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Centamin to pay divi as operations remain unaffected
21st Apr 2020 08:19
(Sharecast News) - Centamin updated the market on the three months ended 31 March on Tuesday, reporting that it took early action to protect the health, safety and wellbeing of its employees and communities in response to the Covid-19 coronavirus pandemic.
The FTSE 250 company said that, in what remained an uncertain environment, it believed it had taken steps to manage the issues that were within its control.
As at 20 April, there were no recorded cases of Covid-19 onsite, and there had been no material disruptions to operations, supply chain or gold shipments, with contingency plans in place to deal with various possible disruptions.
The group lost time injury frequency rate (LTIFR) of 0.31 per 200,000 workplace hours for the first quarter ended 31 March, with a continued target of achieving a zero-harm workplace.
Gold production totalled 125,090 ounces from the Sukari Gold Mine in the quarter, in line with the firm's annual guidance.
It reported "solid" financial performance, with gross revenue of $222.2m (?178.95m) for the period, generated from 139,784 ounces in gold sales at an average realised price of $1,587 per ounce.
Cash costs for the first quarter were $659 per ounce produced, and all-in sustaining costs (AISC) came in at $902 per ounce sold, both of which were in line with annual guidance.
Martin Horgan was appointed as Centamin's new chief executive officer with effect from 6 April, with Ross Jerrard continuing as chief financial officer.
The board declared a 2020 first interim dividend of six US cents per share, totalling $69.4m, with a payment date of 15 May 2020, directly replacing the previously-proposed 2019 final dividend of six cents per share, to provide shareholders with certainty and to expedite the payment.
Centamin reported a "strong" balance sheet with cash and liquid assets of $379.2m, as at 31 March, which was an increase of $30m since 31 December and before the 2020 first interim dividend.
The company had no debt and no hedging.
Looking ahead, the firm said the impact and potential duration of the Covid-19 pandemic remained uncertain.
It said it had undertaken risk analysis scenarios, and had put in place contingency plans for the business., and believed it had taken prudent steps to continue to navigate those difficult times.
Centamin said it was "closely monitoring" the situation, with an active response framework in place to manage and mitigate future impacts within its control
Sukari operations had thus far been uninterrupted, with sufficient staffing resources and critical supplies for the second quarter, during which it expected global travel restrictions could begin to ease.
Should such restrictions be extended into the second half, it was possible that operations might be affected, the board said.
Centamin maintained its 2020 full year guidance, targeting production between 510,000 and 540,000 ounces of gold, weighted 55% to the second half, at cash costs between $630 and $680 per ounce produced, and an all-in sustaining cost of between $870 and $920 per ounce sold.
Open pit material would contribute 80% of the full-year production, driven by higher grade stage four ore.
The balance was scheduled to come from the underground, specifically Ptah, as the focus within Amun was infrastructure upgrades.
Centamin said the second quarter of 2020 was scheduled to be a lower production quarter, producing around 115,000 ounces of gold, reflecting a reduction in underground output.
As a precautionary move to protect the health and wellbeing of the workforce, non-essential capital expenditure had been temporarily deferred, including the Sukari solar plant.
That, Centamin explained, was in order to minimise contractors and other non-operating traffic on and off site, while restrictions related to Covid-19 remained in place.
As a result, 2020 capital expenditure was expected to be in the range of $150, to $170m, down from a previous $190m.
The Sukari life of asset review was ongoing, the board confirmed, with a series of independent optimisation studies across each section of the mine underway, and results expected throughout 2020, which would identify areas of improvement.
"The first quarter was a strong start to the year with operational and financial performance delivered ahead of plan," said chief financial officer Ross Jerrard.
"The commitment and response by our workforce to the Covid-19 pandemic has been exceptional, and we would also like to acknowledge the assistance and support of the Egyptian government.
"Our top priority is to safeguard the health and wellbeing of our people, while taking necessary action to protect our business."
He said the company had, and would continue to, implement proactive measures to minimise the impact to its people, business, community and wider stakeholders.
"Centamin is a resilient and responsibly run business with zero debt and $379.2m in cash and liquid assets, as at 31 March.
"I am confident in our long-term strategy and our ability to respond quickly in this difficult environment."
Jerard said the firm was continuing to operate diligently and invest prudently, adding he believed it was both well equipped to navigate the challenges, and remained well-positioned for the future.
"It was an honour to act as interim CEO and it is a great pleasure to welcome Martin Horgan as Centamin's new CEO.
"I look forward to working closely with Martin to deliver value to all our stakeholders through the implementation of our long-term strategy."
