TIDMCEY
RNS Number : 6704I
Centamin PLC
20 April 2022
20 April 2022
Centamin plc
("Centamin", "Group" or "the Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 31 March 2022
MARTIN HORGAN, CEO, commented: "As planned, Q1 2022 production
reflected the successful transition to owner mining in the
underground, which is now complete, enabling us to unlock the full
potential of the underground operations . Significant investment
resulted in progress being made across all our major project work
streams including the solar power station and the paste fill
plant.
Our exploration team made good progress with initial drill
results from surface exploration within the Sukari concession
indicating the potential to define satellite resources, with
several follow-up targets already identified. In parallel we are
delighted that the airborne survey of the Sukari concession is now
underway and we look forward to updating you on the progress of
these promising growth projects and the continued expansion of the
underground resource base, including the high grade bonanza zones,
during Q2.
Centamin reiterates its 2022 full-year guidance and we look
forward to delivering against our optimisation targets outlined at
the capital markets event on 8 December 2021."
Q1 2022 HIGHLIGHTS
Quarterly operational performance in line with guidance
-- Ongoing safety performance: The Company recorded zero lost time injuries during Q1 2022
-- Transition to owner-operator in the Sukari underground
completed: This exercise involved detailed advanced planning,
including the contractor demobilising; servicing the purchased
mobile equipment; purchase of associated spares and consumables;
and transferring the requisite contractor employees to become
Centamin employees
-- Production on track for 2022 guidance : Due principally to
the underground transition, Q1 2022 production was planned to be
lower than the remaining quarters of the year. Gold production of
93,109 ounces ("oz") for the three months to 31 March 2022 ("Q1")
reflected this transition and we remain on track for 2022
guidance
-- Strong revenue generation: Revenue of US$174.6 million,
generated from gold sales of 92,559 oz at an average realised gold
price of US$1,883/oz sold
-- Costs: Cash costs of US$1,006/oz produced and all-in
sustaining costs ("AISC") of US$1,558/oz sold reflect the planned
reduction in production for the quarter
-- Progressing capital projects: Capital expenditure ("capex")
of US$71.4 million represents the peak quarterly investment in
2022, which included significant investment in the paste fill
plant, solar power station and underground transition
-- Robust balance sheet: Cash and liquid assets of US$217.3 million, as at 31 March 2022
-- Progressing systematic exploration: The airborne geophysical
survey commenced flights during the quarter, marking a first for
Sukari and more broadly the mining sector in Egypt.
Full Year 2022 OUTLOOK UNCHANGED
Investing for operational consistency and growth
-- Gold production of 430,000 to 460,000 oz for the year
-- Cash costs of US$900-1,000/oz produced
-- AISC of US$1,275-1,425/oz sold. Given the current
inflationary operating environment we continue to monitor
consumables pricing and review opportunities to offset price
increases with cost savings initiatives
-- Capex budget of US$225.5 million remains unchanged
-- Exploration expenditure for the year is expected to be US$25
million, predominantly focused on the Doropo Pre-Feasibility Study
(scheduled for completion in H2 2022); ABC fieldwork and drill
testing; airborne geophysics survey of the Sukari Mining Concession
and commencing exploration on the highly prospective Egyptian
Eastern Desert 3,000km(2) landholding
RESULTS SUMMARY
YoY comparative QoQ comparative
Q1 2022 Q1 2021 % <DELTA> Q4 2021 % <DELTA>
SAFETY
LTIFR (1m hours) 0.00 0.42 (100%) 0.31 (100%)
OPEN PIT
Total material mined (kt) 31,001 22,583 37% 30,397 2%
Ore mined (kt) 2,970 3,763 (21%) 2,683 11%
Ore grade mined (g/t Au) 0.92 0.77 19% 0.93 (1%)
UNDERGROUND
Ore mined (kt) 154 170 (9%) 145 6%
Ore grade mined (g/t Au) 3.55 5.84 (39%) 4.97 (28%)
PROCESSING
Ore processed (kt) 2,954 3,018 (2%) 3,210 (8%)
Feed grade (g/t Au) 1.07 1.16 (8%) 1.11 (4%)
Gold recovery (%) 88.1 88.6 (1%) 87.0 1%
Gold production (oz) 93,109 104,047 (11%) 107,549 (13%)
COST & SALES
Gold sold (oz) 92,559 106,573 (13%) 99,936 (7%)
Cash costs (US$/oz produced) 1,006 733 37% 1,000 1%
AISC (US$/oz sold) 1,558 1,091 43% 1,349 16%
Realised gold price (US$/oz) 1,883 1,778 6% 1,828 3%
Revenue (US$m) 174.6 189.9 (8%) 183.0 (5%)
CAPEX (US$m) 71.4 37.8 89% 129.2 (45%)
WEBCAST AND CONFERENCE CALL
The Company will host a webcast and conference call today,
Wednesday, 20 April at 09.30 BST to discuss the results, followed
by an opportunity to ask questions.
