TIDMCEY
RNS Number : 0738A
Centamin PLC
18 January 2024
18 January 2024
Centamin plc
("Centamin", "Group" or "the Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 31 December 2023 (unaudited)
MARTIN HORGAN, CEO, commented : "In 2023, Centamin delivered
another excellent performance, underpinned by our improved safety
results. We have extended our track record of meeting production
guidance to a third year and importantly through our culture of
continuous improvement we have beaten our AISC guidance for
2023.
We look forward to 2024, guiding for another increase in annual
gold production. Combined with our disciplined approach to managing
operating costs, Centamin is extremely well-positioned to benefit
from the current strong gold price environment, as we complete our
capex reinvestment programme and connect Sukari to the Egyptian
national grid.
Our strategic focus remains on growth as we continue to define
and convert resources to reserves at Sukari, build on our recent
exploration success at EDX and progress towards a financial
investment decision at Doropo in Cote d'Ivoire.
I would like to thank the whole team for their ongoing hard work
and dedication to deliver this outcome, and to our broader
stakeholders for their support as we position Centamin for 2024 and
beyond."
HIGHLIGHTS
2023 production guidance delivered
-- Achieved 9.5 million hours worked at the Sukari Gold Mine
("Sukari") with zero lost time injuries ("LTI"). The Group recorded
zero LTIs in the fourth quarter ("Q4") across all assets and one
LTI for the twelve months ended 31 December 2023 ("FY"). The
Group's total recordable injury rate ("TRIFR") for Q4 was 0.97 per
one million hours worked, representing 67% improvement compared to
Q4 2022 ("YoY")
-- Annual gold production delivered in line with 2023 guidance
(450-480koz): Q4 production of 128,127 ounces ("oz"), totalling
450,058 oz produced for 2023
-- Annual revenue of US$ 892 million: Q4 revenue of US$265
million, generated from gold sales of 133,465 oz at an average
realised gold price of US$1,983/oz sold; FY23 revenue of US$892
million, generated from gold sales of 456,625 oz at an average
realised gold price of US$1,948/oz sold
-- Annual cash costs delivered at the lower half of the 2023
guidance range (US$840-990/oz): Q4 cash costs of US$984/oz
produced, resulting in an average annual cash cost of US$895/oz
produced for 2023
-- Annual all-in sustaining costs ("AISC") beat 2023 guidance
(US$1,250-1,400/oz sold): Q4 AISC of US$1,172/oz sold, resulting in
an average annual AISC of US$1,220/oz for 2023, beating the bottom
end of guidance by US$30/oz
-- Annual capital expenditure ("capex") of US$204 million below
guidance of US$272 million: Q4 spend of US$36 million, impacted by
savings from lower diesel prices, lower than expected
capitalisation of operating costs, deferral of the grid power
project deposit payment to Q1 2024 and changes to the equipment
rebuild schedule
-- New Sukari Life of Mine Plan completed : the plan delivers
increased gold production, lower operational costs, reduced
operational risk and significantly reduced carbon emissions. Link
to full announcement here
-- Group Proven & Probable ("P&P") Mineral Reserves
increased by 3.5 million ounces ("Moz") since 2020, before
depletion, and exceeding the Company's stated multi-year target of
3.0Moz. This growth has been driven by an increase in Sukari
reserves by approximately 1.6Moz and declaration of maiden reserves
at Doropo of 1.9Moz. Link to full announcement here
-- Robust balance sheet: cash and liquid assets of US$153
million, as at 31 December 2023 and total liquidity of US$303
million including the undrawn US$150 million sustainability-linked
revolving credit facility
-- The Company will publish its audited full year 2023 financial results on 21 March 2024.
