For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231019:nRSS5852Qa&default-theme=true
RNS Number : 5852Q Centamin PLC 19 October 2023
19 October 2023
Centamin plc
("Centamin", "Group" or "the Company")
LSE: CEY / TSX: CEE
QUARTERLY Report
for the three months ended 30 September 2023 ("Q3")
MARTIN HORGAN, CEO, commented: "We maintain our commitment to safety and are
pleased to announce zero lost time injuries in the quarter. Operationally, the
decision to complete the plant maintenance demonstrates our commitment to the
long-term stewardship of Sukari and due to our operational flexibility 2023
production guidance is maintained.
Today's results reflect another period of disciplined cost management, putting
us on target for the lower half of our 2023 cost guidance range. Our financial
strength and the savings made against our 2023 budget have also given us the
flexibility to accelerate some key 2024 capital expenditures into 2023 without
impacting guidance."
HIGHLIGHTS
Strong cost performance
· Zero lost time injuries: There were no lost time injuries Q3
resulting in a lost time injury frequency ("LTIFR") of zero. The total
recordable injury frequency rate ("TRIFR") was 3.83 per one million hours
worked
· Gold production of 101,370 ounces - as published on 12 October 2023
- bringing the total gold production for the nine months of the year ("YTD")
from the Sukari Gold Mine ("Sukari") to 321,931 oz and is on track for the
lower end of the 2023 guidance range
· Revenue of US$200.4 million (YTD: US$626m), generated from gold sales
of 103,807 oz (YTD:323koz) at an average realised gold price of US$1,927/oz
sold (YTD: US$1,933/oz)
· Cash costs of US$882/oz produced (YTD: US$859/oz) targeting the
lower half of the 2023 guidance range
· All-in sustaining costs ("AISC") of US$1,266/oz sold (YTD:
US$1,240/oz) targeting the lower half of the 2023 guidance range
· Capital expenditure ("capex") of US$59.1 million (YTD US$166m)
reflecting capital cost savings from lower fuel costs and optimisation of the
open pit fleet maintenance strategy in line with the new Sukari life of mine
plan
· Sukari 30MW(AC) solar plant has been operating at nameplate levels for
twelve months as of September, successfully displacing 22 million litres of
diesel fuel with renewable power to reduce greenhouse gas ("GHG") emissions by
approximately 59,000 tonnes of CO(2)-e
· Delivered the Sukari new life of mine plan on 12 October 2023
demonstrating the potential for increased long-term gold production, lower
operational costs, reduced operational risk and significantly reduced carbon
emissions (link to RNS here
(https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=4389914&lang=en-GB&companycode=au-cey&v=)
)
· New Egyptian mining regulatory framework agreed in principle
establishing a clear, competitive exploitation structure for the development
of new mining concessions. This framework will apply to commercial discoveries
made on Centamin's highly prospective 3,000km(2) Eastern Desert Exploration
blocks ("EDX") (link to RNS here
(https://tools.eurolandir.com/tools/Pressreleases/GetPressRelease/?ID=4355862&lang=en-GB&companycode=au-cey&v=)
)
· Strong and flexible balance sheet with available cash and liquid
assets of US$126 million (at 30 September 2023) after the distribution of
US$23 million to shareholders as an interim dividend, and total liquidity of
US$276 million including the undrawn US$150 million sustainability linked
revolving credit facility
2023 OUTLOOK
Annual guidance on track
· Gold production guidance range of 450,000 to 480,000 oz per annum
and targeting the lower end
· Cash cost guidance range of US$840-990/oz produced and AISC guidance
range of US$1,250-1,400/oz sold, now targeting the lower half
· Capex guidance is maintained at US$273 million with further
detail below
· Exploration spend is results-driven. 2023 exploration expenditure
budget is US$30 million, including US$23 million for the pre-development study
work on the Doropo Gold Project
KEY DELIVERABLES
· Group Mineral Resource and Reserve update (Q4 2023)
· Group Exploration Update (Q4 2023)
· Doropo Gold Project definitive feasibility study (mid-2024)
WEBCAST AND CONFERENCE CALL
The Company will host a webcast and conference call today, Thursday, 19
October 2023 at 08.30 BST to discuss the results, followed by an opportunity
to ask questions.
