RE: Have I got thiis right?14 Aug 2024 11:43
Paul,
There was some confusion in 2016 regarding the detail of the original profit share agreement so I sought clarification from Centamin, possibly the company's explanation may be of some help now.
Thu, 3 Mar 2016 at 08:40
RE An Egyptian media speculation on when the profit share started.
A lot of the market miss the fact that the profit share starts at 40%, then 45% then 50%, so it will take a bit of time to get to the 50/50 positive cash flow share.
If you were to aggregate all of the revenue generated from Sukari since production started it is around $1.8bn (excluding 2015, which we are announcing on 21 March – estimates for 2015 are c.$500m), so we are looking at total revs of c.$2.3bn to date. You then have to take away the cash costs, sustaining capex, exploration expenses, and the investment capex (ie building of both plants and the mine etc), and that is way in excess of $2.5bn so far. What has been paid out to the Egyptians has been over $100m in bringing forward some of these payments as well as royalty payments. So we are still some way off on the 40/60 pay out of free cash flow, with most people estimating this will be reached at the end of this year at the very earliest - it depends on what happens with the gold price as the costs are pretty set, and capex has fallen substantially as Stage 4 is complete.Also remember that all of the drilling/exploration costs outside of the Sukari license are not included – this is at Centamin’s own expense and does not feature in the calculation.
I hope that helps.
On behalf of Centamin
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