News Column

Centamin Profit Down, But Announces Maiden Dividend

August 13, 2014

Steve McGrath

LONDON (Alliance News) - Gold producer Centamin PLC Thursday reported lower profit for the second quarter as operating costs rose due a drop in the grade of ore being delivered to its main processing plant, but it predicted that the grade will rise again and it announced a maiden interim dividend.

The company reported a pretax profit of USD11.3 million for the three months to June 30, down from USD51.7 million a year earlier, as revenue declined to USD102.6 million, from USD134.3 million. For the first six months of 2014, the company reported a pretax profit of USD31.9 million, down from USD123.6 million a year earlier, as revenue declined to USD205.3 million, from USD272.5 million.

Second quarter gold production was 81,281 ounces, down 13% on the year but up 9% compared with the first quarter, but its cash cost of production rose 5% on the quarter to USD783 an ounce.

"With gold sales and revenue broadly equivalent to the first quarter, the slight reduction reflected a 5% rise in cash operating costs to US$783 per ounce," the company said in a statement.

However, the company predicted that it would mine higher grades of ore in coming months after developing the infrastructure at its mines, and it therefore maintained its full-year production guidance.

"Whilst underground development ore grades were below forecast, mining rates remain strong and the operation has opened up key high-grade areas for stoping. Therefore, with both plant throughput and average grade set to increase during the remainder of the year, we maintain our full year production guidance of 420,000 ounces in 2014 and continue to look forward to delivering Sukari's long-term target of 450,000 - 500,000 ounces per annum from 2015 onward," Chairman Josef El-Raghy said in a statement.

Sukari is the company's main gold mining site in Egypt. The company has just finished the fourth stage of the processing plant at the site and expects that to help it increase output.

The company said it would pay a maiden interim dividend of 0.87 cents a share, a USD10 million payout to its shareholders, after completing the fourth stage of the plant. It isn't planning any more major extensions to the plant.

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Source: Alliance News

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