JOHANNESBURG (miningweekly.com) – Egypt-focused gold producer Centamin on Thursday announced that a maiden interim dividend of $0.87 a share would be paid for the six months ended June 30, following the completion of the construction and commissioning of Stage 4 of its Sukari mine plant expansion.

Sukari, which increased its second-quarter gold output by 9% quarter-on-quarter, generated revenue of $102.6-million, reflecting a 1% decrease on the previous quarter, owing to a 1% reduction in realised gold prices offsetting a 1% increase in gold sales.

Centamin’s basic earnings a share for the three-month period, at $0.99, were down 47% quarter-on-quarter and 79% year-on-year.

The company stated that the quarter-on-quarter decline was mainly the result of higher costs, combined with a 55% increase in depreciation and amortisation to $21.4-million, owing to an increase in the underlying capitalised mine development properties.

During the quarter under review, Centamin’s unit cash operating cost of production was $783/oz, an increase of $39 compared with the first quarter. Excluding the exceptional provision for fuel prepayments, this equated to $602/oz, an increase of $31 on that of the first quarter.

“The higher unit costs were in line with expectations, with the increase over the prior period primarily due to higher processing costs associated with increased throughput at a lower grade, as well as longer haul distances and increased cycle times for the openpit mining fleet,” the gold producer said.

These factors resulted in operating cash costs increasing by $8.4-million, or 15%, quarter-on-quarter to $63.6-million, while processing and mining costs were up 24% and 11% respectively.

Centamin’s earnings before interest, tax, depreciation and amortisation for the quarter amounted to $32.6-million, down 5% quarter-on-quarter, as a result of a $1.2-million decrease in inventory movement having been offset by the increase in the unit cash costs of production.

During the remainder of the year, the gold miner expected average unit costs to decline as a result of improved efficiencies and higher quarterly production rates to be driven by increasing plant throughput and improving underground grades.

Centamin maintained its full-year cost guidance of $700/oz

Meanwhile, the company noted that it still had a strong and flexible financial position with no debt and no hedging, as well as cash, bullion on hand, gold sales receivables and available-for-sale financial assets of $133.3-million at June 30, down from $137.8-million at the end of March.