Centamin Plc (CEY:LSE) (CEE:TSX)
Centamin reported Q3 production of 148,674 oz Au, a 6% increase over Q2 2016 and 41% higher than Q3 2015. AISC US$644/oz Au. Ongoing optimisation of the process plant resulted in a recoveries of 89.7% up 0.2% from Q2 2016. Full year production is expected towards the upper end of guidance, 520koz Au – 540k oz Au; at AISC of US$720-US$750/oz.
An increase in realised gold prices, higher gold sales and improved operational efficiencies resulted in lower overall costs and a 20% increase in EBITDA to US$122m from Q2. Centamin remains debt-free and un-hedged with cash and bullion on hand of US$417m as at 30 September 2016. Distribution of profit share of US$6.67m reduced basic EPS by 11% from Q2 2016 to US$5.62. Approximately US$23m was made to shareholders in relation to the 2016 interim dividend, declared in August.
News flow from an updated resource and reserve estimate is expected during Q4; as well as continued resource definition drilling from Burkino Faso. The ongoing development of a new exploration decline which commenced in August within the NE Cleopatra zone of Sukari Hill has the potential to increase reserves and support underground production of up to 1Mt per annum at a total project expenditure of US$11.5m over a 9-month period. The underground mine delivered 255kt of ore (in line with Q2 2016), at a grade of 8.97g/t Au (up 4% on Q2 2016).
The Supreme Administrative Court (SAC) appeal and Diesel Fuel Oil court case are both still on-going. The Concession Agreement appeal remains stayed until the Supreme Constitutional Court rules on the validity of Law 32 of 2014. Developments in the DFO case during the quarter are set out further below.
Andrew Pardey, CEO, commented: “Centamin delivered another solid quarter from the Sukari operation, with a record of 148,674 ounces bringing year to date total production to 414,249 ounces of gold.