineral Resources Authority. The MMEA sets out the legal and fiscal
framework that will apply to commercial discoveries made on the
highly prospective c.3,000km(2) of ground awarded to Centamin in
2021 for exploration in the Eastern Desert of Egypt, referred to as
the EDX blocks. Following routine Egyptian government and legal
procedures, the MMEA will be ratified as a Special Law by the Arab
Republic of Egypt in late 2023.
The MMEA terms are comparable to other jurisdictions with
international, modern mining codes. The MMEA does not apply to the
160km(2) Sukari Gold Mine mining concession, which operates
independently under the Sukari Concession Agreement, ratified by
parliament under Egyptian Law No. 222 of 1994.
Exploration
Drilling commenced in Q2 2023 at our EDX Nugrus block. The
Nugrus block is adjacent to the Sukari Mining Concession, sitting
within 30km of the Sukari processing plant. The 10,000 metre drill
programme is focussed on seven priority targets identified from the
initial regional exportation programmes. To date, 3,000 metres have
been drilled with assay results due later in H2 2023. In addition
to the drilling, regional exploration will continue at Nugrus and
Um Rus, including soil and generative rock chip sampling, with BLEG
sampling commencing on the Nadj block in H2 2023.
EXPLORATION
Throughout H1 2023, we continued to advance our highly
prospective exploration portfolio. At Sukari, a 20,000 metre drill
programme was underway across the 160km(2) concession area. The
programme focused on infill drilling of the resources that could
generate satellite feed and testing strike extensions at Quartz
Ridge, V-Shear East, Wadi Alam and the new Arc prospect located
east of Sukari.
At Doropo, reverse circulation and core drilling activities were
focused on resource infill drilling for the DFS. In addition, the
team completed 15,403 metres of auger drilling alongside continued
soil sampling with the aim to generate further drill targets.
At ABC, exploration was focused on testing extensions along the
strike to confirm continuity of mineralisation with trenching
undertaken on the Windou permit which generated several new drill
targets. On the Kona permit, which is where the current Mineral
Resource is located, a 11,500 metre RC programme was completed
testing the Lolosso structure between Kona Central and Kona South
and to the north and south. Moving forwards, we may undertake a
provisional financial evaluation of the current resource before
undertaking any further fieldwork.
OUTLOOK
Centamin is well positioned with g uidance for 2023 unchanged.
We are on track to achieve the midpoint of the production range,
while continuing to progress our key projects that will unlock the
full potential of our portfolio.
I would like to commend our workforce for their commitment,
professionalism and passion. Their operational excellence has
enabled us to deliver another strong half, building on our
operational track record and delivering our strategy. I would also
like to thank our local communities, partners and wider
stakeholders for their support and shared vision.
We look forward to a busy second half of news flow, as we
continue to deliver on our commitments and progress towards our
vision of being a multi-asset, multi-jurisdictional, responsible
producer.
Martin Horgan
CEO
26 July 2023
CFO FINANCIAL REVIEW
( H1 2023 vs H1 2022 )
We are pleased to report material improvements across most of
our key financial metrics including revenue, EBITDA, profit after
tax, operating cash flow and free cash flow. The strength of these
results during a period of elevated capital investment, is
testament to our prudent long-term approach to capital allocation
and cost management.
H1 2023 has delivered strong operating cash flow of US$172
million, the highest in five interim periods. We generated positive
Group free cash flow of US$19 million, after Sukari profit share
distribution of US$46 million to our Egyptian partner, EMRA, and
US$46 million to Centamin, and US$18 million spent advancing our
organic growth pipeline at Doropo (C ô te d'Ivoire), EDX (Egypt)
and ABC (C ô te d'Ivoire).
FINANCIAL PERFORMANCE
Revenues increased YoY by 11% to US$426 million, from annual
gold sales of 219,353 ounces, up 8%, at an average realised price
of US$1,936/oz, also up 3% YoY. Due to timing of gold shipments, a
total of 14,692 ounces of unsold gold bullion was held at Sukari as
at 30 June 2023, equivalent to US$28 million.
The Group adjusted EBITDA was US$193 million, at a 45% EBITDA
margin, principally driven by:
-- 8% increase in gold production, as scheduled, at a 3% higher
average realised gold price YoY; in addition to:
-- a marginal 1% increase in the combined open pit and
underground material mined, some of which has been capitalised to
mining properties as a waste stripping asset, and
-- lower fuel prices and lower fuel consumption, offset by
higher volumes, has resulted in a net US$8 million savings against
budget, predominantly driven by the integration of solar power
generation
-- Profit before tax increased by 36% to US$115 million, due to
the factors below, with basic EPS increasing by 7% to 7.89 US
cents
-- 11% increase in revenue, in line with increased gold sales
-- a significant increase in finance income and other income:
-- due to the volatility of mainly the Egyptian pound ("EGP")
currency, there was a US$4 million foreign exchange gain in H1
2023
-- rising interest rates in both Egypt and the United Kingdom
resulted in a US$2 million increase in interest income from funds
placed in term-deposit, offset by
-- 20% increase in other operating costs, predominantly due to a 9% increase in royalties paid
-- 8% increase in greenfield exploration and evaluation expenditure, as budgeted, and
-- 4% increase in cost of sales, marginally lower than budget
STRINGENT COST MANAGEMENT
Globally cost inflation remains high and central banks continue
to tighten monetary policy in response. Our judicious approach to
forecasting and stringent cost management has allowed us to deliver
costs within our guidance last year and we remaining on track to
meet 2023 guidance.
Cash costs of production in H1 2023 were US$187 million, a 1%
improvement YoY and below our internal forecasts. This is primarily
due to lower fuel prices and lower fuel consumption ( due to the
integration of solar and our focus on operational efficiency
gains,) partially offset by a 2% YoY increase in total material
mined. Unit cash costs of production were US$849/oz produced, a 9%
improvement YoY, driven by higher production volumes.
AISC in H1 2023 were US$269 million, an 8% improvement YoY,
reflecting lower sustaining capex in the period offset by increased
corporate costs due to non-recurring legal fees associated with the
debt facility and gold protection programme. Unit AISC was
US$1,228/oz sold, a 15% improvement YoY, driven by higher sales
volumes. Importantly, our AISC margin is US$708/oz up 66% YoY.
Good progress continues to be made on our multi-year
cost-savings programme with a cumulative US$143 million of our
US$150 million target of cost savings by the end of 2023.
STRONG FINANCIAL POSITION
As of 30 June 2023, Centamin had cash and liquid assets of
US$161 million, including 14.7koz of gold inventory waiting to be
shipped. From a liquidity standpoint, the US$150 million
sustainability-linked revolving credit facility remains available
and undrawn.
CAPITAL INVESTMENT
This year is a period of significant reinvestment in the Sukari
mine with an elevated level of gross capex of US$273 million
budgeted for 2023. This includes US$48 million of sustaining
capitalised deferred stripping. As a number of studies and
multi-year projects move towards completion, we expect the capex to
reduce from 2024 and beyond. These projects underpin our confidence
in the long-term potential of Sukari.
H1 2023 gross capital expenditure was US$108 million, including
commissioning the underground paste-fill plant, continued
contracted waste-stripping programme, new underground equipment
purchases, underground development, open pit equipment rebuilds,
and construction of the North Dump Leach facility. Total sustaining
capex was US$50 million, including US$10 million on deferred
stripping, and non-sustaining was US$58 million. We had expected a
higher capex spend in H1 but due to minor changes in scheduling,
this has been moved to H2 2023 and we remain on track to meet 2023
guidance.
Gold Price Protection ProgramME
Centamin purchased put options for 240,000 ounces of gold at a
strike price of US$1,900/oz. The put options mature at a rate of
20,000 ounces of gold per month, for the twelve months from July
2023 to June 2024 [2] . This is a cash-settled programme, not
involving physical gold delivery.
The programme provides the Company protection should the average
monthly gold price fall below the US$1,900/oz strike price, while
allowing us to retain full exposure to any upside in the gold price
above this level. As detailed above, this programme aligns with a
period of elevated capital investment at Sukari, and gives us
further financial flexibility to pursue the Company's strategy of
delivering growth and returns to shareholders.
We were able to lock-in attractive pricing for put options, for
a total premium paid of US$6.1 million which was funded from the
Group's cash position.
Interim dividend
Consistent with the Company's stated commitment to shareholder
returns, the Board declares an interim dividend of 2.0 US cents per
share (US$23 million) for the period ended 30 June 2023. As per the
dividend policy, this distribution is in line with the commitment
to return a minimum of 30% of Group free cash flow before growth
capex(3) to shareholders in cash dividends. In consideration of the
below factors, and reflecting the Board's confidence, a total of
56% of H1 2023 Group free cash flow before growth capex will be
distributed to shareholders on 29 September 2023:
-- Centamin is in a financially robust position with US$161 million in cash and liquid assets
-- The US$150 million sustainability linked revolving credit
facility remains undrawn as a result of H1 2023 growth capex being
funded from cash flow
-- The gold price protection programme limits the revenue
downside risk below US$1,900/oz gold price
-- The Company is operationally and financially well positioned
for a stronger H2 2023, in line with plan
The interim dividend is calculated by the following:
30 June 2023
US$'000
----------------------------------------------------------- --------------------
Group free cash flow 19,362
------------------------------------------------------------ --------------------
Add back:
Growth capex financed from treasury [3] 21,818
Cashflow available for dividends 41,180
30% minimum distribution as per dividend policy (12,354)
------------------------------------------------------------ --------------------
Surplus cash flow for discretionary capital allocation [4] 28,826
Board interim dividend supplement (10,814)
T otal interim dividend declared 23,168
------------------------------------------------------------ --------------------
Please refer to the Dividend Declaration announcement and or the
website (
www.centamin.com/investors/shares-dividends/dividend-information/ )
for further detail including the interim dividend timetable.
OUTLOOK
Financially, we expect a stronger second half of 2023 driven by
higher production volumes and supported by our gold price
protection Programme, should the gold price move below US$1,900/oz.
Meanwhile, our focus on continuous improvement means we remain
fully focused on managing the bottom line of the business so that
we can maximise the value at Sukari and deliver growth and
diversification combined with sustainable stakeholder returns.
ROSS JERRARD
CFO
26 July 2023
primary statements highlights
H1 2023 H1 2022 Full Year 2022
US$'000 US$'000 US$'000
-------- -------- -------- --------------
Revenue 425,612 381,786 788,424
-------- -------- -------- --------------
Revenue from gold and silver sales for the period increased by
11% year-on-year to US$426 million (2022: US$382 million) with a 3%
increase in the year-on-year average realised gold price to
US$1,936 per ounce sold (2022: US$1,872 per ounce sold)
complimented by an 8% increase in gold ounces sold to 219,353
ounces (2022: 203,587 ounces).
