REG - Centamin PLC - Interim Results
25/07/2024 07:00
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RNS Number : 7349X Centamin PLC 25 July 2024
25 July 2024
Centamin plc
("Centamin" or "the Company" of "the Group")
LSE: CEY / TSX: CEE
INTERIM report
for the six months ended 30 June 2024 ("H1 2024")
MARTIN HORGAN, CEO, commented: "Our focus on operating performance has enabled
us to take advantage of stronger gold prices to deliver improved EBITDA and a
significant increase in free cash flow. Looking ahead to H2 2024, the
commencement of the grid connection project will build on our recent success
in taking costs out of the business, with commissioning due in H1 2025.
At the same time, we are advancing the organic growth opportunities within our
portfolio. The completion of the DFS at Doropo shows a very robust project; we
are now well positioned to apply for a mining licence which we expect should
be granted by the end of 2024, ahead of a final investment decision.
Meanwhile, we are aggressively following up on the recent success at our
Eastern Desert Exploration ("EDX") project with the continued drill out of the
Little Sukari discovery."
H1 2024 HIGHLIGHTS
● The Group lost time injury frequency rate ("LTIFR") was 0.32 per one million
hours worked and the total recordable injury frequency rate ("TRIFR") was 1.45
per one million hours worked
● Gold production of 224,738 ounces ("oz") a 2% year on year ("YoY") increase,
and gold sales of 209,269 oz from the Sukari Gold Mine ("Sukari")
● Q2 2024 cash costs and All-in sustaining costs ("AISC") improved significantly
on Q1 2024 performance. H1 2024 Cash costs of US$977/oz produced, and AISC of
US$1,382/oz sold
● Capital expenditure ("capex") of US$89.5 million, including raising tailings
storage facility ("TSF") 2, open pit and underground fleet purchases,
equipment rebuilds, underground ventilation upgrades and waste mining
● Group free cash flow(1) of US$42.7 million, a 121% YoY improvement from
US$19.4 million in H1 2023
● Positive definitive feasibility study ("DFS") at the Doropo Gold Project, with
a post-tax net present value of US$426 million using an 8% discount rate
("NPV8%") and US$1,900/oz gold price(2), an internal rate of return ("IRR") of
34% IRR and a 2.1 year payback. Link to 18 July 2024 announcement (here
(https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=5732062&lang=en-GB&companycode=au-cey&v=)
)
● Robust balance sheet: cash and liquid assets of US$200 million, as at 30 June
2024 and total liquidity of US$350 million including the undrawn US$150
million sustainability-linked revolving credit facility
● Interim dividend of 2.25 US cents per share, equating to US$26 million,
exceeding the minimum policy of distributing 30% of cash flow available for
dividends(3) with a 53% payout ratio
GROUP FINANCIAL SUMMARY(4)
Quarter on quarter ("QoQ") Year on Year ("YoY")
comparative comparative
US$'000 unless stated Q2 2024 Q1 2024 % Δ H1 2024 H1 2023 % Δ
Gold produced (oz) 119,917 104,821 14% 224,738 220,562 2%
Gold sold (oz) 116,776 92,494 26% 209,269 219,354 -5%
Cash costs (US$/oz produced) 879 1,088 -19% 977 849 15%
AISC (US$/oz sold)(1) 1,273 1,519 -16% 1,382 1,228 13%
Average realised gold price (US$/oz) 2,341 2,062 14% 2,218 1,936 15%
Revenue 274,111 190,984 44% 465,095 425,612 9%
Adjusted EBITDA(1) n/a n/a - 210,777 192,925 9%
Profit before tax n/a n/a - 117,149 114,804 2%
Basic EPS (US cents) n/a n/a - 7.19 7.86 -9%
Capital expenditure 43,413 46,040 -6% 89,453 108,261 -17%
Operating cash flow n/a n/a - 203,560 171,767 19%
Adjusted free cash flow(1) 32,400 10,345 213% 42,743 21,900 95%
1 Refer to Non-GAAP measures end note
2 100% project basis, NPV calculated as of the commencement of construction
and excludes all pre-construction costs
3 See page 8 for interim dividend calculation
4.The Group publishes profitability performance metrics on a bi-annual basis
GROUP OPERATIONAL SUMMARY
Quarter on quarter ("QoQ") comparative Year on Year ("YoY")
comparative
Q2 2024 Q1 2024 % Δ H1 2024 H1 2023 % Δ
SAFETY
LTIFR (1m hours) 0.33 0.32 3% 0.32 0.15 113%
TRIFR (1m hours) 1.31 1.28 2% 1.45 2.94 -51%
OPERATIONAL
Open pit material mined (kt) 32,312 31,772 2% 64,084 65,301 -2%
Open pit ore mined (kt) 7,465 6,231 20% 13,696 6,882 99%
Open pit ore mined grade (g/t Au) 0.67 0.63 6% 0.65 0.88 -26%
Underground ore mined (kt) 278 230 21% 508 458 11%
Underground ore mined grade (g/t Au) 3.33 3.2 4% 3.27 4.21 -22%
Ore processed (kt) 3,339 3,066 9% 6,405 6,082 5%
Feed grade (g/t Au) 1.19 1.12 6% 1.15 1.23 -7%
Gold recovery (%) 87.8 87.66 0% 87.7 88.5 -1%
Gold produced (oz) 119,917 104,821 14% 224,738 220,562 2%
FULL YEAR 2024 OUTLOOK - Guidance Unchanged
Production
● Gold production guidance range of 470,000 to 500,000 oz per annum weighted
towards H2, as previously guided
Costs
● Cash cost guidance range of US$700-850/oz produced:
o H1 2024 cash cost performance is tracking slightly above the guidance
range as a result of the cost of moving some 2.4 million tonnes that was
planned to be mined as waste during the period being reclassified as ore for
later treatment through the dump leach facility. The waste to ore conversion
resulted in a lower strip ratio in Stage 7. As a result of the lower strip
ratio the waste stripping costs that were expected to be allocated to
sustaining capex have been reported in cash costs during the period.
● AISC guidance range of US$1,200-1,350/oz sold:
o The H1 2024 AISC of US$1,382/oz is calculated on a per ounce sold basis
and was therefore impacted by the 15,469 oz difference between production and
sales resulting from the timing of gold sales.
● The cost guidance reflects a range of diesel prices from 75-90 US cents per
litre. The average realised price in H1 2024 was 80 US cents per litre
Capex
● Adjusted capex guidance of US$215m is maintained, including:
o US$112m of sustaining capex
o 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
o Adjusted capex guidance for the full year excluded US$91m of sustaining
deferred stripping reclassified from operating costs as per IFRIC 20. As a
result of the aforementioned reduction in the strip ratio, these costs were
reported in cash costs and were not capitalised as originally planned during
H1 2024. We now budget US$45m of sustaining deferred stripping in H2 2024.
KEY DELIVERABLES
● Doropo Project DFS, Cote d'Ivoire (Completed) - Link to 18 July 2024
announcement (here
(https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=5732062&lang=en-GB&companycode=au-cey&v=)
)
● Accelerated waste-stripping programme (Completed) - Link to 18 July 2024
announcement (here
(https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=5732066&lang=en-GB&companycode=au-cey&v=)
)
● Eastern Desert Exploration ("EDX") drilling update (H2 2024)
● Completion of Solar Expansion Study (H2 2024)
● Sukari 50MW grid connection project completion (H1 2025)
● Doropo final investment decision (H1 2025)
WEBCAST PRESENTATION
The Company will host a webcast presentation today, Thursday, 25 July 2024, at
08.30 BST to discuss the results, followed by an opportunity to ask questions.
Webcast link:
https://www.lsegissuerservices.com/spark/Centamin/events/80411d15-3a8c-475a-8162-3bbcf0a2ac0e
(https://www.lsegissuerservices.com/spark/Centamin/events/80411d15-3a8c-475a-8162-3bbcf0a2ac0e)
PRINT-FRIENDLY VERSION of the announcement: www.centamin.com/
(http://www.centamin.com/media/companynews) media/companynews
(http://www.centamin.com/media/companynews) .
About Centamin
Centamin is an established gold producer, with premium listings on the London
Stock Exchange and the 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 5.7 million ounces of gold, and today has a
projected mine life to 2034.
Through its large portfolio of exploration assets in Egypt and Côte d'Ivoire,
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
(http://www.centamin.com) or contact:
Centamin plc FTI Consulting
Michael Stoner, Head of Corporate Ben Brewerton / Sara Powell / Nick Hennis
investor@centaminplc.com (mailto:investor@centaminplc.com) +442037271000
centamin@fticonsulting.com (mailto:centamin@fticonsulting.com)
ENDNOTES
Guidance
The Company actively monitors the global geopolitical uncertainties and
macroeconomics, such as global inflation, and guidance may be impacted if the
supply chain, workforce or operations are disrupted.
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, Free cash flow and adjusted Free cash flow.
Management believes these measures provide valuable additional information for
users of the financial statements to understand the underlying trading
performance. An explanation of the measures used along with reconciliation to
the nearest IFRS measures is provided in the Financial Review.
Profit after-tax attributable to the owners of the parent ("shareholders")
Centamin's profit after the profit share split with the Egyptian Mineral
Resource Authority ("EMRA"), the Company's Egyptian government partner.
Royalties
Royalties are accrued and paid six months in arrears.
Liquidity
Liquidity is defined as the sum of cash and cash equivalents and available
credit under the Company's revolving credit facility.
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.
Gold produced
Gold produced is gold poured and does not include gold-in-circuit at period
end.
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 direct or indirect
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, the
risks and uncertainties associated with the direct and indirect impacts 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
CEO OPERATIONAL Review
(H1 2024 vs H1 2023)
I am pleased to report a solid first half of 2024 at Sukari, whilst continuing
to advance numerous projects and work streams that will unlock the full
potential of Centamin's portfolio. We remain on track to deliver against our
2024 guidance and all key capital projects are progressing.
HEALTH & SAFETY
We maintained our focus on the protection of our workforce and the local
communities that we work in. Our safety performance continues to be strong,
while noting that our ultimate ambition is to create a zero-harm workplace.
We had one lost time injury at Sukari (as previously reported in Q1 2024) and
two at EDX during H1 2024.
The Group's LTIFR was 0.32 per one million hours worked and we remain focused
on meeting our annual target. The Group TRIFR was 1.45 per one million hours
worked, a 51% decrease YoY.
SUSTAINABILITY
Centamin published the 2023 Sustainability Report (Link to report here
(https://www.centamin.com/media/3059/centamin-sr23_web.pdf) ) which was
produced in accordance with the GRI Sustainability Reporting Standards ("GRI")
'Core option'; the GRI Mining and Metals Sector Supplement; the Sustainability
Accounting Standards Board ("SASB") for the metals and mining industry; and
the recommendations of the Task Force on Climate-related Financial Disclosures
("TCFD"). This report also provides a statement of our conformance to the
Global Industry Standard on Tailings Management ("GISTM").