Webcast link:
https://www.investis-live.com/centamin/6515595de7d60c12002cfe2b/fgsw
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.investis-live.com%2Fcentamin%2F6515595de7d60c12002cfe2b%2Ffgsw&data=05%7C01%7Calexandra%40centaminplc.com%7Cec7f4d68a81c4ab3196408dbc023892a%7Ca02403da39374fe8917b48e08012a5e7%7C0%7C0%7C638315031258673986%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=ejYCsq2PPty9VzoQEKXwDiQlUCecT%2BbkjU7q1gogAeA%3D&reserved=0)
Dial-in telephone numbers:
United Kingdom (and all other locations) +44
(0) 204 587 0498
United States
+1 646 664 1960
Participation access
code:
686280
PRINT-FRIENDLY VERSION of the announcement: www.centamin.com/media/companynews
(http://www.centamin.com/media/companynews) .
RESULTS SUMMARY
Q3 2023 Q3 2022 % Δ Q2 2023 % Δ YTD
SAFETY
LTIFR (1m hours) 0.00 0.00 0% 0.00 0% 0.10
TRIFR (1m hours) 3.83 1.69 127% 3.40 13% 3.43
OPEN PIT
Total material mined (kt) 31,655 35,647 (11%) 32,303 (2%) 96,956
Ore mined (kt) 4,501 2,814 60% 3,609 25% 11,383
Ore grade mined (g/t Au) 0.74 1.04 (28%) 0.90 (17%) 0.83
UNDERGROUND
Ore mined (kt) 245 210 16% 222 10% 703
Ore grade mined (g/t Au) 4.61 6.2 (26%) 4.40 5% 4.35
PROCESSING
Ore processed (kt) 2,786 3,230 (14%) 3,076 (9%) 8.868
Feed grade (g/t Au) 1.25 1.37 (9%) 1.26 (1%) 1.24
Gold recovery (%) 88.5 87.9 1% 88.3 0% 88.5
Gold production (oz) 101,370 127,512 (21%) 114,687 (12%) 321,931
COST & SALES
Gold sold (oz) 103,807 126,610 (18%) 111,693 (7%) 323,160
Cash cost (US$'000) 89,399 103,447 (14%) 87,995 2% 276,555
Cash costs (US$/oz produced) 882 811 9% 767 15% 859
AISC (US$'000) 131,395 163,156 (19%) 124,299 6% 400,855
AISC (US$/oz sold) 1,266 1,289 (2%) 1,113 14% 1,240
Realised gold price (US$/oz) 1,927 1,720 12% 1,969 (2%) 1,933
FINANCIALS
Revenue (US$000) 200,404 218,115 (8%) 220,386 (9%) 626,016
EBITDA (US$000) 99,005 100,630 (2%) 114,683 (14%) 292,420
Profit before-tax (US$'000) 56,497 60,656 (7%) 70,434 (20%) 171,301
Capital expenditure (US$'000) 59,089 74,892 (21%) 54,419 9% 166,144
Free cash flow (US$'000) 12,422 10,666 16% 14,027 (11%) 34,903
HEALTH AND SAFETY
We remain focussed on the protection of our workforce and the local
communities where we operate. Our safety performance continues to be strong;
while noting that our ultimate ambition is to create a zero-harm workplace.
We had no lost time injuries in Q3 2023 across the Group. Notwithstanding,
there has been an increase in low consequence, minor injuries. Proactive
measures have been taken to understand these injuries, identify trends, and
implement mitigations.
In Q3, the Group LTIFR was zero for Q3 and 0.10 per one million hours worked
year to date ("YTD") and the Company is on track to meet the annual LTIFR
target of 0.34. The Group TRIFR was 3.83 per one million hours worked,
bringing YTD to 3.43, which is tracking ahead of the annual TRIFR target of
2.78.
Sukari Gold mine, egypt
(Q3 2023 vs Q3 2022)
Production
Sukari gold production for Q3 totalled 101,370 oz (YTD: 321,931), a 21%
decrease YoY. As announced on 12 October 2023, a potential issue was
identified on SAG mill 1 ("SAG1") following routine mill relining and the
decision was taken to undertake pre-emptive repairs. However, the build-up of
high-grade material on the ROM pad and increased operational flexibility in
the mine plan means that 2023 annual production guidance remains on track at
the lower end of guidance.
Open Pit Mining
Total material moved (waste and ore) of 31.7Mt, a 11% decrease YoY, driven by
lower waste mined and a focus on Sukari hill which increased ore tonnes mined.
