REG - Centamin PLC - Q1 2024 Report
18/04/2024 07:00
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RNS Number : 0261L Centamin PLC 18 April 2024
18 April 2024
Centamin plc
("Centamin", "Group" or "the Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 31 March 2024
MARTIN HORGAN, CEO, commented: "The scheduled processing of lower-grade ore
from the open pit, alongside the planned underground ventilation upgrades and
mill maintenance during Q1 contributed to slightly lower production
year-on-year ("YoY"). Our commitment to cost control meant our AISC on an
absolute basis decreased 3% quarter-on-quarter ("QoQ") and 6% YoY; albeit the
lower production coupled with the timing of gold sales resulted in a temporary
increase in reported unit costs. With improved ventilation and the processing
of lower grade open pit ore substantially completed during Q1, we expect
production rates to now increase for the balance of the year and reaffirm our
2024 production and cost guidance ranges.
We continue to advance organic growth opportunities within our portfolio. We
are actively following up on the recent exploration successes from our Eastern
Desert Exploration ("EDX") drilling programme and are progressing well towards
completion of the DFS for the Doropo project in Cote d'Ivoire by mid-year."
HIGHLIGHTS
● Group safety record of 12.5 million hours worked without a lost time injury
("LTI"). Regrettably, late in the quarter we recorded our first LTI in twelve
months at the Sukari Gold Mine ("Sukari"). The lost time injury frequency rate
("LTIFR") for the three months to 31 March 2024 ("Q1") was 0.32 per one
million hours worked. The Group's total recordable injury frequency rate
("TRIFR") for Q1 was 1.28 per one million hours worked.
● ISO 45001 Certification achieved, providing external validation for Sukari's
occupational health and safety ("OHS") management system.
● Gold production of 104,821 ounces ("oz"), and gold sales 92,494 oz from the
Sukari Gold Mine ("Sukari"), with 19,241 oz of gold bullion on hand, which was
sold at the start of the second quarter.
● Cash costs of US$1,088/oz produced, and All-in sustaining costs ("AISC") of
US$1,519/oz sold, based on 92,494 ounces sold, noting that on an absolute
basis AISC was US$9 million lower QoQ.
● Doropo Environmental and Social Impact Assessment ("ESIA") submitted to the
Cote d'Ivoire government, which alongside the DFS, will form the basis for the
mining license application in mid-2024.
● Capital expenditure ("capex") of US$46 million, including raising TSF2, open
pit and underground fleet purchases, equipment rebuilds, underground
ventilation upgrades and waste mining.
● Robust balance sheet: cash and liquid assets of US$167 million, as at 31 March
2024 and total liquidity of US$317 million including the undrawn US$150
million sustainability-linked revolving credit facility.
RESULTS SUMMARY
Q1 2024 Q1 2023 % Δ Q4 2023 % Δ
SAFETY
Group LTIFR (1m hours) 0.32 0.31 3% 0.00 -
Group TRIFR (1m hours) 1.28 2.77 -54% 0.97 32%
OPEN PIT
Total material mined (kt) 31,772 32,998 -4% 32,229 -1%
Ore mined (kt) 6,231 3,273 90% 5,401 15%
Ore grade mined (g/t Au) 0.63 0.87 -28% 0.67 -6%
UNDERGROUND
Ore mined (kt) 230 236 -3% 301 -24%
Ore grade mined (g/t Au) 3.20 4.02 -20% 4.31 -26%
Q1 2024 Q1 2023 % Δ Q4 2023 % Δ
PROCESSING
Ore processed (kt) 3,066 3,006 2% 3,152 -3%
Feed grade (g/t Au) 1.12 1.2 -7% 1.35 -17%
Gold recovery (%) 87.66 88.8 -1% 89.1 -2%
Gold production (oz) 104,821 105,875 -1% 128,127 -18%
COST & SALES
Gold sold (oz) 92,494 107,661 -14% 133,465 -31%
Cash costs (US$000) 114,041 99,205 15% 117,236 -3%
Cash costs (US$/oz produced) 1,088 937 16% 915 19%
AISC (US$000) 140,453 145,127 -3% 149,481 -6%
AISC (US$/oz sold) 1,519 1,348 13% 1,120 36%
Realised gold price (US$/oz) 2,062 1,902 8% 1,983 4%
FINANCIALS
Revenue (US$000) 190,984 205,226 -7% 264,710 -28%
Capital expenditure (US$'000) 46,040 53,842 -14% 37,868 22%
Free Cash Flow (US$'000) 10,345 36,501 -72% -13,905 174%
OUTLOOK - Guidance unchanged
● Gold production guidance range of 470,000 to 500,000 oz per annum weighted
towards H2
● Cost guidance:
○ Cash cost guidance range of US$700-850/oz produced
○ AISC guidance range of US$1,200-1,350/oz sold
○ Guidance reflects a range of diesel prices from 75-90 US cents per litre
● Adjusted capex guidance is US$215m, including:
○ US$112m of sustaining capex
○ 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
○ Adjusted capex excludes US$91m of sustaining deferred stripping
reclassified from operating costs as per IFRIC 20
KEY MILESTONES
● Doropo Project, Cote d'Ivoire, completed DFS (mid-2024)
● Accelerated waste-stripping programme completion (Q2-2024)
● EDX exploration update (H2 2024)
● Sukari 50MW grid connection project construction (H2 2024)
● Completion of Solar Expansion Study (H2 2024)
WEBCAST
The Company will host a webcast today, Thursday, 18 April at 08.30 BST where
the senior executives will discuss the results, followed by an opportunity to
ask questions.