CORPORATE
I am delighted to report the promotion of Gustav du Toit to the role of Chief
Operating Officer, after two and a half years in the role of General Manager
of the Sukari mine where he led the reinvestment programme and the resulting
operational reset at Sukari. Gustav's responsibilities will now broaden to
include oversight of EDX and the advancement of the Doropo project, following
the completion of the positive DFS. Gavin Harris takes on the role of Sukari
General Manager, from his previous role as Operations Director and Deputy
General Manager. Islam Al Ashker has been promoted to the role of Deputy
General Manager. The fact that all three roles have been filled by the
promotion of internal candidates demonstrates the depth of talent within the
team and the benefit of the employee development programme which looks to
identify, develop and promote individuals into leadership positions.
SUKARI GOLD MINE (Egypt)
The team delivered another solid operational performance in H1 2024 and we
remain on track to meet the 2024 production guidance.
In the open pit, a total of 64 Mt of material was mined, representing a 2%
decrease year-over-year (YoY). Of this, 50 Mt was waste, with 33 Mt mined by
the Centamin fleet and the remainder by contractor Capital Ltd. The 120 Mt
accelerated waste-stripping programme was completed ahead of schedule,
allowing us to retain Capital Ltd to mine up to 10 Mt of waste over the next
three months to September 2024. The additional capacity will support the
construction of a new dump leach pad, as well as facilitating the early
completion of limited waste stripping scheduled for 2025 ahead of the delivery
of the new 785C dump trucks. The net result is expected to be an incremental 2
to 3 Mt to the planned total annual volume at Sukari for 2024, equating to a
1-2% increase.
We mined 14 Mt of ore at an average grade of 0.65 g/t Au, a 99% increase in
tonnage and a 26% decrease in grade YoY. This change reflects the
reclassification of material from Stage 7, which was previously scheduled as
waste, to low-grade ore, leading to a reduction in the strip ratio for Stage
7. The majority of the reclassified material was placed on the dump leach with
the balance going to stockpiles. The average milled grade from the open pit
was 0.97 g/t Au for H1 2024, a 2% decrease YoY.
The underground mine demonstrated the benefits of significant infrastructure
and equipment upgrades since transitioning to owner mining, with the final
ventilation upgrade completed in Q1 2024. These enhancements resulted in an
11% year-over-year (YoY) increase in ore tonnage mined. Although grades were
lower YoY, averaging 3.3 g/t Au, we expect average grades to improve in H2
2024, aligning with our underground reserve grade.
The plant processed 6.4Mt of ore at an average feed grade of 1.15 g/t Au, a 5%
increase in tonnes and 7% decrease in grade YoY. There were several key
projects during the period, including mill relining and work on the mill
motors, all of which were completed successfully with no unplanned disruption
to throughput.
The metallurgical gold recovery rate was 87.7%, reflecting a 1% decrease
year-over-year (YoY). This was influenced by the processing of oxide ore mined
in Stage 7, which negatively impacts recovery rates, in addition to the lower
feed grade. The mining of oxide ore is largely complete, and the remaining
oxide ore will be blended to minimise its impact on recovery.
Doropo GOLD Project (Côte d'Ivoire)
On 18 July 2024, we published the results from the Doropo
definitive-feasibility study
(https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=4346596&lang=en-GB&companycode=au-cey&v=)
("DFS"), which demonstrated the economic robustness of the project with a
post-tax NPV(8%) of US$426 million and an IRR of 34% at US$1,900/oz gold
prices. Importantly, it fulfils Centamin's hurdle rate of 15% internal rate of
return ("IRR") at the US$1,450/oz gold price used for Mineral Reserve
estimation.
The project sits in a well-established mining jurisdiction with a Mineral
Reserve estimate of 1.87Moz, supporting a 10-year life of mine averaging a
production rate 167,000 ounces per annum at all-in sustaining costs of
US$1,047/oz.
Financing options for the project are well advanced, supported by a clear
roadmap for early works that will mitigate completion risks. This study
underlines our confidence in Doropo's potential to become a commercially
viable project, bringing substantial investment and employment opportunities
to northeastern Côte d'Ivoire.
The DFS has resulted in a plan with significantly lower execution risk,
relative to the PFS, reflecting a reconfiguration of the project to reduce its
social impact on local communities. We received regulatory approval of the
Environmental and Social Impact Assessment with the receipt of the
environmental permit in June 2024. The DFS, together with the environmental
permit will form key documents in support of our submission for a mining
licence to the Côte d'Ivoire Government. This application is scheduled to be
submitted in Q3 2024. Following the award of the mining licence and conclusion
of the mining convention, we will then progress to a final investment
decision, following which we will provide an update on the project financing.
Of the US$14 million budgeted for Doropo in 2024, US$8.6 million was spent on
completion of both the DFS and completing the Environmental and Social Impact
Assessment ("ESIA"). There is up to US$6 million identified for early works
including starting front-end engineering design ("FEED"), grade control
drilling and some limited earthworks. These activities will reduce project
delivery risk and potentially expedite construction timelines.
EXPLORATION
Eastern Desert Exploration ("EDX") (Egypt)
At the previously identified targets within the Nugrus block, Little Sukari,
and Umm Majal, the exploration team completed detailed mapping and
ground-based geophysical surveys, consisting of induced polarization (IP) and
magnetic surveys. The second phase of drilling commenced across these targets,
which will now include an expanded programme of 20km of core and reverse
circulation drilling, building on the successful initial drill campaign as
reported (here
(https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=4441857&lang=en-GB&companycode=au-cey&v=)
). In the Um Rus block, follow-up work on soil and rock chip samples from BLEG
anomalies has been completed. In the Nadj block, we established a remote camp
and successfully concluded the BLEG sampling programme, with the collected
samples now being prepared for analysis in overseas laboratories. An update on
the EDX drilling programme is expected to be announced in the second half of
2024.
ABC (Côte d'Ivoire)
At ABC, in light of encouraging drill results from neighbouring permits to the
north, we undertook a soil sampling programme across the northern portion of
the Farako-Nafana permit. This area was previously sampled using termite
mounds as the sample medium; however, it was prudent to re-sample using soil
geochemistry to ensure accuracy.
Geological interpretation of the soils data is ongoing. If any soil anomalies
are identified that require further investigation, we plan to initiate a drill
testing programme towards the end of the year, during the dry season.
Additionally, there is potential to conduct infill drilling in the Kona
Central and South resources.
OUTLOOK
Centamin remains well positioned, and guidance for 2024 remains unchanged.
I would like to commend our workforce for their commitment, professionalism
and passion. I would also like to thank our local communities, partners and
wider stakeholders for their support and shared vision.
We look forward to a busy second half of news flow, as we continue to deliver
on our commitments and progress towards our vision of being a responsible
multi-asset, multi-jurisdictional producer.
Martin Horgan
CEO
25 July 2024
CFO FINANCIAL REVIEW
(H1 2024 vs H1 2023)
We are pleased to report material improvements across the majority of our key
financial metrics including revenue, EBITDA, profit before tax, operating cash
flow and free cash flow.
H1 2024 has delivered strong operating cash flow of US$204 million. This
translated into a positive Group free cash flow of US$43 million, after Sukari
profit share distributions of US$74 million to our Egyptian partner, EMRA, and
US$74 million to Centamin, and US$12 million spent advancing our organic
growth pipeline at Doropo (Côte d'Ivoire), EDX (Egypt) and ABC (Côte
d'Ivoire).
FINANCIAL PERFORMANCE
Revenues increased YoY by 9% to US$464 million, from annual gold sales of
209,269 ounces, down 5%, at an average realised price of US$2,218/oz, up 15%
YoY. Due to timing of gold shipments, a total of 22,381 ounces of unsold gold
bullion was held at Sukari as at 30 June 2024, equivalent to US$52 million
which has now been sold.
The Group adjusted EBITDA was US$211 million, at a 45% EBITDA margin and up 9%
YoY, principally driven by
● A 15% increase in average realised gold price; but also due to:
● A 2% decrease in the combined open pit and underground material mined;
● Lower fuel prices, offset by higher processed volumes, has resulted in a net
US$8 million savings against budget; and
● Offset by a reduction in stripping costs capitalised to the balance sheet
during the period (as per IFRIC 20). This was due to material designated as
waste in the plan which, upon mining this material, was reclassified as
low-grade ore, the strip ratio was reduced accordingly, and as a result, those
costs remained as operating costs for the period, except for the relevant
portion capitalised as inventory at period end.
Profit before tax increased by 2% to US$117 million, due to:
● 9% increase in revenue, in line with the 15% increase in average realised gold
price offset by the 5% decrease in gold ounces sold;
● a significant increase in finance income due to rising interest rates in both
Egypt and the United Kingdom which resulted in a US$1.3 million increase in
interest income from funds placed in term-deposit, offset by:
○ 42% increase in other operating costs, predominantly due to
○ a US$3m increase in corporate costs related to share-based payments and
salaries and wages offset by decrease in the cost of consultants;
○ a US$1m increase in royalties paid; and
○ a US$6m increase in provisions for obsolete and redundant stock
○ 36% decrease in greenfield exploration and evaluation expenditure, as
budgeted; and
○ 10% increase in cost of sales as lower stripping costs were capitalised due to
better-than-expected ore to waste conversion.
The above factors together with an increase in EMRA distributions during the
period resulted in basic EPS decreasing by 9% to 7.19 US cents.
COST MANAGEMENT
Cash costs of production in H1 2024 were US$220 million, a 17% increase YoY.
This is primarily due to lower capitalisation of costs (discussed above),
increased output from the underground and higher throughput in the plant. Unit
cash costs of production were US$977/oz produced, a 15% increase, driven by
the aforementioned cost drivers, partly offset by higher production volumes.
AISC in H1 2024 were US$289 million, a 7% increase YoY, and with lower sales
volumes (due to timing of gold shipments) resulting in unit AISC of
US$1,382/oz sold, a 13% increase YoY.
STRONG FINANCIAL POSITION
As of 30 June 2024, Centamin had cash and liquid assets of US$200 million,
including 22koz of gold inventory waiting to be sold. From a liquidity
standpoint, the US$150 million sustainability-linked revolving credit facility
remains available and undrawn.
CAPITAL INVESTMENT
H1 2024 gross capital expenditure was US$89 million, including the underground
ventilation upgrades, continued contracted waste-stripping programme, new
underground and open pit equipment purchases, underground development, open
pit equipment rebuilds, and raising TSF2.
Total sustaining capex was US$47 million, and non-sustaining was US$42
million. We had expected a higher capex spend in H1 but due to minor changes
in scheduling, this has been moved to H2 2024 and we remain on track to meet
2024 guidance.
Interim dividend
Consistent with the Company's stated commitment to shareholder returns, the
Board declares an interim dividend of 2.25 US cents per share (US$26 million)
for the six-month period ended 30 June 2024. As per the dividend policy, this
distribution is in line with the commitment to return a minimum of 30% of
Group free cash flow before growth capex(3) to shareholders in cash dividends.
