Centamin remains on track to meet 2021 guidance

5th August 2021 By: Simone Liedtke - Writer

Gold miner Centamin remains on track to meet its full-year cost and production guidance, and its key capital projects continue to progress on schedule.

The miner is also financially robust, with $312-million in cash and liquid assets, which CEO Martin Horgan on August 5 said provided the flexibility to invest in the long-term future of the company’s flagship asset, Sukari, in Egypt, and to continue developing the miner’s active growth pipeline in Egypt and Côte d'Ivoire.

Revenue for the six months ended June 30, was $367.4-million from gold sales of 203 802 oz at an average realised gold price of $1 799/oz.

Operations, supply chain and gold shipments were not been materially impacted by the Covid-19 pandemic, Horgan said.

Cash cost of production was $807/oz and all-in sustaining costs (AISC) were $1 186/oz sold, while earnings before interest, taxes, depreciation and amortisation (Ebitda) had a 52% Ebitda margin.

Profit before tax was $116.8-million and net profit after tax attributable to shareholders was $59.5-million, for a basic earnings per share (EPS) of $0.0516.

Capital expenditure (capex) was $78.3-million as good progress was made on key capital projects such as the solar plant, second tailings storage facility, paste-fill plant, workforce accommodation and facility upgrades.

Overall, Centamin said it remained on track to maintain its full-year gold production and cost guidance of between 400 000 oz and 430 000 oz at cash costs of between $800/oz and $900/oz produced and AISC of between $1 150/oz and $1 250/oz sold.

ANALYST COMMENTARY

Centamin’s interim results, following on from the solid production numbers recently, were a little better than Panmure Gordon forecasts and consensus in general, the company’s Kieron Hodgson said in a separate statement on August 5.

As a result, it has upgraded its recommendation on Centamin, with the miner’s results reaffirming Panmure’s view.

Equity research agency Jefferies, meanwhile, shared similar sentiments as Panmure, while BMO Capital Markets said the six-month period’s earnings were slightly “higher than expected” in terms of inventory movements.

Taking this into account, BMO is expecting the second half of the year to be operationally steady.

Following a steady first half of the year that saw production of 204 000 oz, BMO is also forecasting that the second half will be slightly stronger than the first, as Centamin is expected to benefit from bringing forward a ten-day scheduled maintenance at one of its mills in the third quarter of the year.

For the full-year, BMO is forecasting that Centamin will achieve production of 429 000 oz at an AISC of $1 209/oz.

EGYPT

It is also worth noting that Centamin has confirmed its licences from the recent Egyptian licensing round, subject to final legal formalities.

The exploitation terms for Egypt’s Eastern Desert exploration block are expected to be agreed upon within 12 months, with a two-year exploration budget of $10-million set aside.

The new block’s fiscal terms are separate from the Sukari mine’s concession agreement, Centamin said.