TIDMCEY
RNS Number : 8040N
Centamin PLC
31 October 2016
For immediate release 31 October 2016
Centamin plc ("Centamin" or "the Company")
(LSE:CEY, TSX:CEE)
Centamin plc Results for the Third Quarter and Nine Months Ended
30 September 2016
Centamin plc ("Centamin", the "Group" or "the Company") (LSE:
CEY, TSX: CEE) is pleased to announce its results for the third
quarter ended 30 September 2016.
Q3 2016 Operational Highlights(1),(2)
-- Gold production of 148,674 ounces was a 6% increase on Q2 2016 and 41% higher than Q3 2015.
-- Cash cost of production of US$466 per ounce and all-in
sustaining costs (AISC) of US$644 per ounce.
-- Process plant throughput of 2.8 million tonnes (Mt), a 4% decrease on the previous quarter.
-- Recovery of 89.7%, up by 0.2% on the second quarter, reflects
on-going optimisation of the process plant.
-- Sukari underground mine delivered 255kt of ore (in line with
Q2 2016), at a grade of 8.97g/t (up 4% on Q2 2016). Open pit mine
material movement of 16,191kt (up 7% on Q2 2016) with milled grades
of 1.14g/t (up 15% on Q2 2016).
-- Full year 2016 production is expected towards the upper end
of guidance of between 520,000 and 540,000 ounces. Full year 2016
costs are expected towards the lower end of guidance of between
US$530 and US$550 per ounce cash cost of production and between
US$720 to US$750 per ounce AISC.
-- Continued positive results from underground exploration
drilling at Sukari. An updated resource and reserve estimate
expected during the fourth quarter.
-- Development commenced in August of a new exploration decline
within the north-eastern Cleopatra zone of Sukari Hill. The project
is aimed at testing the potential for further reserve growth and
additional underground production of up to 1Mt per annum. Initial
expenditure is expected to be US$11.5 million over 9 months.
-- Resource definition drilling continued in Burkina Faso.
Exploration drilling results from Côte d'Ivoire support the
potential for laterally extensive mineralisation over a number of
prospects.
Financial Highlights(1),(2)
-- EBITDA of US$122.0 million was up 20% on Q2 2016, driven by
an increase in realised gold prices and gold sales volumes together
with improved operational efficiencies and lower overall costs.
-- Centamin remains debt-free and un-hedged with cash, bullion
on hand, gold sales receivable and available-for-sale financial
assets of US$416.9 million at 30 September 2016, up US$84.7 million
over the quarter.
-- Due to the significant cash generation from Sukari, profit
sharing has commenced. The US$28.75 million advance has been
recovered and a further distribution of profit share of US$6.67
million was made to EMRA in October.
-- Basic earnings per share of 5.62 US cents; down 11% on Q2
2016 due to the effect of profit share during the period. Earnings
per share (before profit share) of 8.11 US cents is up 29% on Q2
2016.
Legal Developments in Egypt
-- The Supreme Administrative Court (SAC) appeal and Diesel Fuel
Oil court case are both still on-going. The Concession Agreement
appeal remains stayed until the Supreme Constitutional Court rules
on the validity of Law 32 of 2014. Developments in the DFO case
during the quarter are set out further below.
Q3 2016 Q2 2016 Q3 2015 Q2 2015
------------------------- ----------- -------- -------- -------- --------
Gold produced ounces 148,674 140,306 105,413 107,781
Gold sold ounces 150,201 141,802 104,803 104,168
Cash cost of production US$/ounce 466 461 767 706
AISC US$/ounce 644 669 918 853
Average realised gold
price US$/ounce 1,335 1,268 1,131 1,188
------------------------- ----------- -------- -------- -------- --------
Revenue US$'000 200,845 180,128 118,529 124,192
EBITDA US$'000 122,032 101,605 31,304 37,308
Profit before tax US$'000 93,716 73,379 6,253 18,841
EPS (before profit
share) US cents 8.11 6.30 0.55 1.65
EPS (after profit
share) US cents 5.62 6.30 0.55 1.65
Cash generated from
operations US$'000 139,822 96,144 31,261 49,729
------------------------- ----------- -------- -------- -------- --------
(1) Cash cost of production, AISC, EBITDA and cash, bullion on
hand, gold sales receivables and available-for-sale financial
assets are non-GAAP measures and are defined at the end of the
Financial Statements. AISC is defined by the World Gold Council,
the details of which can be found at www.gold.org.
(2) Basic EPS, EBITDA, AISC, cash cost of production includes an
exceptional provision against prepayments, recorded since Q4 2012,
to reflect the removal of fuel subsidies which occurred in January
2012 (see Note 4 of the Financial Statements)
Andrew Pardey, CEO, commented: "Centamin delivered another solid
quarter from the Sukari operation, with a record of 148,674 ounces
bringing year to date total production to 414,249 ounces of gold.
This operational performance, together with a continuation of the
low operating costs delivered in the second quarter and a further
increase in realised gold prices, resulted in a strong US$85
million increase in our cash and liquid assets balance to US$417
million. Ore throughput rates at the processing operation were
stable, consolidating the improvements delivered over previous
quarters and remaining above our base case forecast rate of 11Mtpa.
The open pit delivered an increase in total material movement and
the underground mine continued to deliver both tonnes and grade in
excess of our base case forecast. We therefore expect full year
2016 production towards the upper end of our guidance range and
costs towards the low end of our guidance range.
We are also pleased to announce that, as a result of the
significant cash generation from Sukari, profit share commenced
during the quarter and the total advance payments made to date of
US$28.75 million were recovered. Future distributions will take
into account ongoing cash flows, historic costs that are still to
be recovered and any future capital expenditure. Subsequent to the
period end a further distribution of profit share of US$6.67m was
made to EMRA."
Centamin will host a conference call on Monday, 31(st) October
at 9.00am (London, UK time) to update investors and analysts on its
results. Participants may join the call by dialling one of the
following three numbers, approximately 10 minutes before the start
of the call.
UK Toll Free: 080 8237 0040
International Toll number: +44 20 3428 1542
Canada Toll free: 1866 404 5783
Participant code: 46103816#
A recording of the call will be available four hours after the
completion of the call on:
UK Toll Free: 0808 237 0026
International Toll number: +44 20 3426 2807
Playback Code: 678456#
Via audio link at
http://www.centamin.com/media/press-releases/2016
________________________________
CHIEF EXECUTIVE OFFICER'S REPORT
Third quarter gold production of 148,674 ounces represents a 6%
increase on the previous quarter as the Sukari operation continued
to deliver plant throughput rates, average grades and metallurgical
recoveries all above base case forecast levels. EBITDA of US$122.0
million was up 20% on the previous quarter, driven by a 6% increase
in gold sales, a 5% rise in the average realised gold price, and a
comparable cash cost of production.
The unit cash cost of production was US$466 per ounce, a US$5
per ounce increase over the previous quarter, with the higher gold
output offset by a 12% increase in mine production costs to US$76.1
million, mainly due to higher open pit mining rates and an increase
in fuel price over the preceding quarter.
