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Share Name Share Symbol Market Type Share ISIN Share Description
Centamin Plc LSE:CEY London Ordinary Share JE00B5TT1872 ORD NPV (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
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Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 473.0 119.7 5.1 21.2 1,264.04

Centamin PLC Q1 2019 Results

24/04/2019 7:24am

UK Regulatory (RNS & others)


TIDMCEY

RNS Number : 8705W

Centamin PLC

24 April 2019

 
 For immediate release     24 April 2019 
 

Centamin plc ("Centamin" or "the Company")

(LSE:CEY, TSX:CEE)

Quarterly Report

for the three months ended 31 March 2019

HIGHLIGHTS

Operational

-- Sukari Gold Mine ("Sukari") produced 116,183 ounces of gold in the first quarter ("Q1"), above forecast of 105,000 - 115,000 ounces.

   --      Ongoing operational improvements delivered in the open pit and underground. 
   --      Record processing plant throughput of 3.25Mt of ore at a 95% plant utilisation rate. 

-- Both unit cash costs and all in sustaining costs ("AISC") trending toward the lower end of annual guidance; cash costs of production of US$631 per ounce produced and AISC of US$898 per ounce sold.

Exploration

-- Successful drilling campaign at Sukari continues to unlock more reserve and resource growth potential, identifying ore suitable for near- and medium-term production; Encouraging results from the Horus Deeps confirmed mineralisation remains open at-depth and along strike.

-- Doropo Project resource update, increasing Indicated resource estimate by 58% to 2.13Moz Indicated and 0.8Moz Inferred with further positive results confirming structural extensions and resource upside.

   --      Maiden resource estimate at ABC Project of 650koz Indicated and 450koz Inferred. 

Environmental, Social and Governance

-- Good progress with succession planning and recruitment initiatives with the appointment of Dr Sally Eyre as Independent Non-Executive Director, Jeremy Langford as Chief Operating Officer ("COO"), as well as several high calibre individuals into key operational roles of Operations Director, Underground Manager, Technical Services and Planning Manager, and Supply Chain Manager.

   --      Group Lost Time Injury Frequency Rate ("LTIFR") of 0.60 per 200,000 workplace hours. 

Financial

-- Generated US$13.9 million of Group free cash flow (1) , net of profit share payments to the Egyptian government and investing activities.

-- Strong and flexible balance sheet with no debt, no hedging and cash and liquid assets(4) of US$331.6 million, as at 31 March 2019.

-- 2018 final dividend approved at the Annual General Meeting, with US$34.6 million (3.0 US cents per share) to be paid to shareholders on 13 May 2019(5) .

Outlook

-- The Company is on track and reiterates annual guidance for 2019: gold production of 490,000 - 520,000 ounces, at cash costs of US$675-725 per ounce produced and an AISC of US$890-950 per ounce sold.

-- Continued exploration focus with 2019 budget of US$40 million targeting Cleopatra exploration and decline development, reserve and resource expansion at Sukari underground, Doropo Project and ABC Project, while identifying new scalable targets for future exploration and growth upside.

-- Updated resource, maiden reserve and Preliminary Economic Assessment ("PEA") for the Doropo Project to be completed by the end of H2 2019.

-- Completion of 40MW (AC) solar power plant feasibility study at Sukari during H2 2019, with the scope to significantly reduce power costs and reliance on fossil fuels.

-- Delivering on the Board succession programme to identify and appoint three Non-Executive Directors with one migrating to Non-Executive Chair.

   --      The Company will release 3-year outlook, including 2020 and 2021 guidance, in Q2 2019. 

Andrew Pardey, CEO, commented:

"We have made a solid start, delivering Q1 ahead of expectations. Despite being the weakest quarter forecasted for 2019, it is encouraging to see the systems and process upgrades across all sections of the mine positively impacting performance. The Company is on track to deliver annual production and cost guidance for 2019. The focus remains firmly on delivering continued operational progress through tight compliance to plan.