In consideration of the below factors, and reflecting the Board's confidence,
a total of 53% of H1 2024 Group free cash flow before growth capex will be
distributed to shareholders on 27 September 2024:
● Centamin is in a financially robust position with US$200 million in cash and
liquid assets;
● The US$150 million sustainability linked revolving credit facility remains
undrawn as a result of H1 2024 growth capex being funded from internally
generated cash flows; and
● The Company is operationally and financially well positioned for a stronger H2
2024, in line with plan.
The interim dividend is calculated by the following:
30 June 2024
(Unaudited)
US$'000
Group free cash flow 42,743
Add back:
Growth capex financed from treasury(1) 6,446
Cashflow available for dividends 49,189
30% minimum distribution as per dividend policy (14,757)
Surplus cash flow for discretionary capital allocation(2) 34,432
Board interim dividend supplement (11,367)
Total interim dividend declared 26,124
1 Defined as Sukari growth capex funded from Treasury and available for
cost-recovery as per the Concession Agreement.
2 Discretionary capital allocation options include future project investment,
portfolio optimisation and supplemental shareholder returns
Please refer to the Dividend Declaration announcement and or the website
(www.centamin.com/investors/shares-dividends/dividend-information/
(http://www.centamin.com/investors/shares-dividends/dividend-information/) )
for further detail including the interim dividend timetable.
OUTLOOK
Financially, we expect a stronger second half of 2024 driven by higher
production volumes. Meanwhile, our focus on cost management means we remain
fully focused on managing the bottom line of the business so that we can
maximise the value at Sukari whilst delivering growth and diversification
alongside stakeholder returns.
ROSS
JERRARD
CFO
25 July 2024
primary statements highlights
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Revenue 465,095 425,612 891,262
Revenue from gold and silver sales for the period increased by 9% year-on-year
to US$465 million (2023: US$426 million) with a 15% increase in the
year-on-year average realised gold price to US$2,218 per ounce sold (2023:
US$1,936 per ounce sold) offset by a 5% decrease in gold ounces sold to
209,269 ounces (2023: 219,354 ounces).
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Cost of sales (295,091) (267,801) (596,836)
Cost of sales represents the cost of mining, processing, refining, transport,
site administration, depreciation, amortisation and movement in production
inventories. Cost of sales is up 10% year-on-year to US$295 million.
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Dividend paid - non-controlling interest in SGM (74,000) (46,000) (112,000)
Profit share payments during the year are reconciled against SGM's audited
financial statements. Any variation between payments made during the year
(based on the Company's estimates) and the SGM's audited financial statements,
may result in a balance due and payable to EMRA or advances to be offset
against future distributions. SGM's 30 June 2023 financial statements have
been audited and signed off; the 30 June 2024 financial statements will be
audited in due course in line with the agreed timetable.
Certain terms of the Concession Agreement (CA) and amounts in the cost
recovery model may also vary depending on interpretation and are therefore
subject to continued discussions between EMRA and management which can result
in variations in the profit-sharing split between periods. Centamin and EMRA
continue working on closing outstanding open audit periods as well as agree on
the timing and mechanism of any financing and ultimately the distribution of
future proceeds between partners.
Refer to note 1.2.1.2 in the 2023 Annual Report for details of the treatment
and disclosure of the EMRA profit share.
CAPITAL EXPENDITURE
The following table provides a breakdown of the total capital expenditure of
the Group:
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Underground exploration 3,884 5,368 9,225
Underground mine development 14,962 16,011 32,350
Other sustaining capital expenditure 28,155 28,950 46,241
Total sustaining capital expenditure 47,001 50,329 87,816
Non-sustaining exploration expenditure - 1,210 2,947
Other non-sustaining capital expenditure((1)) 42,452 56,723 113,348
Total gross capital expenditure 89,453 108,262 204,111
Less:
Sustaining element of waste stripping capitalised((2)) - (10,023) (843)
Capitalised Right of Use Assets (14) (66) (1,216)
Adjusted capital expenditure 89,439 98,173 202,052
(1) Non-sustaining capital expenditure included the spend on North dump
leach pad expansion, tailings storage facility stage lifts and the Capital
Waste Stripping. Non-sustaining costs are primarily those costs incurred at
'new operations' and costs related to 'major projects at existing operations'
that will materially benefit the operation.
(2) Reclassified from operating expenditure.
EXPLORATION EXPENDITURE
The following table provides a breakdown of the total exploration expenditure
of the Group:
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Greenfield exploration
Burkina Faso - 775 869
Côte d'Ivoire 8,816 15,914 25,226
Egypt - Eastern Desert Exploration 3,255 2,234 5,558
Total greenfield exploration expenditure 12,071 18,923 31,653
Brownfield exploration
Sukari Tenement 3,884 6,578 12,172
Total brownfield exploration expenditure 3,884 6,578 12,172
Total exploration expenditure 15,955 25,501 43,825
Exploration and evaluation expenditure comprises expenditure incurred for
exploration activities primarily in Côte d'Ivoire and in the Egypt greenfield
permit areas. Greenfield exploration and evaluation costs (excluding Burkina
Faso) decreased by US$6 million or 33%, primarily driven by reduced work in
Côte d'Ivoire as the Definitive Feasibility Study ("DFS") stage of the Doropo
project has now been finalised. Drilling work was however significantly
expanded in the new Egypt permit areas hence the 41% or US$0.9 million
increase in the exploration costs in that area. The brownfield capitalised
exploration costs on the Sukari concession area decreased by US$3 million or
41% year on year due to the decrease in the surface exploration and evaluation
work and related activities within the Sukari concession areas.
The spend in Burkina Faso was mainly on key services and other regulatory
obligations required to formally exit the country. The in country incorporated
entities have now been formally liquidated.
SUBSEQUENT EVENTS
Interim dividend
The Directors have declared an interim dividend of 2.25 US cents per share on
Centamin plc ordinary shares (totalling approximately US$26 million). The
interim dividend for the half year period ended 30 June 2024 will be paid on
27 September 2024 to shareholders on the register on the Record Date of 30
August 2024.
Other than as noted above, there were no other significant events occurring
after the reporting date requiring disclosure in the financial statements.
NON‑GAAP FINANCIAL MEASURES
1) EBITDA and adjusted EBITDA
EBITDA is a non‑GAAP financial measure, which excludes the following from
profit before tax:
· Finance costs
· Finance income
· Depreciation and amortisation
Management considers EBITDA a valuable indicator of the Group's ability to
generate liquidity by producing operating cash flow to fund working capital
needs and capital expenditures. EBITDA is also frequently used by investors
and analysts for valuation purposes whereby EBITDA is multiplied by a factor
or 'EBITDA multiple' that is based on an observed or inferred relationship
between EBITDA and market values to determine a company's approximate total
enterprise value. EBITDA is intended to provide additional information to
investors and analysts and does not have any standardised definition under
IFRS and should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with IFRS.
EBITDA excludes the impact of income from financing activities and taxes, and
therefore is not necessarily indicative of operating profit or cash flow from
operations as determined under IFRS. Other companies may also calculate EBITDA
differently. The following table provides a reconciliation of EBITDA to profit
for the year before tax.
Adjusted EBITDA removes the effect of transactions that are not core to the
Group's main operations, like adjustments made to normalise earnings, for
example profit on financial assets at fair value through profit or loss,
impairments of property, plant and equipment, non-current mining stockpiles
and exploration and evaluation assets.
Reconciliation of profit before tax to EBITDA and adjusted EBITDA:
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
Profit for the year before tax US$'000 117,149 114,804 195,140
Finance income US$'000 (3,126) (1,791) (4,127)
Finance costs US$'000 2,179 1,380 3,526
Depreciation and amortisation US$'000 93,921 79,022 198,127
EBITDA US$'000 210,123 193,415 392,666
Add back/(less)((1)) US$'000
Net fair value loss/(gain) on derivative financial instruments US$'000 654 (490) 5,509
Adjusted EBITDA US$'000 210,777 192,925 398,175
(1) Adjustments made to normalise earnings for example profit on
financial assets at fair value through profit or loss, impairments of
property, plant and equipment, non-current mining stockpiles and exploration
and evaluation assets.
2) Cash cost of production per ounce produced and sold and all-in sustaining
costs ("AISC") per ounce sold calculation
Cash cost of production and AISC are non-GAAP financial measures. Cash cost of
production per ounce is a measure of the average cost of producing an ounce of
gold, calculated by dividing the operating costs in a period by the total gold
production over the same period. Operating costs represent total operating
costs less sustaining administrative expenses, royalties, depreciation and
amortisation. Management uses this measure internally to better assess
performance trends for the Company as a whole. Management considers that, in
addition to conventional measures prepared in accordance with GAAP, certain
investors use such non-GAAP information to evaluate the Company's performance
and ability to generate cash flows. Management considers that these measures
provide an alternative reflection of the Group's performance for the current
year and are an alternative indication of its expected performance in future
periods. Cash cost of production is intended to provide additional
information, does not have any standardised meaning prescribed by GAAP and
should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. This measure is not necessarily
indicative of operating profit or cash flow from operations as determined
under GAAP. Other companies may calculate these measures differently.
Reconciliation of cash cost of production per ounce produced:
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
Mine production costs (note 2.2) US$'000 219,407 188,344 412,827
Less: Refinery and transport US$'000 (737) (1,182) (1,871)
Movement in inventory ((1)) US$'000 837 (5) (17,133)
Cash cost of production - gold produced US$'000 219,507 187,157 393,823
Gold produced - total (oz.) oz 224,738 220,562 450,058
Cash cost of production per ounce produced US$/oz 977 849 875
1) The movement in inventory on ounces produced is only the net
movement in mining stockpiles and ore in circuit while the movement in ounces
sold (in table below) is the net movement in mining stockpiles, ore in circuit
and gold in safe inventory.
A reconciliation has been included below to show the cash cost of production
metric should gold sold ounces be used as a denominator.
Reconciliation of cash cost of production per ounce sold:
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
Mine production costs (note 2.2) US$'000 219,407 188,344 412,827
Royalties US$'000 13,931 12,733 26,682
Movement in inventory ((1)) US$'000 (9,334) 3,346 (9,536)
Cash cost of production - gold sold US$'000 224,004 204,423 429,973
Gold sold - total (oz.) oz 209,269 219,354 456,625
Cash cost of production per ounce sold US$/oz 1,070 932 942
Movement in inventory
Movement in inventory - cash (above) US$'000 (9,334) 3,346 (9,536)
Effect of depreciation and amortisation - non-cash US$'000 27,227 (4,062) 22,855
Movement in inventory - cash & non-cash (note 2.2) US$'000 17,893 (716) 13,319
(1) The movement in ounces sold is the net movement in mining
stockpiles, ore in circuit and gold in safe inventory while the movement in
inventory on ounces produced (in table above) is only the net movement in
mining stockpiles and ore in circuit while.