The AISC was US$644 per ounce, reflecting a US$25 per ounce (4%)
quarterly reduction, mainly due to a change in costs associated
with inventory movement compared with the previous quarter. Total
sustaining capital expenditure was US$17.0 million, an increase of
US$1.1 million on the second quarter.
Centamin's balance sheet continued to strengthen, ending the
period with US$416.9 million of cash, bullion on hand, gold sales
receivable and available-for-sale financial assets. This represents
an increase of US$84.7 million over the quarter, and follows
expenditure of US$10.4 million on our West African exploration
programme. Centamin remains committed to its policy of being 100%
exposed to the gold price through its un-hedged position.
Subsequent to the period end a payment of approximately US$23
million was made to shareholders in relation to the 2016 interim
dividend, as declared in August.
The lost time injury (LTI) frequency rate at Sukari for Q3 was
0.46 per 200,000 man-hours. This represented a decrease on the
second quarter's achievement of 0.62 per 200,000 man-hours. Whilst
our long-term target is zero LTIs, we continue to view this as a
solid achievement considering Sukari is the first modern gold mine
in Egypt. Safety remains a priority and we continue to develop the
health and safety culture across our operations.
Processing rates were 4% lower than the prior quarter and
remained above our base case 11Mtpa annualised forecast rate. As
foreshadowed in August, there was an expected increase in plant
stoppages during the quarter in relation to planned maintenance. We
continue to see potential for sustained production rates in excess
of our base case. Recoveries of 89.7% were comparable with the
previous quarter and almost 2% above our forecast for the full
year. Work continues on developing the potential to improve and
sustain recoveries at the 90% level at increasing throughput
rates.
The open pit delivered total material movement of 16,191kt, a 7%
increase on the previous quarter, with 2,936kt of ore, a 14%
decrease on the previous quarter. Grades increased in line with the
mine plan, with an average head grade to the plant of 1.14g/t, up
15% from Q2 2016.
The underground mine delivered 255kt of ore (in line with Q2
2016), at a grade of 8.97g/t (up 4% on Q2 2016). The focus for the
operation remains to deliver a minimum of 1Mt per annum of ore at
an average grade which is consistently at, or above, the current
underground reserve average grade of 6g/t.
Full year production is forecast towards the upper end of our
guidance range of between 520,000 and 540,000 ounces. Accordingly,
full year unit costs are expected to be towards the low end of our
guidance ranges (cash cost of production between US$530 and US$550
per ounce and AISC between US$720 to US$750 per ounce). We remain
focussed on realising further increases in productivity and cost
efficiencies and continue to note that optimisation of the mining
and processing operations is ongoing and offers the potential in
the coming quarters to deliver higher gold output and lower costs
than our base case outlook.
As a result of the significant cash generation from Sukari,
profit share commenced during the quarter. Centamin had previously
elected to make advance payments against future profit share from
2013 onwards, in order to demonstrate goodwill towards the Egyptian
government. The total value of these payments, amounting to
US$28.75 million, were recovered by Centamin's wholly-owned
subsidiary Pharaoh Gold Mines ("PGM") during the quarter against
entitlement to profit share by the Egyptian Mineral Resources
Authority ("EMRA").
Subsequent to the period end a further distribution of profit
share of US$6.67m was made to EMRA. Both EMRA and PGM will benefit
from advance distributions of profit share on a proportionate basis
in accordance with the terms of the Concession Agreement and taking
into account ongoing cash flows, historic costs that are still to
be recovered and any future capital expenditure.
Further support for resource expansion and the long-term
sustainability of high-grade production at Sukari from the
underground mine continues to be provided by results from on-going
exploration drilling, as highlighted in the following pages of this
report. A resource and reserve update is planned during the Q4
2016.
During August we began development of a new exploration decline
within the north-eastern Cleopatra zone of Sukari Hill. The total
project expenditure is expected to be US$11.5 million over an
approximate 9-month period. A portal has been established and 188
metres of development completed to the end of the quarter. Initial
exploration drilling will commence following a further 95 metres of
development and will target multiple zones of high-grade
mineralisation, as interpreted from existing data. The initial
project is aimed at developing infrastructure with the capacity to
support mining rates of up to 1 million tonnes per annum from this
area. Ultimate production rates will depend on future results from
the programme and further development, and would be in addition to
the current underground ore production from the Amun and Ptah
declines.
Exploration in Burkina Faso continued to test the potential for
lateral and depth extensions of the more advanced targets, with
priority on the Wadaradoo and Napalapera prospect areas. In Côte
d'Ivoire, drilling over targets defined by geochemical and
geophysical surveys continued to support the potential over a
number of prospects for laterally extensive mineralisation. Further
drilling will be carried out during the fourth quarter, aimed at
initial resource estimation and with a focus on the shallow
high-grade mineralised areas.
Developments in the two litigation actions, Diesel Fuel Oil and
Concession Agreement, are described in further detail in Note 7 to
the financial statements. In respect of the Concession Agreement
case, the Supreme Administrative Court has stayed the Concession
Agreement appeal until the Supreme Constitutional Court has ruled
on the validity of Law 32 of 2014. The Company continues to believe
that it has a strong legal position and, in addition, that it will
ultimately benefit from Law 32 which restricts the capacity for
third parties to challenge any contractual agreement between the
Egyptian government and an investor. This law, whilst in force and
ratified by the new parliament, is currently under review by the
Supreme Constitutional Court. In the event that the Supreme
Constitutional Court rules that Law 32 is invalid, the Group
remains confident that its appeal will be successful on the
merits.
No final decision has been taken by the courts regarding the
Diesel Fuel Oil case. During the quarter, the Egyptian State
Commissioner's office produced a report containing non-binding
recommendations for the Administrative Court in which the case is
proceeding. The report's findings were unfavourable to the Company.
The Company's legal advisers do not believe the report properly
addresses the substantive merits of the Company's case and, as
such, the Company continues to vigorously pursue its claim. The
Company is preparing a response to the report which it will submit
at the next hearing in the case.
OPERATIONAL REVIEW
Sukari Gold Mine:
Q3 2016 Q2 2016 Q3 2015 Q2 2015
---------------------------------- ------- ------- ------- -------
OPEN PIT MINING
Ore mined (1) ('000t) 2,936 3,425 2,204 1,751
Ore grade mined (Au g/t) 1.06 0.90 0.74 0.76
Ore grade milled (Au g/t) 1.14 0.99 0.69 0.75
Total material mined ('000t) 16,191 15,080 14,344 13,671
Strip ratio (waste/ore) 4.51 3.40 5.51 6.81
---------------------------------- ------- ------- ------- -------
UNDERGROUND MINING
Ore mined from development
('000t) 103 113 154 127
Ore mined from stopes ('000t) 153 143 158 155
Ore grade mined (Au g/t) 8.97 9.26 6.45 6.30
---------------------------------- ------- ------- ------- -------
Ore processed ('000t) 2,806 2,928 2,673 2,667
Head grade (g/t) 1.83 1.66 1.35 1.32
Gold recovery (%) 89.7 89.5 88.2 90.3
Gold produced - dump leach
(oz) 1,897 2,431 2,697 4,715
Gold produced - total (2)
(oz) 148,674 140,306 105,413 107,781
Cash cost of production(3)
(4) (US$/oz) 466 461 767 706
Open pit mining 163 155 272 224
Underground mining 38 39 49 48
Processing 222 237 384 381
G&A 43 30 62 53
AISC(3) (4) (US$/oz) 644 669 918 853
---------------------------------- ------- ------- ------- -------
Gold sold (oz) 150,201 141,802 104,803 104,168
Average realised sales
price (US$/oz) 1,335 1,268 1,131 1,188
---------------------------------- ------- ------- ------- -------
(1) Ore mined includes 0t delivered to the dump leach pad in Q3
2016 (21kt @0.46g/t in Q3 2015).
