LSE- and TSX-listed Egypt-focused gold miner Centamin’s revenue increased by 4% year-on-year to $382-million for the first half of the year as a result of gold sales of 203 587 oz at an average realised gold price of $1 872/oz.
The miner’s cash cost of production was $931/oz, while all-inclusive sustaining costs (AISC) were $1 446/oz of gold sold – up 22% year-on-year.
As such, Centamin’s earnings before interest, taxes, depreciation and amortisation (Ebitda) in the period were $153-million – down 19% year-on-year, while net profit after tax attributable to shareholders was $85-million – up 42% year-on-year, resulting in earnings a share of $0.0735 – up 42%.
However, the miner’s production was flat in the period at 203 898 oz, as were sales at 203 587 oz.
Due to be paid to shareholders on October 7, the miner declared an interim dividend of $0.025 a share, equating to a distribution of about $29-million.
CEO Martin Horgan says Centamin delivered a strong performance against guidance and its long-term plans during the first half of the year. “We are now starting to see the benefit of the reinvestment programme, as the revised mine plan delivered improved production and costs during the second quarter.”
Centamin’s group operating cash flow totalled $128-million for the six months to June 30, while group free cash flow of -$25-million reflected investments into the future of its operations with $139-million (including $6-million of non-cash International Financial Reporting Standards 16 additions) going towards capital expenditure (capex).
Horgan adds that the waste stripping programme has enabled re-entry into the higher-grade areas of the openpit, while the transition to owner operations in the underground resulted in much-improved productivity during the second quarter.
The Egyptian Mineral Resources Authority received $33-million as part of Centamin’s profit share and royalty distributions.
Also during the first half of the year, Centamin progressed with key capital projects, such as a solar power plant, paste-fill plant and Stages 2 and 3 of its tailings storage facility.
“The new solar power plant is expected to yield cost and decarbonisation benefits through the second half of the year, and we also look forward to a strong pipeline of news that will highlight the organic growth potential we see across our portfolio of assets,” says Horgan.
The solar plant will be commissioned in the third quarter.
Centamin’s balance sheet reflects available cash and liquid assets of $175-million as at June 30, and after payment of the 2021 final dividend of $58-million on June 15.
Going forward, Centamin reaffirmed its production and cost guidance for the full year at between 430 000 oz and 460 000 oz and $900/oz and 1 000/oz produced, respectively.
AISC for the remainder of the year are expected to be between $1 275/oz and $1 425/oz of gold sold, with Centamin expecting a preference for the higher end.
The capex budget for the year is forecasted to be $225.5-million, while $25-million is expected to go towards exploration.
In the second half of the year, Centamin intends to conduct a capital structure review and an underground expansion study, as well as update the Sukari resource and reserve.
In addition, the miner plans to conduct a prefeasibility study for the Côte d'Ivoire-based Doropo project in the fourth quarter.