Reconciliation of AISC per ounce sold:
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
Mine production costs (note 2.2) US$'000 219,407 188,344 412,827
Movement in inventory US$'000 (9,334) 3,346 (9,536)
Royalties US$'000 13,931 12,733 26,682
Sustaining corporate administration costs US$'000 18,459 14,964 33,110
Rehabilitation provision interest expense unwinding US$'000 803 668 1,333
Sustaining underground development and exploration US$'000 18,847 21,379 41,575
Other sustaining capital expenditure US$'000 28,155 28,950 46,241
By‑product credit US$'000 (973) (928) (1,878)
All‑in sustaining costs ((1)) US$'000 289,295 269,456 550,354
Gold sold - total (oz.) oz 209,269 219,354 456,625
AISC per ounce sold US$/oz 1,382 1,228 1,205
(1) Includes refinery and transport.
3) Cash and cash equivalents, bullion on hand and gold and silver sales
debtor AND FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Management considers that, in addition to conventional measures prepared in
accordance with GAAP, certain investors use such non-GAAP information to
evaluate the Company's performance and ability to generate cash flow and the
measure is intended to provide additional information.
Cash and cash equivalents, bullion on hand, gold and silver sales debtor and
financial assets at fair value through profit or loss is a non-GAAP financial
measure of the available cash and liquid assets at a point in time. Management
uses this measure internally to better assess performance trends for the
Company as a whole.
This non-GAAP measure does not have any standardised meaning prescribed by
GAAP and should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with GAAP. This measure is not
necessarily indicative of cash and cash equivalents as determined under GAAP
and other companies may calculate it differently.
Reconciliation to cash and cash equivalents, bullion on hand, gold and silver
sales debtor and financial assets at fair value through profit or loss:
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Cash and cash equivalents (note 2.10(a)) 109,607 96,231 93,322
Bullion on hand (valued at the period-end spot price) 52,167 28,095 14,261
Gold and silver sales debtor 38,366 33,573 44,917
Derivative instruments at fair value through profit or loss - 3,028 654
Cash and cash equivalents, bullion on hand, gold and silver sales debtor and 200,140 160,927 153,154
financial assets at fair value through profit or loss
The majority of funds have been invested in international rolling short-term
fixed interest money market deposits.
4) Free cash flow and adjusted free cash flow
Free cash flow is a non-GAAP financial measure. Free cash flow is a measure of
the available cash after distributions to the Non-Controlling Interest ("NCI")
in SGM, being EMRA, that the Group has at its disposal to use for capital
reinvestment and to distribute to shareholders of the parent. Free cash flow
is intended to provide additional information, does not have any standardised
meaning prescribed by GAAP and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with GAAP. This
measure is not necessarily indicative of operating profit or cash flow from
operations as determined under GAAP and other companies may calculate this
measure differently.
H1 2024 H1 2023 Full Year 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Net cash generated from operating activities 203,409 171,767 353,600
Less:
Net cash used in investing activities (86,666) (106,405) (198,768)
Dividend paid - non-controlling interest in SGM (74,000) (46,000) (112,000)
Free cash flow 42,743 19,362 42,832
Add back:
Transactions completed through specific available cash resources ((1))
- 2,538 6,163
Adjusted free cash flow 42,743 21,900 48,995
(1) Adjustments made to free cash flow, for example acquisitions and
disposals of financial assets at fair value through profit or loss, which are
completed through specific allocated available cash reserve
governanCe
Share Plan Awards
Granted 02 May 2024
· The Company granted 3,348,600 performance share awards over ordinary shares of
nil par value to 16 employees of the Group under the Company's shareholder
approved Incentive Share Plan. Performance conditions and further details of
the scheme can be found in the 2023 Annual Report
(https://www.centamin.com/media/3056/centamin-ar23-web.pdf) .
· The Company granted 2,510,700 restricted cash settled share awards over
ordinary shares of nil par value to 92 senior employees across the Group under
the Company's shareholder approved Incentive Share Plan. These awards vest
annually over a three-year period in equal tranches to participants, subject
to the scheme rules and the employee remaining with the Company.
PRINCIPAL RISKS AND Uncertainties
RISK MANAGEMENT
Centamin recognises that nothing is without risk. We believe a successful and
sustainable business requires a robust and proactive risk management framework
as its foundation. This is supported by a strong culture of risk awareness,
encouraging openness and integrity, alongside a clearly defined appetite for
risk. This enables the Company to consider risks and opportunities for more
effective decision-making, delivery on our objectives and improve our
performance as a responsible mining company. The Board has overall
responsibility, supported by the Audit and Risk Committee, for establishing a
framework that allows for the review of existing and emerging risks in the
context of both opportunities and potential threats that inform the principal
risks and uncertainties. These risks and opportunities inform the assessment
of the future prospects and long-term viability of the Group, as shown in the
Viability Statement of the 2023 Annual Report and are also considered when
challenging the strategic objectives of the Company.
2024 continues to provide macroeconomic change exacerbated by geopolitical
pressures including the ongoing conflicts in Gaza, the Rea Sea and Ukraine.
Whilst as a business we were able to successfully manage the operational
considerations these have brought, we have felt the financial pressures as
every government, business and individual has globally. The 2023 Annual Report
included the latest updates to the principal and emerging risks driven by
these pressures.
We continue to feel the ongoing global impact of these increased financial
pressures, which we carry on monitoring, and has led to the introduction of
additional mitigations and changes to our ongoing strategy for the financially
focussed risks. When considering the healthy financial position of the
business, including additional measures such as the revolving credit facility,
means we feel there is sufficient financial flexibility to meet the Company's
current and future financial commitments through 2024.
The Directors confirm that a robust assessment of the principal, new and
emerging risks impacting the Company has been undertaken which identified
external, strategic and operational risks on a sliding scale depending on the
level of influence over which the Company may have on the factors which can
impact the risk. For further detail please refer to the Risk Review within the
2023 Annual Report and 2023 Sustainability Report, published on the Company's
website: www.centamin.com.
PRINCIPAL RISKS
The principal risks and uncertainties facing the Group remain unchanged from
those which are set out in detail within the Strategic Report section of the
2023 Annual Report and can be found on the Company's website
(https://www.centamin.com/investors/principal-risks-and-uncertainties/
(https://www.centamin.com/investors/principal-risks-and-uncertainties/) ) .
The principal risks are listed below:
External risks
· Geopolitical
· Legal and regulatory compliance
· Litigation
· Global macroeconomic developments
· Gold price
Strategic risks
· Capital allocation and liquidity
· Diversification
· Concession governance and management
· Licence to operate
· People (attract, develop and retain skilled people)
· Stakeholder environmental and social expectations
· Decarbonisation
Operational risks
· Safety, health and wellbeing
· Exploration and project development
· Maximising our geological potential
· Operational performance and planning
EMERGING RISKS
Below we have outlined a list of emerging risks, these remain unchanged from
those which are set out within the Strategic Report section of the 2023 Annual
Report and website
(https://www.centamin.com/investors/principal-risks-and-uncertainties/) :
· Cyber security
· Infectious disease
· Climate change
DIRECTORS' RESPONSIBILITY STATEMENT
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE SIX MONTHS ENDED
30 JUNE 2024 FINANCIAL REPORT
The Directors confirm that to the best of their knowledge:
a) the set of interim condensed consolidated financial statements for the six
months ended 30 June 2024 has been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting' as adopted by the
European Union;
b) the set of interim condensed consolidated financial statements, which has been
prepared in accordance with the
applicable set of accounting standards, gives a true and fair view of the
assets, liabilities, financial position and profit
or loss of the issuer, or the undertakings included in the consolidation as a
whole as required by DTR 4.2.4;
c) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year); and
d) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein).
The board of Directors that served during all or part of the six month period
ended on 30 June 2024 and their respective responsibilities can be found on
pages 84 to 130 of the 2023 annual report and financial statements of Centamin
plc. There has been no changes to board of Directors since the approval of the
2023 Annual Report.
By order of the Board,
Martin
Horgan
Ross Jerrard
CEO
CFO
25 July
2024
25 July 2024
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
30 JUNE 2024
Independent review report to Centamin plc
Report on the interim condensed consolidated financial statements
Our conclusion
We have reviewed Centamin plc's interim condensed consolidated financial
statements (the "interim financial statements") in the Interim Report of
Centamin plc for the 6 month period ended 30 June 2024 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting' as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
The interim financial statements comprise:
● the unaudited interim condensed consolidated statement of financial
position as at 30 June 2024;
● the unaudited interim condensed consolidated statement of
comprehensive income for the period then ended;
● the unaudited interim condensed consolidated statement of changes in
equity for the period then ended;
● the unaudited interim condensed consolidated statement of cash flows
for the period then ended; and
● the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim Report of Centamin
plc have been prepared in accordance with International Accounting Standard
34, 'Interim Financial Reporting' as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Interim Report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the Directors have
inappropriately adopted the going concern basis of accounting or that the
Directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the Group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The Interim Report, including the interim financial statements, is the
responsibility of, and has been approved by the Directors. The Directors are
responsible for preparing the Interim Report in accordance with the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Interim Report, including the interim
financial statements, the Directors are responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Interim Report based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the Company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
25 July 2024
Unaudited interim condensed consolidated statement of comprehensive income
for the six months ended 30 June 2024
Half year ended Half year ended 30 June Year ended 31 December
30 June
2024 2023 (Unaudited) 2023
(Unaudited) (Audited)
Notes US$'000 US$'000 US$'000
Revenue 2.1 465,095 425,612 891,262
Cost of sales 2.2 (295,091) (267,801) (596,836)
Gross profit 170,004 157,811 294,426
Exploration and evaluation expenditure (12,071) (18,923) (31,653)
Other operating costs 2.2 (42,084) (29,602) (68,542)
Other income 1,007 4,617 5,817
Finance income 2.2 3,126 1,791 4,127
Finance costs 2.2 (2,179) (1,380) (3,526)
Fair value (loss)/gain on derivative financial instruments 2.3 (654) 490 (5,509)
Profit for the period before tax 117,149 114,804 195,140
Tax (120) (10) (255)
Profit for the period after tax 117,029 114,794 194,885
Profit for the period after tax attributable to:
- the owners of the parent 83,356 90,968 92,284
- non-controlling interest in SGM 2.4 33,673 23,826 102,601
Total comprehensive income for the period 117,029 114,794 194,885
Total comprehensive income for the period attributable to:
- the owners of the parent 83,356 90,968 92,284
- non-controlling interest in SGM 2.4 33,673 23,826 102,601
Earnings per share attributable to owners of the parent:
Basic (US cents per share) 7.189 7.860 7.970
Diluted (US cents per share) 7.080 7.728 7.817
( )
The above unaudited interim condensed consolidated statement of comprehensive
income should be read in conjunction with the accompanying notes.
