CENTAMIN, the UK-listed gold producer that operates the Sukari gold mine in Egypt, said second quarter gold production would come in at 124,641 ounces, an 11% year-on-year decline. However, full-year production guidance of 540,000 oz would be maintained, it said. The company is scheduled to announce its interim results on August 3.
Andrew Pardey, CEO of Centamin, said in a company statement today the lower year-on-year production was owing to mining on the cut back of the east wall “… with correspondingly low ore grades reported from these sectors”.
In the latter part of the quarter, higher grade was accessed from the open pit in line with the mine plan. Mining of higher grades from the open pit was expected to continue for the balance of 2017, he said. Consequently, gold production was 14% higher on a quarter-on-quarter basis (Q1: 109,187 oz). Pardey said “excellent grades” had been achieved from Sukari’s underground section.
“With the processing also continuing to deliver very strong levels of productivity, we remain on course to meet our full year 2017 production guidance of 540,000 oz at a cash operating cost of $580/oz and all-in sustaining cost of $790 per ounce,” said Pardey.
Sukari produced 551,036 oz in the 2016 financial year, above guidance of 520,000 to 540,000 oz. AISC came in at $694/oz which was an improvement on the $885/oz achieved in the 2015 financial year and in excess of the $720 to $750/oz guidance.
In February, Centamin guided to production of 540,000 to 580,000 oz for the current financial year at an AISC of $790/oz which Investec Securities said previously “looked comfortable, supporting future dividends”.
Shares in the company were marginally down in early London trade, but have been under pressure for the last three months, falling about 16% after nearly matching its previous all time high of £190.60 seven years ago.
Centamin said in February it would pay a 13.5 US cents per share final dividend which took the full dividend payout to 15c/share, equal to 70% of free cash flow.