Centamin maintains guidance after 'solid' second quarter

The FTSE 250 company reported revenue of $177.5m from gold sales of 97,229 ounces in the three months ended 30 June, at an average realised gold price of $1,822 per ounce sold.

Cash costs came in at $883 per ounce produced, and all-in sustaining costs were $1,290 per ounce sold.

Centamin said its open pit operational performance was ahead of schedule, resulting in a record for total material moved in the quarter of 25.6 million tonnes, making for a first-half total of 48.2 million tonnes.

Group free cash flow was also better than budgeted at $6.9m, which the board put down to the stronger gold price and lower capital expenditure, offset by an accelerated open waste-stripping programme and increased exploration activities.

It completed its strategic review of its West African portfolio in the period, which confirmed positive growth potential at the Doropo Project, following which it started the pre-feasibility study, which was scheduled for completion in the first half of 2022.

Centamin also awarded the engineering, procurement and construction contracts for the Sukari 36MW solar farm and 7.5MW battery-energy storage system in the period, which was also scheduled for completion in the first half of 2022.

The company described its balance sheet as “strong” with no debt, no hedging, and cash and liquid assets of $312.1m as at 30 June, after the $34.5m dividend distribution on 15 June.

Looking ahead, Centamin maintained its 2021 gold production and cost guidance at between 400,000 and 430,000 ounces at cash costs of $800 to $900 per ounce produced, and an all-in sustaining cost of $1,150 to $1,250 per ounce sold.

It also maintained its 2021 capital expenditure guidance at $225m, with a 65% spend in the second half - up from a previous 55%, due to timing adjustments to its payment schedule.

Exploration expenditure for 2021 was increased to $17m from $5m, which now included progressing to the pre-feasibility study at Doropo following the positive review of its West African portfolio.

Centamin also noted that it had recently agreed exploration licence terms for a 3,164 square kilometre total land package in Egypt's Arabian Nubian Shield, subject to final legal formalities which were expected to be completed in the third quarter.

Finally, the life-of-asset) optimisation work programme at Sukari was scheduled for completion in the fourth quarter.

“Centamin has delivered another solid operational performance and we remain on track to meet full-year cost and production guidance,” said chief executive officer Martin Horgan.

“During the quarter, excellent progress was made with the Sukari waste-stripping programme which has significantly outperformed budget and resulted in record material mined.

“This is testament to our team at Sukari delivering improvements in operating efficiencies and further supported by the quick mobilisation and ramp up of the waste-stripping contractor.”

Centamin said it would report its half-year financials and declare an interim dividend for the six month period ended 30 June on 5 August.

At 0955 BST, shares in Centamin were down 0.64% at 103.83p.