Centamin ends year in line with production forecasts

Centamin reported annual gold production in line with expectations in its fourth quarter update on Wednesday, with 107,549 ounces produced in the three months ended 31 December, making for a 2021 total of 415,370 ounces for 2021, at the midpoint of its guidance.

The FTSE 250 miner reported strong revenue generation as well as elevated gold sales receivables, with fourth quarter revenue totalling $183m, generated from gold sales of 99,936 ounces at an average realised gold price of $1,828 per ounce sold.

Full-year revenue totalled $733m, generated from gold sales of 407,252 ounces at an average realised price of $1,797 per ounce.

Annual costs were delivered in line with guidance, with fourth quarter cash costs of $972 per ounce produced, and all-in sustaining costs of $1,256 per ounce sold.

For the full-year, cash costs came in at $859 per ounce produced, and all-in sustaining costs of $1,211 per ounce sold were at the midpoint of annual guidance.

Centamin said it made “excellent progress” on essential capital projects, with fourth quarter capital expenditure totalling $86m, and full-year expenditure at $233m, exceeding its annual guidance of $225m due to the waste-stripping outperformance.

Exploration activities were on schedule, with the company spending $6m on it in the fourth quarter as it advanced the Doropo and ABC projects in Côte d'Ivoire, and full-year exploration spend totalling $14, which was $3m below its annual guidance.

The firm said its balance sheet was “strong”, with no debt and no hedging, and cash and liquid assets totalling $257m at year-end on 31 December.

It reported no material impacts due to the ongoing Covid-19 pandemic, with full health protocols remaining in place, and supply chains and gold shipments not materially impacted.

Centamin also reported a “strong” safety performance, with a lost time injury frequency rate of 0.31 per million site-based hours worked in the fourth quarter, and a full-year rate of 0.46, which was 28% better than its annual target of 0.65.

Looking ahead, Centamin left its 2022 guidance unchanged with gold production of 430,000 to 460,000 ounces expected, cash costs pencilled in at $900 to $1,000 per ounce produced, and all-in sustaining costs of $1,275 to $1,425 per ounce sold anticipated.

Capital expenditure was set to come in at $215m, including $25m of deferred solar and paste-fill plant construction expenditure from 2021.

Exploration expenditure was expected to be $25m, as the company was primarily focussed on the Doropo pre-feasibility study scheduled for completion in the second half, as well as ABC fieldwork and drill testing, and the start of exploration on the Egyptian Eastern Desert 3,000 square kilometre landholding.

“The final quarter delivered what was a highly successful 2021, resulting in Centamin delivering annual gold production and costs at the midpoint of our guidance,” said chief executive officer Martin Horgan.

“2021 has been characterised by solid delivery against our stated plans and completion of the Sukari life-of-asset study, confirming the high-quality and long life of the mine, in addition to identifying significant upside growth opportunities.

“Excellent progress was made against our key capital projects as we continue to invest in the future of our assets.”

Horgan said the company also continued to improve its safety performance, beating its annual targets as it strived to achieve a zero-harm workplace.

“We have commenced 2022 with confidence and excitement and look forward to delivering on our clear roadmap to growing and unlocking further value from Sukari and our exploration portfolio, as outlined at the capital markets event on 8 December 2021.”

Centamin said it would publish its full-year financial results and propose its final dividend in mid-March.

At 0926 GMT, shares in Centamin were down 2.47% at 89.1p.