This has enabled us both to continue investing in our portfolio and to distribute returns to our stakeholders. Our operational track record and strong balance sheet put
OPERATIONAL HIGHLIGHTS
Group safety performance on track to meet safety targets: zero LTIs in Q2, resulting in a lost time injury frequency rate ('LTIFR') of 0.15 H1 2023with a total recordable injury frequency rate ('TRIFR') of 2.94
Production of 220,561 ounces ('oz') for H1 2023 from the
Cash costs of
Decarbonisation roadmap published with interim target of 30% reduction in scope 1 and 2 GHG emissions by 2030. Grid power connection tender submissions are under evaluation and solar expansion study work is underway
New Egyptian mining framework agreed in principle with the Egyptian government for the Company's Eastern Desert Exploration licences ('EDX Blocks') creating a clear, competitive regulatory structure for development of new mining projects(full announcement)
Commenced drilling on 3,000km2 highly prospective EDX Blocks with3,100 metres completed of a 10,000 metre drill programme focussing on seven priority targets identified on the Nugrus block (adjacent to Sukari)
FINANCIAL HIGHLIGHTS
Revenue generation of
Increased EBITDA margin of 45% with EBITDAup 26% to
Basic EPS of 7.86 US cents and net profit after tax attributable to shareholders of
Capital expenditure ('capex') of
Group operating cash flow of
Group free cash flow of
Gold price protection programme implemented for the twelve months to
Strong and flexible balance sheet with available cash and liquid assets of
Interim dividend declared of2.0 US cents per share, equating to a distribution of approximately
2023 OUTLOOK
Guidance unchanged and on track
Gold production guidance range of 450,000 to 480,000 oz per annum targeting the midpoint
Cash cost guidance range of
Adjusted capex guidance is
Exploration spend is results-driven. 2023 exploration expenditure budget is
KEY H2 2023 DELIVERABLES
Sukari updated Life of Mine Plan (NI 43-101), including underground expansion
Group Mineral Resource and Reserve update
Group exploration activities report
GROUP RESULTS SUMMARY[1]
WEBCAST PRESENTATION
The Company will host a webcast presentation today, Wednesday,
About
Contact:
Tel: +442037271000
Guidance
The Company actively monitors the global geopolitical uncertainties and macroeconomics, such as global inflation, and guidance may be impacted if the supply chain, workforce or operations are disrupted.
Non-GAAP measures
This statement includes certain financial performance measures which are not GAAP measures as defined under International Financial Reporting Standards (IFRS). These include EBITDA and adjusted EBITDA, Cash costs of production, AISC, Cash and liquid assets, Free cash flow and adjusted Free cash flow. Management believes these measures provide valuable additional information for users of the financial statements to understand the underlying trading performance. An explanation of the measures used along with reconciliation to the nearest IFRS measures is provided in the Financial Review.
Profit after-tax attributable to the owners of the parent ('shareholders')
Royalties
Royalties are accrued and paid six months in arrears.
Cash and liquid assets
Cash and liquid assets include cash, bullion on hand and gold sales receivables.
Liquidity
Liquidity is defined as the sum of cash and cash equivalents and available credit under the Company's revolving credit facility.
Movements in inventory
Movement in inventory on ounces produced is the movement in mining stockpiles and ore in circuit while the movement in inventory on ounces sold is the net movement in mining stockpiles, ore in circuit and gold in safe inventory.
Gold produced
Gold produced is gold poured and does not include gold-in-circuit at period end.
Forward-looking Statements
This announcement (including information incorporated by reference) contains 'forward-looking statements' and 'forward-looking information' under applicable securities laws (collectively, 'forward-looking statements'), including statements with respect to future financial or operating performance. Such statements include 'future-oriented financial information' or 'financial outlook' with respect to prospective financial performance, financial position, EBITDA, cash flows and other financial metrics that are based on assumptions about future economic conditions and courses of action. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as 'believes', 'expects', 'expected', 'budgeted', 'forecasts' and 'anticipates' and include production outlook, operating schedules, production profiles, expansion and expansion plans, efficiency gains, production and cost guidance, capital expenditure outlook, exploration spend and other mine plans. Although
HEALTH & SAFETY
We remain focussed on the protection of our workforce and the local communities that we work in. Our safety performance continues to be strong; while noting that our ultimate ambition is to create a zero-harm workplace.
