Centamin's first quarter earnings fall on lower gold output

15th May 2014 10:38

Centamin's first quarter earnings declined as gold production was hurt by lower grades at the Sukari mine in Egypt.Earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 58% to 34.3m as gold output fell 15% to 74,241 ounces. Output was affected by a drop in grades and a temporary reduction of mining fleet availability within the high grade stopping areas of the underground mine at Sukari.An expansion of the mine is undergoing initial stages of commissioning and the group expects production to show a steady quarterly increase through the year. Earnings were also affected by a fall in the average sales price of gold which dropped to $1,298 an ounce from $1,604 last year.Costs of production also rose to $744 per ounce from $556 per ounce.Looking ahead, production guidance for 2014 remains unchanged at 420,000 ounces at a cash cost of production of $700 per ounce. "Despite the recent gold price weakness, the operation remains relatively low cost and, with capital expenditure set to reduce significantly as the Stage 4 expansion programme is commissioned, is set to deliver substantial free cash flows for the remainder of the mine life," said Chairman Josef E-Raghy."We therefore remain on track to further consolidate our position as a significant mid-tier gold producer, with the commissioning of the Stage 4 expansion driving the on-going ramp-up towards 450-500,000 ounces production per annum from 2015."RD