A stronger second half for the year is forecast, delivering approximately 55% of the annual production guidance during H2 2019. This will be driven by increasing quarter on quarter open pit ounce contribution, as the grade profile improves with depth, and further optimisation of our underground operations.

We are delighted to have welcomed so many top-tier technical individuals to the Company, including Dr Sally Eyre as a Non-Executive Director and Jeremy Langford as Chief Operating Officer. Their experience will be instrumental in maximising the value of the Company's asset base.

Centamin's clear corporate strategy, technical expertise, highly prospective asset base and robust balance sheet provide the solid foundation to generate sustainable cash flow, drive organic growth and maximise shareholder returns."

Table 1. Q1 2019 Group Production Summary

 
                                                 Quarter on quarter comparative           Year on year comparative 
-----------  ------------------------       ---------------------------------------      ----------------------------- 
                             units            Q1 2019            Q4 2018   % change                 Q1 2018   % change 
------------------------  -----------       ---------  -----------------  ---------      ------------------  --------- 
 Open pit 
 Total material mined            kt            20,987             21,075     (0.4%)                  18,496        15% 
 Ore mined                       kt             3,126              4,990      (37%)                   6,047      (48%) 
 Ore grade mined               g/t Au            0.72               0.75       (4%)                    0.50        44% 
 Strip ratio                  waste/ore          5.71               3.22        77%                    2.06       178% 
------------------------  ----------------  ---------  -----------------  ---------      ------------------  --------- 
 Underground 
 Ore mined                       kt               270                314      (14%)                     312      (14%) 
 Ore grade mined               g/t Au            6.34               6.21         2%                    6.69       (5%) 
------------------------  ----------------  ---------  -----------------  ---------      ------------------  --------- 
 Processing 
 Ore processed                   kt             3,248              3,198         2%                   3,068         6% 
 Feed grade                    g/t Au            1.28               1.45      (11%)                    1.31       (2%) 
 Gold recovery                    %              88.8               89.1     (0.3%)                    89.6     (0.9%) 
------------------------  ----------------  ---------  -----------------  ---------      ------------------  --------- 
 Total gold production           oz           116,183            137,600      (16%)                 124,296       (7%) 
 Gold sold                       oz           111,365            148,851      (25%)                 131,045      (15%) 
------------------------  ----------------  ---------  -----------------  ---------      ------------------  --------- 
 Cash costs of                 US$'000 
  production(1,2)              produced        71,892             82,579      (13%)                  71,312         1% 
 Cash costs of 
  production(1,2)           US$'000 sold       71,471             96,743      (26%)                  78,126       (9%) 
 All-in sustaining costs 
  ("AISC")(1,2)             US$'000 sold       98,041            118,911      (18%)                 106,939       (8%) 
 Unit cash costs(1,2)      US$/oz produced        631                609         4%                     581         9% 
 Unit cash costs(1,2)        US$/oz sold          655                658       (1%)                     603         9% 
 Unit AISC(1,2)              US$/oz sold          898                809        11%                     825         9% 
------------------------  ----------------  ---------  -----------------  ---------      ------------------  --------- 
 Average realised sales 
  price                        US$/oz           1,303              1,235         5%                   1,328       (2%) 
 
 

________________________________________________________________________________________________

(1) Cash cost of production, AISC, and cash, bullion on hand, gold sales receivables, and free cash flow are non-GAAP measures, based on unaudited accounts.

(2) Cash cost of production and AISC reflect a provision against prepayments to reflect the removal of fuel subsidies which occurred in January 2012. Further details can be found in the Company 2018 Annual Report - refer to note 2.7 of the financial information for further details).

(3) Profit share commenced during the third quarter of 2016. The first two years was a 60:40 split of net production surplus to PGM and EMRA respectively. From 1 July 2018 this changed to a 55:45 split for the next two-year period until 30 June 2020, after which all net production surpluses will be split 50:50.

(4) Cash and cash equivalents, bullion on hand, gold sales receivables and financial assets at fair value through other comprehensive income.

