CENTAMIN is to pay out 53% of interim cash flow after declaring a 2.25 US cents per share dividend. The payout is on the back of a strong second quarter recovery at Sukari, its mine in Egypt.
The UK-listed firm reported decent half year operating results after playing catch up on its first quarter. Gold production was 14% higher in the second quarter while cash costs were 19% lower at $879/oz compared to $1,088/oz in the first quarter.
All in all, Centamin produced 224,738 oz in the first half (2023: 220,562 oz), 2% higher at a cash cost of $977/oz compared to $849/oz. All in sustaining costs (AISC), the cost line investors look at closely because it also includes expansion capital, increased 13% to $1,382/oz for the six months ended June.
The poor cost performance in the first quarter took the gloss off a strong environment for gold producers such as Centamin. It reported an average gold price received of $2,218/oz – 15% higher year-on-year.
Basic earnings for the half year came out slightly weaker year-on-year at $7.19/share. Shares in the company were 6% lower today, but on a year-to-date basis the stock is roughly one-fifth higher.
Commenting on the second half, Centamin CEO Martin Horgan said the firm’s grid connection project, which is due to commission, “will build on our recent success in taking costs out of the business”.
The project, which was estimated to cost $20m to $30m, will boost Centamin’s power from renewables as Egypt drives to a 40% of total power from solar and wind. In terms of Centamin’s 2030 interim target, it wants to increase renewable energy sourced from the grid to 38% from 12% currently.
Earlier this month, Centamin said it would lodge an application to mine Doropo, its proposed $373m project in Ivory Coast following completion of a definitive feasibility study.
The study confirmed and improved on an earlier assessment with updated production forecast to be 207,000 ounces per year over the mine’s first five years, and an average of 167,000 oz/year over its 10-year life of mine. This assessments are based on a mineral reserve estimate of 1.88 million oz.
