Centamin output falls in Q3 but says 'well placed' to beat guidance - UPDATE

6th Nov 2013 09:31

- Q3 production down 9 per cent on Q2- EPS down 43 per cent Q-on-Q- "Well placed" to beat FY production guidanceEgypt gold miner Centamin saw gold production slip from the second to the third quarter but said it was well placed to beat its initial guidance for the full year of 320,000 ounces.The FTSE 250 group said gold production was down 9% quarter-on-quarter to 84,757oz, up 39% on the prior year and on target to achieve full-year guidance. But Chairman Josef El-Raghy said, while he expected some impact in fourth quarter plant throughput from the beginning of commissioning the major 'Stage 4' expansion of its Sukari mine's processing plant, "we are now well placed to exceed our initial full year 2013 guidance of 320,000".Stage 4 expansion at Sukari, which will double capacity from 5m to 10m tonnes per year (mtpa), remained on track but a major stumbling block was that the government has yet to issue a permit for the additional daily use of explosives the expansion requires. The third quarter saw a 7% increase in tonnes mined from underground, counterbalanced by the fall in production, and total process plant throughput jumped 3% on the prior quarter and 46% on the prior year.Centamin also extracted gold at a much lower cost than expected, at $693 per oz compared to broker Canaccord's expectations of over $780 per oz.Earnings before interest, tax, depreciation and amortisation was down 32% on the preceding quarter to $43.1m, which was down 36% on the prior year, with basic earnings per share (EPS) down 43% to 2.72 cents, down 51% on the prior year.Centamin took a $11.9m write-down in relation to its investment in AIM-listed Ethiopian-focused miner Nyota Minerals and sold some of its stake, but said recent exploration data was encouraging. The Company said recent political changes in Egypt have not affected operations at Sukari and its remained "confident that Egypt's on-going political transition will not have a material adverse impact on the company's investment".Canaccord said the "robust" operational performance kept the company on track, while ore tonnes delivered from the underground so far in 2013 were stronger than initial guidance. "Both court decisions on the legal appeal in relation to the Sukari mining licence and the appeal against the US$60m retrospective fuel charge are still outstanding and represent the key overhang."Shares in Centamin fell 3.2% to 49.17p at 11:05 on Wednesday. OH