18 April
2024
Centamin plc
("Centamin", "Group" or "the
Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 31 March
2024
MARTIN HORGAN, CEO, commented: "The
scheduled
processing of lower-grade ore from the open pit, alongside the
planned underground ventilation upgrades and mill maintenance
during Q1 contributed to slightly lower production year-on-year
("YoY"). Our commitment to cost control meant our AISC on an
absolute basis decreased 3% quarter-on-quarter ("QoQ") and 6% YoY;
albeit the lower production coupled with the timing of gold sales
resulted in a temporary increase in reported unit costs. With
improved ventilation and the processing of lower grade open pit ore
substantially completed during Q1, we expect production rates to
now increase for the balance of the year and reaffirm our 2024
production and cost guidance ranges.
We
continue to advance organic growth opportunities within our
portfolio. We are actively following up on the recent exploration
successes from our Eastern Desert Exploration ("EDX") drilling
programme and are progressing well towards completion of the DFS
for the Doropo project in Cote d'Ivoire by
mid-year."
HIGHLIGHTS
●
|
Group safety record of 12.5
million hours worked without a lost time injury ("LTI").
Regrettably, late in the quarter we recorded our first LTI in
twelve months at the Sukari Gold Mine ("Sukari"). The lost time
injury frequency rate ("LTIFR") for the three months to 31 March
2024 ("Q1") was 0.32 per one million hours worked. The Group's
total recordable injury frequency rate ("TRIFR") for Q1 was 1.28
per one million hours worked.
|
●
|
ISO
45001 Certification achieved,
providing external validation for Sukari's occupational health and
safety ("OHS") management system.
|
●
|
Gold production of 104,821 ounces ("oz"), and gold sales
92,494 oz from the Sukari Gold Mine
("Sukari"), with 19,241 oz of gold bullion on hand, which was sold
at the start of the second quarter.
|
●
|
Cash costs of US$1,088/oz produced, and All-in sustaining costs
("AISC") of US$1,519/oz sold, based on 92,494 ounces sold,
noting that on an absolute basis AISC was US$9 million lower
QoQ.
|
●
|
Doropo Environmental and Social Impact Assessment ("ESIA")
submitted to the Cote d'Ivoire
government, which alongside the DFS, will form the basis for the
mining license application in mid-2024.
|
●
|
Capital expenditure ("capex") of US$46 million,
including raising TSF2, open pit and underground
fleet purchases, equipment rebuilds, underground ventilation
upgrades and waste mining.
|
●
|
Robust balance sheet: cash and
liquid assets of US$167 million, as at 31 March 2024 and total
liquidity of US$317 million including the undrawn US$150 million
sustainability-linked revolving credit facility.
|
RESULTS SUMMARY
|
Q1 2024
|
Q1
2023
|
% Δ
|
Q4
2023
|
% Δ
|
SAFETY
|
|
|
|
|
|
Group LTIFR (1m hours)
|
0.32
|
0.31
|
3%
|
0.00
|
-
|
Group TRIFR (1m hours)
|
1.28
|
2.77
|
-54%
|
0.97
|
32%
|
OPEN
PIT
|
|
|
|
|
|
Total material mined (kt)
|
31,772
|
32,998
|
-4%
|
32,229
|
-1%
|
Ore mined (kt)
|
6,231
|
3,273
|
90%
|
5,401
|
15%
|
Ore grade mined (g/t Au)
|
0.63
|
0.87
|
-28%
|
0.67
|
-6%
|
UNDERGROUND
|
|
|
|
|
|
Ore mined (kt)
|
230
|
236
|
-3%
|
301
|
-24%
|
Ore grade mined (g/t Au)
|
3.20
|
4.02
|
-20%
|
4.31
|
-26%
|
|
Q1 2024
|
Q1
2023
|
% Δ
|
Q4
2023
|
% Δ
|
PROCESSING
|
|
|
|
|
|
Ore processed (kt)
|
3,066
|
3,006
|
2%
|
3,152
|
-3%
|
Feed grade (g/t Au)
|
1.12
|
1.2
|
-7%
|
1.35
|
-17%
|
Gold recovery (%)
|
87.66
|
88.8
|
-1%
|
89.1
|
-2%
|
Gold production (oz)
|
104,821
|
105,875
|
-1%
|
128,127
|
-18%
|
COST
& SALES
|
|
|
|
|
|
Gold sold (oz)
|
92,494
|
107,661
|
-14%
|
133,465
|
-31%
|
Cash costs (US$000)
|
114,041
|
99,205
|
15%
|
117,236
|
-3%
|
Cash costs (US$/oz
produced)
|
1,088
|
937
|
16%
|
915
|
19%
|
AISC (US$000)
|
140,453
|
145,127
|
-3%
|
149,481
|
-6%
|