(2) Gold produced is gold poured and does not include
gold-in-circuit at period end.
(3) Cash cost of production exclude royalties, exploration and
corporate administration expenditure. Cash cost of production and
AISC are non-GAAP financial performance measures with no standard
meaning under GAAP. For further information and a detailed
reconciliation, please see "Non-GAAP Financial Measures" section
below.
(4) Cash cost of production and AISC reflect an exceptional
provision against prepayments to reflect the removal of fuel
subsidies which occurred in January 2012 (refer to Notes 4 and 5
respectively to the financial statements for further details).
Health and safety - Sukari
The lost time injury (LTI) frequency rate for Q3 2016 was 0.46
per 200,000 man-hours (0.62 in Q2 2016), with a total of 1,290,907
man-hours worked (1,281,666 in Q2 2016). Developing the health and
safety culture onsite has resulted in improved reporting of
incidents compared to previous periods and, although there remains
further room for improvement, Centamin views its LTI frequency rate
as a solid achievement considering Sukari is the first modern gold
mine in Egypt.
Open pit
The open pit delivered total material movement of 16,191kt in
the quarter, an increase of 7% on Q2 2016 due to improvement on
fleet utilization and a 13% increase on the prior year period. The
waste to ore strip ratio was 4.51 compared with 3.40 in the
previous quarter. Mining continued to focus on the Stage 3A and 3B
areas of the open pit.
Ore production from the open pit was 2,936kt at 1.06g/t with an
average head grade to the plant of 1.14 g/t, in line with the mine
plan and our forecast. The ROM ore stockpile increased by 157kt to
1,169kt at the end of the period.
During the fourth quarter, ore mining is scheduled to progress
through the lower benches of the current stage (3A) and upper
portions of the next stage (3B) of pit development. We continue to
expect grades to be in line with the reserve average of
1.05g/t.
Underground mine
Ore production from the underground mine was 255kt, in line with
Q2 2016. The ratio of stoping-to-development ore increased, with
60% of ore from stoping (153kt) and 40% of ore from development
(103kt). Ore tonnages from stopes increased by 7% on the second
quarter.
The average mined grade was 9.0 g/t, comprising ore from stoping
at 8.8 g/t and ore from development at 9.2 g/t.
Total development during the quarter, including the Amun, Ptah
and Horus declines, was 1,848 metres. The Horus decline commenced
in the second quarter of 2016 and is designed to connect Amun and
Ptah. Development within mineralised areas of Amun accounted for
831 metres and took place between the 830 and 665 levels (210 to
395 metres below the underground portal). Ptah development in
mineralised porphyry totalled 537 metres on the P775 and P685
levels.
Work on the exhaust ventilation circuits for both the Amun and
Ptah declines progressed, ensuring sufficient ventilation as the
decline continues to extend deeper into the orebody. The base of
the exhaust system is now the 680 level.
A total of 1,856 metres of grade control diamond drilling were
completed, aimed at short-term stope definition, drive direction
optimisation and underground resource development. Positive results
continue and support extensions of development drives and stoping
blocks. A further 6,785 metres of drilling continued to test for
extensions of the orebody at depth, below the current Amun and Ptah
zones.
Processing
Quarterly throughput at the Sukari process plant was 2,806kt, a
4% decrease on Q2 2016 and a 5% increase on the prior year period.
Plant productivity of 1,437 tonnes per hour (tph) represented a
0.3% increase on Q2 2016 and a 7% increase on the prior year
period. Despite a shutdown of 228 hours on plant 2 during the
quarter to replace the SAG mill girth gear, processing levels
through Q3 2016 remained above the base case forecast annualised
rate of 11Mtpa.
Plant metallurgical recovery was 89.7%, a 0.2% increase on Q2
2016 and a 2% increase on the prior year period. This was a result
of continued focus on maximising flotation mass pull, utilisation
for the Stirred Media Detritors (SMDs) in the fine-grinding circuit
and leaching recoveries.
The extensive focus on maintaining plant throughput and recovery
resulted in a quarterly record for gold produced.
The dump leach operation produced 1,897oz, 22% lower than Q2
2016, which is within the quarter plan.
Exploration
Centamin's "explore to develop" strategy is focussed on
defining, through the exploration process, the optimal path to
development for projects which can provide material returns on
shareholder's capital. The Company aims to undertake systematic
exploration programmes over large-area licence packages within
geologically prospective regions; and will only operate within
stable jurisdictions offering a fiscally-attractive framework for
mining investment. Development decisions are made on the basis that
Centamin will take a self-performing, self-funding and staged
approach to project construction and operation. Through this
value-driven and long-term growth objective, and with its strong
cash flows and healthy balance sheet, the Company believes that it
is well positioned to become a multi-asset gold producer
maintaining a lowest-quartile cost profile and peer-leading
shareholder returns.
Sukari
Drilling from underground remains a focus of the Sukari
exploration programme as new development provides improved access
to test for high-grade extensions of the deposit. The ore body
remains open at depth and further underground drilling of the
Sukari deposit will continue during 2016. During the third quarter,
both rigs were drilling from sites on the Ptah 875 level,
completing 6,785 metres of drilling.
One new drill cuddy was completed on the P735 level with another
to be established in Q4 2016.