Unaudited interim CONDENSED consolidated STATEMENT OF Financial position
as at 30 June 2024
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
Notes US$'000 US$'000 US$'000
Non‑current assets
Property, plant and equipment 2.5 (a) 1,076,104 1,114,000 1,084,019
Exploration and evaluation asset 2.6 24,809 24,809 24,809
Inventories 2.7 120,594 110,337 103,121
Other receivables - 1,582 1,014
Total non‑current assets 1,221,507 1,250,728 1,212,963
Current assets
Inventories 2.7 139,259 112,067 149,457
Trade and other receivables 45,699 39,259 49,443
Prepayments 22,230 13,114 17,404
Derivative financial instruments 2.3 - 3,028 654
Cash and cash equivalents 2.10(a) 109,607 96,231 93,322
Total current assets 316,795 263,699 310,280
Total assets 1,538,302 1,514,427 1,523,243
Non‑current liabilities
Provisions 2.8 40,892 38,064 40,039
Other payables 2.9 5,138 8,814 8,264
Total non‑current liabilities 46,030 46,878 48,303
Current liabilities
Trade and other payables 2.9 89,409 80,966 94,248
Tax liabilities 53 259 102
Employee benefit liabilities 1,885 - -
Provisions 2.8 664 2,954 1,984
Total current liabilities 92,011 84,179 96,334
Total liabilities 138,041 131,057 144,637
Net assets 1,400,261 1,383,370 1,378,606
Equity
Issued capital 679,316 673,527 673,432
Share option reserve 6,081 5,818 10,124
Accumulated profits 742,053 703,662 681,912
Total equity attributable to owners of the parent 1,427,450 1,383,007 1,365,468
Non-controlling interest in SGM (27,189) 363 13,138
Total equity 1,400,261 1,383,370 1,378,606
The above unaudited interim condensed consolidated statement of financial
position should be read in conjunction with the accompanying notes.
The unaudited interim condensed consolidated financial statements were
authorised by the Board of Directors for issue on 25 July 2024 and signed on
its behalf by:
Martin Horgan
Ross Jerrard
CEO,
Director
CFO,
Director
25 July
2024
25 July 2024
Unaudited interim condensed consolidated statement of changes in equity
for the six months ended 30 June 2024
30 June 2024 (Unaudited) Issued capital Share option reserve Accumulated profits Total Non-controlling interests Total
equity
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 January 2024 673,432 10,124 681,912 1,365,468 13,138 1,378,606
Profit for the period after tax - - 83,356 83,356 33,673 117,029
Total comprehensive income for the period - - 83,356 83,356 33,673 117,029
Net recognition of share-based payments - 1,841 - 1,841 - 1,841
Transfer of share-based payments 5,884 (5,884) - - - -
Dividend paid - non-controlling interest in SGM 2.4
- - - - (74,000) (74,000)
Dividend paid - owners of the parent - - (23,209) (23,209) - (23,209)
Balance as at 30 June 2024 679,316 6,081 742,053 1,427,456 (27,189) 1,400,261
30 June 2023 (Unaudited) Issued capital Share option reserve Accumulated profits Total Non-controlling interests Total
equity
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 January 2023 670,994 6,082 641,794 1,318,870 22,537 1,341,407
Profit for the period after tax - - 90,968 90,968 23,826 114,794
Total comprehensive income for the period - - 90,968 90,968 23,826 114,794
Net recognition of share-based payments - 2,269 - 2,269 - 2,269
Transfer of share-based payments 2,533 (2,533) - - - -
Dividend paid - non-controlling interest in SGM 2.4
- - - - (46,000) (46,000)
Dividend paid - owners of the parent - - (29,100) (29,100) - (29,100)
Balance as at 30 June 2023 673,527 5,818 703,662 1,383,007 363 1,383,370
31 December 2023 (Audited) Share option reserve Accumulated profits Total Non-controlling interests Total
Issued capital equity
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 January 2023 670,994 6,082 641,794 1,318,870 22,537 1,341,407
Profit for the year after tax - - 92,284 92,284 102,601 194,885
Total comprehensive income for the year - - 92,284 92,284 102,601 194,885
Own shares acquired (245) - - (245) - (245)
Net recognition of share-based payments - 6,725 - 6,725 - 6,725
Transfer of share-based payments 2,683 (2,683) - - - -
Dividend paid - non-controlling interest in SGM 2.4
- - - - (112,000) (112,000)
Dividend paid - owners of the parent - - (52,166) (52,166) - (52,166)
Balance as at 31 December 2023 673,432 10,124 681,912 1,365,468 13,138 1,378,606
The above unaudited interim condensed consolidated statement of changes in
equity should be read in conjunction with the accompanying notes.
unaudited interim condensed consolidated statement of cash flows
for the six months ended 30 June 2024
Half year ended 30 June Half year ended 30 June Year ended 31 December
2024 (Unaudited) 2023 2023
(Unaudited) (Audited)
Notes US$'000 US$'000 US$'000
Cash flows from operating activities
Cash generated from operating activities 2.10(b) 204,951 172,479 356,195
Income tax paid (68) - (402)
Interest paid (1,474) (712) (2,193)
Net cash generated from operating activities 203,409 171,767 353,600
Cash flows from investing activities
Acquisition of property, plant and equipment (85,758) (101,618) (190,723)
Brownfield exploration and evaluation expenditure (3,884) (6,578) (12,172)
Finance income 2.2 2,976 1,791 4,127
Net cash used in investing activities (86,666) (106,405) (198,768)
Cash flows from financing activities
Cash element of share-based payments (1,407) (583) (583)
Principal element of lease payments (1,024) - -
Own shares acquired - - (245)
Notes payable 53 - -
Dividend paid - non-controlling interest in SGM 2.4 (74,000) (46,000) (112,000)
Dividend paid - owners of the parent (23,209) (29,100) (52,166)
Net cash used in financing activities (99,587) (75,683) (164,994)
Net increase/(decrease) in cash and cash equivalents 17,158 (10,321) (10,163)
Cash and cash equivalents at the beginning of the period 93,322 102,373 102,373
Effect of foreign exchange rate changes (873) 4,179 1,112
Cash and cash equivalents at the end of the period 2.10(a) 109,607 96,231 93,322
( )
The above unaudited interim condensed consolidated statement of cash flows
should be read in conjunction with the accompanying notes.
notes to the unaudited interim condensed consolidated financial statements
for the six months ended 30 June 2024
General information and basis of preparation of interim report
1. Summary of material accounting policies
1.1 Basis of preparation
These unaudited interim condensed consolidated financial statements ("interim
financial statements") have been prepared in accordance with IAS 34 "Interim
Financial Reporting" (IAS 34) as adopted by the European Union and the
requirements of the Disclosure and Transparency Rule sourcebook (DTR) of the
Financial Conduct Authority (FCA) in the United Kingdom as applicable to
interim financial reporting. These unaudited interim condensed consolidated
financial statements are not affected by seasonality.
The unaudited interim condensed consolidated financial statements represent a
'condensed set of financial statements' as referred to in the DTR issued by
the FCA. Accordingly, they do not include all of the information required for
a full annual financial report and are to be read in conjunction with the
Group's financial statements for the year ended 31 December 2023, which were
prepared in accordance with International Financial Reporting Standards
("IFRS") as adopted for use by the European Union. The financial statements
for the year ended 31 December 2023 have been filed with the Jersey Financial
Services Commission. The financial information contained in this report does
not constitute statutory accounts under the Companies (Jersey) Law 1991, as
amended.
The financial information for the year ended 31 December 2023 is based on the
statutory accounts for the year ended 31 December 2023. Readers are referred
to the auditors' report on the Group financial statements as at 31 December
2023 (available at www.centamin.com (http://www.centamin.com) ).
The accounting policies applied in these interim financial statements are
consistent with those used in the annual consolidated financial statements for
the year ended 31 December 2023 except for the adoption of new standards,
endorsed by the EU, which apply for the first time in 2024 as referred to in
the 31 December 2023 Annual Report. The Group has not early adopted any
amendments, standards or interpretations that have been issued but are not yet
effective.
The preparation of these interim condensed consolidated financial statements
requires the use of certain significant accounting estimates and judgements by
management in applying the Group's accounting policies. There have been no
changes to areas as set out in Note 1 of the Group's annual audited
consolidated financial statements for the year ended 31 December 2023
involving significant judgement and estimates.
1.2 Going concern
Management performed detailed analyses and forecasts to assess the economic
impact of a base case and various downside scenarios from a going concern and
viability perspective as at 31 December 2023. Based on the financial and
operational performance analysis and review done for the six-month period to
30 June 2024 the Company is still operating within budget and guidance in
terms of production and costs. Additionally, as at 30 June 2024, management
performed a similar base case and various downside scenarios without applying
any mitigating actions over an 18 month period from 1 July 2024 to 31 December
2025. The scenarios modelled are as follows:
· Base case scenario being the financial model based on the budget;
· Gold price reduction from current levels to US$1,900/oz;
· Fuel price increase to US$1 per litre;
· Open pit tonnage reduction by 2%;
· Open pit grade reduction by 15%;
· Underground tonnage reduction by 6%;
· Underground grade reduction by 20%;
· Processing capacity reduction by 2%;
· Processing plant recovery rate reduction to 87%; and
· A worst-case scenario with a combination of the above.
All the scenarios evaluated above had a net ending positive cash outcome.
This base case analysis as at 30 June 2024 together with the downside
scenarios analyses outlined above, completed shortly after a detailed analysis
to support the year end going concern assessment, was sufficient to give the
Directors comfort that the Company's financial statements for the six months
ended 30 June 2024 should be prepared on a going concern basis.
However, the Group continues to monitor the business' major cost drivers e.g.,
fuel and other key consumables and reagents as well as key operational KPIs
that may have an impact on going concern and take mitigating actions where
necessary. The Group continues to benefit from a strong balance sheet with
large cash balances and no debt. At 30 June 2024 the Group had cash and cash
equivalents of US$110 million (30 June 2023: US$96 million). The Group also
had access to US$150 million of liquidity through the undrawn RCF which is not
modelled to be drawn down under any of the scenarios described above.
These financial statements for the six month period ended 30 June 2024 have
therefore been prepared on a going concern basis, which contemplate the
realisation of assets and liquidation of liabilities during the normal course
of operations.
1.3 Changes in critical judgements and estimates in applying the
entities accounting policies
There were no updates and/or changes to critical accounting judgements and
estimates that management have made in the period in applying the Group's
accounting policies, that have a significant effect on the amounts recognised
and the disclosure of such amounts in the financial statements. Refer to the
2023 Annual Report for applicable critical accounting judgements or estimates.
1.4 Changes in policies and estimates
There were no changes in policies and estimates during the reporting period.
1.5 New and amended standards and their impact to the Group
A number of new or amended standards became applicable for the current
reporting period. Where the new or amended standards were currently
applicable, the Group did not have to change its accounting policies or make
retrospective adjustments as a result of adopting these standards. Refer to
the table below for details of these standards.
Accounting Standard Requirement Effective date
IFRS 18, Presentation and disclosure in financial statements' This standard requires entities to set out requirements for the presentation Effective for periods beginning on or after 1 January 2027*
and disclosure of information in general purpose financial statements
(financial statements) to help ensure they provide relevant information that
faithfully represents an entity's assets, liabilities, equity, income and
expenses.