AISC (US$/oz sold)
|
1,519
|
1,348
|
13%
|
1,120
|
36%
|
Realised gold price
(US$/oz)
|
2,062
|
1,902
|
8%
|
1,983
|
4%
|
FINANCIALS
|
|
|
|
|
|
Revenue (US$000)
|
190,984
|
205,226
|
-7%
|
264,710
|
-28%
|
Capital expenditure
(US$'000)
|
46,040
|
53,842
|
-14%
|
37,868
|
22%
|
Free Cash Flow (US$'000)
|
10,345
|
36,501
|
-72%
|
-13,905
|
174%
|
OUTLOOK - Guidance
unchanged
●
|
Gold production guidance range of
470,000 to 500,000 oz per annum weighted towards H2
|
●
|
Cost
guidance:
○ Cash cost guidance range of
US$700-850/oz produced
○ AISC guidance range of
US$1,200-1,350/oz sold
○ Guidance reflects a range of
diesel prices from 75-90 US cents per litre
|
●
|
Adjusted capex guidance is US$215m,
including:
○ US$112m of sustaining
capex
○ US$103m of non-sustaining
capex, of which US$58m is allocated to growth projects that are
funded from Centamin treasury and cost recovered over three
years
○ Adjusted capex excludes
US$91m of sustaining deferred stripping reclassified from operating
costs as per IFRIC 20
|
KEY
MILESTONES
●
|
Doropo Project, Cote d'Ivoire,
completed DFS (mid-2024)
|
●
|
Accelerated waste-stripping
programme completion (Q2-2024)
|
●
|
EDX exploration update (H2
2024)
|
●
|
Sukari 50MW grid connection project
construction (H2 2024)
|
●
|
Completion of Solar Expansion Study
(H2 2024)
|
WEBCAST
The Company will host a webcast
today, Thursday, 18 April at 08.30 BST where the senior executives
will discuss the results, followed by an opportunity to ask
questions.
Webcast link:
https://www.lsegissuerservices.com/spark/Centamin/events/cf209c2f-3aea-42b2-bc7c-a6d32d8775bd
Please allow a few minutes to
register
Print friendly version of the
quarterly results: https://www.centamin.com/investors/results-reports/
ABOUT CENTAMIN
Centamin is an established gold
producer, with premium listings on the London Stock Exchange and
Toronto Stock Exchange. The Company's flagship asset is the Sukari
Gold Mine ("Sukari"), Egypt's largest and first modern gold mine,
as well as one of the world's largest producing mines. Since
production began in 2009 Sukari has produced over 5.7 million
ounces of gold, and today has a projected mine life to
2035.
Through its large portfolio of
exploration assets in Egypt and Cote d'Ivoire, Centamin is
advancing an active pipeline of future growth prospects, including
the Doropo project in Côte d'Ivoire, and over 3,000km2 of highly
prospective exploration ground in Egypt's Arabian Nubian
Shield.
Centamin practices responsible
mining activities, recognising its responsibility to deliver
operational and financial performance and create lasting mutual
benefit for all stakeholders through good corporate
citizenship.
FOR
MORE INFORMATION please visit the
website www.centamin.com or contact:
Centamin plc
Michael Stoner, Head of
Corporate
investor@centaminplc.com
FTI
Consulting
Ben Brewerton / Sara Powell / Nick
Hennis
+442037271000
centamin@fticonsulting.com
HEATH AND SAFETY
At Sukari there were two significant
achievements during the quarter. Firstly, surpassing a new LTI
(Lost Time Injury) free record of 12.5 million hours, outperforming
the previous benchmark of 9.8 million hours established in March
2023. Secondly, achieving external accreditation of our
Occupational Health and Safety (OHS) management system under ISO
45001:2018 standards, demonstrating our commitment to prioritising
the health and safety of our workforce and stakeholders.
In Q1, there was one lost time
injury ("LTI") resulting in a Group LTIFR of 0.32 per 1,000,000
site-based hours worked. The total recordable injury frequency rate
("TRIFR") for Q1 was 1.28 per 1,000,000 site-based hours
worked.
SUKARI GOLD MINE, EGYPT
(Q1 2024 vs Q1 2023)
Production
Sukari Gold Mine ("Sukari") produced
104,821oz in Q1, a 1% decrease YoY.
Production guidance range for 2024 remains 470,000 to 500,000
ounces.