Selected results received during the third quarter from the
underground drilling programme, which are in addition to those
previously disclosed, include the following:
Hole Number Depth Interval Au (g/t)
(m)
------------- ------- --------- ---------
From
------------- ------- --------- ---------
UGRSD0064 176 1.1 30.6
------------- ------- --------- ---------
UGRSD0594 319.2 0.8 15.3
------------- ------- --------- ---------
UGRSD0595 82 3.15 9.1
------------- ------- --------- ---------
UGRSD0596 203.45 0.55 32.7
------------- ------- --------- ---------
282 0.9 24.1
------------- ------- --------- ---------
295.5 2.75 65.1
------------- ------- --------- ---------
UGRSD0597A 159 1 28.0
------------- ------- --------- ---------
UGRSD0598 345 2 17.4
------------- ------- --------- ---------
UGRSD0603 56 1 19.0
------------- ------- --------- ---------
UGRSD0604 194 3 8.0
------------- ------- --------- ---------
UGRSD0709 279 0.4 35.1
------------- ------- --------- ---------
UGRSD0710 63.1 1.9 20.1
------------- ------- --------- ---------
114.9 1.5 14.7
------------- ------- --------- ---------
214 1 40.1
------------- ------- --------- ---------
218 1 11.9
------------- ------- --------- ---------
223 1.15 12.8
------------- ------- --------- ---------
272 2.2 88.3
------------- ------- --------- ---------
UGRSD0711 217.5 0.5 39.3
------------- ------- --------- ---------
UGRSD0712 91 1 10.4
------------- ------- --------- ---------
UGRSD0713 154 3 87.8
------------- ------- --------- ---------
159.4 1.6 12.4
------------- ------- --------- ---------
278 1 12.5
------------- ------- --------- ---------
301 1 36.5
------------- ------- --------- ---------
UGRSD0716 363 0.7 2745.0
------------- ------- --------- ---------
365 1 35.9
------------- ------- --------- ---------
UGRSD0717 102 1 29.0
------------- ------- --------- ---------
108 1 21.6
------------- ------- --------- ---------
UGRSD0718 221 1 26.4
------------- ------- --------- ---------
Cleopatra Exploration Decline
The existing underground operations at Sukari have demonstrated
that the western contact zone between the main porphyry and the
surrounding metasedimentary rock units is highly prospective for
high-grade gold mineralisation. This contact has limited drilling
in the north western portion of Sukari Hill, where the porphyry is
approximately three hundred metres wide and access for surface
drill rigs is limited.
High grades have been observed along the north-eastern flank of
Sukari Hill, where an interpreted en-echelon set of three
mineralised zones are named Cleopatra, Julius and Antoine.
Cleopatra outcrops as two distinct quartz veins on the north
eastern flank of Sukari Hill, whereas Julius and Antoine do not
outcrop. The zones are interpreted as commencing on the eastern
porphyry contact, dipping broadly to the west.
This project is designed to commence development along strike
within the upper Cleopatra zone. In addition to providing
geological information, exploration drilling will be carried out
from this central drive. The initial project will be developed in
two phases. Phase 1 has a projected cost of US$5 million, with
1,370 metres of development and 96,422 tonnes of mined material to
be completed over a 5-month period.
Phase 1 commenced during the quarter, with the portal
established and 188 metres of development completed, producing
4,240 tonnes of low-grade mineralised material. The first drill
cuddy is planned to be established following a further 95 metres of
development.
Phase 2 has a projected cost of US$6.5 million, with 1,057
metres of development and 54,409 tonnes of mined material to be
completed over a 5-month period. Phase 2 is planned to commence
four months after the start of Phase 1.
The initial project is aimed at developing infrastructure with
the capacity to support mining rates of up to 1 million tonnes per
annum from this area. Ultimate production rates will depend on
future results from the development and exploration drilling and
further development, and will be in addition to the current
underground ore production from the Amun and Ptah declines.
Other prospects
Whilst exploration remains focused on Sukari Hill, there are
seven other prospects that have been identified within the 160km(2)
Sukari tenement area which are close enough such that ore could be
trucked to the existing processing plant. No exploration drilling
was completed on these prospects during the period.
Resource and Reserve
An updated resource and reserve estimate is expected to be
completed during Q4 of 2016.
Burkina Faso
The exploration strategy in Burkina Faso is to systematically
explore and drill-test several targets along the 160km length of
greenstone belt contained within the circa-2,200km(2) licence
holding. Work to date has primarily focussed on the Wadaradoo and
Napelepera prospects. Results from these programmes will facilitate
and focus further resource development during the fourth quarter of
2016.
During the quarter 34,323m of Reverse Circulation (RC) and
1,117m of diamond (DD) drilling were completed, with the drilling
fleet being reduced from 5 to 3 rigs in August. A total of 5,092m
aircore (AC) and 791m auger were also completed.
Resource definition drilling was conducted at Wadaradoo on a 50m
x 50m pattern.
At Wadaradoo North, patchy high-grade mineralisation is
currently defined within a flat-lying reverse thrust over a strike
length of approximately 450m.
At Wadaradoo Main, drilling further defined mineralisation
down-dip within several structures. Results received during the
period included 12m @ 3.35g/t from 292m, 6m @ 2.83g/t from 282m and
7m @ 2.66g/t from 325m.
At Wadaradoo Far East, regional exploration and first-pass RC
drilling was completed on a number of targets. Results to date do
not warrant follow-up work.
Wadaradoo significant RC and DD drill intersections,
downhole
Hole ID From Width Grade
(m) (m) (Au g/t)
---------- ----- ------ ----------
WDRD1408 292 12 3.35
---------- ----- ------ ----------
WDRC1410 282 6 2.83
---------- ----- ------ ----------
WDRD1411 325 7 2.66
---------- ----- ------ ----------
WDRC1606 36 2 6.95
---------- ----- ------ ----------
Following the award of extensions of the Napalapera exploration
permit to the border with Côte d'Ivoire, drilling was completed on
a 50x50m spacing throughout the permit. Mineralisation is hosted
within dilation zones on folds within the main structure. Results
received during the quarter have not supported the requirement for
further drilling.
Napelepera significant RC and DD drill intersections,
downhole
Hole ID From Width Grade
(m) (m) (Au g/t)
--------- ----- ------ ----------
NPRC518 41 2 5.24
--------- ----- ------ ----------
NPRD525 198 6 1.30
--------- ----- ------ ----------
NPRD527 216 9 1.10
--------- ----- ------ ----------
At Tiopolo, a drilling programme tested IP and structural
targets as well as extensions to previously-delineated
mineralisation. Narrow sub-vertical mineralisation has now been
defined over a strike length of 550m which is open along strike and
at depth. Significant results during the quarter were 3m @ 3.50g/t
from 19m and 3m @ 3.05g/t from 76m.
Côte d'Ivoire
Centamin now has five permits in Côte d'Ivoire across the border
from Batie West in Burkina Faso, covering approximately 1,665km(2)
. Ten permits remain under application, some of which are expected
to be granted during 2016.
A total of 26,154m of RC/DD was drilled during the quarter over
several new and previously-tested prospects within an 8km
radius.
At the Hinda prospect, first-pass drilling has identified a
series of stacked quartz veins, with intersections including 3m @
29.2 g/t.
At the new Atirre prospect, a series of quartz veins lie along a
9km southeast-trending structure. Drill results to date include 8m
@ 8.8 g/t, with recent soil anomalies indicating potential
mineralisation along this structural trend.
At Chegue, a known mineralised shear zone of 2km strike length
was previously tested by 500m spaced sections. Recent infill
drilling has highlighted near-surface and high-grade mineralisation
including 21m @ 1.2 g/t and 8m @ 8.8 g/t.
The Nokpa prospect was identified during the previous quarter by
one drill section over an IP target. Further drilling confirms
high-grade mineralisation within several shear zones close to a
dyke swarm. Results include 7m @ 11.1 g/t and 24m @ 2.7 g/t.
Mineralisation remains open at depth.