H1 2023 H1 2022 Full Year 2022
US$'000 US$'000 US$'000
-------------- --------- --------- --------------
Cost of sales (267,801) (257,436) (544,075)
-------------- --------- --------- --------------
Cost of sales represents the cost of mining, processing,
refining, transport, site administration, depreciation,
amortisation and movement in production inventories. Cost of sales
is up 4% year-on-year to US$268 million, mainly because of:
-- 16% increase in depreciation and amortisation charges
year-on-year from US$68 million to US$79 million (+ve). This
increase was mainly due to:
o US$137 million additions to property, plant and equipment
(excl. capital work in progress) which increased the depreciation
and amortisation charges; in addition to higher gold production
year-on-year; partially offset by
-- a 2% decrease (US$4 million) in total mine production costs
from US$192 million to US$188 million (-ve), primarily due to the
following drivers:
o an 11% decrease in processing costs (US$11 million) (-ve). The
decrease was driven by general price decreases and stabilisation on
fuel and other consumables as well as the consumption reduction due
to the solar power coming online. Diesel fuel is mainly consumed at
Sukari for the process plants power generation
o a 20% decrease in administration costs (US$5 million) (-ve);
offset by
o a 17% increase in open pit mining costs (US$10 million)
(+ve)
H1 2023 H1 2022 Full Year 2022
US$'000 US$'000 US$'000
------------------------------------------------ -------- -------- --------------
Dividend paid - non-controlling interest in SGM (46,000) (21,492) (35,492)
------------------------------------------------ -------- -------- --------------
Profit share payments during the year are reconciled against
SGM's audited financial statements. Any variation between payments
made during the year (based on the Company's estimates) and the
SGM's audited financial statements, may result in a balance due and
payable to EMRA or advances to be offset against future
distributions. SGM's 30 June 2022 financial statements have been
audited and signed off, the 30 June 2023 financial statements are
currently under audit.
Refer to note 1.3.1.2 in the 2022 Annual Report for details of
the treatment and disclosure of the EMRA profit share.
CAPITAL EXPITURE
The following table provides a breakdown of the total capital
expenditure of the Group:
H1 2023 H1 2022 Full Year 2022
US$'000 US$'000 US$'000
------------------------------------------------------ -------- -------- --------------
Underground exploration 5,368 1,729 8,636
Underground mine development 16,011 16,965 32,107
Other sustaining capital expenditure 28,950 59,501 124,162
------------------------------------------------------ -------- -------- --------------
Total sustaining capital expenditure 50,329 78,195 164,905
Non-sustaining exploration expenditure 1,210 1,954 3,539
Other non-sustaining capital expenditure (1) 56,723 58,537 115,099
------------------------------------------------------ -------- -------- --------------
Total gross capital expenditure 108,262 138,686 283,543
Less:
Sustaining element of waste stripping capitalised (2) (10,023) (21,649) (51,527)
Capitalised Right of Use Assets (66) (6,339) (7,746)
------------------------------------------------------ -------- -------- --------------
Adjusted capital expenditure 98,173 110,698 224,270
------------------------------------------------------ -------- -------- --------------
(1) Non-sustaining capital expenditure included further spend on
the solar plant, underground paste-fill plant and the Capital Waste
Stripping. Non-sustaining costs are primarily those costs incurred
at 'new operations' and costs related to 'major projects at
existing operations' that will materially benefit the
operation.
(2) Reclassified from operating expenditure.
EXPLORATION EXPITURE
The following table provides a breakdown of the total
exploration expenditure of the Group:
H1 2023 H1 2022 Full Year 2022
US$'000 US$'000 US$'000
----------------------------------------- -------- -------- --------------
Greenfield exploration
Burkina Faso 775 1,688 2,928
Côte d'Ivoire 15,914 15,386 25,120
Egypt - Eastern Desert Exploration 2,234 500 1,675
----------------------------------------- -------- -------- --------------
Total greenfield exploration expenditure 18,923 17,574 29,723
Brownfield exploration
Sukari Tenement 6,578 3,683 12,175
----------------------------------------- -------- -------- --------------
Total brownfield exploration expenditure 6,578 3,683 12,175
----------------------------------------- -------- -------- --------------
Total exploration expenditure 25,501 21,257 41,898
----------------------------------------- -------- -------- --------------
Exploration and evaluation expenditure comprises expenditure
incurred for exploration activities primarily in Côte d'Ivoire and
in the Egypt greenfield permit areas. Greenfield exploration and
evaluation costs (excluding Burkina Faso) increased by US$2 million
or 14% as the exploration and evaluation work at the two Côte
d'Ivoire sites advanced, more significantly at the Doropo site.
Some drilling work has also started at Nugrus, one of the new Egypt
permit areas. The brownfield capitalised exploration costs on the
Sukari concession area increased by US$3 million or 79% year on
year due to the exploration and evaluation work and related
activities at the Sukari permit areas increasing in the period.
The spend in Burkina Faso is mainly on key services and other
regulatory obligations required as the process to formally exit the
project is currently underway.
SUBSEQUENT EVENTS
Interim dividend
The Directors have declared an interim dividend of 2.0 US cents
per share on Centamin plc ordinary shares (totalling approximately
US$23 million). The interim dividend for the half year period ended
30 June 2023 will be paid on 29 September 2023 to shareholders on
the register on the Record Date of 1 September 2023.
Gold price protection programme
Centamin purchased a further six months of put options for
120,000 ounces of gold at a strike price of US$1,900/oz. The put
options mature at a rate of 20,000 ounces of gold per month, for
the six months from January to June 2024. This is a cash-settled
programme, not involving physical gold delivery.
The programme provides the Company protection should the average
monthly gold price fall below the US$1,900/oz strike price, while
allowing us to retain full exposure to any upside in the gold price
above this level. As detailed above, this programme aligns with a
period of elevated capital investment at Sukari, and gives us
further financial flexibility to pursue the Company's strategy of
delivering growth and returns to shareholders. The premium for the
programme extension was US$3.6 million.
Other than as noted above, there were no other significant
events occurring after the reporting date requiring disclosure in
the financial statements.
NON -- GAAP FINANCIAL MEASURES
1) EBITDA and adjusted EBITDA
EBITDA is a non -- GAAP financial measure, which excludes the
following from profit before tax:
-- Finance costs
-- Finance income
-- Depreciation and amortisation
Management considers EBITDA a valuable indicator of the Group's
ability to generate liquidity by producing operating cash flow to
fund working capital needs and capital expenditures. EBITDA is also
frequently used by investors and analysts for valuation purposes
whereby EBITDA is multiplied by a factor or 'EBITDA multiple' that
is based on an observed or inferred relationship between EBITDA and
market values to determine a company's approximate total enterprise
value. EBITDA is intended to provide additional information to
investors and analysts and does not have any standardised
definition under IFRS and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS.
EBITDA excludes the impact of income from financing activities
and taxes, and therefore is not necessarily indicative of operating
profit or cash flow from operations as determined under IFRS. Other
companies may also calculate EBITDA differently. The following
table provides a reconciliation of EBITDA to profit for the year
before tax.
Adjusted EBITDA removes the effect of transactions that are not
core to the Group's main operations, like 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.
Reconciliation of profit before tax to EBITDA and adjusted
EBITDA:
H1 2023 H1 2022 Full Year 2022
--------------------------------------------------------- -------- ------- ------- --------------
Profit for the year before tax US$'000 114,804 84,747 171,001
Finance income US$'000 (1,791) (214) (1,214)
Finance costs US$'000 1,380 529 2,459
Depreciation and amortisation US$'000 79,022 68,054 146,769
--------------------------------------------------------- -------- ------- ------- --------------
EBITDA US$'000 193,415 153,116 319,015
Add back/(less) (1) US$'000
Net fair value gains on derivative financial instruments US$'000 (490) - -
--------------------------------------------------------- -------- ------- ------- --------------
Adjusted EBITDA US$'000 192,925 153,116 319,015
--------------------------------------------------------- -------- ------- ------- --------------
(1) 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. Management uses this measure internally to better
assess performance trends for the Company as a whole. Management
considers that, in addition to conventional measures prepared in
accordance with GAAP, certain investors use such non-GAAP
information to evaluate the Company's performance and ability to
generate cash flow. Management considers that these measures
provide an alternative reflection of the Group's performance for
the current year and are an alternative indication of its expected
performance in future periods. Cash cost of production is intended
to provide additional information, does not have any standardised
meaning prescribed by GAAP and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with GAAP. This measure is not necessarily indicative
of operating profit or cash flow from operations as determined
under GAAP. Other companies may calculate these measures
differently.
Reconciliation of cash cost of production per ounce produced
:
H1 2023 H1 2022 Full Year 2022
------------------------------------------- -------- ------- ------- --------------
Mine production costs (note 2.2) US$'000 188,344 192,090 408,543
Less: Refinery and transport US$'000 (1,182) (1,126) (2,324)
Movement of inventory (1) US$'000 (5) (1,108) (3,673)
------------------------------------------- -------- ------- ------- --------------
Cash cost of production - gold produced US$'000 187,157 189,856 402,546
------------------------------------------- -------- ------- ------- --------------
Gold produced - total (oz.) oz 220,561 203,898 440,974
Cash cost of production per ounce produced US$/oz 849 931 913
------------------------------------------- -------- ------- ------- --------------
1) The movement in inventory on ounces produced is only the net
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:
H1 2023 H1 2022 Full Year 2022
--------------------------------------------------- -------- --------- --------- ----------------
Mine production costs (note 2.2) US$'000 188,344 192,090 408,543
Royalties US$'000 12,733 11,679 23,842
Movement of inventory (1) US$'000 3,346 1,078 (6,789)
--------------------------------------------------- -------- --------- --------- ----------------
Cash cost of production - gold sold US$'000 204,423 204,847 425,596
--------------------------------------------------- -------- --------- --------- ----------------
Gold sold - total (oz.) oz 219,353 203,587 438,638
Cash cost of production per ounce sold US$/oz 932 1,006 970
--------------------------------------------------- -------- --------- --------- ----------------
H1 2023 H1 2022 Full Year 2022
--------------------------------------------------- -------- --------- --------- ----------------
Movement in inventory
Movement in inventory - cash (above) US$'000 3,346 1,078 (6,789)
Effect of depreciation and amortisation - non-cash US$'000 (4,062) 1,341 17,448
--------------------------------------------------- -------- --------- --------- ----------------
Movement in inventory - cash & non-cash (note 2.2) US$'000 (716) 2,419 10,659
--------------------------------------------------- -------- --------- --------- ----------------
(1) The movement in inventory on ounces produced is only net the
movement in mining stockpiles and ore in circuit while the movement
in ounces sold is the net movement in mining stockpiles, ore in
circuit and gold in safe inventory.