Open pit mining
Total material moved (waste and ore)
in Q1 decreased by 4% YoY to 31.8Mt.
Total open pit waste material mined
(owner and contractor) for Q1 was 25.5Mt, a 14% decrease YoY,
predominantly due to the reclassification of material from Stage 7
scheduled to be waste to low-grade ore. This reclassification of
waste to ore also resulted in a reduction in the strip ratio and
grade per tonne. The strip ratio for Q1 was 4.1:1
(waste:ore).
The ongoing contractor
waste-stripping programme mined 7.9Mt, with 93% of the fixed volume
contract mined to date, and completion expected during
Q2.
During Q1, open pit ore was mined
from multiple working areas with ore processed sourced primarily
from Stage 5 and 7. Lower-grade ore mined from Stage 7 was
primarily sent to the dump leach or stockpiled. Total open pit ore
mined for Q1 was 6.2Mt, a 90% increase YoY, at an average mined
grade of 0.63 g/t Au reflecting the 1.8Mt of additional low-grade
ore mined from Stage 7 during the quarter. During 2024, we
anticipate continued conversion of waste to ore in Stage 7;
however, we currently project that this conversion rate will be
lower than the levels seen in Q1.
Underground mining
Total material mined (waste and ore)
in Q1 was 357kt, a 4% increase YoY. Total ore mined was 230kt at an
average combined (stoping and development) grade of 3.20g/t Au.
This represented a 4% increase in ore tonnes YoY and a 20% decrease
in grade YoY. During the quarter upgrades were made to the primary
ventilation including the installation of additional fans to
increase airflow in both the Amun/Horus and Ptah regions of the
mine and facilitate the planned underground expansion. Whilst this
lead to a reduction in material moved QoQ, we expect this to
increase over the balance of the year.
The underground ore mined consisted
of 162kt of ore mined from stopes at an average grade of 3.33g/t
Au, and 68kt of ore mined from development, at an average grade of
2.87g/t Au.
Processing
During Q1, the plant processed 3.0Mt
of ore, a 2% increase YoY, at an average feed grade of 1.12 g/t Au,
a 7% decrease YoY. There were several key maintenance projects
scheduled for the quarter, including mill relining, which were
completed successfully with no unplanned disruption to
throughput.
The metallurgical gold recovery rate
was 87.7% for the quarter, a 1% decrease YoY, driven by the oxide
material and lower feed grade.
During the quarter, the closing
stockpile balance was 21.0Mt at a grade of 0.47g/t Au.
EXPLORATION PROJECTS
The total expensed exploration and
development spend for the quarter was US$6 million.
In 2024, budgeted Group exploration
spend (expensed) is US$23 million, including US$14 million to
complete the Doropo DFS, ESIA, permitting and financing assessment,
and US$9 million for EDX exploration.
Doropo Gold Project (Cote d'Ivoire)
Work at Doropo continued to progress
well, notably with submission of the draft ESIA report to
government for approval and permitting. Community consultation
continues in parallel alongside the commencement of a suite of
pilot livelihood improvement projects.
DFS work included; preliminary
whittle shell selection and ongoing cost estimates using the mining
contactor submissions, metallurgical test work and infrastructure
and flowsheet design finalisation, and completion of hydrology,
sterilisation and geotechnical drilling.
The DFS remains expected to be
completed by mid-2024.
Eastern Desert Exploration ("EDX") (Egypt)
In the Nugrus block
surrounding the Sukari Mining Concession, detailed
mapping of Little Sukari and Umm Majal was completed, alongside the
initiation of ground-based geophysics consisting of induced
polarisation ("IP") and magnetic surveys over these targets.
Additionally, a contractor has been selected for the second phase
of drilling, scheduled to commence in Q2. In the Um Rus block,
follow-up work on soil and rock chip samples from BLEG anomalies
was completed. Finally, in the Nadj block, a remote camp was
established, and the BLEG sampling program was successfully
concluded with the collected samples being prepared for analysis in
overseas laboratories.
The EDX exploration update remains
expected H2 2024
SALES AND COSTS
Gold sales for the quarter were
92,494 oz, a 14% decrease YoY. However we closed the period with
19,241 oz of gold bullion on hand which was sold at the start of
the second quarter. The average realised gold price for the quarter
was US$2,062/oz, up 8% YoY. Revenues generated were US$191.0
million, a 7% decrease YoY, driven by lower gold sales partially
offset by a higher realised gold price.
Unit cash costs of production were
US$1,088/oz produced, a 16% increase YoY. The AISC of US$1,519/oz
Au sold, a 13% increase YoY, reflected the lower gold sales. In
absolute terms, AISC decreased both YoY and QoQ, by US$5 million
and US$9 million respectively.