The Souwa structure has been drilled to 200m vertical depth,
indicating a consistent thickness and grade over a 500 metre strike
length and remaining open in all direction. Drilling results during
the period include 19m @ 1.3 g/t and 8m @ 9.0 g/t. A geochemical
anomaly extends over a strike length of 1,700 meters.
Regional exploration continues to extend over previously
untested areas, including the reconnaissance of the recently
granted permit of Bouna Nord permit.
Further drilling will be carried out during the fourth quarter,
aimed at initial resource estimation and with a focus on the
shallow high-grade mineralised areas.
Côte d'Ivoire significant RC drill intersections, downhole
Prospect HoleID From Width Grade
(m) (m) (Au g/t)
---------- ---------- ----- ------ ----------
Enioda DPRC1016 136 7 3.0
---------- ---------- ----- ------ ----------
DPRC1017 140 9 1.9
--------------------- ----- ------ ----------
Hinda DPRC0323 66 3 29.2
---------- ---------- ----- ------ ----------
DPRC0343 94 3 15.5
--------------------- ----- ------ ----------
Nokpa DPRC1051 13 7 11.1
---------- ----- ------ ----------
DPRC1052 22 5 5.4
--------------------- ----- ------ ----------
DPRC1053 99 5 6.9
--------------------- ----- ------ ----------
DPRC1057 112 5 8.5
--------------------- ----- ------ ----------
DPRC1065 101 14 1.3
--------------------- ----- ------ ----------
DPRC1065 74 24 2.7
--------------------- ----- ------ ----------
DPRC1066 124 20 2.0
--------------------- ----- ------ ----------
DPRC1067 166 11 2.1
--------------------- ----- ------ ----------
DPRC1069 170 12 4.8
--------------------- ----- ------ ----------
Atirre DPRC0347 44 5 8.8
---------- ---------- ----- ------ ----------
Chegue DPRC0393 10 8 8.8
---------- ---------- ----- ------ ----------
DPRC0400 3 21 1.2
--------------------- ----- ------ ----------
Souwa DPRC1029 158 12 1.0
---------- ---------- ----- ------ ----------
DPRC1032 147 8 2.0
--------------------- ----- ------ ----------
DPRC1040 157 19 1.3
--------------------- ----- ------ ----------
DPRC1043 168 13 1.3
--------------------- ----- ------ ----------
DPRC1045 192 13 1.5
--------------------- ----- ------ ----------
DPRC1047 219 8 9.0
--------------------- ----- ------ ----------
FINANCIAL REVIEW
In its seventh year of production, the Sukari Gold Mine remains
highly cash generative and this is reflected in the group's
financial results for the quarter ended 30 September 2016:
-- Q3 2016 revenues of US$200.9 million were up 69% compared
with Q3 2015 due to a 18% rise in average realised gold prices and
a 43% increase in gold sales.
-- Cash cost of production decreased to US$466 per ounce
produced from US$767 in Q3 2015. The main contributing factors were
the higher gold production, improved operational cost efficiencies
and a lower fuel price compared with Q3 2015.
-- AISC of US$644 per ounce sold was lower than the comparable
prior year period of $918 per ounce, mainly due to the factors
described above and the rescheduling of certain sustaining capital
cost items. During Q3 there was a lower quarterly expenditure on
sustaining capital than is expected for the remainder of the
year.
-- EBITDA increased by 289% to US$122.0 million compared to Q3
2015, due to 42% higher gross operating margins as a result of the
increased revenue and the lower cash cost of production.
-- Profit before tax of US$93.7 million was 1399% higher than Q3
2015, mainly due to the 42% higher gross operating margins.
-- Due to the significant cash generation from Sukari, profit
sharing has commenced. The US$28.75 million advance has been
recovered by PGM and a further distribution of profit share of
US$6.67 million was made to EMRA in October.
-- Earnings per share of 5.62 US cents (after profit share), was
1,021 % higher than Q3 2015, mainly due to the higher gross
operating margins, and factors outlined above.
-- Operational cash flow of US$139.8 million was 348% higher
than Q3 2015, due to the factors affecting EBITDA, offset by an
increase in working capital outflows.
Revenue
Revenue from gold and silver sales for the quarter increased by
69% to US$200.9 million (US$118.5 million in Q3 2015), with a 18%
increase in the average realised gold sales price to US$1,335 per
ounce (US$1,131 per ounce in Q3 2015) and a 43% increase in gold
sold to 150,201 ounces (104,803 ounces in Q3 2015).
Cost of sales
Cost of sales represents the cost of mining, processing,
refining, transport, site administration, depreciation,
amortisation and movement in production inventories. Cost of sales
is inclusive of exceptional items of US$5.9 million in relation to
fuel charges (refer to Notes 4 and 5 to the financial statements
for further information) and down 7% compared with the prior year
period to US$98.3 million, as a result of:
(a) a 6% decrease in total mine production costs from US$81.0
million to US$76.1 million, despite a 12% increase in mined tonnes
combined with a 5% increase in processed tonnes as a result of
improved operational efficiencies and lower overall costs; and
(b) a 13% increase in depreciation and amortisation charges from
US$25.1 million to US$28.4 million as higher production physicals,
and reclassification of exploration & evaluation expenditure to
mine development, increased the associated amortisation charges;
and
(c) a 67% decrease in movement in production inventories costs
from US$0.3 million to US$0.1 million.
Other operating costs
Other operating costs comprises expenditure incurred for
communications, consultants, directors' fees, stock exchange
listing fees, share registry fees, employee entitlements, general
office administration expenses, the unwinding of the restoration
and rehabilitation provision, foreign exchange movements, the share
of profit/loss in associates and the 3% production royalty payable
to the Egyptian government. Other operating costs increased by 35%
on the prior year period to US$8.9 million, as a result of:
(a) a US$0.7 million increase in net foreign exchange movements
from a US$0.6 million gain to a US$1.3 million gain; and
(b) a US$2.5 million increase in royalty paid to the government
of the Arab Republic of Egypt in line with the increase in gold
sales revenue; and
(c) a US$0.3 million increase in corporate costs.
Finance income
Finance income reported comprises interest revenue applicable on
the Company's available cash and term deposit amounts. The
movements in finance income are in line with the movements in the
Company's available cash and term deposit amounts.
Profit before tax
As a result of the factors outlined above, the group recorded a
profit before tax for the quarter ended 30 September 2016 of
US$93.7 million (Q3 2015 US$6.3 million).
Earnings per share
Earnings per share of 5.62 US cents (after profit share) has
increased significantly when compared with 0.55 US cents per share
for Q3 2015. The increase was driven by the factors outlined
above.
Subsequent to the period end a further distribution of profit
share of US$6.67m was made to EMRA. EMRA and PGM will benefit from
distributions of this profit share which will be on a proportionate
basis in accordance with the terms of the Concession Agreement and
taking into account any deferred historic capital costs that are
still to be recovered and any future capital expenditure.