Reconciliation of AISC per ounce sold:
H1 2023 H1 2022 Full Year 2022
--------------------------------------------------- -------- ------- ------- --------------
Mine production costs (note 2.2) US$'000 188,344 192,090 408,543
Movement in inventory US$'000 3,346 1,078 (6,789)
Royalties US$'000 12,733 11,679 23,842
Sustaining corporate administration costs US$'000 14,964 11,780 24,282
Rehabilitation costs US$'000 668 294 588
Sustaining underground development and exploration US$'000 21,379 18,694 40,743
Other sustaining capital expenditure US$'000 28,950 59,501 124,162
By -- product credit US$'000 (928) (711) (1,503)
--------------------------------------------------- -------- ------- ------- --------------
All -- in sustaining costs (1) US$'000 269,456 294,405 613,868
--------------------------------------------------- -------- ------- ------- --------------
Gold sold - total (oz.) oz 219,353 203,587 438,638
AISC per ounce sold US$/oz 1,228 1,446 1,399
--------------------------------------------------- -------- ------- ------- --------------
(1) Includes refinery and transport.
3) Cash and cash equivalents, bullion on hand and gold and
silver sales debtor
Cash and cash equivalents, bullion on hand, gold and silver
sales debtor is a non-GAAP financial measure of the available cash
and liquid assets at a point in time. Management uses this measure
internally to better assess performance trends for the Company as a
whole. Management considers that, in addition to conventional
measures prepared in accordance with GAAP, certain investors use
such non-GAAP information to evaluate the Company's performance and
ability to generate cash flow and the measure is intended to
provide additional information.
This non-GAAP measure does not have any standardised meaning
prescribed by GAAP and should not be considered in isolation or as
a substitute for measures of performance prepared in accordance
with GAAP. This measure is not necessarily indicative of cash and
cash equivalents as determined under GAAP and other companies may
calculate it differently.
Reconciliation to cash and cash equivalents , bullion on hand,
gold and silver sales debtor and financial assets at fair value
through profit or loss:
30 June 30 June 31 December 2022
2023 2022
----------------------------------------------------------- --------- ------- --------------- ----------------
Cash and cash equivalents (note 2.10(a)) US$'000 96,231 126,849 102,373
Bullion on hand (valued at the period-end spot price) US$'000 28,095 20,830 24,440
Gold and silver sales debtor US$'000 33,573 27,761 29,832
Derivative instruments at fair value through profit or loss US$'000 3,028 - -
------------------------------------------------------------ -------- ------- --------------- ----------------
US$'000 160,927 175,440 156,645
--------- ------- --------------- ----------------
The majority of funds have been invested in international
rolling short-term interest money market deposits.
4) Free cash flow and adjusted free cash flow
Free cash flow is a non-GAAP financial measure. Free cash flow
is a measure of the available cash after distributions to the
Non-Controlling Interest ("NCI") in SGM, being EMRA, that the Group
has at its disposal to use for capital reinvestment and to
distribute to shareholders of the parent. Free cash flow is
intended to provide additional information, does not have any
standardised meaning prescribed by GAAP and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. This measure is not
necessarily indicative of operating profit or cash flow from
operations as determined under GAAP and other companies may
calculate this measure differently.
H1 2023 H1 2022 Full Year 2022
-------------------------------------------------------------------- ---------- --------- --------- --------------
Net cash generated from operating activities US$'000 171,767 128,674 293,047
Less:
Net cash used in investing activities US$'000 (106,405) (132,134) (274,583)
Dividend paid - non-controlling interest in SGM US$'000 (46,000) (21,492) (35,492)
-------------------------------------------------------------------- ---------- --------- --------- --------------
Free cash flow US$'000 19,362 (24,952) (17,028)
Add back:
Transactions completed through specific available cash resources (1)
US$'000 2,538 - -
-------------------------------------------------------------------- ---------- --------- --------- --------------
Adjusted free cash flow US$'000 21,900 (24,952) (17,028)
-------------------------------------------------------------------- ---------- --------- --------- --------------
(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
reserve
governanCe
Share Plan Awards
Granted 25 April 2023
-- The Company granted 6,065,600 performance share awards over
ordinary shares of nil par value to executive Directors and 21
employees of the Group under the Company's shareholder approved
Incentive Share Plan. Performance conditions and further details of
the scheme can be found in the 2022 Annual Report .
-- The Company granted 3,057,000 restricted share awards over
ordinary shares of nil par value to 112 senior employees across the
Group under the Company's shareholder approved Incentive Share
Plan. These shares vest annually over a three-year period in equal
tranches to participants, subject to the scheme rules and the
employee remaining with the Company.
Legal developments in egypt
On 14 January 2023, Egyptian Law No. 32 of 2014 ("Law 32") was
upheld as constitutional by the Egyptian Supreme Constitutional
Court ("SCC"), having been under challenge since 2014.
SUMMARY
-- Law 32 provides that third parties are prevented from
lawfully challenging contractual agreements between the Egyptian
government and an investor(s), such as the Sukari Gold Mine
Concession Agreement ("Concession Agreement")
-- The SCC judgment gives 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
-- As per the provisions of Egyptian Civil Procedures Law,
Centamin's subsidiary, PGM, has submitted an application to the SAC
to resume the Appeal proceedings and request the SAC to reject the
original case in its entirety in accordance with the provisions of
Law 32
-- The SAC has set the hearing date for 2 September 2023
-- Operations at the Sukari Gold Mine remain unaffected and continue as normal
There have been no material developments since the issuance of
the 2022 annual report. For further detail please refer to Note 5.1
of the 2022 Annual Report .
PRINCIPAL RISKS AND Uncertainties
RISK MANAGEMENT
Centamin recognises that nothing is without risk. We believe a
successful and sustainable business requires a robust and proactive
risk management framework as its foundation. This is supported by a
strong culture of risk awareness, encouraging openness and
integrity, alongside a clearly defined appetite for risk. This
enables the Company to consider risks and opportunities for more
effective decision-making, delivery on our objectives and improve
our performance as a responsible mining company. The Board has
overall responsibility, supported by the Audit and Risk Committee,
for establishing a framework that allows for the review of existing
and emerging risks in the context of both opportunities and
potential threats that inform the principal risks and
uncertainties. These risks and opportunities inform the assessment
of the future prospects and long-term viability of the Group, as
shown in the Viability Statement of the 2022 Annual Report and are
also considered when challenging the strategic objectives of the
Company.
2022 was a year of extreme macroeconomic changes exacerbated by
geopolitical pressures including the situation in Ukraine and the
ongoing impacts of the COVID pandemic. Whilst as a business we were
able to successfully manage the operational considerations of the
pandemic, we have felt the financial pressures as every government,
business and individual has globally. The 2022 Annual Report
included updates to the principal and emerging risks driven by
these pressures, with detail provided on these changes in the Risk
Review of the 2022 Annual Report. There has been no change to the
Principal and Emerging risks since then except for those
highlighted below. We continue to feel the ongoing global impact of
these increased financial pressures, which we continue to monitor,
which has led to the introduction of the Gold Price Protection
Programme, as highlighted in the CFO Financial Review. These
downside protection mechanisms have changed the mitigations and
ongoing strategy through H2 2023 for the financially focussed risks
of Gold price, Global macroeconomic developments and Capital
allocation & liquidity. When also considering the healthy
financial position of the business, additional measures such as the
focus on cost savings initiatives and the revolving credit
facility, means we feel there is now sufficient financial
flexibility to meet the Company's current and future financial
commitments through 2023. In addition, regarding the Litigation
risk we are awaiting the Supreme Administrative Court hearing, as
highlighted in the Legal Developments in Egypt, to make the
relevant updates to this risk.
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 2022
Annual Report and 2022 Sustainability Report, published on the
Company's website: www.centamin.com.
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 2022 Annual Report and can be found
on the Company's website (
https://www.centamin.com/investors/principal-risks-and-uncertainties/
) .
The principal risks are listed below:
External risks
-- Geopolitical
-- Legal and regulatory compliance
-- Litigation
-- Global macroeconomic developments
-- Gold price
Strategic risks
-- Capital allocation and liquidity
-- Diversification
-- Concession governance and management
-- Licence to operate
-- People (attract, develop and retain skilled people)
-- Stakeholder environmental and social expectations
-- Decarbonisation
Operational risks
-- Safety, health and wellbeing
-- Exploration and project development
-- Maximising our geological potential
-- 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 2022 Annual Report and website :
-- Cyber security
-- Infectious disease
-- Climate change
________________________________________________________________________________________________
DIRECTORS' RESPONSIBILITY STATEMENT
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE SIX
MONTHSED 30 JUNE 2023 FINANCIAL REPORT
The Directors confirm that to the best of their knowledge:
a) the set of interim condensed consolidated financial
statements for the six months ended 30 June 2023 has been prepared
in accordance with International Accounting Standard 34 'Interim
Financial Reporting' as adopted by the European Union;
b) the set of interim condensed 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 2023 and their respective
responsibilities can be found on pages 90 to 147 of the 2022 annual
report and accounts of Centamin plc.
By order of the Board,
Martin Horgan Ross Jerrard
CEO CFO
26 July 2023 26 July 2023
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE SIX MONTHSED
30 JUNE 2023
Independent review report to Centamin plc
Report on the interim condensed consolidated financial
statements
Our conclusion
We have reviewed Centamin plc's interim condensed consolidated
financial statements (the "interim financial statements") in the
Interim Report of Centamin plc for the 6 month period ended 30 June
2023 (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.
The interim financial statements comprise:
-- the unaudited interim condensed consolidated statement of
financial position as at 30 June 2023;
-- the unaudited interim condensed consolidated statement of
comprehensive income for the period then ended;
-- the unaudited interim condensed consolidated statement of
changes in equity for the period then ended;
-- the unaudited interim condensed consolidated statement of
cash flows for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim Report
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.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom ("ISRE (UK) 2410"). 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
Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the Directors have inappropriately
adopted the going concern basis of accounting or that the Directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with ISRE (UK) 2410.
However, future events or conditions may cause the Group to cease
to continue as a going concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Interim Report, including the interim financial statements,
is the responsibility of, and has been approved by the Directors.
The Directors are responsible for preparing the Interim Report in
accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. In
preparing the Interim Report, including the interim financial
statements, the Directors are responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but
to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the Interim Report based on our review. Our
conclusion, including our Conclusions relating to going concern, is
based on procedures that are less extensive than audit procedures,
as described in the Basis for conclusion paragraph of this report.
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.