(5) Full details on the Company's dividend policy, including the 2018 Final Dividend timetable, can be found on the website at https://www.centamin.com/investors/shareholder-services/dividend-information

Conference call and Webcast

The Company will be hosting a conference call and webcast today, Wednesday, 24 April at 08.30 BST (UK time) to discuss the results with investors and analysts.

Please find below the required participation details for the call:

Conference call

   Participant access code:        412140 
   Dial-in telephone number:        +44 203 936 2999 

Webcast

Please follow this link to join the webcast: https://www.investis-live.com/centamin/5cb6f8231983a11000690ad9/idhs

A replay of the webcast will be made available on the Company website by the close of business today.

Enquiries

For further information, please visit the website www.centamin.com or contact:

 
  Centamin plc 
   Andrew Pardey, Chief Executive Officer     Buchanan 
   Alexandra Carse, Investor Relations        Bobby Morse 
   alexandra.carse@centamin.je                Chris Judd 
                                              centamin@buchanan.uk.com 
 

_______________________________________________________________________________________________________

Operational Review

Sukari Gold Mine, Egypt

Production

Gold production was 116,183 ounces for the quarter, a 7% reduction compared to the corresponding quarter in 2018 ("YoY"). The open pit operation performed broadly in line with plan and the underground operation performed better than plan, with improvements to underground operational efficiencies delivering higher grades.

The dump leach operations contributed 2,332 ounces, an 8% increase YoY. As mining progresses with Stage 5 stripping, some low-grade oxide and transitional material will be delivered to the dump leach throughout the year.

Cleopatra decline development in mineralisation resulted in 2,189 ounces produced, a 49% increase YoY, due to ramp up in development.

Costs(1,2)

Strong cost control with absolute cash costs of production of US$71.9 million, flat YoY and a 13% improvement QoQ. Less than budgeted fuel and processing reagents were consumed in the quarter, partially offsetting increased year-on-year costs of the consumables. Higher-grade underground tonnes were prioritised for processing ahead of open pit tonnes, resulting in increased open pit stockpiles, positively impacting costs during the quarter.

Absolute AISC of gold sold was US$98.0 million, an improvement of 8% YoY and 18% QoQ, as a result of lower sustaining capital costs incurred for the quarter, in line with the capital expenditure profile for 2019.

Unit cash costs of production of US$631 per ounce produced, a 9% increase YoY and 4% increase QoQ, and unit AISC of US$898 per ounce sold, a 9% increase YoY and 11% increase QoQ - as a result of comparatively fewer gold ounces produced and sold in the respective quarter.

Open pit mining

The open pit delivered a steady start to 2019. Ongoing performance initiatives, in particular the centralisation of open pit scheduling (through the integration of mine planning, optimisation programmes, maintenance and rebuild programmes) have resulted in improved compliance with the mine plan.

Total material mined of 21.0Mt, a 13% increase YoY, driven by improvements to the mining sequence and routine workplace training. Total ore mined of 3.1Mt at an average grade of 0.72g/t, a 48% reduction in tonnes YoY and a 44% increase in grade YoY. Mining principally focussed on lowering Stage 4 West to the reduced level ("RL") of Stage 4 North, requiring increased waste stripping balanced with higher grade ore tonnes, as the grade profile increases with depth.

The strip ratio increased to 5.71:1, in line with the annual guidance of 5.85:1. The orebody tightens with depth and Stage 5 stripping has commenced in parallel to ensure a smooth transition from Stage 4 sulphide material to Stage 5 sulphide material in 2021.

The open pit delivered 2.9Mt at an average milled grade of 0.83g/t to the plant and 88kt at an average grade of 0.35g/t to the dump leach pads. The ROM stockpiles increased from 12.2Mt at 0.47g/t to 12.3Mt at 0.45g/t over the quarter.

Underground mining

All sections of the underground performed well against the mine plan in Q1. Technological improvements and new processes and controls have been valuable drivers in performance.

Total ore mined of 270kt, a 14% decrease YoY, due to increased waste material movement of 69kt, a 243% increase YoY, as decline development focuses on preparing new near-term stoping areas and accessing medium-term production levels. Blended underground ore grade averaged 6.34 g/t, a 5% decrease YoY.

