Ft.com24 Apr 2019 19:35
Centamin shares climb to top of FTSE 250 leaderboard
Neil Hume in London AN HOUR AGO Print this page
Shares in Centamin climbed to the top of the FTSE 250 leaderboard on Wednesday after the gold producer reported higher than expected production.
After several disappointing quarters, Centamin said output from Sukari — Egypt’s first large-scale modern gold mine — was 116,000 ounces in the first quarter, beating market forecasts. Analysts had expected output of 105,000 to 115,000.
Centamin said its processing plant chomped through 3.25m tonnes of ore in the three months to March, helping to lower cash costs, which will fell to $631 an ounce. The company generated almost $14m of free cash flow and ended the quarter with $331m of cash.
“We have made a solid start, delivering first-quarter results 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,” chief executive Andrew Pardey said.
Shares in Centamin rose 10.2 per cent to 87.85p, but are still more than 40 per cent lower than they were this time a year ago.
The London-listed company is trying to rebuild trust with investors after a challenging 2018 when it cut production guidance several times because of operational problems.
Centamin mines from both a large open pit and also a higher grade underground mine at Sukari.
“Guidance for 2019 has been maintained at 490,000-520,000 ounces and we believe that it is achievable at this point,” said Numis Securities analyst Jonathan Guy. “Management have indicated that a new medium term mine plan should be released in Q2 to cover the period for 2020 and 2021. At this point we expect production to remain flat at 510,000 ounces in these two years.”
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