PricewaterhouseCoopers LLP
Chartered Accountants
London
26 July 2023
Unaudited interim condensed consolidated statement of
comprehensive income
for the six months ended 30 June 2023
Half year Half year Year ended
ended ended 30 31 December
30 June June
2023 2022
(Unaudited) 2022 (Unaudited)* (Audited)
Notes US$'000 US$'000 US$'000
---------------------------------------- ------ -------------- ------------------ -------------
Revenue 2.1 425,612 381,786 788,424
Cost of sales 2.2 (267,801) (257,436) (544,075)
---------------------------------------- ------ -------------- ------------------ -------------
Gross profit 157,811 124,350 244,349
Exploration and evaluation expenditure (18,923) (17,574) (29,723)
Other operating costs 2.2 (29,602) (24,081) (49,003)
Other income 4,617 2,493 6,623
Finance income 2.2 1,791 214 1,214
Finance costs 2.2 (1,380) (655) (2,459)
Net fair value gain on derivative
financial instruments 2.3 490 - -
Profit for the period before
tax 114,804 84,747 171,001
Tax (10) (10) (226)
---------------------------------------- ------ -------------- ------------------ -------------
Profit for the period after tax 114,794 84,737 170,775
Profit for the period after tax
attributable to:
- the owners of the parent 90,968 84,737 72,490
- non-controlling interest in
SGM 2.4 23,826 - 98,285
---------------------------------------- ------ -------------- ------------------ -------------
Total comprehensive income for
the period 114,794 84,737 170,775
---------------------------------------- ------ -------------- ------------------ -------------
Total comprehensive income for
the period attributable to:
- the owners of the parent 90,968 84,737 72,490
- non-controlling interest in
SGM 2.4 23,826 - 98,285
---------------------------------------- ------ -------------- ------------------ -------------
Earnings per share attributable
to owners of the parent:
Basic (US cents per share) 7.860 7.352 6.287
Diluted (US cents per share) 7.728 7.277 6.203
---------------------------------------- ------ -------------- ------------------ -------------
*In the 2022 Interim Condensed Consolidated Statement of
Comprehensive Income, Finance costs were included and disclosed in
the line 'Other operating costs', in these financial statements
they are now separately disclosed in their own line and as such
'Other operating costs' for the 6 months ended 30 June 2022 have
changed.
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 2023
30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
Notes US$'000 US$'000 US$'000
----------------------------------- -------- -------------- ------------- ------------
Non -- current assets
Property, plant and equipment 2.5 1,114,000 1,026,494 1,086,649
Exploration and evaluation asset 2.6 24,809 25,261 24,809
Inventories 2.7 110,337 78,823 94,773
Other receivables 1,582 1,010 1,372
----------------------------------- -------- -------------- ------------- ------------
Total non -- current assets 1,250,728 1,131,588 1,207,603
----------------------------------- -------- -------------- ------------- ------------
Current assets
Inventories 2.7 112,067 125,481 134,065
Trade and other receivables 39,259 28,777 35,628
Prepayments 13,114 13,095 13,864
Derivative financial instruments 2.3 3,028 - -
Cash and cash equivalents 2.10(a) 96,231 126,849 102,373
Total current assets 263,699 294,202 285,930
----------------------------------- -------- -------------- ------------- ------------
Total assets 1,514,427 1,425,790 1,493,533
----------------------------------- -------- -------------- ------------- ------------
Non -- current liabilities
Provisions 2.8 38,064 42,973 37,425
Other payables 2.9 8,814 12,179 11,801
----------------------------------- -------- -------------- ------------- ------------
Total non -- current liabilities 46,878 55,152 49,226
----------------------------------- -------- -------------- ------------- ------------
Current liabilities
Trade and other payables 2.9 80,966 71,039 99,395
Tax liabilities 259 237 249
Provisions 2.8 2,954 3,366 3,256
Total current liabilities 84,179 74,642 102,900
----------------------------------- -------- -------------- ------------- ------------
Total liabilities 131,057 129,794 152,126
----------------------------------- -------- -------------- ------------- ------------
Net assets 1,383,370 1,295,996 1,341,407
----------------------------------- -------- -------------- ------------- ------------
Equity
Issued capital 673,527 670,994 670,994
Share option reserve 5,818 4,245 6,082
Accumulated profits 703,662 682,505 641,794
----------------------------------- -------- -------------- ------------- ------------
Total equity attributable to:
- owners of the parent 1,383,007 1,357,744 1,318,870
- non-controlling interest in SGM 363 (61,748) 22,537
Total equity 1,383,370 1,295,996 1,341,407
----------------------------------- -------- -------------- ------------- ------------
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
26 July 2023 and signed on its behalf by:
Martin Horgan Ross Jerrard
CEO, Director CFO, Director
26 July 2023 26 July 2023
Unaudited interim condensed consolidated statement of changes in
equity
for the six months ended 30 June 2023
Share
Issued option Accumulated Non-controlling Total
30 June 2023 (Unaudited) capital reserve profits Total interests equity
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------- ------ --------- --------- ------------ ---------- ---------------- -----------
Balance as at 1
January 2023 670,994 6,082 641,794 1,318,870 22,537 1,341,407
Profit for the period
after tax - - 90,968 90,968 23,826 114,794
Total comprehensive
income for the period - - 90,968 90,968 23,826 114,794
Own shares acquired - - - - - -
Net recognition of
share-based payments - 2,269 - 2,269 - 2,269
Transfer of share-based
payments 2,533 (2,533) - - - -
Dividend paid -
non-controlling
interest in SGM 2.4 - - - - (46,000) (46,000)
Dividend paid - owners
of the parent - - (29,100) (29,100) - (29,100)
Balance as at 30
June 2023 673,527 5,818 703,662 1,383,007 363 1,383,370
------------------------------- ------ --------- --------- ------------ ---------- ---------------- -----------
Share
Issued option Accumulated Non-controlling Total
30 June 2022 (Unaudited) capital reserve profits Total interests equity
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------ ------ --------- --------- ------------ ----------- ---------------- -----------
Balance as at 1
January 2022 669,531 4,975 655,508 1,330,014 (40,256) 1,289,758
Profit for the period
after tax - - 84,737 84,737 - 84,737
Total comprehensive
income for the period - - 84,737 84,737 - 84,737
Own shares acquired (523) - - (523) - (523)
Net recognition of
share-based payments - 1,256 - 1,256 - 1,256
Transfer of share-based
payments 1,986 (1,986) - - - -
Dividend paid -
non-controlling
interest in SGM 2.4 - - - - (21,492) (21,492)
Dividend paid - owners
of the parent - - (57,740) (57,740) - (57,740)
Balance as at 30
June 2022 670,994 4,245 682,505 1,357,744 (61,748) 1,295,996
------------------------------ ------ --------- --------- ------------ ----------- ---------------- -----------
Share
31 December 2022 Issued option Accumulated Non-controlling Total
(Audited) capital reserve profits Total interests equity
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------ ------ ---------- --------- ------------ ---------- ---------------- -----------
Balance as at 1
January 2022 669,531 4,975 655,508 1,330,014 (40,256) 1,289,758
Profit for the year
after tax - - 72,490 72,490 98,285 170,775
Total comprehensive
income for the year - - 72,490 72,490 98,285 170,775
Net recognition of
share-based payments - 2,570 - 2,570 - 2,570
Transfer of share-based
payments 1,463 (1,463) - - - -
Dividend paid -
non-controlling
interest in SGM 2.4 - - - - (35,492) (35,492)
Dividend paid - owners
of the parent - - (86,204) (86,204) - (86,204)
Balance as at 31
December 2022 670,994 6,082 641,794 1,318,870 22,537 1,341,407
------------------------------ ------ ---------- --------- ------------ ---------- ---------------- -----------
The above unaudited interim condensed consolidated statement of
changes in equity should be read in conjunction with the
accompanying notes.
unaudited interim condensed consolidated statement of cash
flows
for the six months ended 30 June 2023
Half year Half year Year ended
ended 30 ended 30 31 December
June June
2022 2022
2023 (Unaudited) (Unaudited)* (Audited)*
Notes US$'000 US$'000 US$'000
--------------------------------------- -------- ------------------ --------------- -------------
Cash flows from operating activities
Cash generated from operating
activities 2.10(b) 172,479 129,060 294,625
Income tax (paid)/received - (25) (230)
Interest paid (712) (361) (1,871)
Net cash generated from operating
activities 171,767 128,674 292,524
--------------------------------------- -------- ------------------ --------------- -------------
Cash flows from investing activities
Acquisition of property, plant
and equipment (101,618) (128,665) (263,622)
Brownfield exploration and evaluation
expenditure (6,578) (3,683) (12,175)
Finance income 2.2 1,791 214 1,214
--------------------------------------- -------- ------------------ --------------- -------------
Net cash used in investing activities (106,405) (132,134) (274,583)
--------------------------------------- -------- ------------------ --------------- -------------
Cash flows from financing activities
Cash element of share-based payments (583) (523) (523)
Dividend paid - non-controlling
interest in SGM 2.4 (46,000) (21,492) (35,492)
Dividend paid - owners of the
parent (29,100) (57,740) (86,204)
Net cash used in financing activities (75,683) (79,755) (122,219)
--------------------------------------- -------- ------------------ --------------- -------------
Net decrease in cash and cash
equivalents (10,321) (83,215) (104,278)
Cash and cash equivalents at
the beginning of the period 102,373 207,821 207,821
Effect of foreign exchange rate
changes 4,179 2,243 (1,170)
--------------------------------------- -------- ------------------ --------------- -------------
Cash and cash equivalents at
the end of the period 2.10(a) 96,231 126,849 102,373
--------------------------------------- -------- ------------------ --------------- -------------
* The comparatives at 30 June 2022 have been restated to reflect
an increase of cash generated from operating activities of $0.7m,
interest paid of $0.4m and a reduction of the effect of foreign
exchange rate changes of $0.3m. The comparatives at 31 December
2022 have been restated to reflect an increase of cash generated
from operating activities of $2.5m, interest paid of $1.9m and a
reduction of the effect of foreign exchange rate changes of
$0.6m.
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 2023
General information and basis of preparation of interim
report
1. Summary of material accounting policies
1.1 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 2022, 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 2022 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 2022 is
based on the statutory accounts for the year ended 31 December
2022. Readers are referred to the auditors' report on the Group
financial statements as at 31 December 2022 (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
2022 except for the adoption of new standards and endorsed by the
EU which apply for the first time in 2023 as referred to in the 31
December 2022 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 areas
involving significant judgement and estimates, other than those
disclosed in note 1.1 above, and set out in Note 1 of the Group's
annual audited consolidated financial statements for the year ended
31 December 2022.
1.2 Going concern
Management performed detailed analyses and forecasts to assess
the economic impact of a base case and various downside scenarios
from a going concern and viability perspective as at 31 December
2022. Based on the financial and operational performance analysis
and review done for the six-month period to 30 June 2023 the
Company is still operating within budget and guidance in terms of
production and costs. Additionally, as at 30 June 2023, management
performed similar base case and various downside scenarios without
applying any mitigating actions over a period of at least twelve
months from 26 July 2023 and an example of such mitigating measures
that was not applied would be drawdowns on the available US$150
million revolving credit facility. The scenarios modelled are as
follows:
-- Base case scenario being the financial model based on the budget;
-- Average realised gold price reduction to US$1,750/oz;
-- Fuel price increase to US$1 per litre;
-- Processing capacity reduction by 20%;
-- Processing plant recovery rate reduction by 3%; and
-- A worst case scenario with a combination of the above.
