TIDMCEY
RNS Number : 4390P
Centamin PLC
19 October 2021
19 October 2021
Centamin plc
("Centamin", "Group"or "the Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 30 September 2021
MARTIN HORGAN, CEO, commented : "This quarter marked another
period of solid operational delivery. We entered the final quarter
in a good position and remain firmly on track to meet our stated
guidance for 2021. As outlined at the recent Geology capital
markets event, the Company has been busy progressing several growth
projects at the same time as delivering the Sukari operational
reset. Centamin continues to generate positive free cash flow
whilst delivering increased investment into key capital projects,
underpinning the long-term sustainability of Sukari. Further to
this, we very much look forward to updating the market on the
results of our Sukari Life of Asset optimisation work, which we
expect to announce on Wednesday the 1(st) of December."
HIGHLIGHTS
Solid operational performance
-- Gold production for the third quarter ("Q3") was slightly
ahead of schedule at 103,546 ounces ("oz"), bringing production for
the nine months of the year ("YTD") to 307,821 oz, and the Company
remains on track to achieve 2021 production guidance
-- Revenue generated of US$182.9 million from gold sales of
103,514 oz at an average realised gold price of US$1,764/oz
sold
-- Cash costs of US$846/oz produced (YTD: US$ 820/oz) and all-in
sustaining costs ("AISC") of US$1,266/oz sold (YTD: US$1,197/oz),
and the Company remains on track to achieve 2021 cost guidance
-- Adjusted Group free cash flow of US$6.9 million (YTD:
US$23.8m) was ahead of budget reflecting stronger gold price
partially offset by increased mining costs driven by more open pit
material mined
-- Growth capital projects progressed on schedule with US$67.6
million of capital expenditure ("capex") (YTD: US$146.9m)
-- Egyptian exploration bid round terms signed and finalised,
securing c.3,000km(2) of highly prospective greenfield landholding
within the Eastern Desert of the Egyptian Arabian Nubian Shield
-- Strong balance sheet with no debt, no hedging and cash and
liquid assets of US$256.1 million, as at 30 September 2021, after
US$46.1 million interim dividend distribution on 30 September
2021
-- Full COVID-19 protocols remain in place and operations,
supply chains and gold shipments have not been materially
impacted.
OUTLOOK
On track to meet full year 2021 guidance
-- Gold production guidance maintained: 400,000 to 430,000 oz,
targeting the midpoint of 415,000 ounces
-- Cost guidance maintained: cash costs of US$800-900/oz
produced and AISC of US$1,150-1,250/oz sold, targeting the lower
half of both the guidance ranges
-- Capex guidance maintained: US$225 million, with a 65% spend
in H2 (previously 55%) due to timing adjustments to the payment
schedule
-- Exploration expenditure guidance maintained at US$17 million
-- The Company will publish updated Sukari Mineral Reserve and
Resource statements and the results of the Sukari Life of Asset
(Phase 2) optimisation work programme on Wednesday 1 December
2021.
WEBCAST AND CONFERENCE CALL
The Company will host a webcast and conference call today,
Tuesday, 19 October at 08.30 BST to discuss the results, followed
by an opportunity to ask questions.