Profit share payments made to EMRA, pursuant to these provisions
of the Concession Agreement, are recognised as a variable charge in
the income statement (below profit after tax) of Centamin,
resulting in a reduction in earnings per share. The profit share
payments during the year will be reconciled against SGM's audited
June 2017 financial statements. Any variation between payments made
during the year (which are based on the Company's estimates) and
the audited financial statements, may result in a balance due and
payable to EMRA or advances to be offset against future
distributions.
Financial position
Centamin has a strong and flexible financial position with no
debt, no hedging and cash, bullion on hand, gold sales receivables
and available-for-sale financial assets of US$416.9 million at 30
September 2016, up from US$216.1 million at 30 September 2015.
At 30 September As at 31 December At 30 September
2016 2015 2015
US$'000 US$'000 US$'000
Cash at Bank 388,352 199,616 190,574
Bullion on hand 13,489 10,492 13,251
Gold sales receivable 14,850 20,472 12,042
Available for sale financial
assets 163 163 189
---------------- ------------------ ----------------
416,854 230,743 216,055
---------------- ------------------ ----------------
The majority of funds have been invested in international
rolling short-term interest money market deposits.
Current assets have increased from Q4 2015 to Q3 2016 by
US$178.0 million or 49% to US$540.7 million, as a result of:
(a) an increase in net cash inflows of US$186.7 million net of foreign exchange movements;
(b) a US$6.6 million decrease in collective stores inventory value to US$99.9 million;
(c) a US$2.2 million increase in overall mining stockpiles, gold
in circuit levels and finished goods inventory values to US$30.5
million; and
(d) a US$7.2 million decrease in gold sale receivables.
Non-current assets have decreased from Q4 2015 to Q3 2016 by
US$25.2 million to US$1,027 million, as a result of:
(a) US$48.7 million expenditure for property, plant and
equipment (comprising of plant and mining equipment and
rehabilitation asset);
(b) US$83.6 million charges for depreciation and amortisation;
(c) US$38.6 million increase in exploration and evaluation
assets, as a result of the drilling programmes in Sukari Hill, the
Sukari tenement area, Burkina Faso and Côte d'Ivoire;
(d) a US$28.8 million decrease in prepayments due to the
reclassification of the advance payments made to EMRA of $28.8
million from non-current assets to current assets, which have now
been recovered.
Current liabilities have decreased from Q4 2015 to Q3 2016 by
US$4.9 million to US$49.6 million due to a:
(a) US$8.2 million decrease in payables and accrual balances;
(b) US$6.8 million decrease in the income tax liabilities
balance through the settlement of the income tax obligation
appearing in the financial accounts as at the end of December 2015;
and a
(c) US$10 million increase in current provisions.
Non-current liabilities have increased from Q4 2015 to Q3 2016
by US$0.4 million to US$7.6 million as a result of an increase in
the rehabilitation provision.
The value of issued capital has increased from Q4 2015 to Q3
2016 by US$1.9 million due to the vesting of awards under the
employee share plans.
Share option reserves reported have decreased from Q4 2015 to Q3
2016 by US$0.1 million to US$2.3 million as result of the
forfeiture and vesting of awards and the resultant transfer to
accumulated profits and issued capital respectively, offset by the
recognition of the share-based payments expenses for the
period.
Accumulated profits increased from Q4 2015 to Q3 2016 by
US$155.6 million as a result of a:
(a) US$178.5 million profit for the period attributable to the
shareholders of the Company; offset by a
(b) US$22.9 million final dividend payment in respect of the
year ended 31 December 2015 paid to shareholders in the first half
of the year.
Cashflow
Net cash flows generated by operating activities comprise
receipts from gold and silver sales and interest income, offset by
operating and corporate administration costs. Cash flows have
increased from Q3 2015 to Q3 2016 by US$108.6 million to US$139.9
million, primarily attributable to an increase in revenue, due to
an increase in gold sold ounces combined with a higher average
realised price.
Net cash flows used in investing activities comprise exploration
expenditure and capital development expenditures including the
acquisition of financial and mineral assets. Cash outflows have
increased by US$18.6 million from Q3 2015 to Q3 2016 to US$34.4
million. The primary use of the funds in the second quarter was for
investment in underground development at the Sukari site in Egypt
and exploration expenditures incurred in West Africa.
Net cashflows generated by financing activities comprise the
dividend payments made to shareholders.
Effects of exchange rate changes have increased by US$1.2
million as a result of movements of some of the functional
currencies used within the operation in the quarter.
Capital Expenditure
Q3 2016 Capital Expenditure
A breakdown of capital expenditure for the Group during Q3 2016
is as follows:
US$ million
Open pit development -
Underground mine development(1) 10.1
Other sustaining capital
expenditure 7.0
Total Sustaining Capex 17.1
(1) Includes underground
exploration drilling
Q3 2016 Exploration Expenditure
A breakdown of exploration expenditure for the Group during Q3
2016 is as follows:
US$ million
Burkina Faso exploration 7.1
Cote d'Ivoire exploration 3.3
Total Exploration Expenditure 10.4
CORPORATE UPDATE
Following the resignation of Kevin Tomlinson in May 2016, the
Board and Nomination Committee have met and approved the
appointment of Trevor Schultz (Non-Executive Director) as a member
of the Remuneration and Nomination committee and Edward Haslam
(Deputy Chairman and Senior Independent Non-Executive Director) as
a member of the Health, Safety, Environmental and Sustainability
committee.
PRINCIPAL RISKS AFFECTING THE CENTAMIN GROUP
The operations of the Company are speculative due to the high
risk nature of its business which includes the acquisition,
financing, exploration, development and operation of mining
properties. These risk factors could materially affect the
Company's future operations and could cause actual events to differ
materially from those described in forward-looking statements
relating to the Company.
There have been no changes in the Company's risks and
uncertainties during the nine month period ended 30 September 2016
from those described in the Group's annual management discussion,
analysis and business review for the year ended 31 December 2015,
and the Company does not anticipate any changes in the Company's
risks and uncertainties during the next three months to 31 December
2016. The key principal risks relate to the following:
-- Single project dependency
-- Sukari Project joint venture risk and relationship with EMRA
-- Gold price and currency exposure
-- Jurisdictional taxation exposure
-- Political risk - Sukari
-- Political risk - West Africa
-- Reserve and resource estimations
-- Failure to achieve production estimates
-- Litigation risks
Centamin takes a number of measures to mitigate risks associated
with its underlying operational and exploration activity which are
monitored and evaluated regularly. Due to the nature of these
inherent risks, it is not possible to give absolute assurance that
mitigating actions will be wholly effective. The Company is exposed
to changes in the economic environment through its operations in
Egypt, as well as its operations in West Africa (Burkina Faso and
Côte d'Ivoire). Relationships with governments and the maintenance
of exploration permits and licence areas remain key risks and key
focus for all exploration, development and operational
projects.
One of the Company's main objectives is to achieve a target of
zero injuries and for every employee to be safe every day. The
control environment and operating practices in place at the mining
and exploration operations helps reduce the likelihood of harm to
employees. Centamin is committed to attracting, energising,
developing and training its workforce to ensure they are highly
skilled and motivated.
