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Centamin commissions 36 MW solar plant at Sukari gold mine

19th January 2023

By: Darren Parker

Creamer Media Contributing Editor Online

     

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London-listed Centamin commissioned a 36 MW solar plant at its Sukari gold mine, located in the Nubian Desert near the Red Sea in Egypt, during the fourth quarter of last year, resulting in immediate cost savings and reductions in carbon emissions, CEO Martin Horgan has said.

At the release of the company’s report for the quarter ended December 31, 2022, on January 19, he noted that the commissioning of the solar plant would result in a potential cost saving of up to $20-million a year at current fuel prices.

Centamin’s total capital expenditure (capex) for the year ended December 31, 2022, was $224.3-million, which included spending on the solar plant in addition to the construction of a paste plant, which Horgan said was on track for commissioning in the first half of 2024.

In addition, Centamin revealed that it had achieved a new safety record, recording no lost-time injuries (LTI) in the fourth quarter of 2022 and reaching a site record of eight-million LTI-free hours at its Sukari gold mine.

The LTI frequency rate for the 12 months ending December 31 was 0.08 per one-million hours worked, representing an 83% improvement over the previous year.

Centamin also reported strong production and financial results. Yearly gold production reached 440 974 oz, in line with guidance. That included 109 564 oz that were produced in the fourth quarter. Revenue for the year reached $787-million, with $188-million generated in the fourth quarter from gold sales at an average price of $1 735/oz.

“The fourth-quarter performance represented a successful conclusion to the year. Our operating team delivered on our 2022 guidance for both ounces and costs at Sukari, despite the impact of industry-wide inflationary pressures,” Horgan said.

Costs were also delivered in line with guidance, with cash costs of $997/oz and all-in sustaining costs (AISC) of $1 445/oz sold for the fourth quarter, with $913/oz produced and an AISC of $1 399/oz for the full year.

Additionally, the company reported a 13% increase in measured and indicated mineral resources, driven by a focus on geological exploration and confirmed potential for expansion of the Sukari underground mine.

“We completed the Sukari underground expansion study, confirming the ability to increase mining rates by 30% from 2025. For the second consecutive year, we materially grew the Sukari reserves,” Horgan pointed out.

The company also announced that it had secured a $150-million sustainability-linked revolving credit facility to fund growth and enhancement opportunities, and reported a strong balance sheet with cash and liquid assets of $156.6-million as of December 31. This would provide greater flexibility to fund growth, said Horgan.

“Outside of Sukari, the Doropo prefeasibility study is on track for [the first half of] 2023, with work focused on assessing new potential capital and cost saving opportunities, and on our earlier-stage exploration blocks in Egypt, we have identified drill targets to be tested later this year,” Horgan said.

Sukari gold mine has set its 2023 full-year production target at between 450 000 oz and 480 000 oz, weighted towards the second half of the year.

The company also provided guidance for cash costs, which are expected to be in the range of $840/oz to $990/oz, and AISC of $1 250/oz to $1 400/oz sold, reflecting higher fuel prices and global inflationary pressures.

The company also announced a capex guidance of $225-million, as it continues to identify growth and optimisation projects at the Sukari mine, including the development of a gravity circuit, expansion of the dump leach capacity, and the start of the underground expansion.

Centamin said this also reflects inflationary pressures on the contracted waste-stripping programme, specifically from higher fuel prices.

In addition, the company budgeted $30-million for exploration, including $23-million for the predevelopment study work on the Doropo project.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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