IFRS 19, Subsidiaries without Public Accountability: Disclosures The objective of this standard is to specify the disclosure requirements an Effective for periods beginning on or after 1 January 2027*
entity is permitted to apply instead of the disclosure requirements in other
IFRS Accounting Standards.
*The accounting standards outlined above have not yet been endorsed by the EU
1.6 Tax: Global implementation of OECD Pillar Two model rules
In December 2021, the Organisation for Economic Co-operation and Development
("OECD") published Tax Challenges Arising from the Digitalisation of the
Economy - Global Anti-Base Erosion Model Rules (Pillar Two): Inclusive
Framework on BEPS, hereafter referred to as the 'OECD Pillar Two model rules'
or 'the rules'. The rules are designed to ensure that large multinational
enterprises within the scope of the rules pay a minimum level of tax on the
income arising in a specific period in each jurisdiction where they operate.
In general, the rules apply a system of top-up taxes that brings the total
amount of taxes paid in a jurisdiction up to the minimum rate of 15%.
The rules need to be passed into national legislation based on each country's
approach. Pillar Two legislation has not yet been enacted in Jersey; however,
the Treasury Minister of Jersey, the Company's country of incorporation, has
announced their intentions in relation to Pillar Two implementation. They
intend to implement an Income Inclusion Rule ("IIR") and a Multinational
Corporate Income Tax ("MCIT") with effect for accounting periods commencing on
or after 1 January 2025, while continuing to monitor global implementation.
The rules will impact current income tax when the legislation comes into
effect.
When enacted, applying the OECD Pillar Two model rules as introduced by the
relevant jurisdictions in which the Group operates, and determining their
impact on the Group's financial statements will be complex and poses a number
of practical challenges. However, since the Pillar Two legislation does not
apply to the Group in 2024, the Group has no related current tax exposure at
the reporting date.
The Group expect to be in scope of the OECD Pillar Two model rules from 2025
onwards based on current forecasts of revenue and would therefore expect the
IIR to apply in Jersey (as the place of residence of the Group's ultimate
parent entity). It is currently in the process of performing an assessment of
the potential impact on the Group, including through a process of engagement
with the relevant tax authorities and the Group's tax advisors.
The Group makes significant profit share payments to EMRA, an Egyptian
government body (refer to note 2.4 (a) for further information). The Group's
view is that these profit share payments, which are prescribed by the Sukari
Concession Agreement and paid periodically to an Egyptian governmental
organisation, are "…imposed in lieu of a generally applicable corporate
income tax" and should constitute "Covered Taxes" under Article 4.2.1 of the
Pillar Two model rules. On this basis, the Group does not expect to be
liable for top-up taxes under the rules upon their implementation and
application to the Group, but this remains subject to discussion with the
relevant tax authorities and the detailed implementation of the rules.
2. How numbers are calculated
2.1 Segment reporting
The Group is engaged in the business of exploration for, and mining of,
precious metals, which represents three operating segments, two in the
business of exploration and one in the mining of precious metals. The Board is
the Group's chief operating decision-maker within the meaning of IFRS 8
'Operating segments'. Management has determined the operating segments based
on the information reviewed by the Board for the purposes of allocating
resources and assessing performance.
The Board considers the business from a geographic perspective and a mining of
precious metals versus exploration for precious metals perspective.
Geographically, management considers separately the performance in Egypt,
Burkina Faso, Côte d'Ivoire and Corporate (which includes Jersey, United
Kingdom and Australia). From a mining of precious metals versus exploration
for precious metals perspective, management separately considers the Egyptian
mining of precious metals from the Egyptian and West African exploration for
precious metals in these geographies. The Egyptian mining operations derive
its revenue from the sale of gold while the West African and the other
Egyptian exploration entities are currently only engaged in precious metal
exploration and do not produce any revenue.
The Board assesses the performance of the operating segments based on profits
and expenditure incurred as well as exploration expenditure in each region.
Egypt is the only operating segment, with one of its entities, SGM, mining
precious metals and therefore has revenue and cost of sales whilst the
remaining operating segments do not. All operating segments are reviewed by
the Board as presented and are key to the monitoring of ongoing performance
and assessing the plans of the Group.
Non‑current assets other than financial instruments by country:
30 June 30 June 31 December
2024 (Unaudited) 2023 2023
(Unaudited) (Audited)
US$'000 US$'000 US$'000
Egypt 1,220,188 1,249,357 1,210,391
Burkina Faso* - 3 -
Côte d'Ivoire 385 1,035 537
Corporate 934 333 1,021
Total non-current assets 1,221,507 1,250,728 1,211,949
*All Burkina Faso entities have been liquidated
Additions to non-current assets mainly relate to Egypt and are disclosed in
the Property, Plant and Equipment note 2.5.
Statement of financial position by operating segment:
30 June 2024 Egypt Egypt Exploration Burkina Côte
Total Mining Faso* d'Ivoire Corporate
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Statement of financial position
Total assets 1,538,302 1,437,108 4,439 - 5,213 91,542
Total liabilities (138,041) (117,891) (1,007) - (1,515) (17,628)
Net assets/total equity 1,400,261 1,319,217 3,432 - 3,698 73,914
*All Burkina Faso entities have been liquidated
30 June 2023 Egypt Egypt Burkina Côte
Total Mining Exploration Faso d'Ivoire Corporate
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Statement of financial position
Total assets 1,514,427 1,419,087 4,545 58 5,116 85,621
Total liabilities (131,057) (124,473) (804) (465) (2,306) (3,009)
Net assets/total equity 1,383,370 1,294,614 3,741 (407) 2,810 82,612
Egypt Egypt Burkina Côte
Mining Exploration Faso d'Ivoire Corporate
31 December 2023
Total
(Audited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Statement of financial position
Total assets 1,523,243 1,434,074 4,391 30 6,149 78,600
Total liabilities (144,637) (133,177) (787) - (2,596) (8,077)
Net assets/total equity 1,378,606 1,300,897 3,604 30 3,553 70,523
Statement of comprehensive income by operating segment:
Half-year ended 30 June 2024 Egypt Egypt Exploration Burkina Côte d'Ivoire
Total Mining Faso Corporate
(Unaudited)* US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Statement of comprehensive income
Gold sales 464,122 464,122 - - - -
Silver sales 973 973 - - - -
Revenue 465,095 465,095 - - - -
Cost of sales (295,091) (295,091) - - - -
Gross profit 170,004 170,004 - - - -
Exploration and evaluation costs (12,071) - (3,255) - (8,816) -
Other operating costs((1)) (42,084) (23,236) (666) 1,062 (471) (18,773)
Other income 1,007 1,323 102 - 3,941 (4,359)
Fair value loss on derivative financial instruments
(654) - - - - (654)
Finance income 3,126 736 - - - 2,390
Finance costs (2,179) (948) (20) - (35) (1,176)
Profit/(loss) for the period before tax 117,149 147,879 (3,839) 1,062 (5,381) (22,572)
Tax (120) (8) (53) - (21) (39)
Profit/(loss) for the period after tax 117,029 147,871 (3,892) 1,062 (5,402) (22,610)
Profit/(loss) for the period after tax attributable to:
- owners of the parent ((2)) 83,356 114,198 (3,892) 1,062 (5,402) (22,610)
- non-controlling interest in SGM ((2)) 33,673 33,673 - - - -
(1) The US$1m gain in the Burkina Faso segment relates to intercompany
loans due to Centamin West Africa Holdings Limited (included as an expense
within the Corporate segment) that were written off in the 6 months period
ended 30 June 2024. These amounts are fully eliminated on consolidation,
therefore do not impact the overall Group results.
(2) Please note that the cost recovery model on which profit share
is based under the Concession Agreement is different to the accounting results
presented above due to various adjustments and as such the share of profit
disclosed above is not reflective of the 55%:45% split that was in place from
1 July 2018 to 30 June 2020 and the 50%:50% split from 1 July 2020 onwards
that occurs in practice.
Statement of comprehensive income by operating segment:
Half-year ended 30 June 2023 Egypt Egypt Exploration Burkina Faso Côte d'Ivoire
Total Mining Corporate
(Unaudited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Statement of comprehensive income
Gold sales 424,684 424,684 - - - -
Silver sales 928 928 - - - -
Revenue 425,612 425,612 - - - -
Cost of sales (267,801) (267,801) - - - -
Gross profit 157,811 157,811 - - - -
Exploration and evaluation costs (18,923) - (2,234) (775) (15,914) -
Other operating costs((1)) (29,602) (15,397) (126) 687 (240) (14,526)
Other income 4,617 4,788 102 108 (354) (27)
Net fair value gain on derivative financial instruments
490 - - - - 490
Finance income 1,791 563 - - - 1,228
Finance costs (1,380) (781) (12) (1) (21) (565)
Profit/(loss) for the period before tax 114,804 146,984 (2,270) 19 (16,529) (13,400)
Tax (10) (10) - - - -
Profit/(loss) for the period after tax 114,794 146,974 (2,270) 19 (16,529) (13,400)
Profit/(loss) for the period after tax attributable to:
- owners of the parent ((2)) 90,968 123,148 (2,270) 19 (16,529) (13,400)
- non-controlling interest in SGM ((2)) 23,826 23,826 - - - -
(1) The US$0.7m gain in the Burkina Faso segment relates to intercompany
loans due to Centamin West Africa Holdings Limited (included as an expense
within the Corporate segment) that were written off in the 6 months period
ended 30 June 2023. These amounts are fully eliminated on consolidation,
therefore do not impact the overall Group results.
(2) Please note that the cost recovery model on which profit share is
based under the Concession Agreement is different to the accounting results
presented above due to various adjustments and as such the share of profit
disclosed above is not reflective of the 55%:45% split that was in place from
1 July 2018 to 30 June 2020 and the 50%:50% split from 1 July 2020 onwards
that occurs in practice.