All the scenarios evaluated above had a net ending positive cash
outcome.
This base case analysis as at 30 June 2023 together with the
downside scenarios analysis outlined above, completed shortly after
a detailed analysis to support the year end going concern
assessment, was sufficient to give the Directors comfort that the
Company's financial statements for the six months ended 30 June
2023 should be prepared on a going concern basis.
However, the Group continues to monitor the business' major cost
drivers e.g., fuel and other key consumables and reagents as well
as key operational KPIs that may have an impact on going concern
and take mitigating actions where necessary. The Group continues to
benefit from a strong balance sheet with large cash balances and no
debt. At 30 June 2023 the Group had cash and cash equivalents of
US$96 million (30 June 2022: US$127 million) and had initiated a
gold price protection programme, refer to note 2.3. The Group also
had US$150 million of liquidity through the undrawn RCF.
These financial statements for the six month period ended 30
June 2023 have therefore been prepared on a going concern basis,
which contemplate the realisation of assets and liquidation of
liabilities during the normal course of operations.
1.3 Changes in critical judgements and estimates in applying the entities accounting policies
There were no updates and/or changes to critical accounting
judgements and estimates that management have made in the period in
applying the Group's accounting policies, that have a significant
effect on the amounts recognised and the disclosure of such amounts
in the financial statements. Refer to the 2022 Annual Report for
applicable critical accounting judgements or estimates.
1.4 Changes in policies and estimates
There were no changes in policies and estimates during the
reporting period.
1.5 New and amended standards and their impact to the Group
A number of new or amended standards became applicable for the
current reporting period. Where the new or amended standards were
currently applicable, the Group did not have to change its
accounting policies or make retrospective adjustments as a result
of adopting these standards. Refer to the table below for details
of these standards.
Accounting Standard Requirement Impact on financial
statements
------------------------------------------- ---------------------------
IFRS 17 Insurance IFRS 17 was issued in May 2017 No material impact
Contracts as replacement for IFRS 4 Insurance on these Group
Contracts. It requires a current unaudited interim
measurement model where estimates condensed consolidated
are remeasured in each reporting financial statements
period.
---------------------- ------------------------------------------- ---------------------------
Disclosure of The IASB amended IAS 1 to require Impact on disclosure
Accounting Policies entities to disclose their material of accounting policies
- Amendments to rather than their significant
IAS 1 and IFRS accounting policies. The amendments Requirements incorporated
Practice Statement define what is 'material accounting in these unaudited
2 policy information' and explain interim condensed
how to identify when accounting consolidated financial
policy information is material. statements
They further clarify that immaterial
accounting policy information
does not need to be disclosed.
If it is disclosed, it should
not obscure material accounting
information.
To support this amendment, the
IASB also amended IFRS Practice
Statement 2 Making Materiality
Judgements to provide guidance
on how to apply the concept of
materiality to accounting policy
disclosures.
---------------------- ------------------------------------------- ---------------------------
Definition of The amendment to IAS 8 Accounting No material impact
Accounting Estimates Policies, Changes in Accounting on these Group
- Amendments to Estimates and Errors clarifies unaudited interim
IAS 8 how companies should distinguish condensed consolidated
changes in accounting policies financial statements
from changes in accounting estimates.
The distinction is important,
because changes in accounting
estimates are applied prospectively
to future transactions and other
future events, whereas changes
in accounting policies are generally
applied retrospectively to past
transactions and other past events
as well as the current period.
---------------------- ------------------------------------------- ---------------------------
Deferred Tax The amendments to IAS 12 Income No material impact
related to Assets Taxes require companies to recognise on these Group
and Liabilities deferred tax on transactions that, unaudited interim
arising from a on initial recognition, give rise condensed consolidated
Single Transaction to equal amounts of taxable and financial statements
- Amendments to deductible temporary differences.
IAS 12 They will typically apply to transactions
such as leases of lessees and
decommissioning obligations and
will require the recognition of
additional deferred tax assets
and liabilities.
---------------------- ------------------------------------------- ---------------------------
International The amendments aim to provide No material impact
Tax Reform -Pillar temporary relief from accounting on these Group
Two Model Rules for deferred taxes arising from unaudited interim
- Amendments to the implementation of the Pillar condensed consolidated
IAS 12 Two model rules. financial statements
---------------------- ------------------------------------------- ---------------------------
The Group is within the scope of the OECD Pillar two model
rules. Pillar two legislation was recently substantively enacted in
some of the territories in which the Group operates and will come
into effect in these territories (Australia and UK) from 1 January
2024 and 1 January 2025 in Jersey. At the interim reporting date,
none of the Pillar two legislation is effective and so the Group
has no related current tax exposure. The Group has commenced their
Pillar two impact analysis but is, as yet, not in a position to
provide quantified analysis of the potential future impact.
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 the mining
of precious metals. The Board is the Group's chief operating
decision-maker within the meaning of IFRS 8 'Operating segments'.
Management has determined the operating segments based on the
information reviewed by the Board for the purposes of allocating
resources and assessing performance.
The Board considers the business from a geographic perspective
and a mining of precious metals versus exploration for precious
metals perspective. Geographically, management considers separately
the performance in Egypt, Burkina Faso, Côte d'Ivoire and Corporate
(which includes Jersey, United Kingdom and Australia). From a
mining of precious metals versus exploration for precious metals
perspective, management separately considers the Egyptian mining of
precious metals from the Egyptian and 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 and recently incorporated Egyptian 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,
with one of its entities, SGM 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
2023 (Unaudited) 2022 2022
(Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------- ---------------- ------------ -----------
Egypt 1,249,357 1,129,691 1,206,226
Burkina Faso 3 468 20
Côte d'Ivoire 1,035 873 908
Corporate 333 556 449
Total non-current assets 1,250,728 1,131,588 1,207,603
------------------------- ---------------- ------------ -----------
Additions to non-current assets mainly relate to Egypt and are
disclosed in the Property, Plant and Equipment note 2.5.
Statement of financial position by operating segment:
30 June 2023 Egypt Egypt Exploration Burkina Côte
Total Mining Faso d'Ivoire Corporate
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------------- --------- --------- ----------------- ------- --------- -----------
Statement of financial
position
Total assets 1,514,427 1,419,087 4,545 58 5,116 85,621
Total liabilities (131,057) (124,473) (804) (465) (2,306) (3,009)
----------------------- --------- --------- ----------------- ------- --------- -----------
Net assets/total
equity 1,383,370 1,294,614 3,741 (407) 2,810 82,612
----------------------- --------- --------- ----------------- ------- --------- -----------
30 June 2022 Egypt Egypt Burkina Côte
Total Mining Exploration Faso d'Ivoire Corporate
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------------- --------- --------- ----------------- ------- --------- -----------
Statement of financial
position
Total assets 1,425,790 1,344,491 2,864 1,575 2,579 74,281
Total liabilities (129,794) (127,285) (669) (1,319) (1,733) 1,212
----------------------- --------- --------- ----------------- ------- --------- -----------
Net assets/total
equity 1,295,996 1,217,206 2,195 256 846 75,493
----------------------- --------- --------- ----------------- ------- --------- -----------
31 December 2022 Egypt Egypt Burkina Côte
Total Mining Exploration Faso d'Ivoire Corporate
(Audited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------------- --------- --------- ----------------- ------- --------- -----------
Statement of financial
position
Total assets 1,493,533 1,413,266 4,057 40 4,074 72,096
Total liabilities (152,126) (142,556) (533) (470) (3,421) (5,146)
----------------------- --------- --------- ----------------- ------- --------- -----------
Net assets/total
equity 1,341,407 1,270,710 3,524 (430) 653 66,950
----------------------- --------- --------- ----------------- ------- --------- -----------
Statement of comprehensive income by operating segment:
Half-year ended 30 Egypt Egypt Exploration Burkina Côte
June 2023 Total Mining Faso* d'Ivoire Corporate
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------------- ---------- ---------- ----------------- -------- --------- -----------
Statement of comprehensive
income
Gold sales 424,684 424,684 - - - -
Silver sales 928 928 - - - -
--------------------------- ---------- ---------- ----------------- -------- --------- -----------
Revenue 425,612 425,612 - - - -
Cost of sales (267,801) (267,801) - - - -
Gross profit 157,811 157,811 - - - -
Exploration and evaluation
costs (18,923) - (2,234) (775) (15,914) -
Other operating costs (29,602) (15,397) (126) 687 (240) (14,526)
Other income 4,617 4,788 102 108 (354) (27)
Net fair value gain
on derivative financial
instruments 490 - - - - 490
Finance income 1,791 563 - - - 1,228
Finance costs (1,380) (781) (12) (1) (21) (565)
Profit/(loss) for
the period before tax 114,804 146,984 (2,270) 19 (16,529) (13,400)
Tax (10) (10) - - - -
--------------------------- ---------- ---------- ----------------- -------- --------- -----------
Profit/(loss) for
the period after tax 114,794 146,974 (2,270) 19 (16,529) (13,400)
--------------------------- ---------- ---------- ----------------- -------- --------- -----------
Profit/(loss) for
the period after tax
attributable to:
- owners of the parent
(1) 90,968 123,148 (2,270) 19 (16,529) (13,400)
- non-controlling interest
in SGM (1) 23,826 23,826 - - - -
--------------------------- ---------- ---------- ----------------- -------- --------- -----------
* The US$0.7m gain in the Burkina Faso segment relates to
intercompany loans due to Centamin West Africa Holdings Limited
(included as an expense within the Corporate segment) that were
written off in the 6 months period ended 30 June 2023. These
amounts are fully eliminated on consolidation, therefore do not
impact the overall Group results.
(1) Please note that the cost recovery model on which profit
share is based under the Concession Agreement is different to the
accounting results presented above due to various adjustments and
as such the share of profit disclosed above is not reflective of
the 55%:45% split that was in place from 1 July 2018 to 30 June
2020 and the 50%:50% split from 1 July 2020 onwards that occurs in
practice. Refer to the statement of cash flows by operating segment
below for further information on the profit share paid to EMRA.
