5th Oct 2016 09:01
LONDON (Alliance News) - Centamin PLC on Wednesday said production for the full year 2016 will be at the top end of its guidance range after reporting increases during the third quarter as throughput levels remain above the company's internal targets.
All of the company's production comes from the Sukari mine in Egypt, and production in the third quarter of 2016 amounted to 148,674 ounces, 6.0% higher than the second quarter when 140,306 ounces were produced and, compared to last year, production was 41% higher.
"We expect full year 2016 production to be towards the upper end of our guidance range of between 520,000 and 540,000 ounces," said Chief Executive Andrew Pardy.
Production for the first nine months of the year stands at 414,249 ounces of gold. If Centamin produced the same amount of gold in the fourth quarter as it did in the third, then full year production would come in at 562,923 ounces - way above the company's guidance range.
Although not reiterated on Wednesday, Centamin has previously said it aimed to achieve an all-in sustaining cash cost for the year of USD720 to USD750 per ounce.
Notably, Centamin raised its full year production guidance and lowered its cost estimates earlier this year from the original target to produce 470,000 ounces at an all-in cost of USD900 per ounce.
That is happening in tandem with higher gold prices and Centamin benefited from an average rise of 2.6% in the gold price achieved in the first six months of 2016 versus the previous year. Spot gold was trading at USD1,272 per ounce on Wednesday, 20% higher than the price at the start of 2016 of USD1,062.
Throughput fell 4.0% quarter-on-quarter but was still above the company's base-case target rate of 11.0 million tonnes on an annual basis and the process plant was slightly more productive in the third quarter compared to the second.
Throughput fell to 2.8 million tonnes of ore in the third quarter from 2.9 million tonnes in the second, and that can also be compared to the throughput in the third quarter of 2015 of 2.7 million tonnes of ore.
The process plant productivity improved slightly quarter-on-quarter to 1,437 tonnes of ore being processed per hour compared to 1,432 tonnes and one year earlier the plant was processing 1,342 tonnes of ore each hour.
Grades looked to have improved in the third quarter compared to the second as the amount of ore taken from the open pit has fallen whilst production has continued to rise. A total of 2.9 million tonnes of ore from the pit was used for production purposes in the third quarter compared to 3.4 million tonnes in the second quarter and 2.2 million tonnes a year earlier.
However, the amount of waste that Centamin mined seems to have increased substantially, which would impact costs. Centamin moved 16.2 million tonnes of material from the open pit in the third quarter compared to only 15.0 million tonnes in the second quarter and 14.3 million tonnes in the third quarter of 2015.
The material moved is made up of the ore needed to produce the desired gold plus the waste that is also mined. That implies the amount of waste mined in the third quarter was around 13.3 million tonnes compared to 11.6 million tonnes in the second quarter and 12.1 million tonnes a year earlier.
The amount of taken from the underground operation at the Sukari mine in the third quarter for production purposes fell to 255,000 tonnes from 256,000 tonnes in the second quarter and 312,000 tonnes a year earlier.
"Ore throughput rates at the processing operation were stable, consolidating the improvements delivered over previous quarters and remaining above our base case forecast rate of 11.0 million tonnes per annum. The open pit delivered an increase in total material movement and the underground mine continued to deliver both tonnes and grade in excess of our base case forecast," said Pardey.
Centamin shares were trading up 0.3% to 145.70 pence per share on Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Centamin PLC