Webcast link :
https://www.investis-live.com/centamin/624ee7282c01e00c00606dfa/asdf
Dial-in telephone numbers:
United Kingdom (and all other locations) +44 (0) 203 936 2999
United States +1 646 664 1960
Participation access code: 403731
HEALTH AND SAFETY
Operational safety has been a key focus across the Group.
Prioritised management oversight and empowering employees to be
safety leaders has resulted in an improved safety performance. In
Q1, there were no lost time injuries ("LTI") therefore resulting in
a lost time injury frequency rate ("LTIFR") of 0.0 per 1,000,000
site-based hours worked, compared to the corresponding 0.42 in the
first quarter in 2021 ("YoY"). The total recordable injury
frequency rate ("TRIFR") for Q1 was 3.23 per one million site-based
hours worked, below our 2022 target of 3.99 but an increase from
1.67 YoY.
Sukari Gold mine, egypt
(Q1 2022 vs Q1 2021)
Production
Sukari gold production for the quarter was 93,109 oz, an 11%
decrease YoY, due to scheduled reduced production during the
transition to owner mining in the Sukari underground.
Open Pit Mining
Total material moved (waste and ore) of 31.0Mt, a 37% increase
YoY, driven by improved operating efficiencies and productivity
plus the accelerated waste stripping programme.
Total open pit waste material mined for the quarter was 28.0Mt,
a 49% increase YoY, driven by the ongoing execution of the
accelerated waste-stripping programme (9.2Mt), aimed at improving
the long-term flexibility of the open pit. The strip ratio for the
quarter was 9.4:1 (waste:ore).
Open pit ore mining in Q1 continued to focus on the Stage 5
North and Stage 4 East. Total open pit ore mined for the quarter
was 3.0Mt, a 21% reduction YoY, at an average mined grade of 0.92
grams of gold per tonne ("g/t Au"), a 19% improvement YoY, driven
by improved grades from the primary mining area of Stage 5
North.
During the quarter, the low-grade stockpiles increased from
18.6Mt to 18.7Mt at 0.46g/t Au.
Underground Mining
As planned, mined tonnage was lower due to the transition to
owner mining, with the contractor fully demobilising from site,
servicing of all purchased equipment and the transition of selected
staff from contractor to owner. Volumes and grades are planned to
increase through the remainder of the year given full autonomy over
the underground and progression of activities to higher grade
areas. In parallel, the underground drilling contractor was also
replaced during the quarter and similarly operations are planned to
ramp up over the balance of the year.
Total material mined (waste and ore) was 214kt, a 17% reduction
YoY. Total ore mined was 154kt at an average combined (stoping and
development) grade of 3.55g/t Au. This represented a 9% reduction
in ore tonnes YoY and a 39% decrease in grade YoY.
The underground ore was made up of 100 kt of ore mined from
stopes, at an average grade of 3.46g/t Au, and 54kt of ore mined
from development, at an average grade of 3.73g/t Au.
Processing
The plant processed 3.0Mt of ore, a 2% decrease YoY, at an
average feed grade of 1.07 g/t Au, an 8% decrease YoY reflecting
the mined material over the period delivered to the plant.
The metallurgical gold recovery rate was 88.1% for the quarter,
a 1% reduction YoY, reflecting the lower contribution from
underground ore and the grade-recovery relationship.
During the period, a series of optimisation studies were
commenced with the aim of improving overall plant performance and
included the assessment of gravity gold recovery, alternate reagent
supply and tails detoxification processes.
Capital Projects
Total Capex in Q1 was US$71.4 million, which was an 89% increase
YoY. Significant investment was made in key capital projects during
the quarter. The solar power project, tailing storage facility 2
lift and pump upgrades, underground equipment purchase, underground
development and the waste stripping programme were all progressed.
Development and construction of the solar power project and paste
fill plant are scheduled for commissioning in Q3 2022 and Q1 2023,
respectively. Solar power project activities completed in the
quarter included civil works for the battery storage facility,
drilling and installation of tracker posts as well as installation
of solar modules. The paste fill plant earthworks and site
preparation neared completion with civil and steelworks advancing
well.
Sukari Exploration
Good progress continued to be made in respect of the exploration
of the Sukari orebody with a particular focus on the underground
growth targets including the higher grade zones of the Bast
section. These remain a priority focus for resource definition
drilling during 2022 with the aim of fast tracking them into the
production schedule at the earliest opportunity.
Surface exploration on the 160km(2) Sukari Mining Concession
continued with the completion of the 10,000m drilling programme,
targeting potential satellite deposits for the Sukari processing
facility. Initial assay results have been received with promising
results, supporting our strategy of generating additional Sukari
mill feed through systematic exploration. The remaining results are
expected during Q2 2022.
Pending the receipt of the full assay results, follow-up
programmes will be designed with the aim of further testing
prospective targets with the aim of developing resources and
ultimately reserves.
The airborne geophysical survey commenced flights during the
quarter marking a first for Sukari and more broadly the mining
sector in Egypt. The programme is scheduled for completion during
Q2 and has been designed to identify potential exploration targets
within the concession and further provide insights that could be
used as we explore our highly prospective exploration ground
secured in the Eastern Desert.
A full exploration update on all our growth projects is planned
to be made during Q2 2022.