Ore mined from stoping of 168kt at 8.20g/t, a 5% increase in tonnes YoY and 13% improvement in grade YoY, driven by increased grade control drilling and improved dilution controls, resulting in improved operational efficiencies.

Approximately 2,000 metres of development was completed within the Amun/Ptah underground, including decline, ore drive and cross cut development, resulting in ore mined from development of 102kt at an average grade of 3.27g/t, a 33% decrease in tonnes YoY and 46% decrease in grade YoY.

Cleopatra decline development progressed 834 metres. Development in mineralisation resulted in 53,349 ore tonnes at an average grade of 1.44g/t.

Good underground equipment availability and utilisation throughout the quarter, including two operational long-hole drill rigs ("LHDR").

Processing

The plant processed a record 3.25Mt of ore, a 6% increase YoY, with plant utilisation exceeding 95%.

Feed grade to the processing plant averaged 1.28g/t, down 2% YoY, but exceeding expectations, due to an increase in high-grade underground feed.

Metallurgical recovery averaged 88.8%, down 1% YoY. Work is ongoing to optimise the flotation stability, including the installation of Visiofroth cameras to Plant 1.

Exploration Review

Sukari Gold Mine, Egypt

Successful exploration inside the Sukari complex has yielded outstanding results, unlocking more reserve and resource growth potential, including the continuation of high-grade structures within the porphyry.

A total of 15,206 metres of diamond drilling was completed at Sukari in Q1.

Amun / Ptah Production Decline

A total of 4,167 metres were drilled from the Amun, targeting reserve and resource extensions within the Osiris Flats structure, testing resource extensions within the Top of Horus and drilling deeper holes into the underexplored Horus Deeps.

Proximal to the current decline development drives and outside the existing reserve and resource, results confirmed high-grade continuity of mineralisation along the Osiris thrust southern and western extensions. Top of Horus results demonstrated the orebody remains open to the south, with higher-grades located along the contact zone, presenting significant reserve and resource growth potential.

Exploration drilling into the Horus Deeps returned some promising results, geologically analogous to results historically seen in the upper Amun. Results indicated potential for significant medium-grade (with a subsection of higher-grade intersections) resource expansion below and along strike to the current defined Sukari gold deposit. Follow up drilling has been prioritised throughout 2019 to better understand and define these deeper mineralised structures.

Table 2. Q1 Significant Drill Intercepts - Amun

 
 
       Tenement ID    Prospect ID      Hole ID   Level (mRL)   Interval (m)   Grade (Au g/t) 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0856         559.6              3             13.6 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0856         576.6              4              8.6 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0856         650.7            0.3             60.4 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0857         580.7            0.9             21.2 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0857         584.5              1             14.9 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0859         545.3            0.2             53.7 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0862         557.4              3              6.7 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0892         630.6              2             40.1 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine    HORUS DEEPS    UGRSD0893          97.6              2              9.6 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine    HORUS DEEPS    UGRSD0893         302.1              1             14.6 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine    HORUS DEEPS    UGRSD0893          86.4              2             10.3 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD0894         636.5              2             25.9 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine    HORUS DEEPS    UGRSD0900         364.9             29              6.3 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine    HORUS DEEPS      INCLUDE         372.5             11              7.9 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine    HORUS DEEPS      INCLUDE         356.8             15              6.2 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine    HORUS DEEPS    UGRSD0900         341.2              1             68.4 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD1202         645.4              1            289.0 
------------------  -------------  -----------  ------------  -------------  --------------- 
  Sukari Gold Mine           AMUN    UGRSD1202         644.4              2             22.8 
------------------  -------------  -----------  ------------  -------------  --------------- 
 

Ptah is a key growth driver for the underground mine. In Q1, 7,700m were drilled, including infill drilling of the eastern Ptah stockwork situated ahead of near-term scheduled ore drive development. Drilling from the 660mRL and 735mRL focussed on medium term underground development designs along the Ptah eastern contact of porphyry.