Webcast link:
https://www.lsegissuerservices.com/spark/Centamin/events/cf209c2f-3aea-42b2-bc7c-a6d32d8775bd
(https://www.lsegissuerservices.com/spark/Centamin/events/cf209c2f-3aea-42b2-bc7c-a6d32d8775bd)
Please allow a few minutes to register
Print friendly version of the quarterly results:
https://www.centamin.com/investors/results-reports/
(https://www.centamin.com/investors/results-reports/)
ABOUT CENTAMIN
Centamin is an established gold producer, with premium listings on the London
Stock Exchange and Toronto Stock Exchange. The Company's flagship asset is the
Sukari Gold Mine ("Sukari"), Egypt's largest and first modern gold mine, as
well as one of the world's largest producing mines. Since production began in
2009 Sukari has produced over 5.7 million ounces of gold, and today has a
projected mine life to 2035.
Through its large portfolio of exploration assets in Egypt and Cote d'Ivoire,
Centamin is advancing an active pipeline of future growth prospects, including
the Doropo project in Côte d'Ivoire, and over 3,000km2 of highly prospective
exploration ground in Egypt's Arabian Nubian Shield.
Centamin practices responsible mining activities, recognising its
responsibility to deliver operational and financial performance and create
lasting mutual benefit for all stakeholders through good corporate
citizenship.
FOR MORE INFORMATION please visit the website www.centamin.com or contact:
Centamin plc
Michael Stoner, Head of Corporate
investor@centaminplc.com
FTI Consulting
Ben Brewerton / Sara Powell / Nick Hennis
+442037271000
centamin@fticonsulting.com
HEATH AND SAFETY
At Sukari there were two significant achievements during the quarter. Firstly,
surpassing a new LTI (Lost Time Injury) free record of 12.5 million hours,
outperforming the previous benchmark of 9.8 million hours established in March
2023. Secondly, achieving external accreditation of our Occupational Health
and Safety (OHS) management system under ISO 45001:2018 standards,
demonstrating our commitment to prioritising the health and safety of our
workforce and stakeholders.
In Q1, there was one lost time injury ("LTI") resulting in a Group LTIFR of
0.32 per 1,000,000 site-based hours worked. The total recordable injury
frequency rate ("TRIFR") for Q1 was 1.28 per 1,000,000 site-based hours
worked.
SUKARI GOLD MINE, EGYPT
(Q1 2024 vs Q1 2023)
Production
Sukari Gold Mine ("Sukari") produced 104,821oz in Q1, a 1% decrease YoY.
Production guidance range for 2024 remains 470,000 to 500,000 ounces.
Open pit mining
Total material moved (waste and ore) in Q1 decreased by 4% YoY to 31.8Mt.
Total open pit waste material mined (owner and contractor) for Q1 was 25.5Mt,
a 14% decrease YoY, predominantly due to the reclassification of material from
Stage 7 scheduled to be waste to low-grade ore. This reclassification of waste
to ore also resulted in a reduction in the strip ratio and grade per tonne.
The strip ratio for Q1 was 4.1:1 (waste:ore).
The ongoing contractor waste-stripping programme mined 7.9Mt, with 93% of the
fixed volume contract mined to date, and completion expected during Q2.
During Q1, open pit ore was mined from multiple working areas with ore
processed sourced primarily from Stage 5 and 7. Lower-grade ore mined from
Stage 7 was primarily sent to the dump leach or stockpiled. Total open pit ore
mined for Q1 was 6.2Mt, a 90% increase YoY, at an average mined grade of 0.63
g/t Au reflecting the 1.8Mt of additional low-grade ore mined from Stage 7
during the quarter. During 2024, we anticipate continued conversion of waste
to ore in Stage 7; however, we currently project that this conversion rate
will be lower than the levels seen in Q1.