SALES AND COSTS
Gold sales for the quarter were 92,559 oz, a 13% decrease YoY.
The average realised gold price for the quarter was US$1,883/oz, up
6% YoY. Revenues generated of US$174.6 million, decreased by 8%
YoY, driven by lower gold sales, marginally offset by a higher
realised gold price.
Cash costs of production were US$93.6 million for the quarter, a
23% increase YoY, with lower underground costs partially offsetting
higher fuel prices and increased open pit costs as a result of the
increase in material moved. Unit cash costs of production were
US$1,006/oz produced, a 37% increase YoY.
Total all-in sustaining costs ("AISC") were US$144.2 million for
the quarter, a 23% increase YoY, resulting from inventory movements
and capitalising of waste above the life of mine strip ratio. Unit
AISC of US$1,558/oz sold, a 43% increase in YoY costs, reflecting
the lower gold sales.
EXPLORATION PROJECTS
The total exploration spend for the quarter was $11.9m, of which
US$9.3m was expensed, a 210% increase YoY. In Côte d'Ivoire the
Doropo PFS is progressing as planned, and at ABC trenching
continued. We look forward to providing a comprehensive update
later this year.
FINANCIAL POSITION
Free Cash Flow
Under the terms of the Sukari Concession Agreement, the Egyptian
government earned US$5.5 million in royalty payments and received
US$8.5 million in profit share payments during the quarter. After
Sukari profit share distribution, Group exploration expenditure and
corporate investing activities, Group free cash flow for the
quarter was negative US$21.4 million, as a result of the US$25m of
deferred growth capex from Q4 2021 and the continued investment in
waste stripping and other capital projects. Capital expenditure
continues in key areas that will improve the long-term
profitability and operability of Sukari, such as the solar plant,
waste stripping programme, paste fill plant and underground
equipment purchase.
Balance Sheet
Centamin is in a strong financial position, with net cash and
liquid assets to US$217.3 million as at 31 March 2022. The Company
remains unhedged and debt-free.
Governance
-- The Company will be publishing its 2021 Sustainability Report on 27 April 2022
-- As announced on 5 April 2022, the Company's AGM will be held on 10 May 2022
-- As announced on 16 March 2022, the Board of Directors
recommended a final dividend of 5 US cents per share, subject to
shareholder approval at the 2022 AGM.
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 circa 5 million ounces of gold, and today has a
projected mine life of 12 years.
Through its large portfolio of exploration assets in Egypt and
West Africa, Centamin is advancing an active pipeline of future
growth prospects, including the Doropo project in Côte d'Ivoire,
and over 3,000km(2) of highly prospective exploration ground in the
Egypt's Arabian Nubian Shield.
Centamin practices responsible mining activities, recognising
its responsibility to not only deliver operational and financial
performance but to 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 Buchanan
Michael Stoner, Group Corporate Manager Bobby Morse/Ariadna Peretz/James
investor@centaminplc.com Husband
+ 44 (0) 20 7466 5000
centamin@buchanan.uk.com
NOTES
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. 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 2021 Annual Report
https://www.centamin.com/investors/results-reports/ .
Exploration expenditure
Exploration expensed covers all exploration activities excluding
the Sukari Concession Agreement.
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.
Cost savings
Cost savings were calculated relative to the incumbent
underground contractor contract terms, all things being equal, and
include the initial equipment purchase required to maintain current
production levels and future capital cost estimates related to any
near-term fleet replacement.
Qualified Person
Information of a scientific or technical nature in this document
was prepared under the supervision of Craig Barker, an employee of
the Company and a Qualified Person, as such term is defined by
National Instrument 43-101 Standards of Disclosure for Mineral
Projects of the Canadian Securities Administrators.
The Qualified Person has verified the data disclosed, including
sampling, analytical, and test data underlying the information or
opinions contained in this announcement in accordance with
standards appropriate to their qualifications.
Forward-looking Statements
This announcement (including information incorporated by
reference) contains "forward-looking statements" and
"forward-looking information" under applicable securities laws
(collectively, "forward-looking statements"), including statements
with respect to future financial or operating performance. Such
statements include "future-oriented financial information" or
"financial outlook" with respect to prospective financial
performance, financial position, EBITDA, cash flows and other
financial metrics that are based on assumptions about future
economic conditions and courses of action. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expects",
"expected", "budgeted", "forecasts" and "anticipates"." and include
production outlook, operating schedules, production profiles,
expansion and expansion plans, efficiency gains, production and
cost guidance, capital expenditure outlook, exploration spend and
other mine plans. Although Centamin believes that the expectations
reflected in such forward-looking statements are reasonable,
Centamin can give no assurance that such expectations will prove to
be correct. Forward-looking statements are prospective in nature
and are not based on historical facts, but rather on current
expectations and projections of the management of Centamin about
future events and are therefore subject to known and unknown risks
and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements. In addition, there are a number of
factors that could cause actual results, performance, achievements
or developments to differ materially from those expressed or
implied by such forward-looking statements; the risks and
uncertainties associated with 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
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DRLEAFLNFESAEAA
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