Results confirmed continuity of grade with high-grades concentrated along strike on the eastern contact where stockwork zones form internally within the porphyry.

Table 3. Q1 Significant Drill Intercepts - Ptah

 
 
       Tenement ID    Prospect ID       Hole ID   Level (mRL)   Interval (m)   Grade (Au g/t) 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0936           627              1             12.8 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0936           588              1              8.6 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0941           576            0.3             59.9 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0941           584              1              7.3 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0944           625              2              7.5 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0944           620              1             10.0 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0947           630              4            450.7 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0947           638              7              6.8 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0947           638              2              6.9 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0969           627              7            198.1 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0969           606              1             14.4 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0970           639              1              8.8 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0989           641              3             11.2 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0989           645            0.3             16.7 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0989           628            0.3             14.0 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0991           682              3             44.8 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0991           681              1            118.0 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0991           734              2              7.7 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0992           669              1             55.1 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0993           689              1              8.0 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD0994           671              1             23.1 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH     UGRSD1014           659              1             14.2 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH    UGRSD1015A           700             17              7.9 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH    UGRSD1015A           698              7             13.7 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           PTAH    UGRSD1015A           642              1             14.3 
------------------  -------------  ------------  ------------  -------------  --------------- 
 

Cleopatra Exploration and Development Decline

Exploration and development focussed on the upper Cleopatra zone, with the aim of increasing the geological understanding and near-term growth potential through systematically drilling the structures. New drill platforms were established as decline development progressed lower into the porphyry.

In Q1, a total of 3,327 metres were drilled from two drill sites. Drilling from the 1150mRL targeted the northern extension of the Porphyry-Keel/Ptah Deeps. Late in Q1, the rig was moved to 1090mRL, targeting reserve and resource growth collating data on the Stage 7 open pit-underground interface with an infill programme along the Antoni structure

Decline development advanced ahead of schedule towards the Antoni structure, completing 834 metres.

Table 4. Q1 Significant Drill Intercepts - Cleo

 
 
       Tenement ID    Prospect ID       Hole ID   Level (mRL)   Interval (m)   Grade (Au g/t) 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO    CRSD127_W1         491.9            0.3             17.8 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO    CRSD127_W1         481.9              2              9.4 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO       CRSD130        1132.5              1              8.5 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO    CRSD129_W1         842.8              1              7.4 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO    CRSD127_W1           525              1              6.7 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO       CRSD134         948.1              1              6.5 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO       CRSD128         444.7              1              6.1 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO    CRSD129_W1         565.8              1              5.7 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO       CRSD129        1130.9              1              5.1 
------------------  -------------  ------------  ------------  -------------  --------------- 
  Sukari Gold Mine           CLEO       CRSD128           462             12              4.9 
------------------  -------------  ------------  ------------  -------------  --------------- 
 

Doropo Project, Cote d'Ivoire

The updated mineral resource estimate declared at Doropo of 50Mt at 1.31g/t for 2.13Moz Indicated and 19Mt at 1.3g/t for 0.8Moz Inferred sits within a 6km radius area ("Resource Area").

A total of 55,000 metres of drilling have been budgeted for 2019, targeting near-term resource growth, maiden reserve and increased target generation outside the Resource Area.

Resource Area

In Q1, 16,885 metre of aircore drilling was completed, testing for structural extensions and geochemical anomalies. Results were excellent, identifying multiple new mineralised structures and confirmation of mineralised extensions to the current resource structures, demonstrating further resource growth potential within the existing Resource Area.

Drill testing the Han deposit extensions commenced towards the end of the quarter, with 1,703 m of RC drilling completed.

Follow up RC drilling on numerous priority targets for resource expansion and structural extensions at Han, Enioda, Souwa and Chegue in Q2.

The PEA work continues to progress, with completion expected in H2. Drilling has been prioritised within the Resource Area to ensure updated results are included in the PEA studies.

Further metallurgical sampling, including 557m of drilling at Enioda, Chegue, Kekeda and Souwa deposits was also undertaken.