OUTLOOK
2024 guides to a year of higher production at lower costs
-- Gold production guidance range of 470,000 to 500,000 oz per
annum weighted evenly between H1:H2 (50:50)
-- Cost guidance:
o Cash cost guidance range of US$700-850/oz produced, and
o AISC guidance range of US$1,200-1,350/oz sold
o Guidance reflects a range of diesel prices from 75-90 US cents
per litre
RESULTS SUMMARY
All financial data points included within this report are
unaudited
Q4 2023 Q4 2022 % <DELTA> Q3 2023 % <DELTA> FY 2023 FY 2022 % <DELTA>
============================== ======== ======== ========== ======== ========== ======== ======== ==========
SAFETY
LTIFR (1m hours) 0.00 0.00 0% 0.00 0% 0.08 0.08 0%
TRIFR (1m hours) 0.97 2.95 -67% 3.83 -75% 2.83 2.61 8%
==============================
OPEN PIT
Total material mined (kt) 32,229 36,401 -11% 31,655 2% 129,186 136,420 -5%
Ore mined (kt) 5,401 3,032 78% 4,501 20% 16,784 11,696 44%
Ore grade mined (g/t Au) 0.67 0.96 -30% 0.74 -9% 0.78 0.99 -21%
============================== ======== ==========
UNDERGROUND
Ore mined (kt) 301 233 29% 245 23% 1,004 829 21%
Ore grade mined (g/t Au) 4.31 4.25 1% 4.61 -7% 4.33 4.75 -9%
============================== ======== ==========
PROCESSING
Ore processed (kt) 3,152 3,045 4% 2,786 13% 12,020 12,114 -1%
Feed grade (g/t Au) 1.35 1.23 10% 1.25 8% 1.27 1.26 1%
Gold recovery (%) 89.1 88.6 1% 88.5 1% 88.7 88.2 1%
Gold production (oz) 128,127 109,564 17% 101,370 26% 450,058 440,974 2%
============================== ======== ==========
COST & SALES
Gold sold (oz) 133,465 108,441 23% 103,807 29% 456,625 438,638 4%
Cash costs (US$/oz produced) 984 997 -1% 882 12% 895 913 -2%
AISC (US$/oz sold) 1,172 1,441 -2% 1,266 -7% 1,220 1,399 -13%
Realised gold price (US$/oz) 1,983 1,735 14% 1,927 3% 1,948 1,794 9%
FINANCIALS
Revenue (US$000) 265,246 188,523 41% 200,404 32% 891,262 788,424 13%
Adjusted capex (US$'000) 48,056 64,828 -26% 56,528 -15% 201,550 224,270 -10%
Gross capex (US$'000) 36,248 69,981 -48% 59,089 -39% 202,392 283,543 -29%
============================== ======== ======== ========== ======== ========== ======== ======== ==========
KEY MILESTONES
-- Doropo Project, Cote d'Ivoire, completed DFS (mid-2024)
-- Sukari accelerated waste-stripping programme completion (mid-2024)
-- EDX exploration update (H2 2024)
-- Sukari 50MW grid connection (H2 2024)
WEBCAST
The Company will host a webcast today, Thursday, 18 January at
08.30 GMT where the senior executive will discuss the results,
followed by an opportunity to ask questions.
-- Webcast link : https://www.lsegissuerservices.com/spark/Centamin/events/7e02f555-5752-4816-ad8a-cc6070561d9b
PRINT-FRILY VERSION of the quarterly results:
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 million ounces of gold, and today has a
projected mine life to 2035.
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
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 FTI Consulting
Alexandra Barter-Carse, Head of Corporate Ben Brewerton / Sara Powell / Nick Hennis
Communications +442037271000
investor@centaminplc.com centamin@fticonsulting.com
HEALTH AND SAFETY
Operational safety continues to be a key focus across the Group
with no LTIs being reported in the quarter (FY: 1 LTI).
The Q4 LTIFR was zero per 1,000,000 site-based hours worked (FY:
0.08). The total recordable injury frequency rate ("TRIFR") for Q4
was 0.97 per 1,000,000 site-based hours worked (FY: 2.83), down 67%
year on year ("YoY"). TRIFR for 2023 was 2.83, which was marginally
above our 2023 target of 2.78. At Sukari, we continue to advance
our preparations for certification of our OHS management system
against ISO 45001 with our first certification audit scheduled in
Q1 2024.
Sukari Gold mine, egypt
(Q4 2022 vs Q4 2021)
Production
Sukari Gold Mine ("Sukari") produced 128,127oz (FY: 450,058 oz)
in Q4, a 17% increase YoY driven largely by an increased
contribution from underground ore mined during the quarter and
high-grade ore stockpiled from the previous quarter.