Webcast link :
https://www.investis-live.com/centamin/6156f486e7d5c90c00312729/iewlw
Dial-in telephone numbers :
United Kingdom (and all other locations) +44 (0) 203 936 2999
United States +1 646 664 1960
South Africa +27 (0) 87 550 8441
Participation access code: 291583
RESULTS SUMMARY
QoQ comparative YoY comparative
------------------ ------ ------------------ ---------
Q3 2021 Q2 2021 % Q3 2020 % YTD 2021
============================== ======== ======== ====== ========== ====== =========
OPEN PIT
Total material mined (kt) 31,656 25,585 24% 17,682 79% 79,824
Ore mined (kt) 2,915 3,031 (4%) 3,805 (23%) 9,708
Ore grade mined (g/t Au) 1.02 0.76 34% 1.01 1% 0.84
Ore grade milled (g/t Au) 1.05 0.87 21% 1.28 (18%) 0.94
=============================== ========== =========
UNDERGROUND
Ore mined (kt) 201 223 (10%) 139 45% 594
Ore grade mined (g/t Au) 4.47 4.67 (4%) 5.38 (17%) 4.94
=============================== ======== ========
PROCESSING
Ore processed (kt) 2,885 2,804 3% 2,931 (2%) 8,706
Feed grade (g/t Au) 1.29 1.18 10 % 1.48 (13%) 1.21
Gold recovery (%) 88.7 89.3 (1%) 87.4 2 % 89.1
Gold production (oz) 103,546 100,228 3% 128,240 (19%) 307,821
=============================== ======== ======== ========== =========
COST & SALES
Gold sold (oz) 103,514 97,229 6% 118,617 (13%) 307,316
Cash costs (US$/oz produced) 846 883 (4%) 682 24% 820
AISC (US$/oz sold) 1,266 1,232 3% 961 32% 1,197
Realised gold price (US$/oz) 1,764 1,822 (3%) 1,933 (9%) 1,787
Revenue (US$m) 182.9 177.5 3% 229.6 (20%) 550.3
CAPEX (US$m) 67.6 41.6 63% 38.7 75% 146.9
Free Cash Flow (US$m) 6.9 6.9 0% 36.3 (81%) 23.8
=============================== ======== ======== ====== ========== ====== =========
FOR MORE INFORMATION please visit the website www.centamin.com or contact:
Centamin plc Buchanan
Alexandra Barter-Carse, Corporate Communications Bobby Morse/ Ariadna Peretz/
+44 (0) 7700 713 738 James Husband
investor@centaminplc.com + 44 (0) 20 7466 5000
centamin@buchanan.uk.com
HEALTH AND SAFETY
Operational safety remains a focus throughout the Group in
creating a safe work environment which supports a healthy and
productive workforce. In Q3, there were zero lost time injuries
("LTI") (YTD: four) therefore resulting in a lost time injury
frequency rate ("LTIFR") of zero (YTD: 0.51 per 1,000,000
site-based hours worked). The total recordable injury frequency
rate ("TRIFR") for Q3 was 3.84 per one million site-based hours
worked (YTD: 3.60). Both lagging indicators are better than
targeted for the year.
In Q3, Centamin experienced no material production, sales or
supply chain disruptions due to COVID-19 at Sukari or the
exploration projects in West Africa. Full COVID-19 protocols remain
in place.
Production
(Q3 2021 vs Q2 2021)
Sukari gold production for the quarter was 103,546 oz, a 3%
improvement QoQ and slightly ahead of budget. Year-to-date gold
production for the first nine months of the year was 307,821 oz and
remains on track to meet 2021 guidance.
Open Pit Mining
Record quarterly total material moved (waste + ore) of 31.7Mt
(YTD: 79.8Mt), a 24% increase QoQ, driven by improved operating
efficiencies and productivities leading to continued owner-operator
fleet outperformance and contract-mining reaching capacity run rate
ahead of schedule.
Open pit ore mining in Q3 continued to focus on the Stage 5
North and Stage 4 West areas. Total open pit ore mined for the
quarter was 2.9Mt (YTD: 9.7Mt), a 4% reduction QoQ, at an average
mined grade of 1.02 grams of gold per tonne ("g/t Au") (YTD: 0.84
g/t Au), a 34% improvement QoQ driven by scheduled higher grades
delivered from Stage 4 West.
Record total open pit waste material mined for the quarter was
28.7Mt (YTD: 70.1Mt), a 27% increase QoQ, driven by the continued
ramp up of the open pit waste-stripping programme. The
owner-operated fleet moved 20.3Mt and the contract-miner moved
8.4Mt of waste material. The strip ratio for the quarter was 9.9:1
(waste:ore) (YTD: 7.2:1). Collectively, year to date, the owner
operator and contractor have outperformed the schedule by 17%.