Centamin recognises the value of being a socially responsible
employer and the importance of engaging with the wider community in
the areas in which it operates. By investing in the community and
engaging in projects that directly and positively impact local
people, Centamin can foster a cooperative working environment.
LEGAL ACTIONS
As detailed in Note 7 of the accompanying interim condensed
consolidated financial statements, the Group's appeal against the
30 October 2012 ruling by the Egyptian Administrative Court remains
on-going. During the quarter, the Supreme Administrative Court
stayed the Concession Agreement appeal until the Supreme
Constitutional Court rules on the validity of Law 32 of 2014. If
the Supreme Constitutional Court upholds Law 32, the Group is
advised that it will benefit from its provisions. In the event that
the Supreme Constitutional Court rules that Law 32 is invalid, the
Group remains confident that its appeal will be successful on the
merits. Centamin does not currently see the need to take the matter
to proceedings outside of Egypt as Centamin remains of the belief
that the Egyptian Supreme Administrative Court will rule in
Centamin's favour, based on the legal merits of the case.
The Group continues to benefit from the full support of the
Ministry of Petroleum and EMRA, both in the appeal and at the
operational level.
In light of the on-going dispute with the Egyptian Government
regarding the price at which diesel fuel oil (DFO) is supplied to
the mine at Sukari, it has been necessary since January 2012 to
advance funds to fuel supplier based on the international price for
diesel. The Company has fully provided against the prepayment of
US$224 million as an exceptional item, of which US$16.9 million has
been made during the nine months. Refer to Note 4 of the
accompanying interim condensed consolidated financial statements
for further details on the impact of this exceptional provision on
the Group's results for Q2 2016.
In November 2012 the Group received a further demand from its
fuel supplier for the repayment of fuel subsidies received in the
period from late 2009 through to January 2012, for EGP403 million
(approximately US$45 million at current exchange rates). No
provision has been made in respect of the historic subsidies prior
to January 2012 as, based on legal advice that it has received to
date, the Company believes that, notwithstanding the unfavourable
State Commissioner's report, the prospects of a court finding in
its favour in relation to this matter are strong.
As disclosed previously, the Company has commenced proceedings
in the Administrative Court in Egypt in relation to these matters.
Developments in the case during the quarter are set out in the
Chief Executive Officer's report above. The Company remains of the
view that an instant move to international fuel prices is not a
reasonable outcome and will look to recover any funds advanced thus
far at the higher rate should the court proceedings be successfully
concluded. Please refer to Note 7 to the accompanying interim
condensed consolidated financial statements and the most recently
filed Annual Information Form (AIF) for further information.
With the exception of the relationships with EMRA and the
Egyptian government referred to above, we do not believe there are
any third party relationships which are critical to the Group's
success or which would have a material impact upon the Group's
position if the relationship broke down.
Andrew Pardey
Chief Executive Officer
Set out below are the unaudited consolidated Financial
Statements for the Group, including notes thereto, for the quarter
and nine months ended 30 September 2016.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
(a) the condensed set of interim consolidated financial
statements for the quarter and nine months ended 30 September 2016
has been prepared in accordance with International Accounting
Standard 34 'Interim Financial Reporting' as adopted by the
European Union and as issued by the International Accounting
Standards Board ("IASB");
(b) the condensed set of interim consolidated financial
statements, which has been prepared in accordance with the
applicable set of accounting standards, gives a true and fair view
of the assets, liabilities, financial position and profit or loss
of the issuer, or the undertakings included in the consolidation as
a whole as required by DTR 4.2.4;
(c) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first nine months and description of principal risks and
uncertainties for the remaining three months of the year); and
(d) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the Board,
Chief Executive Officer Chief Financial Officer
Andrew Pardey Ross Jerrard
31 October 2016 31 October 2016
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE QUARTER AND NINE MONTHSED
30 SEPTEMBER 2016
CONTENTS
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 20
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION 22
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY 23
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
24
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 25
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME FOR THE THREE MONTHSED 30 SEPTEMBER 2016
Note 30 September 2016 30 September 2015
-------------------------------------- --------------------------------------
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items (1) Total
US$'000 (1) US$'000 US$'000 US$'000 US$'000
US$'000
------------ ------------- --------- ------------ ------------- ---------
Revenue 3 200,845 - 200,845 118,529 - 118,529
Cost of sales 4 (92,481) (5,866) (98,347) (95,199) (10,584) (105,783)
------------ ------------- --------- ------------ ------------- ---------
Gross profit 108,364 (5,866) 102,498 23,330 (10,584) 12,746
Other operating costs 4 (8,917) - (8,917) (6,734) - (6,734)
Impairment of available-for-sale
financial assets (8) - (8) 203 - 203
Finance income 4 143 - 143 38 - 38
Profit before tax 99,582 (5,866) 93,716 16,837 (10,584) 6,253
Tax (26) - (26) - - -
------------ ------------- --------- ------------ ------------- ---------
Profit for the period
after tax 99,556 (5,866) 93,690 16,837 (10,584) 6,253
------------ ------------- --------- ------------ ------------- ---------
EMRA profit share 5 (28,750) - (28,750)
------------ ------------- --------- ------------ ------------- ---------
Profit for the period
after EMRA profit share 70,806 (5,866) 64,940 16,837 (10,584) 6,253
------------ ------------- --------- ------------ ------------- ---------
Profit for the period
attributable to:
* the owners of the parent 70,806 (5,866) 64,940 16,837 (10,584) 6,253
Other comprehensive
income
Items that may be reclassified
subsequently to profit
or loss:
Profits/losses on available
for sale financial assets
(net of tax) 13 - - - (75) - (75)
------------ ------------- --------- ------------ ------------- ---------
Other comprehensive
income for the period - - - (75) - (75)
------------ ------------- --------- ------------ ------------- ---------
Total comprehensive
income for the period
attributable to:
- the owners of the
parent 70,806 (5,866) 64,940 16,762 (10,584) 6,178
------------ ------------- --------- ------------ ------------- ---------
- - -
Earnings per share before
profit share:
Basic (cents per share) 10 8.616 (0.508) 8.108 0.740 (0.194) 0.546
Diluted (cents per share) 10 8.580 (0.505) 8.075 0.734 (0.197) 0.537
Earnings per share after profit share:
Basic (cents per share) 10 6.128 (0.508) 5.620 0.740 (0.194) 0.546
Diluted (cents per share) 10 6.102 (0.505) 5.597 0.734 (0.197) 0.537
(1() Refer to Note 4 for further details.
