TIDMCEY
RNS Number : 2317W
Centamin PLC
22 April 2021
22 April 2021
Centamin plc
("Centamin" or "the Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 31 March 2021
MARTIN HORGAN, CEO, COMMENTED : "Today's Q1 results reflect a
solid quarterly operating performance and are a good start to 2021.
The Company delivered production as scheduled, including record
material movement and continued to progress capital projects on
schedule. Centamin maintains its 2021 full year guidance and we
look forward to delivering the strategic review of our exploration
pipeline during Q2, followed later in the year by the Sukari Life
of Asset Phase 2."
HIGHLIGHTS
Operational performance in line with budget
-- Gold production from the Sukari Gold Mine ("Sukari") for the
first quarter ("Q1"), was 104,047 ounces ("oz"), in line with 2021
guidance
-- Record quarterly total material moved of 22.8 million tonnes
("Mt"), driven by improved operating efficiencies and the
commencement of the accelerated waste-stripping programme
-- Revenue generated of US$190 million from gold sales of
106,573 oz at an average realised gold price of US$1,778/oz
sold
-- Cash costs of US$733/oz produced and all-in sustaining costs ("AISC") of US$1,091/oz sold
-- Group free cash flow of US$9 million, after US$37 million of
capital expenditure ("capex") and US$27 million distributed to the
Egyptian government in profit share payments and royalties
-- Strong balance sheet with no debt, no hedging and cash and
liquid assets of US$331 million, as at 31 March 2021
OUTLOOK UNCHANGED
Investing for operating reliability and consistency
-- 2021 gold production and cost guidance maintained: 400,000 to
430,000 oz, split equally across H1 and H2 (50:50), at costs of
US$800-900/oz produced and AISC of US$1,150- 1,250/oz sold
-- 2021 capex guidance maintained: US$225 million, with spend
weighted towards H2 (45:55) driven by the Sukari solar project and
paste-fill plant construction timelines
QoQ comparative YoY comparative
========================= ==================
Q1 2021 Q4 2020 % Q1 2020 %
======================== ================= ======== ======== ===== ========== ======
Open pit
Total material mined kt 22,583 21,324 6% 20,501 10%
Ore mined kt 3,763 3,553 6% 4,176 -10%
Ore grade mined g/t Au 0.77 0.74 5% 1.12 -31%
======================== =================
Underground
Ore mined kt 170 165 3% 154 10%
Ore grade mined g/t Au 5.84 3.66 60% 4.98 17%
======================== ================= ======== ======== ===== ========== ======
Processing
Ore processed kt 3,018 2,911 4% 3,077 -2%
Feed grade g/t Au 1.16 0.86 34% 1.5 -23%
Gold recovery % 88.6 88.6 0% 87.5 1%
Gold production oz 104,047 67,996 53% 125,090 -17%
======================== ================= ======== ======== ===== ========== ======
Cost & Sales
Gold sold oz 106,573 79,535 34% 139,784 -24%
Cash costs US$/oz produced 733 1,080 -32% 659 11%
AISC US$/oz sold 1,091 1,613 -32% 902 21%
Realised gold price US$/oz 1,778 1,887 -6% 1,587 12%
Revenue US$m 189.9 150.3 26% 222.2 -15%
CAPEX US$m 37.0 47.9 -23% 21.9 69%
Free Cash Flow US$m 9.4 3.5 170% 45.6 -79%
======================== ================= ======== ======== ===== ========== ======
WEBCAST AND CONFERENCE CALL
The Company will host a webcast and conference call today,
Thursday, 22 April at 08.30 BST (UK time) to discuss the results
with investors and analysts, followed by an opportunity to ask
questions. Please find below the required participation details for
the call. A replay will be made available on the Company
website.
Webcast link:
https://www.investis-live.com/centamin/60702988fb74790c003a4ee4/typl
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: 012214
FOR MORE INFORMATION please visit the website www.centamin.com or contact:
Centamin plc Buchanan
Alexandra Barter-Carse, Corporate Communications Bobby Morse / Kelsey Traynor
+44 (0) 7700 713 738 + 44 (0) 20 7466 5000
investors@centamin.je centamin@buchanan.uk.com
HEALTH & SAFETY
Operational safety remains a strict focus throughout the Group
in creating a safe work environment which supports a healthy and
productive workforce. In Q1, there was one lost time injury ("LTI")
resulting in a lost time injury frequency rate ("LTIFR") of 0.42
per one million site-based hours worked, representing a 53%
improvement QoQ. The total recordable injury frequency rate
("TRIFR") was 1.67 for Q1 per one million site-based hours worked,
representing a 78% improvement QoQ.