Statement of comprehensive income by operating segment:
Full-year ended 31 December 2023
Egypt Egypt Exploration Burkina Côte d'Ivoire
Total Mining Faso Corporate
(Audited) US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Statement of comprehensive income
Revenue 891,262 891,262 - - - -
Cost of sales (596,836) (596,836) - - - -
Gross profit 294,426 294,426 - - - -
Exploration and evaluation costs (31,653) - (5,558) (869) (25,226) -
Other operating costs((1)) (68,542) (39,069) (377) 1,221 (127) (30,190)
Other income 5,817 6,058 99 102 1,686 (2,128)
Finance income 4,127 1,475 - - - 2,652
Finance costs (3,526) (1,681) (42) 2 (75) (1,730)
Net fair value loss on derivatives (5,509) - - - - (5,509)
Profit/(loss) for the year before tax 195,140 261,209 (5,878) 456 (23,742) (36,905)
Tax (255) (220) - - (21) (14)
Profit/(loss) for the year after tax 194,885 260,989 (5,878) 456 (23,763) (36,919)
Profit/(loss) for the year after tax attributable to:
- owners of the parent ((2)) 92,284 158,388 (5,878) 456 (23,763) (36,919)
- non-controlling interest in SGM ((2)) 102,601 102,601 - - - -
(1) The US$1.2m gain in the Burkina Faso segment relates to intercompany
loans due to Centamin West Africa Holdings Limited (included as an expense
within the corporate segment) that were written off in the year. These amounts
are fully eliminated on consolidation, therefore do not impact the overall
Group results
(2) Please note that the cost recovery model on which profit share is
based under the Concession Agreement is different to the accounting results
presented above due to various adjustments and as such the share of profit
disclosed above is not reflective of the 55%:45% split that was in place from
1 July 2018 to 30 June 2020 and 50%:50% split from 1 July 2020 onwards that
occurs in practice, refer to the statement of cash flows by operating segment
below for further information
( )
All gold and silver sales during the period were made to a single customer in
Switzerland, MKS Pamp SA ("MKS").
Exploration expenditure by operating segment
The following table provides a breakdown of the total exploration expenditure
of the Group by operating segment:
30 June 30 June 31 December 2023
2024 (Unaudited) 2023 (Audited)
(Unaudited)
US$'000 US$'000 US$'000
Côte d'Ivoire 8,816 15,914 25,226
Egypt - Exploration 3,255 2,234 5,558
Burkina Faso - 775 869
Exploration expenditure - greenfield 12,071 18,923 31,653
Egypt - Mining 3,884 6,578 12,172
Exploration expenditure - brownfield 3,884 6,578 12,172
Total exploration expenditure 15,955 25,501 43,825
2.2 Profit before tax
Profit for the period has been arrived at after crediting/(charging) the
following gains/(losses) and income/(expenses):
30 June 30 June 31 December 2023
2024 (Unaudited) 2023 (Audited)
(Unaudited)
US$'000 US$'000 US$'000
Other income
Net foreign exchange gains 977 4,464 5,641
Other income 30 153 176
1,007 4,617 5,817
Finance income 3,126 1,791 4,127
Finance costs (2,179) (1,380) (3,526)
Net fair value (loss)/gain on derivative financial instruments (654) 490 (5,509)
Expenses
Cost of sales*
Mine production costs (219,407) (188,344) (412,827)
Movement in inventory 17,893 (716) 13,319
Depreciation and amortisation (93,577) (78,741) (197,328)
(295,091) (267,801) (596,836)
Other operating costs
Corporate compliance (1,190) (2,248) (3,961)
Fees payable to the external auditors (738) (465) (1,080)
Corporate consultants' fees (770) (2,581) (4,301)
Salaries and wages (8,572) (5,605) (12,434)
Employee share-based payments (5,132) (2,852) (7,308)
Other administration expenses (2,057) (1,212) (4,026)
Corporate costs (sub-total) (18,459) (14,963) (33,110)
Royalty - attributable to the ARE government (13,931) (12,733) (26,682)
Net movement on provision for stock obsolescence (5,694) 419 4,004
Loss on retirement of fixed assets (3,604) (1,855) (9,415)
Inventory written-off - - (3,721)
Other provisions (51) 29 1,182
Other non-corporate operating expenses (345) (499) (800)
(42,084) (29,602) (68,542)
* Inventories recognised as an expense in the Consolidated Statement of
Comprehensive Income during the half year ended 30 June 2024 amounted to
US$295 million (30 June 2023: US$ 268 million) and these were included in
'cost of sales' .
2.3 Derivative financial instruments
On 14 June 2023, the Company entered into put option contracts whereby it
purchased a series of gold put option contracts (the "commodity contracts"). A
total of US$2.5 million, was paid to BMO, the counterparty as a premium on
entering into six put option contracts for a total of 120,000 ounces
representing, 20,000 ounces for each month beginning 1 July 2023 to 31
December 2023 at a strike price of US$1,900/oz as part of the Gold Price
Protection Programme. As part of the same programme, on 20 July 2023, the
Company entered into a second series of six put option contracts for a total
of 120,000 ounces representing, 20,000 ounces for each month beginning 1
January 2024 to 30 June 2024 at a strike price of US$1,900/oz and a total of
US$3.6 million, was paid to HSBC, the counterparty as a premium on entering
into the contracts. By entering into these contracts, the Company was able to
ensure that it reasonably protected the Group's cash flows by initiating a
gold price protection programme for the contracted ounces at these prices over
the 12 month period to 30 June 2024.
There were no open or outstanding contracts as at 30 June 2024. These
derivative instruments were not designated as hedges by the Company and were
marked-to-market at the end of each reporting period with the mark-to-market
adjustment recorded in the consolidated income statement.
The full carrying value of the options as at 31 December 2023 of US$653,538
was crystallised to realised losses in the income statement in the half year
period ended 30 June 2024 as the average gold price over the period covered by
the six 2024 contracts was consistently above the strike price.
The commodity contracts were marked-to-market using a valuation model which
uses quoted observable inputs and are classified as Level 2 in the fair value
hierarchy.
2.4 Non-controlling interest in SGM
EMRA is a 50% shareholder in SGM and is entitled to a share of 50% of SGM's
net production surplus which can be defined as 'revenue less payment of the
fixed royalty to the Arab Republic of Egypt (ARE) and recoverable costs'.
Earnings attributable to the non-controlling interest in SGM (i.e., EMRA) are
pursuant to the provisions of the Concession Agreement (CA) and are recognised
as profit attributable to the non-controlling interest in SGM in the
attribution of profit section of the statement of comprehensive income of the
Group. The profit share payments during the year will be reconciled against
SGM's audited financial statements. The SGM financial statements for the year
ended 30 June 2024 will be audited in due course in line with the agreed
timetable.
Certain terms of the CA and amounts in the cost recovery model may also vary
depending on interpretation and are therefore subject to continued discussions
between EMRA and management which can result in variations in the profit
sharing split between periods and therefore the timing and distribution of
proceeds between partners.
a) Statement of comprehensive income and statement of financial
position impact
30 June 30 June 31 December 2023
2024 (Unaudited) 2023 (Audited)
(Unaudited)
US$'000 US$'000 US$'000
Statement of comprehensive income
Profit for the period after tax attributable to the non-controlling interest 102,601
in SGM((1))
33,673 23,826
Statement of financial position
Total equity attributable to the non-controlling interest in SGM((1)) 13,138 22,537 22,537
(opening)
Profit for the period after tax attributable to the non-controlling interest 102,601
in SGM((1))
33,673 23,826
Dividend paid - non-controlling interest in SGM (74,000) (46,000) (112,000)
Total equity attributable to the non-controlling interest in SGM((1)) 13,138
(closing)
27,189 363
(1) Profit share commenced during the third quarter of 2016. The first two
years was a 60:40 split of net production surplus to PGM and EMRA
respectively. From 1 July 2018 this changed to a 55:45 split for the next
two-year period until 30 June 2020, after which all net production surpluses
will be split 50:50.
Any variation between payments made during the year (which are based on the
Company's estimates) and the SGM audited financial statements, may result in a
balance due and payable to EMRA or advances to be offset against future
distributions. This will be reflected as an amount attributable to the NCI in
SGM in the statement of financial position and statement of changes in equity.
b) Statement of cash flow impact
30 June 30 June 31 December 2023
2024 (Unaudited) 2023 (Audited)
(Unaudited)
US$'000 US$'000 US$'000
Statement of cash flows
Dividend paid - non-controlling interest in SGM((1)) (74,000) (46,000) (112,000)
(2) Profit share commenced during the third quarter of 2016. The first two
years was a 60:40 split of net production surplus to PGM and EMRA
respectively. From 1 July 2018 this changed to a 55:45 split for the next
two-year period until 30 June 2020, after which all net production surpluses
will be split 50:50.
EMRA and PGM benefit from advance distributions of profit share which are made
on a weekly or fortnightly basis and proportionately in accordance with the
terms of the CA. Future distributions will take into account ongoing cash
flows, historical costs that are still to be recovered and any future capital
expenditure. All profit share payments will be reconciled against SGM's
audited June financial statements for current and future periods.
2.5 (a) Property, plant and equipment
Mine Capital
Half year ended 30 June 2024 Office Plant and Mining development work in
(Unaudited) equipment Buildings equipment equipment properties progress Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Cost
Balance at 1 January 2024 8,168 56,776 673,601 319,775 1,146,835 37,744 2,242,899
Additions - - 152 - - 85,611 85,763
Additions and modifications: Right of use assets - 18 - (23) - - (5)
Transfers from capital work in progress 37 797 9,344 21,990 51,531 (83,699) -
Transfer from exploration and evaluation asset - - - - 3,884 - 3,884
Transfers between categories - - 1,216 (1,216) - - -
Disposals - (95) (5,780) (25,919) - - (31,794)
Disposals: Right of use assets - (122) - - - - (122)
Balance at 30 June 2024 8,205 57,374 678,533 314,607 1,202,250 39,656 2,300,625
Accumulated depreciation and amortisation
Balance at 1 January 2024 (7,076) (24,968) (346,336) (250,362) (530,175) - (1,158,880)
Depreciation and amortisation (254) (2,082) (37,194) (22,008) (32,416) - (93,954)
Transfers between categories - - (679) 679 - - -
Disposals - 126 3,465 24,721 - - 28,312
Balance at 30 June 2024 (7,330) (26,924) (380,744) (246,970) (562,591) - (1,224,522)
Year ended 31 December 2023 (Audited)
Cost
Balance at 1 January 2023 8,151 21,701 635,376 383,521 1,009,754 78,804 2,137,307
Additions 76 290 44 402 - 189,911 190,723
Additions: Right of use assets - 1,150 66 - - - 1,216
Increase in rehabilitation asset - - - - 1,310 - 1,310
Transfers from capital work in progress 890 3,216 74,033 29,233 123,599 (230,971) -
Transfers from exploration and evaluation asset - - - - 12,172 - 12,172
Transfers between categories 515 31,782 (26,266) (6,031) - - -
Disposals (1,464) (52) (9,373) (87,350) - - (98,239)
Disposals: Right of use assets - (1,311) (279) - - - (1,590)
Balance at 31 December 2023 8,168 56,776 673,601 319,775 1,146,835 37,744 2,242,899
Accumulated depreciation and amortisation
Balance at 1 January 2023 (6,634) (3,573) (308,034) (288,521) (443,896) - (1,050,658)
Depreciation and amortisation (1,387) (3,001) (63,511) (43,986) (86,242) - (198,127)
Transfers between categories (522) (19,412) 15,589 4,345 - - -
Disposals 1,467 1,018 9,620 77,800 - - 89,905
Balance at 31 December 2023 (7,076) (24,968) (346,336) (250,362) (530,138) - (1,158,880)
Net book value
As at 31 December 2023 1,092 31,808 327,265 69,413 616,697 37,744 1,084,019
As at 30 June 2024 875 30,450 297,789 67,637 639,659 39,656 1,076,104
As at 30 June 2024, the Group has contractual commitments for capital
expenditure for the remainder of the year amounting to US$54 million (H1 2023:
US$47 million).
