REG - Centamin PLC - Q3 2024 Report

CentaminAnnouncement

17/10/2024 07:00

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RNS Number : 4847I  Centamin PLC  17 October 2024

17 October 2024

Centamin plc

("Centamin", "Group" or "the Company")

LSE: CEY / TSX: CEE

 

QUARTERLY Report

for the three months ended 30 September 2024 ("Q3")

MARTIN HORGAN, CEO, commented: "The performance at Sukari disclosed in our
August trading update has been maintained through the remainder of Q3,
building on the operational momentum from Q2 2024. This strong performance
follows our significant investment in operational improvements which
positioned us to capitalise on the current record gold price. The improved
production and continued cost discipline, resulted in US$103 million in free
cash flow in Q3, 730% higher year-on-year ("YoY"). We expect the Q3 gold
production rate to be sustained for the rest of the year and reaffirm our 2024
production and cost guidance ranges.

At the same time, 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, with
the second phase of drilling nearing completion. We are also making good
progress with our mining license application for the Doropo project in Cote
d'Ivoire, which we expect to be granted by the end of 2024, ahead of a final
investment decision."

 

Q3 2024 HIGHLIGHTS

 ●    Gold production of 131,726 ounces ("oz"), up 30% YoY, and gold sales of
      149,659 oz, up 44% YoY, from the Sukari Gold Mine ("Sukari"). Total gold
      production for the nine months of the year ("YTD") is 356,465 oz.
 ●    Cash costs of US$766/oz produced, and All-in sustaining costs ("AISC") of
      US$1,256/oz sold.
 ●    Capital expenditure ("capex") of US$67 million, including raising TSF2, open
      pit and underground fleet purchases, equipment rebuilds, and underground
      infrastructure.
 ●    Capital Ltd successfully completed additional waste mining operations in Q3
      and has begun to demobilise its earthmoving fleet. This will result in
      normalised mining volumes from the open pit and reduction in overall open pit
      mining unit costs going forwards.
 ●    US$103 million in free cash flow, a YoY increase of 730%, after Sukari profit
      share distribution, Group exploration expenditure and corporate investing
      activities, YTD we have generated US$145 million.
 ●    Robust balance sheet: cash and liquid assets of US$242 million, as at 30
      September 2024 and total liquidity of US$392 million including the undrawn
      US$150 million sustainability-linked revolving credit facility.

group operational SUMMARY

                           Q3-24    Q3-23    % Δ   Q2-24    % Δ   YTD
 SAFETY
 LTIFR (1m hours)          0.65     0.00     n/a   0.33     97%   0.43
 TRIFR (1m hours)          1.96     3.83     -49%  1.45     35%   1.51
 OPEN PIT
 Material mined (kt)       29,922   31,655   -5%   32,312   -7%   94,006
 Ore mined (kt)            5,930    4,501    32%   7,465    -21%  19,626
 Ore mined grade (g/t Au)  0.83     0.74     12%   0.67     24%   0.71
 UNDERGROUND
 Ore mined (kt)            254      245      4%    278      -9%   762
 Ore mined grade (g/t Au)  3.86     4.61     -16%  3.33     16%   3.46
 PROCESSING
 Ore processed (kt)        3,013    2,786    8%    3,339    -10%  9,417
 Feed grade (g/t Au)       1.43     1.25     14%   1.19     20%   1.24
 Gold recovery (%)         89.1     88.5     1%    87.8     2%    88.2
 Gold produced (oz)        131,726  101,370  30%   119,917  10%   356,465

 

 

 

group financial SUMMARY

                                    Q3-24    Q3-23    % Δ   Q2-24    % Δ   YTD
 COST & SALES
 Gold sold (oz)                     149,659  103,807  44%   116,776  28%   358,928
 Cash costs (US$/oz produced)       766      882      -13%  879      -13%  899
 AISC (US$/oz sold)(1)              1,256    1,266    -1%   1,273    -1%   1,329
 Avg. realised gold price (US$/oz)  2,459    1,927    28%   2,341    5%    2,318
 FINANCIALS
 Revenue (US$000)                   368,620  200,404  84%   274,111  34%   833,715
 Capital expenditure (US$'000)      66,916   59,089   13%   43,413   54%   156,369
 Adj. free cash flow(1) (US$'000)   103,156  12,422   730%  32,400   218%  145,899

 

