23rd Oct 2019 08:28
(Alliance News) - Centamin PLC is still targeting the bottom end of 2019 guidance, it said on Wednesday, with October the strongest month of the year so far.
The FTSE 250 gold miner, which operates Egypt's Sukari mine, earlier in October said 490,000 ounces of gold, the bottom end of previous guidance, will still achievable, and it reiterated this on Wednesday.
Gold production in the third quarter of 2019 was 98,045 ounces, 17% lower than the second quarter and also 17% lower than a year before.
Centamin's gold sales were 108,826 ounces in the quarter. This was 3% down on the second quarter, but 2% higher than a year prior, delivering USD160.8 million in revenue.
For the first nine months of 2019, Centamin has produced 332,141 ounces of gold, 1% lower than a year before.
The company said the open pit at Sukari has continued to improve grades, though mining rates at the higher-grade stage four west wall were slower than planned. Underground production exceeded targets, Centamin continued.
Absolute cash costs of production, and all-in sustaining costs, are both scheduled to be better than budget for both the third quarter and the first nine months of 2019, the miner said.
Chief Executive Andrew Pardey said: "This quarter was one of continuing transition. Further key staff changes were made at Sukari as we continue to strive for increased performance in key areas of the operation.
"The operational leadership team have commenced a comprehensive review, supported by external consultants, across all sections of the mine, including mining methodology and infrastructure."
Pardey also said Centamin is confident on "significant" 2019 cash flow, allowing an "attractive" dividend for the year.
Pardey's departure was announced at the start of October, and he has a 12-month notice period. Centamin said succession plans are underway, with an executive search firm now appointed.
Looking to the fourth quarter of 2019, Centamin expects "strong" free cash flow due to improving gold sales and reduced costs, meaning the final dividend will likely be a minimum of 4 US cents.
Centamin paid an interim dividend 4 cents as well this year, so that would result in a full-year payout of 8 cents. For 2018, the final dividend was 3 cents, which had meant the total for that year was more than halved to 5.5 cents from 12.5 cents in 2017.
Elsewhere at Sukari, Centamin is looking into building a 30 megawatt solar plant to provide a new power source and also to reduce carbon emissions. There also have been "excellent" drilling results during the quarter at the mine.
At Doropo, in Ivory Coast, a "significant" 10-kilometre long anomaly was found at the Kilosegui deposit. A new mineral resource has provided an indicated resource of 3.6 million tonnes of ore containing 120,000 ounces of gold.
Shares were 1.3% higher on Wednesday in early trade in London at 108.42 pence each.
By George Collard; [email protected]
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