Production guidance range for 2024 is 470,000 to 500,000 ounces
representing an increase in annual production from 2023.
Open pit mining
Total material moved (waste and ore) in Q4 decreased by 11% YoY
to 32.3Mt (FY: 129.8Mt) as mining increased at the top of the
Sukari hill in Stage 7, which has a lower mining rate given the
topography.
Total open pit waste material mined (owner and contractor) for
Q4 was 26.8Mt (FY: 112.4Mt), a 24% decrease YoY, predominantly due
to the reclassification of material scheduled to be waste to
low-grade ore from Stage 7. This reclassification of waste to ore
also resulted in a reduction in the strip ratio and grade per
tonne. The strip ratio for Q4 was 5.0:1 (waste:ore) (FY: 6.7:1).
The ongoing contractor waste-stripping programme mined (10.0Mt),
further improving mining flexibility within the open pit.
During Q4, open pit ore was mined from multiple working areas
with ore processed sourced primarily from Stage 5 North and East.
Lower-grade ore mined from Stage 7 was sent to the dump leach.
Total open pit ore mined for Q4 was 5.4Mt (FY: 16.8Mt), a 78%
increase YoY, at an average mined grade of 0.67 g/t Au (FY: 0.78g/t
Au), reflecting the 2.2Mt of low-grade ore mined from Stage 7
during the quarter.
During 2023 the accelerated waste-stripping programme
outperformed against budgeted tonnes by 22%. The programme is
currently 86% complete and expected to be concluded by the middle
of 2024.
Underground mining
Total material mined (waste and ore) in Q4 was 413kt (FY:
1,469kt), a 37% increase YoY. Total ore mined was 301kt (FY 2022:
1,004kt) at an average combined (stoping and development) grade of
4.31g/t Au (FY: 4.33g/t Au). This represented a 29% increase in ore
tonnes YoY and a 1% increase in grade YoY.
The underground ore mined consisted of 223 kt of ore mined from
stopes at an average grade of 4.12g/t Au, and 79kt of ore mined
from development, at an average grade of 4.85g/t Au.
Processing
During Q4, the plant processed 3.2Mt of ore (FY: 12.0Mt), a 5%
increase YoY, at an average feed grade of 1.35 g/t Au (FY: 1.27g/t
Au), a 10% increase YoY reflecting the increased underground ore
mined during the quarter and high-grade ore stockpiled during the
plant maintenance in Q3.
The metallurgical gold recovery rate was 89.1% for the quarter
(FY: 88.7%), above budget, driven by higher grades, usage of new
reagents and improved comminution control.
During the quarter, the closing stockpile balance was 21.0Mt at
a grade of 0.47g/t Au.
EXPLORATION PROJECTS
The total exploration and development spend for the quarter was
US$7 million (FY: US$31m).
Doropo Gold Project (Cote d'Ivoire)
During Q4, work at Doropo continued progressing the ESIA and DFS
including updated scheduling and cost estimates using the latest
resource model, metallurgical test work and infrastructure and
flowsheet design with technical field work primarily the ongoing
hydrology, sterilisation and geotechnical drilling .
The DFS and ESIA work is expected to be completed by June
2024.
Eastern Desert Exploration ("EDX") (Egypt)
During Q4, the focus was on completing our maiden drill
programme on the Nugrus block, adjacent to the Sukari mining
concession. The initial 10,000 metre drill programme was increased
to 16,216 metres with the identification of additional drill
targets. A recent comprehensive update on EDX is available here
.
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.
SALES AND COSTS
Gold sales for the quarter were 133,465 oz (FY: 456,625oz), a
23% increase YoY. The average realised gold price for the quarter
was US$1,983/oz (FY: US$1,948/oz), up 2% YoY. Revenues generated
were US$264.7 million (FY: US$889.4m), a 40% increase YoY, driven
by higher gold price and gold sales, reflecting the deferred
production from Q3 due to the mill maintenance.
Unit cash costs of production were US$984/oz produced (FY:
US$895/oz), reflecting an 1% improvement YoY. The AISC of
US$1,172/oz Au sold (FY: US$1,220/oz) a 19% improvement YoY,
reflecting higher gold sales.
