Egypt-focused gold miner Centamin reports that increased gold sales and a higher gold price contributed to a 196% year-on-year increase in the company's free cash flow to $56-million for the quarter ended June 30.
During the June quarter, the company, which operates the Sukari mine, sold 130 745 oz of gold, a 16% improvement year-on-year, in line with higher production.
The average realised price of gold increased by 32% year-on-year to $1 731/oz.
Centamin built up cash and liquid assets to the value of $367-million, after having declared its first interim dividend distribution of $69-million on May 15.
Gross revenue for the quarter was $227-million, representing an improvement of 54% year-on-year, while net cash generated from operating activities was $144-million, a 151% year-on-year increase.
The Sukari gold mine produced 130 994 oz of gold in the June quarter, an 11% improvement year-on-year.
The outperformance in the quarter is a result of an increase in mill feed head grade and the deferral of planned maintenance programmes from the second quarter of the year, to the second half of the year, resulting in more tonnes processed and greater production volumes, the company says.
The deferred maintenance was a precautionary measure in light of the Covid-19 pandemic, to reduce non-essential third-party traffic on site, and will be carried out in the second half of the year.
In terms of openpit mining, the total ore mined was 4.1-million tonnes at an average grade of 0.98 g/t, a 14% increase in tonnes year-on-year and a 40% improvement in grade year-on-year, predominantly driven by mining in the higher-grade Stage 4 North and West areas of the openpit.
Total openpit waste material mined was 16.1-million tonnes, which is 3% less year-on-year, and excluded 890 000 t scheduled as waste material but reclassified as low-grade ore and stockpiled, increasing ore tonnes and reducing both the mined grade and strip ratio.
The openpit delivered 2.8-million tonnes of ore to the mill, at an average milled grade of 1.27 g/t, and 265 000 t to the dump leach pads, at an average grade of 0.41 g/t.
In the second quarter of the year, stockpiles increased from 14.8-million tonnes at 0.48 g/t to 15.8-million tonnes at an average grade of 0.47 g/t.
Underground mining in the second quarter focussed in Ptah, where total ore mined was 168 000 t at an average grade of 5.99 g/t. This represented a 46% year-on-year decrease in tonnes but a 24% year-on-year improvement in grade.
The underground production benefited from improvements in mine planning and operations that realised better dilution control which, in turn, reduced tonnes mined while improving the grade delivered to the run-of-mine pad.
A number of planned stoping areas were deferred until the second half of the year and, commensurately, a number of higher-grade stopes were brought forward into the second quarter as a result of operating considerations to enhance the mining sequence.
Centamin CEO Martin Horgan says that despite the considerable challenges presented by Covid-19, the operating team at Sukari have been fast-acting and agile in their response to protect the health, safety and wellbeing of its workforce, inclusive of contractors, while maintaining the continuity of operations.
“While we continue to actively manage the potential future impacts of Covid-19, we remain confident we are on track to meet guidance and have narrowed the production range to 510 000 oz to 525 000 oz, and kept cost guidance unchanged.”