Statement of comprehensive income by operating segment:
Half-year ended 30 Egypt Egypt Exploration Burkina Côte
June 2022 Total Mining Faso d'Ivoire Corporate
(Unaudited)* US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------- --------- --------- ----------------- ------- --------- -----------
Statement of comprehensive
income
Gold sales 381,075 381,075 - - - -
Silver sales 711 711 - - - -
------------------------------- --------- --------- ----------------- ------- --------- -----------
Revenue 381,786 381,786 - - - -
Cost of sales (257,436) (257,436) - - - -
Gross profit 124,350 124,350 - - - -
Exploration and evaluation
costs (17,574) - (500) (1,688) (15,386) -
Other operating (costs)/income (24,081) (14,187) (32) (68) (144) (9,650)
Other income 2,493 3,902 97 (10) (544) (952)
Finance income 214 (2) - - - 216
Finance costs (655) (586) (5) (1) (37) (26)
Profit/(loss) for
the period before tax 84,747 113,477 (440) (1,767) (16,111) (10,412)
Tax (10) (10) - - - -
------------------------------- --------- --------- ----------------- ------- --------- -----------
Profit/(loss) for
the period after tax 84,737 113,467 (440) (1,767) (16,111) (10,412)
Profit/(loss) for
the period after tax
attributable to:
- owners of the parent
(1) 84,737 113,467 (440) (1,767) (16,111) (10,412)
- non-controlling interest - - - - - -
in SGM (1)
------------------------------- --------- --------- ----------------- ------- --------- -----------
*In the 2022 Interim Condensed Consolidated Statement of
Comprehensive Income, Finance costs were included and disclosed in
the line 'Other operating costs', in these financial statements
they are now separately disclosed in their own line and as such
'Other operating costs' for June 2022 have changed.
(1) Please note that the cost recovery model on which profit
share is based under the Concession Agreement is different to the
accounting results presented above due to various adjustments and
as such the share of profit disclosed above is not reflective of
the 55%:45% split that was in place from 1 July 2018 to 30 June
2020 and the 50%:50% split from 1 July 2020 onwards that occurs in
practice. Refer to the statement of cash flows by operating segment
below for further information on the profit share to EMRA.
Statement of comprehensive income by operating segment:
Full-year ended 31
December 2022
Egypt Egypt Exploration Burkina Côte
Total Mining Faso d'Ivoire Corporate
(Audited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------------- --------- --------- ------------------- ------------------- ----------- -----------
Statement of comprehensive
income
Gold sales 786,921 786,921 - - - -
Silver sales 1,503 1,503 - - - -
--------------------------- --------- --------- ------------------- ------------------- ----------- -----------
Revenue 788,424 788,424 - - - -
Cost of sales (544,075) (544,075) - - - -
Gross profit 244,349 244,349 - - - -
Exploration and evaluation
costs (29,723) - (1,675) (2,928) (25,120) -
Other operating costs (49,003) (27,299) (116) (506) (326) (20,756)
Other income 6,623 8,039 196 (168) (666) (778)
Finance income 1,214 99 - - - 1,115
Finance costs (2,459) (1,098) (19) (2) (58) (1,282)
Impairment of intra-group
loans - - - 140,623 - (140,623)
Profit/(loss) for
the year before tax 171,001 224,090 (1,614) 137,019 (26,170) (162,324)
Tax (226) (226) - - - -
--------------------------- --------- --------- ------------------- ------------------- ----------- -----------
Profit/(loss) for
the year after tax 170,775 223,864 (1,614) 137,019 (26,170) (162,324)
--------------------------- --------- --------- ------------------- ------------------- ----------- -----------
Profit/(loss) for
the year after tax
attributable to:
- owners of the parent
(1) 72,490 125,579 (1,614) 137,019 (26,170) (162,324)
- non-controlling interest
in SGM (1) 98,285 98,285 - - - -
--------------------------- --------- --------- ------------------- ------------------- ----------- -----------
(1) Please note that the cost recovery model on which profit
share is based under the Concession Agreement is different to the
accounting results presented above due to various adjustments and
as such the share of profit disclosed above is not reflective of
the 55%:45% split that was in place from 1 July 2018 to 30 June
2020 and the 50%:50% split from 1 July 2020 onwards that occurs in
practice. Refer to the statement of cash flows by operating segment
below for further information on the profit share to EMRA.
All gold and silver sales during the period were made to a
single customer in North America, Asahi Refining Canada Ltd.
Statement of cash flows by operating segment:
Half year ended 30 June 2023 Egypt Egypt Burkina Côte Corporate
Total Mining Exploration Faso d'Ivoire (1)
(1) (1)
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
---------------------------- ---------- ---------- ------------ ------- ------------------- --------------------
Statement of cash flows
Net cash generated
from/(used
in) operating activities 171,767 210,645 (54) 73 (629) (38,268)
Net cash (used in)/generated
from investing activities (106,405) (107,523) (165) - (259) 1,542
Net cash (used in)/generated
from financing activities
Cash element - Share Based
Payments (583) - - - - (583)
Dividend paid -
non-controlling
interest in SGM (46,000) (46,000) - - - -
Dividend (paid)/received -
intragroup - (78,034) - - - 78,034
Dividend paid - owners of
the
parent (29,100) - - - - (29,100)
---------------------------- ---------- ---------- ------------ ------- ------------------- --------------------
Net (decrease)/increase in
cash
and cash equivalents (10,321) (20,912) (219) 73 (888) 11,625
Cash and cash equivalents at
the beginning of the period 102,373 27,373 1,971 1 1,422 71,606
Effect of foreign exchange
rate
changes 4,179 5,248 193 (19) (249) (994)
---------------------------- ---------- ---------- ------------ ------- ------------------- --------------------
Cash and cash equivalents at
the end of the period 96,231 11,709 1,945 55 285 82,237
---------------------------- ---------- ---------- ------------ ------- ------------------- --------------------
(1) Please note that the cash generated by operating activities
for Burkina Faso and Côte d'Ivoire are affected by the movements in
working capital, specifically intercompany loans, with its direct
parent entity Centamin West Africa Holdings Limited which is
included within the corporate segment.
Statement of cash flows by operating segment (continued):
Half year ended 30 June 2022 Egypt Egypt Burkina Côte
Total Mining Exploration Faso d'Ivoire Corporate
(1) (2) (2) (1),(2)
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------------ --------- --------- ------------ ------- --------- -----------
Statement of cash flows
Net cash generated from/(used
in) operating activities 128,674 181,173 1,297 15 638 (54,449)
Net cash (used in)/generated
from investing activities (132,134) (130,764) (1,148) - (436) 214
Net cash (used in)/generated
from financing activities
Cash element - Share Based Payments (523) - - - - (523)
Dividend paid - non-controlling
interest in SGM (21,492) (21,492) - - - -
Dividend paid - owners of the
parent (57,740) - - - - (57,740)
------------------------------------ --------- --------- ------------ ------- --------- -----------
Net (decrease)/increase in cash
and cash equivalents (83,215) 28,917 149 15 202 (112,498)
Cash and cash equivalents at
the beginning of the period 207,821 13,609 935 5 859 192,413
Effect of foreign exchange rate
changes 2,243 4,495 114 (16) (449) (1,901)
------------------------------------ --------- --------- ------------ ------- --------- -----------
Cash and cash equivalents at
the end of the period 126,849 47,021 1,198 4 612 78,014
------------------------------------ --------- --------- ------------ ------- --------- -----------
(1) The comparatives at 30 June 2022 have been restated to
reflect an increase of cash generated from operating activities of
$0.7m, interest paid of $0.4m and a reduction of the effect of
foreign exchange rate changes of $0.3m.
(2) Please note that the cash generated by operating activities
for Burkina Faso and Côte d'Ivoire are affected by the movements in
working capital, specifically intercompany loans, with its direct
parent entity Centamin West Africa Holdings Limited which is
included within the corporate segment.
Year ended 31 December 2022 Egypt Egypt Burkina Côte
Total Mining Exploration Faso d'Ivoire Corporate
(1) (2) (2) (1)(2)
(Audited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------------------------------- --------- --------- ------------ ------- --------- -----------
Statement of cash flows
Net cash generated from/(used
in) operating activities 292,524 321,542 1,912 (2,644) 1,673 (29,959)
Net cash (used in)/generated
from investing activities (274,583) (274,120) (976) - (595) 1,108
Net cash used in financing activities
Cash element of share-based payments (523) - - - - (523)
Dividend paid - non-controlling
interest in SGM (35,492) (35,492) - - - -
Dividend paid - owners of the
parent (86,204) - - - - (86,204)
-------------------------------------- --------- --------- ------------ ------- --------- -----------
Net (decrease)/increase in cash
and cash equivalents (104,278) 11,930 936 (2,644) 1,078 (115,578)
Cash and cash equivalents at
the beginning of the year 207,821 13,609 935 5 859 192,413
Effect of foreign exchange rate
changes (1,170) 1,834 100 2,640 (515) (5,229)
-------------------------------------- --------- --------- ------------ ------- --------- -----------
Cash and cash equivalents at
the end of the year 102,373 27,373 1,971 1 1,422 71,606
-------------------------------------- --------- --------- ------------ ------- --------- -----------
(1) The comparatives at 31 December 2022 have been restated to
reflect an increase of cash generated from operating activities of
$2.5m, interest paid of $1.9m and a reduction of the effect of
foreign exchange rate changes of $0.6m.
(2) Please note that the cash generated by operating activities
for Burkina Faso and Côte d'Ivoire are affected by the movements in
working capital, specifically intercompany loans, with its direct
parent entity Centamin West Africa Holdings Limited which is
included within the corporate segment.
Exploration expenditure by operating segment
The following table provides a breakdown of the total
exploration expenditure of the Group by operating segment:
Half year Half year Year ended
ended 30 ended 31 December
June 30 June
2022 2022
2023 (Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------- ----------------- ------------ ------------
Côte d'Ivoire 15,914 15,386 25,120
Egypt - Exploration 2,234 500 1,675
Burkina Faso 775 1,688 2,928
------------------------------------- ----------------- ------------ ------------
Exploration expenditure - greenfield 18,923 17,574 29,723
Egypt - Mining 6,578 3,683 12,175
Exploration expenditure - brownfield 6,578 3,683 12,175
Total exploration expenditure 25,501 21,257 41,898
------------------------------------- ----------------- ------------ ------------
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
2022 2022
2023 (Unaudited) (Unaudited)* (Audited)
US$'000 US$'000 US$'000
--------------------------- ----------------- ------------- ------------
Other income
Net foreign exchange gains 4,464 2,452 6,559
Other income 153 41 64
4,617 2,493 6,623
--------------------------- ----------------- ------------- ------------
Finance income 1,791 254 1,214
Finance costs (1,380) (654) (2,459)
--------------------------- ----------------- ------------- ------------
Expenses
Cost of sales
Mine production costs (188,344) (192,090) (408,543)
Movement in inventory (716) 2,419 10,659
Depreciation and amortisation (78,741) (67,765) (146,191)
------------------------------ --------- --------- ---------
(267,801) (257,436) (544,075)
------------------------------ --------- --------- ---------
Other operating costs
Corporate compliance (2,248) (1,320) (2,869)
Fees payable to the external auditors (465) (493) (895)
Corporate consultants (2,581) (1,378) (2,697)
Salaries and wages (5,605) (6,677) (11,979)
Employee equity settled share-based payments (2,852) (1,256) (2,570)
Other administration expenses (1,212) (656) (3,272)
Corporate costs (sub-total) (14,963) (11,780) (24,282)
Other provisions 29 (32) 1,180
Net movement on provision for stock obsolescence 419 - (579)
Other non-corporate operating expenses (2,354) (590) (1,480)
Royalty - attributable to the ARE government (12,733) (11,679) (23,842)
(29,602) (24,081) (49,003)
------------------------------------------------- -------- -------- --------
* In the 2022 Interim Condensed Consolidated Statement of
Comprehensive Income, Finance costs were included and disclosed in
the line 'Other operating costs', in these financial statements
they are now separately disclosed in their own line and as such
'Other operating costs' for 2022 have changed.
