CEO Interview part 315 Jul 2024 06:38
E: Does Centamin have plans to participate in upcoming tenders for gold exploration?
MH: Yes, certainly. We're always very interested to see where we can grow our portfolio within Egypt. After being awarded our blocks from the last tender and that exploration cycle coming to its natural conclusion, we will have the human resources and funding to start looking at new areas.
E: In terms of mining operations themselves, what sort of challenges does Centamin face, and how do you plan to improve the efficiency of your operations in Egypt and elsewhere?
MH: Egypt is, in a sense, a relatively immature mining sector. In a more mature mining jurisdiction, you tend to find multiple service providers, be that for equipment, consulting services, and so on. With us being the only significant gold producer in Egypt, you don't have that same depth of support that you would get in a more established jurisdiction.
Having said that, what Egypt does benefit from significantly is a deep pool of human capital and good infrastructure. On the human capital side, we see a number of high quality candidates coming out of various walks of life, so while these people might not have specific mining expertise, we're able to train them very quickly.
E: Turning to the gold market itself, what are your expectations for gold prices in the coming years? And what risks does Centamin face from the fluctuation in these prices?
MH: I always love this question — and it's impossible to answer. Gold in one sense is a currency, in another sense is a hedge against geopolitical risk, and gold also has a use for fabrication in jewelry — so there are a lot of different drivers of gold prices.
The best thing that we can do is make sure that we are as low-cost a producer as possible and really focus on our bottom line. When we see gold prices are high, we should be making good returns. When we see that gold prices are low, we can continue operating and still generate good cashflow because we're in the lower half of the cost curve.
Having said that, I do think that the macro outlook today is broadly supportive of the gold price. I don't think we're going to see gold retreat back to the levels of a decade ago. The macro outlook feels supportive in the short term, and the longer it stays at these prices, the more they get locked in.
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