OUTLOOK - Guidance unchanged

 Production
 ●    Gold production guidance range of 470,000 to 500,000 oz per annum

      o  Production is weighted towards H2, as previously guided

      o  Production performance is tracking towards the mid-point of guidance
 Costs
 ●    Cash cost guidance range of US$700-850/oz produced:
      o  We expect cash costs to be towards the upper end of the guidance range as
      a result of the cost of tonnes planned to be mined as waste being reclassified
      as ore. The waste to ore conversion has resulted in a lower strip ratio and as
      a result the waste stripping costs that were expected to be allocated to
      sustaining capex have been reported in cash costs. AISC is unaffected by the
      reallocation of costs.
 ●    AISC guidance range of US$1,200-1,350/oz sold:
 ●    The cost guidance reflects a range of diesel prices from 75-90 US cents per
      litre. The average realised price YTD is 79 US cents per litre.
 Capex
 ●    Adjusted capex guidance of US$215 million is maintained, including:

      o  US$112 million of sustaining capex

      o  US$103 million of non-sustaining capex, of which US$58 million 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$91 million of
      sustaining deferred stripping reclassified from operating costs as per IFRIC
      20. As a result of the reduction in the strip ratio, these costs were reported
      in cash costs and were not capitalised as originally planned. We now budget up
      to US$25 million of sustaining deferred stripping in Q4 2024, with none
      capitalised YTD.

 

KEY MILESTONES

 ●    Doropo Project DFS, Cote d'Ivoire (Completed) - Link to 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 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 (H2 2025)
 ●    Doropo final investment decision (H1 2025)

 

WEBCAST

The Company will host a webcast today, Thursday, 17 October at 08.30 BST where
the senior executives will discuss the results, followed by an opportunity to
ask questions.

Webcast link:
https://sparklive.lseg.com/Centamin/events/1a99b855-aad9-4fae-bed5-3090c2da7e3d/centamin-q-3-2024-results
(https://sparklive.lseg.com/Centamin/events/1a99b855-aad9-4fae-bed5-3090c2da7e3d/centamin-q-3-2024-results)

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 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 5.9 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 or contact:

Centamin plc
 
  FTI Consulting
 

Michael Stoner, Head of Corporate
                                  Ben Brewerton / Sara Powell
/ Nick Hennis

investor@centaminplc.com
                                        +442037271000

 
 
                 centamin@fticonsulting.com

 

HEATH AND SAFETY

In Q3, regrettably, there were two lost time injuries ("LTI"). One was within
our Eastern Desert Exploration team, and the other at Sukari, resulting in a
Group LTIFR of 0.65 per 1,000,000 site-based hours worked. The total
recordable injury frequency rate ("TRIFR") was 1.96 per 1,000,000 site-based
hours worked. Operational safety remains a key focus across the Group,
proactive measures are being undertaken to understand these injuries, identify
trends, and implement mitigations.

 

SUKARI GOLD MINE, EGYPT

(Q3 2024 vs Q3 2023)

Production

Sukari Gold Mine ("Sukari") produced 131,726oz in Q3, a 30% increase YoY, YTD
production is 356,465 oz.

Production guidance range for 2024 remains 470,000 to 500,000 ounces.

Open pit mining

Total material moved (waste and ore) decreased by 5% YoY to 29.9 Mt, of which
23.9 Mt was waste split between the SGM fleet (17.3 Mt moved) with the
remaining volume by contractor. Capital Ltd successfully completed additional
waste mining operations in Q3 and have begun to demobilise their earthmoving
fleet. This will result in normalised mining volumes from the open pit and a
reduction in overall open pit mining unit costs going forwards.

Ore mined was 5.9 Mt at an average grade of 0.83 g/t Au, an increase of 32%
and 12% respectively YoY. This included the reclassification of material from
Stage 7 from waste to low-grade ore, leading to a reduction in the strip ratio
for this area. 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 1.25 g/t Au.

Underground mining

Total material mined (waste and ore) was 391 kt an 9% increase YoY. Total ore
mined was 254 kt at an average combined (stoping and development) grade of
3.86 g/t Au, an increase of 4% and a decrease of 16% respectively, YoY.

The underground ore mined consisted of 195 kt of ore mined from stopes at an
average grade of 3.75 g/t Au, and 58kt of ore mined from development, at an
average grade of 4.20 g/t Au.

