Centamin production at Sukari well above 2016 forecast

9th Jan 2017 07:13

(ShareCast News) - Centamin announced its preliminary production results for the quarter to 31 December from its Sukari Gold Mine in Egypt on Monday, with total gold production for the period of 136,787 ounces - an 8% decrease on the previous quarter and a 16% increase on Q4 2015.The FTSE 250 firm said that brought full year production to 551,036 ounces, a 25% increase on 2015 and above the guidance range of between 520,000 and 540,000 ounces.Quarterly throughput at the process plant was 2,948kt, a 5% increase on the previous quarter.Open pit total material movement decreased 2% on the previous quarter to 15,811kt, while open pit ore production decreased by 25% to 2,183kt at an average mined grade of 0.84g/t.The average head grade to the plant from the open pit was 0.85g/t, and the run of mine ore stockpile balance decreased by 592kt to 577kt at the end of the period.Centamin said the underground operation delivered 228kt of ore, 10% less than the previous quarter, at an average mined grade of 10.43g/t.Ore from stoping was 125kt at 10.01g/t and ore from development was 103kt at 10.94g/t.Forecast production for 2017 from the Sukari Gold Mine was now 540,000 ounces at a cash operating cost of $580 per ounce and all-in-sustaining cost of $790 per ounce, Centamin's board said, based on a plant throughput of 11.75Mt and approximately 1Mt of underground ore mined at a grade of 7.26g/t.During Q1 2017 the open pit is scheduled to develop a low grade east wall cutback and planned gold production will be lower than Q4 2016, though with ongoing optimisation, the company said there remained scope for further increases in productivity and production growth.Centamin's full year results for 2016 are due to be released on 1 February 2017, at which time the board of directors said they expect to propose a final dividend for 2016.Due to the strong financial position of the company and the ongoing cash flow generation from the Sukari Gold Mine, the board expected the full year dividend to exceed the maximum provided by the current policy, and as a result it approved an update to Centamin's dividend policy.It said it would now will aim to approve an annual dividend of at least 30% of net cash flow after sustaining capital costs and following the payment of profit share due to the Government of Egypt."Production of 136,787 ounces from Sukari in the fourth quarter marked a seventh successive year of growth, with 2016 full year output ... exceeding the top end of our revised annual guidance range," commented CEO Andrew Pardey."Free cash flow generation from Sukari has further strengthened Centamin's financial position during 2016, a trend we expect to continue."Ongoing optimisation of the processing and mining operations continues to offer scope for further increases in productivity."Pardey said the board remained committed to a "disciplined approach" to capital allocation, as well as the potential for exploration to deliver significant shareholder value over the long-term."Results from our programmes in Burkina Faso and Côte d'Ivoire continue to build momentum and warrant further investment, and we again exit the year with a robust financial and operating base on which to continue delivering our growth strategy."