CAPITAL EXPENDITURE
Key capital projects progressed as
scheduled during Q1, including the TSF2 embankment raise, the north
dump leach expansion, underground ventilation upgrades - namely the
installation of additional fans, underground and open pit equipment
purchases and the ongoing waste-stripping programme which remains
on track for completion during Q2.
(US$m)
|
Q1-24
|
2024
Guidance
|
SUSTAINING CAPEX
|
|
|
Underground mine
development
|
8
|
53
|
Equipment rebuilds (60% funded from treasury)
|
7
|
44
|
Other sustaining capex
|
9
|
15
|
Total adjusted sustaining capex
|
24
|
112
|
|
|
|
NON-SUSTAINING CAPEX
|
|
|
Growth capex (funded from treasury) including grid
connection, fleet
replacement and
exploration
|
-
|
58
|
Contract waste stripping
capitalised
|
19
|
36
|
Other non-sustaining
capex
|
3
|
9
|
Total non-sustaining capex
|
22
|
103
|
TOTAL ADJUSTED
CAPEX (after reclassification)
|
46
|
215
|
Sustaining element of open pit
waste stripping capitalised from opex1
|
-
|
91
|
GROSS CAPEX
|
46
|
306
|
1Reclassified from operating
expenditure, from 2021, the Company implemented a more granular
methodology to the accounting and classification of waste-stripping
costs, in line with IFRS accounting standards. As such, there is an
accounting reclassification of open pit waste mining costs,
resulting in a reduction in total cash costs with a corresponding
equal increase in the sustaining expenditure and therefore AISC,
with no impact on net cash flow
FINANCIAL POSITION
Balance Sheet
Under the terms of the Sukari
Concession Agreement, the Egyptian government earned US$6 million
in royalty payments and alongside Centamin received an equal US$21
million in profit share payments during the quarter. After Sukari
profit share distribution, Group exploration expenditure and
corporate investing activities, the free cash flow for the quarter
was US$10.3 million.
Balance Sheet
Centamin is in a strong financial
position, with net cash and liquid assets of US$167 million as at
31 March 2024. The Company has a US$150 million senior secured
sustainability linked revolving credit facility ("RCF") which is
available and undrawn.
Liquidity
|
31 March
2024
(US$m)
|
Cash on hand
|
103
|
Bullion on hand
|
43
|
Gold sales receivable
|
22
|
Financial assets at fair value
through profit or loss*
|
1
|
TOTAL CASH & LIQUID ASSETS
|
167
|
Sustainability-linked RCF
(undrawn)
|
150
|
TOTAL LIQUIDITY
|
317
|
*The financial assets at fair value through profit or loss
relate to the open gold put options purchased by the Company in
FY2022 as part of the gold price protection
programme
ENDNOTES
Financials
Financial data points included
within this report are unaudited.
Non-GAAP measures
This statement includes certain
financial performance measures which are non-GAAP measures. These
include Cash costs of production, AISC, Cash and liquid assets, and
Free cash flow. Management believes these measures provide valuable
additional information for users of the financial statements to
understand the underlying trading performance. Definitions and
explanation of the measures used along with reconciliation to the
nearest IFRS measures are detailed in the Company's 2023 Annual
Report www.centamin.com/investors/results-reports/.
Adjusted capital expenditure
Excludes the sustaining capital
element of the waste-stripping.
Exploration expenditure
Exploration expensed covers all
exploration activities excluding the Sukari Concession Agreement
and are expensed in the period they are incurred.
Cash and liquid assets
Cash and liquid assets include cash,
bullion on hand, gold sales receivables and financial assets at
fair value through profit or loss.
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 the ongoing impacts of COVID-19 or
other pandemic, general business, economic, competitive, political
and social uncertainties; the results of exploration activities and
feasibility studies; assumptions in economic evaluations which
prove to be inaccurate; currency fluctuations; changes in project
parameters; future prices of gold and other metals; possible
variations of ore grade or recovery rates; accidents, labour
disputes and other risks of the mining industry; climatic
conditions; political instability; decisions and regulatory changes
enacted by governmental authorities; delays in obtaining approvals
or financing or completing development or construction activities;
and discovery of archaeological ruins. 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, uncertainty and disruption caused by the outbreak of
COVID-19. Forward-looking statements contained herein are made as
of the date of this announcement and the Company disclaims any
obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise.
Accordingly, readers should not place undue reliance on
forward-looking statements.
LEI: 213800PDI9G7OUKLPV84
Company No: 109180