2.3 Derivative financial instruments
On 14 June 2023, the Company entered into put option contracts
whereby it purchased a series of gold put option contracts (the
"commodity contracts"). A total of US$2.5 million, was paid to BMO,
the counterparty as a premium on entering into the contracts. By
entering into these contracts, the Company was able to ensure it
can reasonably protect the Group's cash flows by initiating a gold
price protection program for the contracted ounces at these prices
over the six-month period to year end.
The details of the commodity contracts opened and outstanding as
at 30 June 2023, are as follows:
Commodity contract Quantity Contract Term Strike Premium Mark-to-Market MtM Adjustment
type (1) (Oz) price Paid ("MtM")
per Oz
(1)(2)
$US $US'000 $US'000 $US
Gold put option 1 Jul 23 to
- purchased 20,000 31 Jul 23 1,900 423 140 (283)
---------- --------------- -------- ---------- ---------------- ----------------
Gold put option 1 Aug 23 to
- purchased 20,000 31 Aug 23 1,900 423 354 (69)
---------- --------------- -------- ---------- ---------------- ----------------
Gold put option 1 Sep 23 to
- purchased 20,000 30 Sep 23 1,900 423 494 71
---------- --------------- -------- ---------- ---------------- ----------------
Gold put option 1 Oct 23 to
- purchased 20,000 31 Oct 23 1,900 423 600 177
---------- --------------- -------- ---------- ---------------- ----------------
Gold put option 1 Nov 23 to
- purchased 20,000 30 Nov 23 1,900 423 683 260
---------- --------------- -------- ---------- ---------------- ----------------
Gold put option 1 Dec 23 to
- purchased 20,000 31 Dec 23 1,900 423 757 334
---------- --------------- -------- ---------- ---------------- ----------------
Total/W. Avg 120,000 1,900 2,538 3,028 490
---------- --------------- -------- ---------- ---------------- ----------------
1. Quantities and strike prices do not fluctuate by month within each calendar year
2. Contracts are exercisable based on the average price for the
month being below the strike price of the put.
The resulting fair values of the outstanding commodity contracts
at 30 June 2023, have been recognised, in derivative assets on the
consolidated statement of financial position. These derivative
instruments were not designated as hedges by the Company and are
marked-to-market at the end of each reporting period with the
mark-to-market adjustment recorded in the consolidated profit or
loss.
The commodity contracts are marked-to-market using a valuation
model which uses quoted observable inputs and are classified as
Level 2 in the fair value hierarchy. During the six months ended 30
June 2023, a total of $US0.5 million in unrealised fair value gains
on the commodity contracts was recognised in the consolidated
profit or loss.
2.4 Non-controlling interest in SGM
EMRA is a 50% shareholder in SGM and is entitled to a share of
50% of SGM's net production surplus which can be defined as
'revenue less payment of the fixed royalty to the Arab Republic of
Egypt (ARE) and recoverable costs'.
Earnings attributable to the non-controlling interest in SGM
(i.e., EMRA) are pursuant to the provisions of the Concession
Agreement (CA) and are recognised as profit attributable to the
non-controlling interest in SGM in the attribution of profit
section of the statement of comprehensive income of the Group. The
profit share payments during the year will be reconciled against
SGM's audited financial statements. The SGM financial statements
for the year ended 30 June 2023 have not been signed off at the
date of this report and are in the process of being audited.
Certain terms of the CA and amounts in the cost recovery model
may also vary depending on interpretation, and are therefore
subject to continued discussions between EMRA and management which
can result in variations in the profit sharing split between
periods.
a) Statement of comprehensive income and statement of financial position impact
Half year Half year Year ended
ended 30 ended 31 December
June 30 June
2022 2022
2023 (Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------------- ----------------- ------------ ------------
Statement of comprehensive income
Profit for the period after tax attributable
to the non-controlling interest in SGM(1) 23,826 - 98,285
------------------------------------------------- ----------------- ------------ ------------
Statement of financial position
Total equity attributable to the non-controlling
interest in SGM(1) (opening) 22,537 (40,256) (40,256)
Profit for the period after tax attributable
to the non-controlling interest in SGM(1) 23,826 - 98,285
Dividend paid - non-controlling interest
in SGM (46,000) (21,492) (35,492)
------------------------------------------------- ----------------- ------------ ------------
Total equity attributable to the non-controlling
interest in SGM(1) (closing) 363 (61,748) 22,537
------------------------------------------------- ----------------- ------------ ------------
(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
2022 2022
2023 (Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
----------------------------------------- ----------------- ------------ ------------
Statement of cash flows
Dividend paid - non-controlling interest
in SGM(1) (46,000) (21,492) (35,492)
----------------------------------------- ----------------- ------------ ------------
(2) Profit share commenced during the third quarter of 2016. The
first two years was a 60:40 split of net production surplus to PGM
and EMRA respectively. From 1 July 2018 this changed to a 55:45
split for the next two-year period until 30 June 2020, after which
all net production surpluses will be split 50:50.
EMRA and PGM benefit from advance distributions of profit share
which are made on a weekly or fortnightly basis and proportionately
in accordance with the terms of the CA. Future distributions will
take into account ongoing cash flows, historical costs that are
still to be recovered and any future capital expenditure. All
profit share payments will be reconciled against SGM's audited June
financial statements for current and future periods.
2.5 Property, plant and equipment
Mine Capital
Half year ended 30 June Office Plant Mining development work
2023 and in
(Unaudited) equipment Buildings equipment equipment properties progress Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------------- --------- --------- --------- --------- ----------- --------- -----------
Cost
Balance at 1 January 2023 8,151 21,701 635,376 383,521 1,009,754 78,804 2,137,307
Additions 34 68 33 289 - 101,194 101,618
Additions: IFRS16 right
of use assets - - 66 - - - 66
Transfers from capital
work in progress 485 1,981 46,375 11,235 69,817 (129,893) -
Transfer from exploration
and evaluation asset - - - - 6,578 - 6,578
Disposals (314) - - (35,936) - - (36,250)
Disposals: IFRS16 right
of use assets - - (156) - - - (156)
Balance at 30 June 2023 8,356 23,750 681,694 359,109 1,086,149 50,105 2,209,163
--------------------------- --------- --------- --------- --------- ----------- --------- -----------
Accumulated depreciation
and amortisation
Balance at 1 January 2023 (6,634) (3,573) (308,034) (288,521) (443,896) - (1,050,658)
Depreciation and
amortisation (479) (1,315) (20,044) (20,394) (36,790) - (79,022)
Disposals 309 - 140 34,068 - - 34,517
Balance at 30 June 2023 (6,804) (4,888) (327,938) (274,847) (480,686) - (1,095,163)
--------------------------- --------- --------- --------- --------- ----------- --------- -----------
Year ended 31 December
2022 (Audited)
Cost
Balance at 1 January 2022 9,243 13,823 625,077 359,467 816,224 85,003 1,908,837
Additions 127 1,041 526 281 - 261,647 263,622
Additions: IFRS 16 right
of use assets - 2,342 1,399 4,005 - - 7,746
Decrease in rehabilitation
asset - - - - (5,839) - (5,839)
Transfers from capital
work in progress 508 6,587 10,808 63,201 186,742 (267,846) -
Transfers from exploration
and evaluation asset - - - - 12,627 - 12,627
Disposals (1,727) (1,019) (2,434) (43,294) - - (48,474)
Disposals: IFRS16 right
of use assets - (1,073) - (139) - - (1,212)
Balance at 31 December
2022 8,151 21,701 635,376 383,521 1,009,754 78,804 2,137,307
--------------------------- --------- --------- --------- --------- ----------- --------- -----------
Accumulated depreciation
and amortisation
Balance at 1 January 2022 (7,543) (3,026) (275,640) (288,323) (378,088) - (952,620)
Depreciation and
amortisation (818) (2,221) (34,467) (43,455) (65,808) - (146,769)
Disposals 1,727 1,674 2,073 43,257 - - 48,731
--------------------------- --------- --------- --------- --------- ----------- --------- -----------
Balance at 31 December
2022 (6,634) (3,573) (308,034) (288,521) (443,896) - (1,050,658)
--------------------------- --------- --------- --------- --------- ----------- --------- -----------
Net book value
As at 31 December 2022 1,517 18,128 327,342 95,000 565,858 78,804 1,086,649
--------------------------- --------- --------- --------- --------- ----------- --------- -----------
As at 30 June 2023 1,552 18,862 353,756 84,262 605,462 50,105 1,114,000
--------------------------- --------- --------- --------- --------- ----------- --------- -----------
As at 30 June 2023, the Group has contractual commitments for
capital expenditure for the remainder of the year amounting to
US$47 million.
Included within the depreciation charge for the period in
relation to ROU assets is US$0.5 million for buildings and US$0.6
million related to plant and equipment (2022: US$0.3 million
buildings and US$0.4 million plant and equipment).
The net book value of the assets in the note above includes the
following amounts relating to ROU assets on leases; US$1.9 million
(2022: US$2.4 million) within buildings, US$0.5 million (2022:
US$0.6 million) within plant and equipment and US$3.4 million
(2022: US$3.8 million) within mining equipment.
Deferred stripping assets of US$54 million (2022: US$63 million)
were recognised in the six-month period ended 30 June 2023, which
have been included in mine development properties, US$18 million
(2022: US$10 million) of amortisation has been recognised in the
same period.
Management has considered a number of factors when concluding on
whether an impairment trigger existed as at 30 June 2023.
Notwithstanding the fact that the carrying value of the Group's net
assets exceeded its market capitalisation as at 30 June 2023,
management noted that the fall in share price is consistent with an
industry-wide trend, and that there have not been significant
operational issues at Sukari in the period, and the Group remains
on track to achieve its annual production guidance, with costs in
line with forecasts. As such, management has concluded that there
is not an impairment trigger relating to the Sukari CGU as at 30
June 2023.