Total open pit waste material mined for the quarter was 27.2Mt, at 17%
decrease YoY. This includes 9.4Mt of contracted waste-stripping as part of
the accelerated waste-stripping programme, with a similar performance expected
in Q4. The strip ratio for the quarter was 6:1 (waste:ore).
During Q3, open pit ore was mined from multiple working areas, with
contributions from Stage 5 North, East, West and Stage 7. Total open pit ore
mined for the quarter was 4.5Mt, a 60% increase YoY, at an average mined grade
of 0.74 grams of gold per tonne ("g/t Au"), a 28% decrease YoY. This was
driven by a greater conversion of waste to ore from Stage 7 of the open
pit, which resulted in more than scheduled low grade ore mined and less waste
mined. Grades are expected to improve moderately throughout the year averaging
approximately 0.8g/t for 2023.
During the quarter, the low-grade stockpiles increased by 363kt to 17.8Mt at
an average grade of 0.45g/t Au.
Underground Mining
Total material mined (waste and ore) was 359kt, a 34% increase YoY, reflecting
the ramp up in mining rates following the transition to owner-mining in H1
2022. Total ore mined was 245kt at an average combined (stoping and
development) grade of 4.61g/t Au. This represented a 16% increase in ore
tonnes YoY and a -26% increase in grade YoY.
The underground ore was made up of 161kt of ore mined from stopes, at an
average grade of 5.31g/t Au, and 83kt of ore mined from development, at an
average grade of 3.24g/t Au.
Processing
The plant processed 2.8Mt of ore, a 14% decrease YoY, at an average feed grade
of 1.25 g/t Au, a 9% decrease YoY due to the pre-emptive repairs. The work was
successfully completed and SAG1 has been fully operational since 1 October
2023.
The metallurgical gold recovery rate was 88.5% for the quarter, a 1% increase
YoY.
Sukari Mining Concession ("SMC") Exploration
Brownfield exploration across the 160km(2) Sukari Concession amounted to
US$3.7 million in the quarter. This is capitalised and captured within the
2023 capex guidance.
Work focused on the development of additional Mineral Resources within the SMC
that can be converted to Mineral Reserves and incorporated into the mine plan.
In Q3, a total of 10,864 metres were drilled across a number of targets,
including at V Shear East, Wadi Alam, Quartz Ridge and ARC prospects.
Capital Expenditure
Key capital projects progressed well during Q3, with activities focussed
around underground development, tailings storage facility 2, equipment
rebuilds and the contracted waste-stripping programme.
The total capex in Q3 was US$59.1 million and after removing the impact of the
waste mining accounting treatment, adjusted capex was US$56.5 million.
Q3 2023 YTD
(US$m) (US$m)
Underground exploration 2.6 8.0
Underground mine development 9.6 25.6
Rebuilds, underground transition and other sustaining capex 12.3 31.3
Sustaining element of waste stripping capitalised 1 (#_ftn1) 2.6 12.6
Sustaining CAPEX 27.1 77.4
Underground paste-fill plant, North dump leach & tailings storage facility 8.8 19.5
Contract waste stripping capitalised 19.1 63.4
Other non-sustaining capex 4.1 5.8
Non-sustaining CAPEX 32.0 88.7
TOTAL CAPEX 59.1 166.1
Less:
Sustaining element of waste stripping capitalised(1) (2.6) (12.6)
ADJUSTED CAPEX (after reclassification) 56.5 153.5
The 2023 capital expenditure guidance remains unchanged at US$273 million.
This includes a lower deferred sustaining stripping cost of US$25 million,
predominantly driven by a conversion of waste to ore which has reduced the
strip ratio and reclassified some sustaining capex to operating expenditure.
However, forecasted annual capital cost savings of US$24 million, partially
offset by ongoing outperformance on the contracted waste-stripping programme,
has meant that the Company can accelerate certain key capital projects,
previously scheduled for 2024, into 2023 without the need to revise guidance:
Forecasted 2023 capital savings of approximately US$24 million, primarily
from:
· Lower overall open pit mining costs resulting from fuel savings
· Optimised open pit fleet management strategy, as per the new
Sukari life of mine plan
Partially offset by:
· 2023 contracted waste-stripping outperformance is expected to
result in 21% more tonnes moved than scheduled, but due to lower fuel prices,
only result in a 6% additional capital cost
Accelerated capital spend into 2023:
· US$12.5 million towards the Sukari grid power connection, and
· US$6.6 million spend towards new open pit 785C truck purchases
SALES AND COSTS
Gold sales for the quarter were 103,807 oz, a 18% decrease YoY. The average
realised gold price for the quarter was US$1,927/oz, up 12% YoY. Revenues
generated of US$200.4 million, 8% lower YoY, driven by lower production
volumes and subsequent gold sales.