Processing

The plant processed 3.0 Mt of ore, at an average feed grade of 1.43 g/t Au, an
increase of 8% and 14% respectively YoY. Scheduled mill relines were completed
successfully early in the quarter.

The metallurgical gold recovery rate was 89.1%, a 1% increase YoY, driven by
higher feed grade.

The closing stockpile balance was 22.0 Mt at a grade of 0.48 g/t Au.

 

EXPLORATION PROJECTS

The total expensed exploration and development spend for the Q3 was US$6
million, YTD US$18 million.

In 2024, budgeted Group exploration spend (to be 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)

The positive results of the definitive feasibility study ("DFS") were
published (link to announcement here
(https://www.centamin.com/media/3088/cey-rns_doropo_dfs_final_17072024_website.pdf)
) and the NI 43-101 technical report has now been filed on SEDAR.

A copy of the full technical report has also been made available on the
Company website: (link here
(https://www.centamin.com/media/3094/2024-doropo-ni43-101-technical-report.pdf)
)

Based on the positive outcome of the DFS, a Mining Licence application was
submitted to the Government of Côte d'Ivoire and is currently in progress
with the administration. In parallel with the application process, the project
team have commenced pre-development planning works to support an FID decision
during H1 2025 and enable a quick start to project construction should it
proceed.

ABC (Côte d'Ivoire)

A soil sampling programme was completed across the northern portion of the
Farako-Nafana permit. This area was previously sampled using termite mounds as
the sample medium and the programme has focussed on re-sampling using soil
geochemistry to ensure better accuracy.

Geological interpretation of the soils data is ongoing with the hope of
identifying soil anomalies that could be drill tested towards the end of the
year at the start of the dry season.

Eastern Desert Exploration ("EDX") (Egypt)

The second phase of drilling continued across Little Sukari, this will consist
of an expanded programme of core and reverse circulation ("RC") drilling. So
far this year we have drilled 23.6km of RC and core, and current activities
are focussed on a combination of infilling the known zone of mineralisation
plus testing potential strike and depth extensions to the north west and
south. We expect drilling to be completed early in Q4 with assay results
expected to return over the balance of the quarter.

 

SALES AND COSTS

Gold sales for the quarter were 149,659 oz, a 44% increase YoY. The average
realised gold price for the quarter was US$2,459/oz, up 28% YoY. Revenues
generated were US$368.6 million, an 84% increase YoY, driven by higher gold
sales and realised gold price.

Unit cash costs of production were US$766/oz produced, a 13% decrease YoY,
leading to an AISC of US$1,256/oz Au sold, a 1% decrease YoY.

 

CAPITAL EXPENDITURE

Key capital projects progressed as scheduled during Q3 QTD, including raising
TSF 2, fleet purchases, equipment rebuilds and underground infrastructure.

 (US$m)                                                        Q3 2024  UNAUDITED   YTD 2024    2024

                                                                                    UNAUDITED   Guidance

 SUSTAINING CAPEX
 Underground mine development                                  10                   25          53
 Equipment rebuilds (60% funded from treasury)                 5                    30          44
 Other sustaining capex                                        31                   38          15
 Total sustaining capex                                        46                   93          112

 NON-SUSTAINING CAPEX
 Growth capex (funded from treasury) including grid

 connection, fleet replacement and exploration                 3                    7           58
 Contract waste stripping capitalised                          18                   53          36
 Other non-sustaining capex                                    -                    3           9
 Total non-sustaining capex                                    21                   63          103
  GROSS CAPEX                                                  67                   156         306
  Sustaining element of open pit waste stripping capitalised   -                    -           (91)

 from opex(1)
 TOTAL ADJUSTED CAPEX (after reclassification)                 67                   156         215

 

(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

Free cash flow

After Sukari profit share distribution, Group exploration expenditure and
corporate investing activities, the free cash flow for Q3 was US$103 million,
an increase of 730% YoY.

Balance Sheet

Centamin is in a strong financial position, with net cash and liquid assets of
US$242 million as at 30 September 2024. The Company has a US$150 million
senior secured sustainability linked revolving credit facility ("RCF") which
is available and undrawn.

Liquidity

                                      30 September 2024

                                      (US$m)
 Cash on hand                         184
 Bullion on hand                      12
 Gold sales receivable                46
 TOTAL CASH & LIQUID ASSETS           242
 Sustainability-linked RCF (undrawn)  150
 TOTAL LIQUIDITY                      392

 

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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