We had only one lost time injury in H1 2023 at Sukari. Notwithstanding, there has been an increase in low consequence, minor injuries. Proactive measures have been taken to understand these injuries, identify trends, and implement mitigations. These measures include 'safety stops' focused on awareness sessions and the implementation of programmes that ensure greater management oversight and enhance hazard identification education.
The Group LTIFR was 0.15 per one million hours worked and we are on track to meet our annual target. The Group TRIFR was 2.94 per one million hours worked, a 1% increase YoY.
SUSTAINABILITY
Tailings management
Our comprehensive and systematic approach to tailings management continues, with good progress on bringing the governance processes and management systems in line with the Global Industry Standard on Tailings Management ('GISTM'). The raising of our second tailings storage facility ('TSF2') continues to progress ahead of schedule.
Energy and climate change
In
The Sukari 30MWAC solar plant has now been operating for nine months and has exceeded project power generation expectations, showcasing exceptional performance as we operate in the peak sunlight hours during the summer months. The preliminary technical work to expand the Sukari solar capacity to 50MWAC is complete and advanced studies are underway including project design and timeline. The tender process for the Egyptian grid connection was launched in Q1. All qualifying proposals have been received and are currently under review by our management team supported by external technical advisors. The estimated target for grid connection is 2024. These two carbon abatement initiatives will reduce our GHG carbon emissions by 30% from our 2021 base year by 2023 and deliver significant cost-savings.
Professional development
In H2 2023, alongside the second year of our Employee Development Pathway we will also be rolling out the Leadership Development Pathway at Sukari, targeted at all management and supervisory roles. We are committed to educate, develop and empower our workforce with the requisite tools and skills to continue to deliver operational excellence.
The Sukari team delivered another solid operational performance in H1 2023 and we remain on track to meet the midpoint of 2023 production guidance. Total open pit material mined was 65Mt, a 1% increase YoY. The accelerated waste-stripping programme continues to yield positive results, increasing operational flexibility with multiple working areas available in the north, east and west of the pit. The
In terms of total open pit ore tonnes, Sukari achieved 7Mt with an average grade of 0.88g/t Au. This marks a 20% increase in tonnes and an 11% decrease in grade YoY, reflecting the scheduled inclusion of low-grade oxide and transitional ore tonnes from Stage 7, which will be placed on the dump leach. Open pit average milled grade was 0.99 g/t Au for H1 2023, a 2% decrease YoY.
The underground mine continues to benefit from the transition to owner mining, as demonstrated by a 19% increase in ore tonnage mined YoY. Grades remained consistent YoY, averaging 4.2g/t Au. We anticipate a slight improvement in average grades during H2 2023. The key focus within the underground is augmenting the fleet with a staged replacement of end-of-life equipment, whilst simultaneously introducing the use of paste-fill into the operating cycle.
The underground paste-fill plant commenced commissioning during Q2 pouring the first paste into trial stopes, with the excellent results for both Portland and slag cement strength. As part of the commissioning phase, we are conducting various performance monitoring and optimisation programmes such as viscosity modelling test work as we work to refine the process. It's worth noting that the trial stopes are located within historically mined areas, ensuring no disruption to current mining operations. To ensure a seamless transition, we will continue to utilise the existing underground backfilling system of cemented rock fill ('CRF') and waste rock fill in parallel with the commissioning of the paste plant. This approach mitigates implementation risk while maintaining ongoing mining operations.
As planned, the plant processed 6Mt of ore at an average feed grade of 1.23 g/t Au, a 4% increase YoY in tonnes and 1% in grade. There were several key projects during the period, including mill relining and work on the mill motors, all of which were completed successfully with no unplanned disruption to throughput.
The metallurgical gold recovery rate was 88.5%, in line with budget and flat YoY. Work on the gravity circuit continued to progress with design reviews nearing completion. The design review is underway with a detailed design tender and construction decision by the end of 2023.
Significant progress has been made on the North Dump leach project, with the installation of the high-density polyethylene ('HDPE') liner completed, and the base layer of mill scats placed on top of the liner. Ore placement has commenced on the fully constructed cells. We aim to initiate leaching activities in H2 2023, depending on the percolation rates, this could potentially result in the first pregnant gold solution being generated at the end of 2023.