Cash costs of production were US$89.4 million for the quarter, a 14%
improvement YoY, due to lower input costs such as fuel and consumables. Unit
cash costs of production were US$882/oz produced, a 9% increase YoY due to
lower production volumes.
Total all-in sustaining costs ("AISC") were US$131.4 million for the quarter,
a 19% improvement YoY, reflecting lower sustaining capital expenditure. Unit
AISC of US$1,266/oz sold, a 2% improvement YoY.
EXPLORATION PROJECTS
The total greenfield exploration spend for the quarter was US$5.5 million
(YTD: US$24.5m).
Doropo Project, Côte d'Ivoire
During Q3, fieldwork continued at Doropo, including infill drilling within the
main resource cluster and testing regional deposits outside the existing
project resource. Total spend in the quarter amounted to US$3.7 million
(YTD: US$19.6m):
· 997 metres of core infill and twin hole drilling at the Vako,
Sanbayoro and Attire prospects
· 24,938 metres of reverse circulation pulp samples were analysed
using an X-ray fluorescence ("XRF") machine
The DFS and ESIA work continued and is expected to be completed by June 2024.
Eastern Desert Exploration ("EDX"), Egypt
During Q3, the focus was on advancing our maiden drill programme on the Nugrus
block, adjacent to the Sukari mining concession. The initial 10,000 metre
drill programme was increased to 15,000 metres with the identification of
additional drill targets:
· 10,910 metres of exploration drilling was completed in Q3
· Drilling focussed on eight targets which were identified through
an comprehensive fieldwork programme
· The programme is scheduled for completion in October and assay
results are expected to be received in Q4 2023
Regional fieldwork work continued across all three concession blocks,
including soil and rock chip sampling on the Nugrus block, planning of the
Najd block BLEG sampling programme is underway, and at the Um Rus we prepared
to undertake soil surveys during Q4.
FINANCIAL POSITION
Free Cash Flow
Under the terms of the Sukari Concession Agreement, the Egyptian government
earned US$6 million (YTD: US$18.7m) in royalty payments and received US$23.0
million (YTD: US$69.0m) 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$12.4 million
(YTD: US$34.9m).
Balance Sheet
Centamin is in a strong financial position, with cash and liquid assets to
US$125.7 million as at 30 September 2023. The Company has a US$150 million
senior secured sustainability-linked revolving credit facility ("RCF") which
is available and undrawn.
Liquidity
30 September 2023
(US$m)
Cash on hand 78.5
Bullion on hand 22.9
Gold sales receivable 13.6
Financial assets at fair value through profit or loss* 10.6
TOTAL CASH & LIQUID ASSETS 125.7
Sustainability-linked revolving credit facility (undrawn) 150.0
TOTAL LIQUIDITY 275.7
*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
About Centamin
Centamin is an established gold producer, with a premium listing on the London
Stock Exchange and a secondary listing on 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 over 5 million
ounces of gold, and today has 6.0Moz in gold Mineral Reserves. 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 has over 3,000km(2) of highly prospective
exploration ground in Egypt's Nubian Shield.
Centamin recognises its responsibility to deliver operational and financial
performance and create lasting mutual benefit for all stakeholders through
good corporate citizenship, including but not limited to in 2022, achieving
new safety records; commissioning of the largest hybrid solar farm for a gold
mine; sustaining a +95% Egyptian workforce; and, a +60% Egyptian supply chain
at Sukari.
FOR MORE INFORMATION please visit the website www.centamin.com
(http://www.centamin.com) or contact:
Centamin plc FTI Consulting
Alexandra Barter-Carse, Head of Corporate Communications 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.
Royalties
Royalties are accrued and paid six months in arrears.
Cash and liquid assets
Cash and liquid assets include cash, bullion on hand and gold sales
receivables.
Liquidity
Liquidity is defined as the sum of cash and cash equivalents and available
Company credit.
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
1 (#_ftnref1) 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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END QRTGPGCCUUPWGQR