In Q1, Centamin experienced no material production, sales or
supply chain disruptions due to COVID-19 at Sukari or the
exploration projects in West Africa. The Company has implemented
strict test, track, isolate and safety measures for the long-term,
acknowledging the duration of the pandemic and the lasting impacts
remain uncertain. There is an ongoing focus on staffing levels and
workplace fatigue management while global restrictions on the
movement of people persist.
Production
(Q1 2021 vs Q4 2020)
Sukari gold production for the quarter was 104,047 oz, a 53%
increase compared to the fourth quarter of 2020 ("QoQ"), driven by
improved open pit and underground mined grade, resulting in a 34%
increase in feed grade; and a 17% reduction compared to the first
quarter of 2020 ("YoY") reflecting the conclusions of the Life of
Asset Phase 1 and three-year outlook presented in December
2020.
Open Pit Mining
Open pit ore mining in Q1 focussed primarily on the low to
medium grade Stage 5 North area. More low-grade tonnes were mined
than scheduled driven by ongoing conversion of waste to ore. Total
open pit ore mined for the quarter was 3.8Mt, a 6% increase QoQ, at
an average mined grade of 0.77 grams of gold per tonne ("g/t Au"),
a 5% improvement QoQ.
Total open pit waste material mined for the quarter was 18.8Mt,
a 6% increase QoQ. The strip ratio for the quarter was 5:0
(waste:ore). The contracted waste-stripping programme commenced
ahead of schedule and will continue to ramp up through the
year.
Underground Mining
Underground mining in the quarter focussed on the Ptah zone,
including some higher-grade stopes. Total ore mined was 170kt at an
average combined (stoping and development) grade of 5.84g/t Au.
This represented a 3% increase in tonnes QoQ and a 60% increase in
grade QoQ driven by the scheduled mining of higher-grade
stopes.
The underground ore split was 1 14kt of ore mined from stopes,
at an average grade of 6.86g/t Au, and 56kt of ore mined from
development, at an average grade of 3.77g/t Au. Total underground
waste mined was 87kt, a 29% decrease QoQ.
The Company continues to work closely with the underground
contractors to mitigate the impacts of reduced staffing levels due
to COVID-19.
Processing
The plant processed 3.0Mt of ore, a 4% increase QoQ, at an
average feed grade of 1.16g/t Au, a 34% improvement QoQ. The
metallurgical gold recovery rate was 88.6% for the quarter,
consistent QoQ. During the quarter, the low-grade stockpiles
increased from 17.4Mt to 18.3Mt at 0.47g/t Au.
SALES & COSTS
Gold sales for the quarter were 106,573oz, a 34% increase QoQ,
in line with production volumes. The average realised gold price
for the quarter was US$1,778/oz, down 6%, reflecting a weaker spot
gold price. Revenues generated of US$189.9 million, up 26% QoQ,
driven by higher gold sales.
Total cash costs of production were US$76.3 million for the
quarter, a 4% increase QoQ, driven by higher volumes of material
movement, partially offset by increased movement in inventory
including an increase in run of mine ("ROM") stockpiled material.
Unit cash costs of production were US$733/oz produced, a 32%
reduction QoQ, predominantly driven by higher production
volumes.
Total all-in sustaining costs ("AISC") were US$116.3 million for
the quarter, an 9% reduction QoQ, driven by a 29% reduction in
sustaining capital expenditure over the quarter. Unit AISC of
US$1,091/oz sold, a 32% reduction QoQ, reflecting higher relative
sales volumes.
FINANCIAL POSITION
Free Cash Flow
Total capex in Q1 was US$37.0 million, a 23% decrease QoQ. Under
the terms of the Sukari Concession Agreement, the Egyptian
government earned US$5.7 million in royalty payments and received
US$21.7 million in profit share payments during the quarter. After
Sukari profit share distribution and Group investing activities,
Group free cash flow for the quarter was US$9.4 million.
Balance Sheet
The Company is in a strong financial position, building net cash
and liquid assets to US$330.7 million, as at 31 March 2021, and
before distribution of the proposed 2020 final dividend totalling
US$34.7 million - subject to shareholder approval at the annual
general meeting on 11 May 2021. The Company remains unhedged and
debt-free.
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 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, 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.
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.
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
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