Centamin said the full-year financial results for the 12 months ended 31 December would be published in mid-May.
At 0831 BST, shares in Centamin were up 3.96% at 143.89p.
The FTSE 250 company said that, in what remained an uncertain environment, it believed it had taken steps to manage the issues that were within its control.
As at 20 April, there were no recorded cases of Covid-19 onsite, and there had been no material disruptions to operations, supply chain or gold shipments, with contingency plans in place to deal with various possible disruptions.
The group lost time injury frequency rate (LTIFR) of 0.31 per 200,000 workplace hours for the first quarter ended 31 March, with a continued target of achieving a zero-harm workplace.
Gold production totalled 125,090 ounces from the Sukari Gold Mine in the quarter, in line with the firm's annual guidance.
It reported "solid" financial performance, with gross revenue of $222.2m (?178.95m) for the period, generated from 139,784 ounces in gold sales at an average realised price of $1,587 per ounce.
Cash costs for the first quarter were $659 per ounce produced, and all-in sustaining costs (AISC) came in at $902 per ounce sold, both of which were in line with annual guidance.
Martin Horgan was appointed as Centamin's new chief executive officer with effect from 6 April, with Ross Jerrard continuing as chief financial officer.
The board declared a 2020 first interim dividend of six US cents per share, totalling $69.4m, with a payment date of 15 May 2020, directly replacing the previously-proposed 2019 final dividend of six cents per share, to provide shareholders with certainty and to expedite the payment.
Centamin reported a "strong" balance sheet with cash and liquid assets of $379.2m, as at 31 March, which was an increase of $30m since 31 December and before the 2020 first interim dividend.
The company had no debt and no hedging.
Looking ahead, the firm said the impact and potential duration of the Covid-19 pandemic remained uncertain.
It said it had undertaken risk analysis scenarios, and had put in place contingency plans for the business., and believed it had taken prudent steps to continue to navigate those difficult times.
Centamin said it was "closely monitoring" the situation, with an active response framework in place to manage and mitigate future impacts within its control
Sukari operations had thus far been uninterrupted, with sufficient staffing resources and critical supplies for the second quarter, during which it expected global travel restrictions could begin to ease.
Should such restrictions be extended into the second half, it was possible that operations might be affected, the board said.
Centamin maintained its 2020 full year guidance, targeting production between 510,000 and 540,000 ounces of gold, weighted 55% to the second half, at cash costs between $630 and $680 per ounce produced, and an all-in sustaining cost of between $870 and $920 per ounce sold.
Open pit material would contribute 80% of the full-year production, driven by higher grade stage four ore.
The balance was scheduled to come from the underground, specifically Ptah, as the focus within Amun was infrastructure upgrades.
Centamin said the second quarter of 2020 was scheduled to be a lower production quarter, producing around 115,000 ounces of gold, reflecting a reduction in underground output.
As a precautionary move to protect the health and wellbeing of the workforce, non-essential capital expenditure had been temporarily deferred, including the Sukari solar plant.
That, Centamin explained, was in order to minimise contractors and other non-operating traffic on and off site, while restrictions related to Covid-19 remained in place.
As a result, 2020 capital expenditure was expected to be in the range of $150, to $170m, down from a previous $190m.
The Sukari life of asset review was ongoing, the board confirmed, with a series of independent optimisation studies across each section of the mine underway, and results expected throughout 2020, which would identify areas of improvement.
"The first quarter was a strong start to the year with operational and financial performance delivered ahead of plan," said chief financial officer Ross Jerrard.
"The commitment and response by our workforce to the Covid-19 pandemic has been exceptional, and we would also like to acknowledge the assistance and support of the Egyptian government.
"Our top priority is to safeguard the health and wellbeing of our people, while taking necessary action to protect our business."
He said the company had, and would continue to, implement proactive measures to minimise the impact to its people, business, community and wider stakeholders.
"Centamin is a resilient and responsibly run business with zero debt and $379.2m in cash and liquid assets, as at 31 March.
"I am confident in our long-term strategy and our ability to respond quickly in this difficult environment."
Jerard said the firm was continuing to operate diligently and invest prudently, adding he believed it was both well equipped to navigate the challenges, and remained well-positioned for the future.
"It was an honour to act as interim CEO and it is a great pleasure to welcome Martin Horgan as Centamin's new CEO.
"I look forward to working closely with Martin to deliver value to all our stakeholders through the implementation of our long-term strategy."
Centamin said the full-year financial results for the 12 months ended 31 December would be published in mid-May.
At 0831 BST, shares in Centamin were up 3.96% at 143.89p.