Centamin gold production slips on lower open pit grades

Egyptian gold miner Centamin said it was on track for its full year target after production in the first three months of the year was lower than planned but higher than this time last year.

The FTSE 250 group unearthed 124,296 ounces of gold from its Sukari mine in the first quarter of 2018, which was unexpectedly down 19% on the fourth quarter of 2017 due to a lower grades from open pit mining. One bright spot was that production was up 14% on the first quarter of last year.

Chief executive Andrew Pardey confirmed there was no change to full year production guidance of 580,000 ounces after what he characterised as a "solid start".

Production was lower than planned "due to the transitional zone of the open pit delivering lower than expected grades". While 6.05 millitonnes were mined from the open pit, up 6% on the preceding quarter and 144% year-on-year, the average mined grade of 0.50 grammes per tonne was down 19% on the past quarter and up 6% increase year-on-year.

Pardey added: "Additional grade control drilling and rescheduling has resulted in accelerated access to the higher grade open pit Stage 4 primary ore throughout the second quarter."

Underground mining delivered 312 kilotonnes of ore, at an average mined grade of 6.69g/t, a 5% increase in tonnes QoQ and a 24% increase YoY.

Centamin and processed 3.07 metric tonnes, the same as the fourth quarter and up 6% YoY, while metallurgical plant recoveries for the quarter were 89.6%, a 1% increase on the preceding quarter and YoY.

This was following the continued focus on process controls and successful enhancements to the elution circuit, Pardey said.

A fourth secondary crusher having been installed and commissioning underway, throughput capacity will be further lifted in line with increased underground tonnage.

"Building on the strong plant performance this quarter we look forward with confidence to delivering on our production guidance throughout 2018," Pardey said.