Underground mining
Total material mined (waste and ore) in Q1 was 357kt, a 4% increase YoY. Total
ore mined was 230kt at an average combined (stoping and development) grade of
3.20g/t Au. This represented a 4% increase in ore tonnes YoY and a 20%
decrease in grade YoY. During the quarter upgrades were made to the primary
ventilation including the installation of additional fans to increase airflow
in both the Amun/Horus and Ptah regions of the mine and facilitate the planned
underground expansion. Whilst this lead to a reduction in material moved QoQ,
we expect this to increase over the balance of the year.
The underground ore mined consisted of 162kt of ore mined from stopes at an
average grade of 3.33g/t Au, and 68kt of ore mined from development, at an
average grade of 2.87g/t Au.
Processing
During Q1, the plant processed 3.0Mt of ore, a 2% increase YoY, at an average
feed grade of 1.12 g/t Au, a 7% decrease YoY. There were several key
maintenance projects scheduled for the quarter, including mill relining, which
were completed successfully with no unplanned disruption to throughput.
The metallurgical gold recovery rate was 87.7% for the quarter, a 1% decrease
YoY, driven by the oxide material and lower feed grade.
During the quarter, the closing stockpile balance was 21.0Mt at a grade of
0.47g/t Au.
EXPLORATION PROJECTS
The total expensed exploration and development spend for the quarter was US$6
million.
In 2024, budgeted Group exploration spend (expensed) is US$23 million,
including US$14 million to complete the Doropo DFS, ESIA, permitting and
financing assessment, and US$9 million for EDX exploration.
Doropo Gold Project (Cote d'Ivoire)
Work at Doropo continued to progress well, notably with submission of the
draft ESIA report to government for approval and permitting. Community
consultation continues in parallel alongside the commencement of a suite of
pilot livelihood improvement projects.
DFS work included; preliminary whittle shell selection and ongoing cost
estimates using the mining contactor submissions, metallurgical test work and
infrastructure and flowsheet design finalisation, and completion of hydrology,
sterilisation and geotechnical drilling.
The DFS remains expected to be completed by mid-2024.
Eastern Desert Exploration ("EDX") (Egypt)
In the Nugrus block surrounding the Sukari Mining Concession, detailed mapping
of Little Sukari and Umm Majal was completed, alongside the initiation of
ground-based geophysics consisting of induced polarisation ("IP") and magnetic
surveys over these targets. Additionally, a contractor has been selected for
the second phase of drilling, scheduled to commence in Q2. In the Um Rus
block, follow-up work on soil and rock chip samples from BLEG anomalies was
completed. Finally, in the Nadj block, a remote camp was established, and the
BLEG sampling program was successfully concluded with the collected samples
being prepared for analysis in overseas laboratories.
The EDX exploration update remains expected H2 2024
SALES AND COSTS
Gold sales for the quarter were 92,494 oz, a 14% decrease YoY. However we
closed the period with 19,241 oz of gold bullion on hand which was sold at the
start of the second quarter. The average realised gold price for the quarter
was US$2,062/oz, up 8% YoY. Revenues generated were US$191.0 million, a 7%
decrease YoY, driven by lower gold sales partially offset by a higher realised
gold price.
Unit cash costs of production were US$1,088/oz produced, a 16% increase YoY.
The AISC of US$1,519/oz Au sold, a 13% increase YoY, reflected the lower gold
sales. In absolute terms, AISC decreased both YoY and QoQ, by US$5 million and
US$9 million respectively.
CAPITAL EXPENDITURE
Key capital projects progressed as scheduled during Q1, including the TSF2
embankment raise, the north dump leach expansion, underground ventilation
upgrades - namely the installation of additional fans, underground and open
pit equipment purchases and the ongoing waste-stripping programme which
remains on track for completion during Q2.
(US$m) Q1-24 2024
Guidance
SUSTAINING CAPEX
Underground mine development 8 53
Equipment rebuilds (60% funded from treasury) 7 44
Other sustaining capex 9 15
Total adjusted sustaining capex 24 112
NON-SUSTAINING CAPEX
Growth capex (funded from treasury) including grid connection, fleet - 58
replacement and exploration
Contract waste stripping capitalised 19 36
Other non-sustaining capex 3 9
Total non-sustaining capex 22 103
TOTAL ADJUSTED CAPEX (after reclassification) 46 215
Sustaining element of open pit waste stripping capitalised from opex(1) - 91
GROSS CAPEX 46 306
(1)Reclassified from operating expenditure, from 2021, the Company implemented
a more granular methodology to the accounting and classification of
waste-stripping costs, in line with IFRS accounting standards. As such, there
is an accounting reclassification of open pit waste mining costs, resulting in
a reduction in total cash costs with a corresponding equal increase in the
sustaining expenditure and therefore AISC, with no impact on net cash flow
FINANCIAL POSITION
Balance Sheet
Under the terms of the Sukari Concession Agreement, the Egyptian government
earned US$6 million in royalty payments and alongside Centamin received an
equal US$21 million in profit share payments during the quarter. After Sukari
profit share distribution, Group exploration expenditure and corporate
investing activities, the free cash flow for the quarter was US$10.3 million.