Included within the depreciation charge for the period in relation to ROU
assets is US$0.4 million for buildings and US$0.2 million related to plant and
equipment (H1 2023: US$0.5 million buildings and US$0.6 million plant and
equipment).
The net book value of the assets in the note above includes the following
amounts relating to ROU assets on leases; US$1.9 million (H1 2023: US$1.9
million) within buildings, US$0.7 million (H1 2023: US$0.5 million) within
plant and equipment and US$2.0 million (H1 2023: US$3.4 million) within mining
equipment.
Deferred stripping assets of US$35 million (H1 2023: US$54 million) were
recognised in the six-month period ended 30 June 2024, which have been
included in mine development properties, US$13 million (H1 2023: US$18
million) of amortisation has been recognised in the same period.
The Group implemented a new enterprise resource planning (ERP) software
system, SAP (S4 HANA) during the 2023 financial year. As part of the
implementation and migration from the legacy system, an extensive review
process of the fixed assets was performed as part of the fixed asset register
and operational record clean up and consequently assets that were identified
as not being in use and/or had been previously replaced by other assets (e.g.
mobile equipment rebuilds) had their carrying values derecognised from the
statement of financial position.
The fixed assets derecognised as part of this process, which are included
within disposals in the 31 December 2023 section of the table above, had a
total cost of US$61million, accumulated depreciation of US$53 million and a
carrying value of US$8 million which was recognised as a loss in the profit or
loss statement within the other operating costs line. In addition, where
assets were identified as being classified in incorrect asset categories,
reclassification adjustments were made to correct this in the 2023 financial
year, see the PPE note above. The Directors concluded that the adjustments
were qualitatively immaterial to the financial statements given the small
proportion of the overall property, plant and equipment balance impacted, and
the quantum of the impact in the profit or loss statement.
Management has considered a number of factors when concluding on whether an
impairment trigger existed as at 30 June 2024, including assessing the
carrying value of the Group's net assets in comparison to the Group's market
capitalisation, review of the operations in its locations, and most
importantly at Sukari as it makes up a significantly portion of the Group's
net assets. Based on the assessment, there were no issues that were noted
which may adversely impact the Group's assets and as such, management has
concluded that there is not an impairment trigger relating to the Sukari CGU
and any of its other assets as at 30 June 2024.
Assets that have been cost recovered under the terms of the CA in Egypt are
included in the statement of financial position under property, plant and
equipment as the SGM will use them until the expiration of the CA.
2.6 Exploration and evaluation asset
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Balance at the beginning of the year 24,809 24,809 24,809
Expenditure for the period 3,884 6,578 12,172
Transfer to property, plant and equipment (3,884) (6,578) (12,172)
Balance at end of the period 24,809 24,809 24,809
The exploration and evaluation asset relates to the drilling, geological
exploration and sampling of potential ore reserves and can all be attributed
to Egypt.
In accordance with the requirements of IAS 36 'Impairment of Assets' and IFRS
6 'Exploration for and evaluation of mineral resources' exploration assets are
assessed for impairment when facts and circumstances (as defined in IFRS 6
'Exploration for and evaluation of mineral resources') suggest that the
carrying amount of exploration and evaluation asses may exceed its recoverable
amount.
An impairment trigger assessment was performed as at 30 June 2024 on the
exploration and evaluation assets and no impairment triggers were identified.
2.7 Inventories
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Non-current
Mining stockpiles 120,594 110,337 103,121
Current
Mining stockpiles, ore in circuit, doré supplies 46,227 24,556 45,807
Stores inventory 101,226 93,596 106,150
Provision for obsolete stores inventory (8,194) (6,085) (2,500)
139,259 112,067 149,457
The calculation of weighted average costs of mining stockpiles is applied at a
detailed level. The open pit ore on the Mine ROM is split into seven different
grade categories and the underground ore is treated as a single high-grade
category. Each grade category is costed individually on a weighted average
basis applying costs specifically related to extracting and moving that grade
of ore to and from the Mine ROM pad. The grade categories range from
high-grade underground and open pit ore to low-grade open pit ore. Costs per
contained ounce differ between the various cost categories.
Currently at Sukari, low-grade-low (0.4 to 0.5g/t) open pit stockpile material
above the cut-off grade of 0.4g/t has been classified as follows on the
statement of financial position:
· Current assets - No low-grade-low stockpiles are in the current inventory
balance as none are scheduled to be processed within the next twelve months;
and
· Non-Current assets - 15.6Mt at 0.45g/t of stockpiles are in non-current assets
as these ore tonnes are also not scheduled to be processed within the next
twelve months
2.8 Provisions
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Current
Employee benefits((1)) 406 2,429 1,054
Other current provisions((2)) 258 525 930
664 2,954 1,984
Non‑current
Restoration and rehabilitation((3)) 40,842 38,064 40,039
Other non-current provisions 50 - -
40,892 38,064 40,039
Movement in restoration and rehabilitation provision
Balance at beginning of the year 40,039 37,396 37,396
Decrease in provision - - 1,310
Interest expense - unwinding of discount 803 668 1,333
Balance at end of the period 40,842 38,064 40,039
1) Employee benefits relate to annual, sick, and long service leave
entitlements and bonuses.
2) Provision for customs, rebates and withholding taxes.
3) The provision for restoration and rehabilitation is as per the 31
December 2023 assessment. At that date, the provision was discounted at 4.01%
(2022: 3.68%) using a US$ applicable rate and inflation applied at 2.40%
(2022: 2.37%). The annual review undertaken as at 31 December 2023 resulted
in a US$1.3 million increase in the provision (2022: US$5.8 million decrease).
The key assumptions within the estimate, the various ranges and further
details are disclosed in note 1.2.4 in the 2023 Annual Report. No updates to
the provision were made in H1 2024 other than the unwinding of the interest.
In 2023, the Group made significant progress to align its tailings management
framework to the GISTM and is able to report its level of conformance against
each principle of the standard. This did not have a material impact on the
provision recognised during the year. Overall, the Group's tailings management
and governance system was assessed to be in conformance with approximately 80
to 85% of the GISTM requirements. The Group has put in place a clear action
plan and roadmap to fully conform with the GISTM by end-2025.
We will monitor and report on our progress towards full conformance, refer to
page 19 of the Strategic Report of the 2023 Annual Report.
2.9 Trade and other payables
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Non-Current
Other creditors((1)) 5,138 8,814 8,264
5,138 8,814 8,264
Current
Trade payables 38,088 34,856 27,637
Other creditors and accruals((1)) 51,323 46,110 66,611
89,411 80,966 94,248
(1) Included within non-current other creditors and current other
creditors and accruals is $2.4m (2023: $4.8m) and $7.4m (2023 $4.9m)
respectively in relation to the remaining instalments of a $17.6m settlement
agreement signed with EMRA in 2021. By its nature, elements of the cost
recovery mechanism within the Concession Agreement are subject to
interpretation and ongoing audits by EMRA.
Also included within current and non-current other creditors are lease
liabilities of US$1.4m (2023: US$2m) and US$2.7m (2023: US$3.8m) respectively.
2.10 Cash flow information
(a) Reconciliation of cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents
includes cash on hand and at bank and short-term deposits of less than 90 days
maturity on inception.
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Cash and cash equivalents - per statement of cash flows and
statement of financial position 109,607 96,231 93,322
109,607 96,231 93,322
(b) Reconciliation of profit for the year to cash flows from operating
activities
30 June 30 June 31 December 2023
2024 2023 (Audited)
(Unaudited) (Unaudited)
US$'000 US$'000 US$'000
Profit for the period before tax 117,149 114,804 195,140
Adjusted for:
Depreciation/amortisation of property, plant and equipment 93,921 79,022 198,127
Inventory written off 373 204 3,721
Inventory obsolescence provision 5,694 (419) (4,004)
Foreign exchange gains, net (1,962) (4,463) (5,682)
Fair value loss/(gain) on derivative financial instruments 654 (490) 5,509
Share‑based payments expense 5,132 2,268 7,306
Finance income (3,126) (1,791) (4,127)
Finance costs 2,179 1,380 3,526
Loss on disposal of property, plant and equipment 3,604 1,855 9,415
Changes in working capital during the period:
(Increase)/decrease in trade and other receivables 5,963 (3,632) (13,815)
(Increase)/decrease in inventories (12,969) 6,853 (19,737)
(Increase)/decrease in prepayments (5,509) 540 (3,181)
Purchase of derivative financial instruments - (2,538) (6,163)
Decrease in trade and other payables (6,484) (21,481) (9,901)
Increase in provisions 332 367 61
Cash flows generated from operating activities 204,951 172,479 356,195
(c) Non‑cash financing and investing activities
During the period there have been no non‑cash financing and investing
activities.
3. Unrecognised items
3.1 Contingent liabilities
Refer to note 2.9 for additional information on the EMRA position with respect
to provisions.
Other than as highlighted above, there were no contingent liabilities at year
end.
3.2 Subsequent events
The Directors declared an interim dividend of 2.25 US cents per share on
Centamin plc ordinary shares (totalling approximately US$26 million). The
interim dividend for the half year period ended 30 June 2024 will be paid on
27 September 2024 to shareholders on the register on the Record Date of 30
August 2024.
Other than the above, there were no other significant events occurring after
the reporting date requiring disclosure in the financial statements.
3.3 Related Parties
There have been no material changes in relation to the related party
transactions, as disclosed in the FY2023 Annual Report and Accounts, and
details of the Non-Controlling Interest in SGM for the period ended 30 June
2024 are set out in 2.4 above.
4. Other information
4.1 Contributions to Egypt
Gold sales agreement
On 27 March 2023, SGM and the Central Bank of Egypt ("CBE") amended their 20
December 2016 agreement with respect to SGM's facilitation of the purchase of
refined gold bullion for the CBE from its refiner. The amended agreement
provides that the parties may elect, on a monthly basis, for the CBE to supply
SGM with its local Egyptian currency requirements for that month to a maximum
value of EGP130 million. In return, SGM facilitates the purchase of refined
gold bullion for the CBE from SGM's refiner, Asahi Refining Canada Ltd up to
30 June 2023 and thereafter, MKS PAMP SA. This agreement with CBE was entered
into as SGM requires local currency for its operations in Egypt (it receives
its revenue for gold sales in US dollars). The values related to these
transactions are as follows:
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Gold purchased 28,963 12,993 34,124
Refining costs 13 7 17
Freight costs 35 20 43
29,011 13,020 34,184
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
Oz Oz Oz
Gold purchased 13,438 6,752 17,520
At 30 June 2024 the net receivable in EGP owing from the Central Bank of Egypt
is approximately the equivalent of US$50,830 (30 June 2023: US$16,062 net
receivable and 31 December 2023: US$25,045 receivable).
-END-
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