9th Jul 2014 06:57
LONDON (Alliance News) - Centamin PLC Wednesday said its gold production rates fell in its second quarter compared to the previous year, as underground ore grades remained below forecast and open-pit ore production dropped.
Despite its recent difficulties, the FTSE 250 miner reaffirmed its production forecast for the full-year and said it continues to move towards its long-term target of 450,000 to 500,000 ounces per year from 2015 onwards.
Centamin said its gold production fell 13% to 81,281 ounces for the three months ended June 30 from 93,624 ounces in the same period the previous year, stating that grades realised from development ore were lower than the forecast annual average and open-pit ore production rates fell 39% to 1.8 million tonnes from 3.0 million tonnes.
Centamin didn't provide detail on its realised ore grades.
However the company said its stage 4 commissioning for plant expansion is ongoing, and it expects a steady lift in throughput during the second half of the year. With underground average grades also expected to improve as the company accesses higher grade stoping blocks, Centamin said gold production levels are expected to progressively increase in the third and fourth quarters.
The firm also noted that its gold production rates increased 9% on its previous quarter with record quarterly throughput of 2.0 million tonnes, a 32% increase on the first quarter, after the start of ore treatment from the new stage 4 plant circuit.
As a result, Centamin reiterated its production guidance for 2014 at 420,000 ounces of gold.
"Whilst underground development ore grades were below forecast, mining rates remain strong and the operation is on a solid footing having opened up key high-grade areas for stoping," Chairman Josef El-Raghy said in a statement. "Therefore, with both plant throughput and average grade set to materially increase during the remainder of the year, we maintain our full year production guidance."
It April, the company announced that gold production from its Sukari gold mine in Egypt declined in the first quarter of 2014, hit by a temporary reduction in underground average grade.
Centamin reported total gold production for the quarter to end-March of 74,241 ounces, down 14% compared to the previous year and down 19% from the fourth quarter of 2013 after poor mining equipment availability within the high-grade stoping areas of the underground mine.
In January 2012, the company stopped receiving diesel fuel oil for its Sukari mine at subsidised prices, after pressure from Egyptian General Petroleum Corp, according to Centamin, and received a demand from its supplier Chevron Corp for the repayment of fuel subsidies from late 2009 to January 2012, some USD60 million in total.
The company lodged an appeal against Egyptian General Petroleum in 2012 over the situation, but to date no final decision has been made on the matter and so the company continues to have to provide for the prepayment costs as exceptional items.
By Tom McIvor; [email protected]; @TomMcIvor1
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