Balance Sheet
Centamin is in a strong financial position, with net cash and liquid assets of
US$167 million as at 31 March 2024. The Company has a US$150 million senior
secured sustainability linked revolving credit facility ("RCF") which is
available and undrawn.
Liquidity
31 March 2024
(US$m)
Cash on hand 103
Bullion on hand 43
Gold sales receivable 22
Financial assets at fair value through profit or loss* 1
TOTAL CASH & LIQUID ASSETS 167
Sustainability-linked RCF (undrawn) 150
TOTAL LIQUIDITY 317
*The financial assets at fair value through profit or loss relate to the open
gold put options purchased by the Company in FY2022 as part of the gold price
protection programme
ENDNOTES
Financials
Financial data points included within this report are unaudited.
Non-GAAP measures
This statement includes certain financial performance measures which are
non-GAAP measures. These include Cash costs of production, AISC, Cash and
liquid assets, and Free cash flow. Management believes these measures provide
valuable additional information for users of the financial statements to
understand the underlying trading performance. Definitions and explanation of
the measures used along with reconciliation to the nearest IFRS measures are
detailed in the Company's 2023 Annual Report
www.centamin.com/investors/results-reports/
(http://www.centamin.com/investors/results-reports/) .
Adjusted capital expenditure
Excludes the sustaining capital element of the waste-stripping.
Exploration expenditure
Exploration expensed covers all exploration activities excluding the Sukari
Concession Agreement and are expensed in the period they are incurred.
Cash and liquid assets
Cash and liquid assets include cash, bullion on hand, gold sales receivables
and financial assets at fair value through profit or loss.
FORWARD-LOOKING STATEMENTS
This announcement (including information incorporated by reference) contains
"forward-looking statements" and "forward-looking information" under
applicable securities laws (collectively, "forward-looking statements"),
including statements with respect to future financial or operating
performance. Such statements include "future-oriented financial information"
or "financial outlook" with respect to prospective financial performance,
financial position, EBITDA, cash flows and other financial metrics that are
based on assumptions about future economic conditions and courses of action.
Generally, these forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expects", "expected",
"budgeted", "forecasts" and "anticipates"." and include production outlook,
operating schedules, production profiles, expansion and expansion plans,
efficiency gains, production and cost guidance, capital expenditure outlook,
exploration spend and other mine plans. Although Centamin believes that the
expectations reflected in such forward-looking statements are reasonable,
Centamin can give no assurance that such expectations will prove to be
correct. Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and projections
of the management of Centamin about future events and are therefore subject to
known and unknown risks and uncertainties which could cause actual results to
differ materially from the future results expressed or implied by the
forward-looking statements. In addition, there are a number of factors that
could cause actual results, performance, achievements or developments to
differ materially from those expressed or implied by such forward-looking
statements; the risks and uncertainties associated with the ongoing impacts of
COVID-19 or other pandemic, general business, economic, competitive, political
and social uncertainties; the results of exploration activities and
feasibility studies; assumptions in economic evaluations which prove to be
inaccurate; currency fluctuations; changes in project parameters; future
prices of gold and other metals; possible variations of ore grade or recovery
rates; accidents, labour disputes and other risks of the mining industry;
climatic conditions; political instability; decisions and regulatory changes
enacted by governmental authorities; delays in obtaining approvals or
financing or completing development or construction activities; and discovery
of archaeological ruins. Financial outlook and future-ordinated financial
information contained in this news release is based on assumptions about
future events, including economic conditions and proposed courses of action,
based on management's assessment of the relevant information currently
available. Readers are cautioned that any such financial outlook or
future-ordinated financial information contained or referenced herein may not
be appropriate and should not be used for purposes other than those for which
it is disclosed herein. The Company and its management believe that the
prospective financial information has been prepared on a reasonable basis,
reflecting management's best estimates and judgments at the date hereof, and
represent, to the best of management's knowledge and opinion, the Company's
expected course of action. However, because this information is highly
subjective, it should not be relied on as necessarily indicative of future
results. There can be no assurance that forward-looking statements will prove
to be accurate, as actual results and future events could differ materially
from those anticipated in such information or statements, particularly in
light of the current economic climate and the significant volatility,
uncertainty and disruption caused by the outbreak of COVID-19. Forward-looking
statements contained herein are made as of the date of this announcement and
the Company disclaims any obligation to update any forward-looking statement,
whether as a result of new information, future events or results or otherwise.
Accordingly, readers should not place undue reliance on forward-looking
statements.
LEI: 213800PDI9G7OUKLPV84
Company No: 109180
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