Table 5. Q1 Significant Drill Intercepts - Doropo Resource Area

 
           Tenement ID    Prospect ID     Hole ID     Level (mRL)   Interval (m)   Grade (Au g/t) 
----------------------  -------------  ----------                  -------------  --------------- 
                                                       From    To 
----------------------  -------------  ----------  --------  ----  -------------  --------------- 
  Doropo Resource Area         Chegue    DPAC6746        36    40              4              5.1 
----------------------  -------------  ----------  --------  ----  -------------  --------------- 
  Doropo Resource Area          Hinda    DPAC6555        10    14              4              9.6 
----------------------  -------------  ----------  --------  ----  -------------  --------------- 
  Doropo Resource Area          Hinda    DPAC6569        32    39              7              2.7 
----------------------  -------------  ----------  --------  ----  -------------  --------------- 
  Doropo Resource Area          Hinda    DPAC6579        12    22             10              2.1 
----------------------  -------------  ----------  --------  ----  -------------  --------------- 
  Doropo Resource Area          Hinda    DPAC6581        20    33             13              0.9 
----------------------  -------------  ----------  --------  ----  -------------  --------------- 
  Doropo Resource Area          Hinda    DPAC6583        30    33              3              2.2 
----------------------  -------------  ----------  --------  ----  -------------  --------------- 
  Doropo Resource Area    Tiguilegoun    DPAC6697         8    11              3              3.7 
----------------------  -------------  ----------  --------  ----  -------------  --------------- 
 

Doropo Regional

Located 30 km southwest of the Doropo 7km resource area is the new discovery, Kilosequi. Kilosegui is a shallow south dipping shear zone, between 22deg to 28deg, hosted in granodiorite that displays average widths of 6 to 15 metres with a pervasive silica-sericite-pyrite alteration. Soil sampling and auger gold anomalism from work completed in 2018 corresponded with magnetic imagery, indicating Kilosegui is a major structural feature, extending greater than 8km.

In Q1, seven shallow RC drill sections were completed (2,687 metres). Within the quarter, results were received on five of the drill sections, all confirming significant mineralisation. Further RC drilling will be completed during 2019, systematically testing the structure. In Q2, a GAIP survey will be done over the Kilosegui area, to improve the understanding of the subparallel and crosscutting structures, in addition to drill target generation of the mineralised shoots.

On the Kalamon, Varale and Tehini 3 permits, 3,538 soil samples were collected, mostly on infill grids. An RC rig began reconnaissance drilling on the Gogo permit at the end of Q1.

Table 6. Q1 Significant Drill Intercepts - Kilosequi, Doropo Regional

 
    Tenement ID    Prospect ID     Hole ID     Level (mRL)   Interval (m)   Grade (Au g/t) 
---------------  -------------  ----------                  -------------  --------------- 
                                               From     To 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5001        9     21             12              1.3 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5002       35     44              9              2.4 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5003       84    100             16              1.9 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5005       11     17              6              1.6 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5006       30     38              8              1.2 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5007       45     59             14              1.2 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5012       34     40              6              1.9 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5013       75     85             10              3.3 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5014       15     21              6              1.9 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
  Doropo Permit      Kilosequi    DPRC5015       38     50             12              1.2 
---------------  -------------  ----------  -------  -----  -------------  --------------- 
 

ABC Project, Cote d'Ivoire

Maiden mineral resource estimate declared at Kona South of 19.6Mt at 1.03 g/t, 0.65Moz gold in the Indicated category and 16Mt at 0.9 g/t, 0.45Moz gold in the Inferred category. The scope of the ABC maiden resource, after only two years exploration following discovery, highlights the potential scale and quality of the Lolosso Gold Corridor ("LGC") and the regional generative potential of the ABC landholding.

A 34,000 metres drill programme is budgeted for 2019 focussing on resource development at Kona Central and Kona South, while testing the resource extension potential between the two prospects, and drill testing high priority targets along the LGC in addition to airborne magnetic/radiometric surveying and geochemical sampling.