Assets that have been cost recovered under the terms of the CA
in Egypt are included on the statement of financial position under
property, plant and equipment as the Company will use them until
the expiration of the CA.
2.6 Exploration and evaluation asset
30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------ ------------- ------------ -----------
Balance at the beginning of the year 24,809 25,261 25,261
Expenditure for the period 6,578 3,683 12,175
Transfer to property, plant and equipment (6,578) (3,683) (12,627)
Balance at end of the period 24,809 25,261 24,809
------------------------------------------ ------------- ------------ -----------
The exploration and evaluation asset relates to the drilling,
geological exploration and sampling of potential ore reserves and
can all be attributed to Egypt.
In accordance with the requirements of IAS 36 'Impairment of
Assets' and IFRS 6 'Exploration for and evaluation of mineral
resources' exploration assets are assessed for impairment when
facts and circumstances (as defined in IFRS 6 'Exploration for and
evaluation of mineral resources') suggest that the carrying amount
of exploration and evaluation asses may exceed its recoverable
amount.
An impairment trigger assessment was performed as at 30 June
2023 on the exploration and evaluation assets and no impairment
triggers were identified.
2.7 Inventories
30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
--------------------------------------------- ------------- ------------ -----------
Non-current
Mining stockpiles 110,337 78,823 94,773
--------------------------------------------- ------------- ------------ -----------
Current
Mining stockpiles, ore in circuit, doré
supplies 24,556 48,546 40,836
Stores inventory 93,596 82,860 99,733
Provision for obsolete stores inventory (6,085) (5,925) (6,504)
112,067 125,481 134,065
--------------------------------------------- ------------- ------------ -----------
The calculation of weighted average costs of mining stockpiles
is applied at a detailed level. The open pit ore on the Mine ROM is
split into seven different grade categories and the underground ore
is treated as a single high-grade category. Each grade category is
costed individually on a weighted average basis applying costs
specifically related to extracting and moving that grade of ore to
and from the Mine ROM pad. The grade categories range from
high-grade underground and open pit ore to low-grade open pit ore.
Costs per contained ounce differ between the various cost
categories.
Currently at Sukari, low grade-low (0.4 to 0.5g/t) open pit
stockpile material above the cut-off grade of 0.4g/t has been
classified as follows on the statement of financial position:
-- No low-grade-low stockpiles are in the current inventory
balance as none are scheduled to be processed within the next
twelve months; and
-- 14.6Mt at 0.45g/t to non-current assets as these ore tonnes
are not scheduled to be processed within the next twelve months
2.8 Provisions
30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------- ------------- ------------ -----------
Current
Employee benefits(1) 2,429 1,981 2,276
Other current provisions(2) 525 1,385 980
2,954 3,366 3,256
------------------------------------------- ------------- ------------ -----------
Non -- current
Restoration and rehabilitation(3) 38,064 42,941 37,396
Other non-current provisions - 32 29
38,064 42,973 37,425
------------------------------------------- ------------- ------------ -----------
Movement in restoration and rehabilitation
provision
Balance at beginning of the year 37,396 42,647 42,647
Decrease in provision - - (5,839)
Interest expense - unwinding of discount 668 294 588
------------------------------------------- ------------- ------------ -----------
Balance at end of the period 38,064 42,941 37,396
------------------------------------------- ------------- ------------ -----------
1) Employee benefits relate to annual, sick, and long service leave entitlements and bonuses.
2) Provision for customs, rebates and withholding taxes.
3) The provision for restoration and rehabilitation is as per
the 31 December 2022 assessment. At that date, the provision was
discounted at 3.63% (2021: 1.38%) using a US$ applicable rate and
inflation applied at 2.37% (2021: 2.5%). The annual review
undertaken as at 31 December 2022 resulted in a US$5.8 million
decrease in the provision (2021: US$21.9 million increase). The key
assumptions within the estimate, the various ranges and further
details are disclosed in note 1.3.6 in the 2022 Annual Report. No
updates to the provision were made in H1 2023 other than the
unwinding of the interest.
As at 30 June 2023, the work is ongoing to reliably estimate the
value of incremental costs required to achieve the Group's
conformance with the new standard, the Global Industry Standard for
Tailings Management ("GISTM") and hence no incremental
rehabilitation provision has been recognised. The Group's progress
will be reassessed at year end by which time the Group expects to
be in a position to estimate the value of these incremental
costs.
2.9 Trade and other payables
30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
----------------------------------- ------------- ------------ -----------
Non-Current
Other creditors(1) 8,814 12,179 11,801
8,814 12,179 11,801
----------------------------------- ------------- ------------ -----------
Current
Trade payables 34,856 30,914 43,493
Other creditors and accruals(1)(2) 46,110 40,125 55,902
80,966 71,039 99,395
----------------------------------- ------------- ------------ -----------
(1) Included within non-current other creditors and current
other creditors and accruals is $4.8m (2022: $7.3m) and $4.9m (2022
$4.9m) respectively in relation to the remaining instalments of a
$17.6m settlement agreement signed with EMRA in 2021. By its
nature, elements of the cost recovery mechanism within the
Concession Agreement are subject to interpretation and ongoing
audits by EMRA. It is possible that future settlement agreements
may be agreed with EMRA in relation to historic items. The
Directors have assessed that it is not probable that any additional
settlements with EMRA will be required as at 30 June 2023, and
therefore no additional provisions have been recognised within
these financial statements.
Also included within current and non-current other creditors are
lease liabilities of US$2m and US$3.8m respectively.
(2) Included within the current other creditors is a US$8m
decrease in SGM's stock and non-stock item accruals as at 30 June
2023 as compared to 31 December 2022 mainly driven by comparatively
some cost reductions on locally sourced inputs due to the
devaluation of the EGP currency, lower diesel unit prices and a
stabilised owner operated model.
2.10 Cash flow information
(a) Reconciliation of cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash
equivalents includes cash on hand and at bank and short-term
deposits of less than 90 days maturity on inception.
30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
------------------------------------------ ------------- ------------ -----------
Cash and cash equivalents - per statement
of cash flows and
statement of financial position 96,231 126,849 102,373
96,231 126,849 102,373
------------------------------------------ ------------- ------------ -----------
(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
2023 2022 2022
(Unaudited) (Unaudited)(1) (Audited)
(1)
US$'000 US$'000 US$'000
----------------------------------------- --------------- --------------- ------------
Profit for the period before tax 114,804 84,747 171,001
Adjusted for:
Depreciation/amortisation of property,
plant and equipment 79,022 68,054 146,769
Inventory written off 204 - 2
Inventory obsolescence provision (419) - 579
Foreign exchange gains, net (4,463) (2,452) (6,559)
Fair value gain on derivative financial
instruments (490) - -
Share -- based payments expense 2,268 1,256 2,570
Finance income (1,791) (214) (1,214)
Finance costs 1,380 655 2,459
Loss on disposal of property, plant
and equipment 1,855 301 899
Changes in working capital during
the period:
(Decrease)/increase in trade and
other receivables (3,632) 3,801 (3,049)
Increase/(decrease) in inventories 6,853 (10,828) (35,940)
Increase/(decrease) in prepayments 540 (6,040) (7,172)
Purchase of derivative financial
instruments (2,538) - -
Decrease in trade and other payables (21,481) (9,263) 25,053
Increase/(decrease) in provisions 367 (957) (773)
----------------------------------------- --------------- --------------- ------------
Cash flows generated from operating
activities 172,479 129,060 294,625
----------------------------------------- --------------- --------------- ------------
(1) The comparatives as at 30 June 2022 and 31 December 2022
have been restated to reflect finance costs of US$0.6m and US$2.5m
respectively, now added back to cash flows from operating
activities.
(c) Non -- cash financing and investing activities
During the period there have been no non -- cash financing and
investing activities.
3. Unrecognised items
3.1 Contingent liabilities
There have been no significant changes to the Concession
agreement court case and the EMRA position since the issuance of
the 2022 annual report, for further information and disclosure on
this matter please refer to the 31 December 2022 Annual Report.
3.2 Subsequent events
The Directors declared an interim dividend of 2.0 US cents per
share on Centamin plc ordinary shares (totalling approximately
US$23 million). The interim dividend for the half year period ended
30 June 2023 will be paid on 29 September 2023 to shareholders on
the register on the Record Date of 1 September 2023.
On 20 July 2023, the Company entered into a second series of six
put option contracts for a total of 120,000 ounces i.e., 20,000
ounces for each month beginning 1 January 2024 to 30 June 2024 at a
strike price of US$1,900/oz as part of the Gold Price Protection
Programme. A total of US$3.6 million, was paid to HSBC, the
counterparty as a premium on entering into the contracts.
Other than the above, there were no other significant events
occurring after the reporting date requiring disclosure in the
financial statements.
4. Other information
4.1 Contributions to Egypt
Gold sales agreement
On 20 December 2016, SGM entered into a contract with the
Central Bank of Egypt ("CBE"). The agreement provides that the
parties may jointly elect, on a monthly basis, for the CBE to
supply SGM with its local Egyptian currency requirements for that
month to a maximum value of EGP80 million (2022: EGP80 million). In
return, SGM facilitates the purchase of refined gold bullion for
the CBE from SGM's refiner, Asahi Refining Canada Ltd. This
transaction has been entered into as SGM requires local currency
for its operations in Egypt (it receives its revenue for gold sales
in US dollars). Sixty-two transactions have been entered into at
the date of this report, five of which occurred in the six months
ended 30 June 2023, pursuant to this agreement, and the values
related thereto are as follows:
30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
--------------- ------------- ------------ -----------
Gold purchased 12,993 27,515 50,497
Refining costs 7 15 28
Freight costs 20 28 56
--------------- ------------- ------------ -----------
13,020 27,558 50,581
--------------- ------------- ------------ -----------
30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
Oz Oz Oz
--------------- ------------- ------------ -----------
Gold purchased 6,752 14,596 27,907
--------------- ------------- ------------ -----------
At 30 June 2023 the net receivable in EGP owing from the Central
Bank of Egypt is approximately the equivalent of US$16,062 (30 June
2022: US$42,922 net payable and 31 December 2022: US$23,681
receivable).
-END-
[1] The Company publishes profitability performance metrics on a
bi-annual basis.
[2] Please refer to subsequent events for further disclosure on
the extended gold protection programme.
[3] Defined as Sukari growth capex funded from Treasury and
available for cost-recovery as per the Concession Agreement. The
FY23 estimated growth capex funded from treasury is US$53m
[4] Discretionary capital allocation options include future
project investment, portfolio optimisation, supplemental
shareholder returns
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 DZGZNVKNGFZM
(END) Dow Jones Newswires
July 26, 2023 02:00 ET (06:00 GMT)
Centamin (LSE:CEY)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Centamin (LSE:CEY)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