Underground Mining
Total material mined (waste + ore) of 301kt (YTD: 871kt), a 4%
reduction QoQ.
Total ore mined was 201kt (YTD: 594kt) at an average combined
(stoping and development) grade of 4.47g/t Au (YTD: 4.94 g/t). In
line with the mine plan, this represented a 10% reduction in ore
tonnes QoQ and a 4% reduction in grade QoQ.
The underground ore split was 138 kt of ore mined from stopes,
at an average grade of 4.69g/t Au, and 63kt of ore mined from
development, at an average grade of 4.00g/t Au.
The Sukari underground mining tender process progressed well
during the quarter. The independently run process has reached the
evaluation phase, including assessing several competitive
contractor proposals and a cost and risk benefit analysis of both
contract-mining versus owner-operator mining the underground
operations.
Processing
The plant processed 2.9Mt of ore (YTD: 8.7Mt), a 3% increase
QoQ, at an average feed grade of 1.29g/t Au (YTD: 1.21 g/t), a 10%
improvement QoQ. There were several planned maintenance projects
completed during the quarter, including mill relining and
polyurethane coating spray.
The metallurgical gold recovery rate was 88.7% for the quarter
(YTD:89.1%), less than a 1% reduction QoQ.
During the quarter, the low-grade stockpiles increased from
18.8Mt to 18.9Mt at 0.46g/t Au.
Capital Projects
Total capex in Q3 was US$67.6 million (YTD: US$146.9m), which
was an 63% increase QoQ and in line with full year budget. Sukari
capital projects progressed well including the second tailings
storage facility ("TSF2"), solar plant construction, equipment
rebuild programme, development of the underground paste-fill plant
and processing plant optimisation work.
SALES AND COSTS
Gold sales for the quarter were in line with budget at 103,514oz
(YTD: 307,316 oz), a 6% improvement QoQ. The average realised gold
price for the quarter was US$1,764/oz (YTD: US$1,787/oz), down 3%
QoQ. Revenues generated of US$182.9 million (YTD: US$550.3m),
increased by 3% QoQ, driven by higher gold sales and offset by
lower realised gold price.
Total cash costs of production were slightly better than budget
at US$87.6 million for the quarter (YTD: US$252.3m), a 1% reduction
QoQ, with lower underground costs partially offsetting higher fuel
prices and increased open pit costs due to more material moved.
Unit cash costs of production were US$846/oz produced (YTD:
US$820/oz), a 4% reduction QoQ.
Total all-in sustaining costs ("AISC") were slightly ahead of
budget at US$131.1 million for the quarter (YTD: US$367.9m), as the
open pit contractor waste-stripping programme ramped up to full
capacity. This marked an 9% increase in AISC QoQ, predominantly
reflecting higher than scheduled sustaining capital expenditure in
the quarter. Unit AISC of US$1,266/oz sold (YTD: US$1,197/oz), a 3%
increase QoQ, reflecting higher costs offset by higher gold
sales.
FINANCIAL POSITION
Free Cash Flow
Under the terms of the Sukari Concession Agreement, the Egyptian
government earned US$5.5 million in royalty payments (YTD:
US$16.5m) and received US$15.5 million in profit share payments
during the quarter (YTD: US$61.2m). After Sukari profit share
distribution, Group exploration expenditure and corporate investing
activities, Group free cash flow for the quarter was US$6.9 million
(YTD: US$23.8m).
The Company is in a strong financial position, with net cash and
liquid assets to US$256.1 million as at 30 September 2021, and
after distribution of the 2021 interim dividend totalling US$46.1
million. The Company remains unhedged and debt-free.
EXPLORATION
Total exploration expenditure in the quarter was US$2.7 million
(YTD: US$7.5m).