In Q1, the Kona permit surface geochemical programme was completed along the 23km LGC strike, including, on a 100m x 50m grid, 2,529 metres of auger drilling, resulting in 370 samples collected. Results highlighted several coherent and continuous gold anomalies, including a significant 1km long anomaly in the north of the permit. During Q2, a systematic RC drill programme will be completed, testing the surface geochemical anomalies.

Within the Kona permit, 7,862 metres of RC drilling completed, testing for the auger anomalies and structural concepts along the 23km strike of LGC structure. Initial results, along the Kona South resource extensions, confirmed new anomalies with continuous and coherent (low grade) gold mineralisation. Most the results to be returned in Q2 as RC drilling continues drill testing resource extensions and down-dip from the declared resource. Infill drilling scheduled for Kona Central, a near term source of resource growth potential.

Commenced early stage field exploration on the adjacent permit to Kona, FarakoNafana, including 231 soil samples collected. This will continue into Q2 with permit-wide geological mapping, interpretation and target generation.

In 2019, a regional magnetic-radiometric airborne survey will be completed across the full ABC license.

Table 7. Q1 Significant Drill Intercepts - Kona Central, ABC Project

 
  Tenement ID     Prospect ID     Hole ID     Level (mRL)   Interval (m)   Grade (Au g/t) 
-------------  --------------  ----------                  -------------  --------------- 
                                              From     To 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0153       66     78             12              0.7 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0153      158    174             16              0.6 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0176       39     56             17              0.6 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0177      127    145             18              0.5 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0179       55     68             13              0.8 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0179       74     89             15              0.6 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0180      125    150             25              0.5 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0185      119    122              3              2.4 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0196        3      6              3              2.9 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0196      149    169             20              0.5 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
  ABC Project    Kona Central    KNRC0199       77     86              9              1.2 
-------------  --------------  ----------  -------  -----  -------------  --------------- 
 

Environmental, Social and Governance

Health and safety

Health and safety are core priorities and at the forefront of our decision making. As previously reported, a drilling contractor in Cote d'Ivoire was fatally attacked by a swarm of killer bees while working at one of our Ivorian projects. We are continually reviewing and developing our health and safety procedures to mitigate any future risk of repeat incidents and ensure a safe workplace and protect the wellbeing of our people.

During Q1, we had five Lost Time Injuries reported, two at Sukari and three in Cote d'Ivoire (related to the fatality incident) bringing the Group LTIFR to 0.60 per 200,000 workplace hours for Q1.

Our aim is to create an environment such that every person, employee and contractors, return home safely at the end of their shift. We learn from every incident and look to apply ways of improving our work environment.

Solar feasibility update

The Company is assessing the viability of using solar as a partial source of power at Sukari. This would significantly reduce the reliance on fossil fuels and have the potential to materially reduce power costs.

The pricing proposals for critical construction items and long-lead items for the conceptual 40MW (AC) solar design are expected by the close of Q2. Final project feasibility study to be submitted to the Board in H2 for capital approval.

Water management

We are committed to improving operational water efficiency, targeting a 50:50 balance between sea water draw and closed-circuit water recycling for 2019. Significant progress was made in Q1, delivering 81% water recycled for the quarter.

Board and Management

Good progress was made in Q1 on succession planning and recruitment initiatives with the appointment of a number of top-tier individuals, as detailed below:

Dr Sally Eyre joined the Board as a Non-Executive Director, effective 10 April 2019. Dr Eyre is a mining finance professional with extensive experience in global resource capital markets and mining operations. As a geologist, with a PhD in Economic Geology, significant Board and Executive mining experience, Dr Eyre brings strong technical and commercial balance to the existing Board composition.

Jeremy Langford has joined the Company as Chief Operating Officer ("COO"). Jeremy is an engineer with an impressive career of developing and building mines. Most recently Jeremy was COO at Endeavour Mining and prior to that Ampella Mining. His wealth of operational and development expertise in West African gold, makes Jeremy a valued addition to the Management team and will be instrumental in steering future growth prospects, as the Company continues to unlock value from its asset portfolio.