The optimised life of mine plan is on track for completion in Q4, including the fully-engineered underground expansion. Our team has recently concluded a comprehensive work programme with external support, specifically addressing the updated geotechnical parameters that will assist in determining the criteria for the revised open pit and underground mine design. Moving ahead, our focus will be on analysing the initial outputs derived from the revised input parameters, as well as refining the open pit stage design, expanded underground and equipment maintenance strategy.
On
Doropo ESIA terms of reference were approved by the Ivorian government with work commencing immediately afterwards. Baseline studies and the impact assessment are well advanced supporting the optimisation of the project design and accompanying stakeholder engagement.
The project sits in a well-established mining jurisdiction, and with a maiden Mineral Reserve estimate of 1.87Moz of Probable reserves, it supports a 10-year life of mine with an average production rate of 173,000 ounces per annum at all-in sustaining costs of
We have identified several opportunities for potential reserve and resource growth and to further optimise the project, which will be assessed as part of the DFS. Of the
EASTERN DESERT EXPLORATION BLOCKS (
Model mining exploitation agreement
On
The MMEA terms are comparable to other jurisdictions with international, modern mining codes. The MMEA does not apply to the 160km2
Exploration
Drilling commenced in Q2 2023 at our EDX Nugrus block. The Nugrus block is adjacent to the Sukari Mining Concession, sitting within 30km of the Sukari processing plant. The 10,000 metre drill programme is focussed on seven priority targets identified from the initial regional exportation programmes. To date, 3,000 metres have been drilled with assay results due later in H2 2023. In addition to the drilling, regional exploration will continue at Nugrus and
EXPLORATION
Throughout H1 2023, we continued to advance our highly prospective exploration portfolio. At Sukari, a 20,000 metre drill programme was underway across the 160km2 concession area. The programme focused on infill drilling of the resources that could generate satellite feed and testing strike extensions at
At Doropo, reverse circulation and core drilling activities were focused on resource infill drilling for the DFS. In addition, the team completed 15,403 metres of auger drilling alongside continued soil sampling with the aim to generate further drill targets.
At
OUTLOOK
I would like to commend our workforce for their commitment, professionalism and passion. Their operational excellence has enabled us to deliver another strong half, building on our operational track record and delivering our strategy. I would also like to thank our local communities, partners and wider stakeholders for their support and shared vision.
We look forward to a busy second half of news flow, as we continue to deliver on our commitments and progress towards our vision of being a multi-asset, multi-jurisdictional, responsible producer.
We are pleased to report material improvements across most of our key financial metrics including revenue, EBITDA, profit after tax, operating cash flow and free cash flow. The strength of these results during a period of elevated capital investment, is testament to our prudent long-term approach to capital allocation and cost management.
H1 2023 has delivered strong operating cash flow of
FINANCIAL PERFORMANCE
Revenues increased YoY by 11% to
STRINGENT COST MANAGEMENT
Globally cost inflation remains high and central banks continue to tighten monetary policy in response. Our judicious approach to forecasting and stringent cost management has allowed us to deliver costs within our guidance last year and we remaining on track to meet 2023 guidance.
Cash costs of production in H1 2023 were
AISC in H1 2023 were
Good progress continues to be made on our multi-year cost-savings programme with a cumulative
STRONG FINANCIAL POSITION
As of
CAPITAL INVESTMENT
This year is a period of significant reinvestment in the Sukari mine with an elevated level of gross capex of
H1 2023 gross capital expenditure was
Gold Price Protection Programme
The programme provides the Company protection should the average monthly gold price fall below the
We were able to lock-in attractive pricing for put options, for a total premium paid of
Interim dividend
Consistent with the Company's stated commitment to shareholder returns, the Board declares an interim dividend of 2.0 US cents per share (
The
The gold price protection programme limits the revenue downside risk below
The Company is operationally and financially well positioned for a stronger H2 2023, in line with plan
Contact:
Web: www.centamin.com
The Company publishes profitability performance metrics on a bi-annual basis.
This information is provided by RNS, the news service of the
(C) 2023 Electronic News Publishing, source