Doropo Project (Côte d'Ivoire): Pre-feasibility study ("PFS")
progressed throughout the quarter, including commencing the 70,000
metre reverse circulation and environmental and social impact
assessment ("ESIA") baseline work programme. The PFS remains on
track for completion during mid-2022.
ABC Project (Côte d'Ivoire): An updated Mineral Resource
estimate was announced in September, doubling the gold Mineral
Resource to 2.16Moz @ 0.93 g/t Inferred. A further contiguous
permit was secured - the Windou permit - which extends the
landholding along the Sassandra Fault system to 90km. Soil sampling
ongoing across all three permits, Farako-Nafana, Kona and Windou
with the aim of delineating additional exploration targets for
further investigation.
Egyptian Bid Round: Finalised and signed exploration terms,
securing c.3,000km(2) of highly prospective greenfield acreage
within the Eastern Desert of the Egyptian Arabian Nubian
Shield:
-- Nugrus Block (1,086km(2) ) - the licenses surrounding the
Sukari Mining Concession targeting potential satellite deposits and
low capex mill feed to the Sukari processing plant
-- Najd Block (1,374km(2) ) - located 100km northwest of Sukari
in the Central Eastern Desert, exploring for a potential standalone
operation
-- Um Rus Block (524km(2) ) - is a new block of licenses,
located 40km north of Sukari, exploring for a potential standalone
operation. Note: The previously announced Samyoky Block (705km(2) )
has been relinquished for the preferred Um Rus block.
ENDNOTES
Guidance
The Company actively monitors the developments of the COVID-19
pandemic and guidance may be impacted if the workforce or operation
are disrupted.
Financials
Financial data points included within this report are
unaudited.
Non-GAAP measures
This statement includes certain financial performance measures
which are non-GAAP measures as defined under International
Financial Reporting Standards (IFRS). 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 2020 Annual Report
https://www.centamin.com/investors/results-reports/ .
Royalties
Royalties are accrued and paid six months in arrears.
Cash and liquid assets
Cash and liquid assets include cash, bullion on hand, gold sales
receivables and financial assets at fair value through profit or
loss.
Forward-looking Statements
This announcement (including information incorporated by
reference) contains "forward-looking statements" and
"forward-looking information" under applicable securities laws
(collectively, "forward-looking statements"), including statements
with respect to future financial or operating performance.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "believes",
"expects", "expected", "budgeted", "forecasts" and "anticipates".
Although Centamin believes that the expectations reflected in such
forward-looking statements are reasonable, Centamin can give no
assurance that such expectations will prove to be correct.
Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and
projections of the management of Centamin about future events and
are therefore subject to known and unknown risks and uncertainties
which could cause actual results to differ materially from the
future results expressed or implied by the forward-looking
statements. In addition, there are a number of factors that could
cause actual results, performance, achievements or developments to
differ materially from those expressed or implied by such
forward-looking statements; the risks and uncertainties associated
with the ongoing impacts of COVID-19 or other pandemic, general
business, economic, competitive, political and social
uncertainties; the results of exploration activities and
feasibility studies; assumptions in economic evaluations which
prove to be inaccurate; currency fluctuations; changes in project
parameters; future prices of gold and other metals; possible
variations of ore grade or recovery rates; accidents, labour
disputes and other risks of the mining industry; climatic
conditions; political instability; decisions and regulatory changes
enacted by governmental authorities; delays in obtaining approvals
or financing or completing development or construction activities;
and discovery of archaeological ruins. There can be no assurance
that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information or statements, particularly in
light of the current economic climate and the significant
volatility, uncertainty and disruption caused by the outbreak of
COVID-19. Forward-looking statements contained herein are made as
of the date of this announcement and the Company disclaims any
obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise.
Accordingly, readers should not place undue reliance on
forward-looking statements.
LEI: 213800PDI9G7OUKLPV84
Company No: 109180
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END
DRLMZMMGVRMGMZM
(END) Dow Jones Newswires
October 19, 2021 02:00 ET (06:00 GMT)
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