In Q4, we reached our US$150 million multi-year cost savings
target. Despite the continuing inflationary pressures, we remain
firmly focussed on stringent cost control and identifying new
potential cost savings opportunities.
Cost guidance for 2024 reflects the Company's ongoing prudent
approach to input cost assumptions recognising ongoing inflationary
pressures and global geopolitical tensions. For example, the cost
ranges reflect assumed diesel prices ranging from 75-90 US cents
per litre. Cash cost guidance is between US$700-850/oz produced and
AISC guidance is between US$1,200-1,350/oz sold.
Capital Expenditure
As part of the reinvestment programme at Sukari, key capital
projects progressed as scheduled during Q4, including TSF2
embankment raise, north dump leach expansion, long-lead deposit on
open pit dump trucks and ongoing waste-stripping programme.
The gross capex in Q4 was US$36 million (FY: US$202m) and after
removing the impact of this waste mining accounting treatment which
has no impact on net cash flow, adjusted capex was US$48 million
(FY: US$201m). Adjusted capex for Q4 is greater than gross capex
driven by the year-end reconciliation. Gross capex guidance for
2023 was US$272 million including US$48 million of sustaining waste
stripping capitalised. Actual sustaining waste-stripping
capitalised was US$1m due to the increased ore mined from Stage 7
which had been budgeted as waste. At the Q3, the Company flagged
capex savings resulting from lower than budgeted realised fuel
price and revised equipment rebuild scheduling in line with the
updated Sukari Life of Mine plan released in October 2023.
2024 capex guidance
In 2024, adjusted capex guidance is US$215 million, including
2023 deferred capex, US$112 million of sustaining capex and US$103
million non-sustaining capex, of which US$58 million is allocated
to growth projects that are funded from Centamin treasury and under
the Sukari Concession Agreement are cost recovered over three
years. These discreet projects include grid, fleet expansion and
underground expansion. Adjusted capex excludes US$91 million of
sustaining deferred stripping reclassified from operating
costs.
All capex calculations prudently assume diesel price of 90 US
cents per litre.
2024 2024
Guidance Sukari LOM Plan(1)
===========================================================================
(US$m) (US$m)
=========================================================================== ========== ====================
SUSTAINING CAPEX
Underground mine development 53 57
Equipment rebuilds 44 37
Other sustaining capex 15 16
Total adjusted sustaining capex 112 110
=========================================================================== ========== ====================
NON-SUSTAINING CAPEX
Growth capex (funded from treasury) including grid connection, fleet
replacement and exploration 58 55
Contract waste stripping capitalised 36 34
Other non-sustaining capex 9 -
Total non-sustaining capex 103 89
=========================================================================== ========== ====================
TOTAL ADJUSTED CAPEX (after reclassification) 215 199
=========================================================================== ========== ====================
Sustaining element of open pit waste stripping capitalised from opex (2) 91 Included in opex
=========================================================================== ========== ====================
(1) As per the new Sukari life of mine plan published on 12
October 2023.
(2) Reclassified 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
Centamin is in a strong financial position, with net cash and
liquid assets to US$153 million as at 31 December 2023. The Company
has a US$150 million senior secured sustainability linked revolving
credit facility ("RCF") which is available and undrawn.
Liquidity
31 December 2023
(US$m)
=============================================== ==================
Cash on hand 93
Bullion on hand 14
Gold sales receivable 45
Financial assets at fair value through profit
or loss* 1
TOTAL CASH & LIQUID ASSETS 153
=============================================== ==================
Sustainability-linked RCF (undrawn) 150
=============================================== ==================
TOTAL LIQUIDITY 303
=============================================== ==================
* 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
Systems upgrade - SAP implementation
Throughout 2023, Centamin has been transferring the Group's
financial accounting systems to SAP. SAP is intended to streamline
operations and improve data insights, data integrity and an overall
stronger business framework - a key to the Company's digital
transformation and long term strategic objectives. The project was
launched over a period of 10 months across the organisation with
November 2023 as the first month under the new SAP system.
All financial data points included within this report are
unaudited and subject to internal and external verification. Full
year 2023 results are due out on 21 March 2024.
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 2022 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 and gold
sales receivables.
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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DRLBRMLTMTIBBLI
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