From the 6 May 2019, outgoing COO, Mark Morcombe, will no longer be with the Group, and all related remuneration related to long term incentive plans will lapse.

Sukari Gold Mine

Following a full assessment of the operational organisation structure in 2018, management identified key areas of appointment for the company to deliver an improved performance in 2019.

In Q1, the Company has successfully attracted high calibre individuals with extensive experience into key operational roles such as: Operations Director, Underground Manager, Technical Services and Planning Manager, and Supply Chain Manager.

All these individuals are based at Sukari, where they will report to the General Manager of Operations who was appointed in 2018.

Legal

There is no material change or development to report in relation to the Concession Agreement appeal or the Diesel Fuel Oil case.

Financial position

Centamin remains committed to its policy of being 100% exposed to the gold price through its unhedged position. The Company is in a solid financial position with cash and liquid assets(4) of US$331.6 million, as at 31 March 2019, and no debt.

The Company's strong balance sheet provides the financial flexibility and agility to drive organic growth through our highly prospective exploration pipeline and are well positioned to take advantage of any market opportunities suitable for the business and growth strategy.

Final Dividend

The Company has a sustainable dividend policy in place, delivering five consecutive years of shareholder returns. The Board regularly reviews opportunities to compete for capital and maximise shareholder returns.

The final dividend of 3.0 US cents per share was approved by shareholders at Annual General Meeting ("AGM") on 8 April 2019, equating to US$34.6 million to be returned shareholders on 13 May 2019, resulting in a full year dividend, including interim, of 5.5 US cents for the 2018 financial year, equating to US$63.5 million returned to shareholders.

Free Cash Flow(1)

Group free cash flow generation of US$13.9 million in Q1, after profit share distribution to the non-controlling interest ("NCI") in Sukari Gold Mine ("SGM") and Group investing activities.

Foreign Direct Investment ("FDI")(4)

The Egyptian state has benefited during Q1, directly from dividends paid, by way of profit share, to the NCI, of US$20.5 million in addition to US$4.3 million in royalty payments.

Group Capital Expenditure

Total capital expenditure for 2019 is budgeted to be US$120 million, including exploration expenditure in West Africa, regional Sukari seismic exploration programme, Sukari underground exploration and development, solar feasibility study completion, underground cemented hydraulic backfill plant, second tailings storage facility engineer studies, and ongoing fleet rebuild programme.

In Q1, sustaining capital expenditure was US$22.6 million with key investment attributed to underground exploration and development and scheduled fleet rebuild programme. Non-sustaining exploration activities of US$4.5 million were expensed in the quarter.

Table 8. Q1 Group capitalised expenditure breakdown

 
                                            Q1 2019  Q1 2018 
                                            US$'000  US$'000 
------------------------------------------  -------  ------- 
Underground exploration                       1,612    1,588 
Underground mine development                  9,004    8,920 
Other sustaining capital expenditure         12,025    8,312 
------------------------------------------  -------  ------- 
Total sustaining capital expenditure         22,641   18,820 
------------------------------------------  -------  ------- 
Non-sustaining exploration capitalised(6)     2,585    2,271 
------------------------------------------  -------  ------- 
 

(6) Only includes US$1.6 million of the Sukari expenditure relating to Cleopatra in non-sustaining capital expenditure before the offset of net pre-production gold sales.

Exploration expenditure

Table 9. Q1 Group exploration expenditure breakdown

 
                                     Q1 2019   Q1 2018 
                                     US$'000   US$'000 
-----------------------------------  -------  -------- 
Arab Republic of Egypt(7,8)            4,197     3,859 
Burkina Faso                           1,230     1,084 
Côte d'Ivoire                     3,325     3,419 
Total exploration expenditure(7,8)     8,752     8,362 
-----------------------------------  -------  -------- 
 

(7) Including Cleopatra expenditure before the offset of net pre-production gold sales.

(8) Includes US$2.58 million of non-sustaining capital expenditure on for Sukari exploration and development which is capitalised under the terms of the Concession Agreement

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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April 24, 2019 02:01 ET (06:01 GMT)

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