The above Unaudited Interim Condensed Consolidated Statement of
Comprehensive Income should be read in conjunction with the
accompanying notes.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME FOR THE NINE MONTHSED 30 SEPTEMBER 2016
Note 30 September 2016 30 September 2015
-------------------------------------- --------------------------------------
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items (1) Total
US$'000 (1) US$'000 US$'000 US$'000 US$'000
US$'000
------------ ------------- --------- ------------ ------------- ---------
Revenue 3 529,080 - 529,080 378,200 - 378,200
Cost of sales 4 (279,933) (16,969) (296,902) (268,753) (35,424) (304,177)
------------ ------------- --------- ------------ ------------- ---------
Gross profit 249,147 (16,969) 232,178 109,447 (35,424) 74,023
Other operating costs 4 (24,826) - (24,826) (20,974) - (20,974)
Impairment of available-for-sale
financial assets 145 - 145 474 - 474
Finance income 4 463 - 463 136 - 136
Profit before tax 224,929 (16,969) 207,960 89,083 (35,424) 53,659
Tax (811) - (811) (8) - (8)
Profit for the period
after tax 224,118 (16,969) 207,149 89,075 (35,424) 53,651
EMRA profit share (28,750) - (28,750) - - -
------------ ------------- --------- ------------ ------------- ---------
Profit for the period
after EMRA
profit share 195,368 (16,969) 178,399 89,075 (35,424) 53,651
------------ ------------- --------- ------------ ------------- ---------
Profit for the period
attributable to:
* the owners of the parent 195,368 (16,969) 178,399 89,075 (35,424) 53,651
------------ ------------- --------- ------------ ------------- ---------
Other comprehensive
income
Items that may be reclassified
subsequently to profit
or loss:
Losses on available
for sale financial
assets (net of tax) 13 61 - 61 (175) - (175)
------------ ------------- --------- ------------ ------------- ---------
Other comprehensive
income for the period 61 - 61 (175) - (175)
------------ ------------- --------- ------------ ------------- ---------
Total comprehensive
income for the period
attributable to:
- the owners of the
parent 195,429 (16,969) 178,460 88,900 (35,424) 53,476
------------ ------------- --------- ------------ ------------- ---------
- - -
Earnings per share
before profit share:
Basic (cents per share) 10 19.428 (1.471) 17.957 7.787 (3.097) 4.690
Diluted (cents per
share) 10 19.326 (1.464) 17.862 7.679 (3.054) 4.625
Earnings per share
after profit share:
Basic (cents per share) 10 16.936 (1.471) 15.465 7.787 (3.097) 4.690
Diluted (cents per
share) 10 16.846 (1.463) 15.383 7.679 (3.054) 4.625
(1() Refer to Note 4 for further details.
The above Unaudited Interim Condensed Consolidated Statement of
Comprehensive Income should be read in conjunction with the
accompanying notes.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 30 SEPTEMBER 2016
Note 30 September 31 December
2015
2016 (Audited)
(Unaudited) US$'000
US$'000
NON-CURRENT ASSETS
Property, plant and equipment 11 884,021 871,467
Exploration and evaluation asset 12 143,066 152,077
Prepayments 5 - 28,750
Other receivables 83 60
------------ -----------
Total non-current assets 1,027,170 1,052,354
------------ -----------
CURRENT ASSETS
Inventories 130,364 134,775
Available-for-sale financial assets 163 163
Trade and other receivables 17,847 23,784
Prepayments 5 3,946 4,330
Cash and cash equivalents 16a 388,352 199,616
------------ -----------
Total current assets 540,672 362,668
------------ -----------
Total assets 1,567,842 1,415,022
------------ -----------
NON-CURRENT LIABILITIES
Provisions 7,557 7,139
------------ -----------
Total non-current liabilities 7,557 7,139
------------ -----------
CURRENT LIABILITIES
Trade and other payables 45,624 47,138
Tax liabilities - 6,837
Provisions 4,058 576
------------ -----------
Total current liabilities 49,682 54,551
------------ -----------
Total liabilities 57,239 61,690
------------ -----------
Net assets 1,510,603 1,353,332
------------ -----------
EQUITY
Issued capital 8 667,472 665,590
Share option reserve 2,344 2,469
Accumulated profits 840,787 685,273
------------ -----------
Total Equity 1,510,603 1,353,332
------------ -----------
The above Unaudited Interim Condensed Consolidated Statement of
Financial Position should be read in conjunction with the
accompanying notes.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY FOR THE NINE MONTHSED 30 SEPTEMBER 2016
Share option Accumulated
Issued Capital reserve profits Total Equity
US$'000 US$'000 US$'000 US$'000
-------------- ------------ ----------- --------------
Balance as at 1 January 2016 665,590 2,469 685,273 1,353,332
Profit for the period - - 178,399 178,399
Other comprehensive income for
the period (17) - 60 43
-------------- ------------ ----------- --------------
Total comprehensive income for
the period (17) - 178,459 178,442
Dividend paid - - (22,946) (22,946)
Transfer of share based payments 1,899 (1,899) - -
Recognition of share based payments - 1,774 - 1,774
Balance as at 30 September 2016 667,472 2,344 840,786 1,510,602
-------------- ------------ ----------- --------------
Share
option Accumulated Total Equity
Issued Capital reserve profits US$'000
US$'000 US$'000 US$'000
-------------- -------- ----------- --------------
Balance as at 1 January 2015 661,573 4,098 667,702 1,333,373
Profit for the period - - 53,651 53,651
Other comprehensive income for
the period - - (175) (175)
-------------- -------- ----------- --------------
Total comprehensive income for
the period - - 53,476 53,476
Dividend paid - - (22,727) (22,727)
Transfer of share based payments 3,437 (3,437) - -
Recognition of share based payments - 1,914 - 1,914
Balance as at 30 September 2015 665,010 2,575 698,451 1,366,036
-------------- -------- ----------- --------------
The above Unaudited Interim Condensed Consolidated Statement of
Changes in Equity should be read in conjunction with the
accompanying notes.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE AND NINE MONTHSED 30 SEPTEMBER 2016
Three Months Ended Nine Months Ended
30 September 30 September
Note 2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Cash flows from operating
activities
Cash generated in operating
activities 16(b) 139,965 31,299 296,785 132,401
Finance income (143) (38) (463) (136)
--------- ---------
Net cash generated by operating
activities 139,822 31,261 296,322 132,265
--------- --------- --------- ---------
Cash flows from investing
activities
Acquisition of property, plant
and equipment (22,127) (9,562) (48,657) (25,073)
Exploration and evaluation
expenditure (12,403) (6,251) (38,634) (20,266)
Finance income 143 38 463 136
--------- ---------
Net cash used in investing
activities (34,388) (15,775) (86,828) (45,203)
--------- --------- --------- ---------
Cash flows from financing
activities
Dividend paid - - (22,946) (22,727)
Net cash provided by financing
activities - - (22,946) (22,727)
--------- --------- --------- ---------
Net increase in cash and cash
equivalents 105,434 15,486 186,548 64,335
Cash and cash equivalents
at the beginning of the period 281,677 174,978 199,616 125,659
Effect of foreign exchange
rate changes 1,241 110 2,188 580
--------- --------- --------- ---------
Cash and cash equivalents
at the end of the period 16 388,352 190,574 388,352 190,574
--------- --------- --------- ---------
The above Unaudited Condensed Consolidated Statement of Cash
Flows should be read in conjunction with the accompanying
notes.
NOTE 1: ACCOUNTING POLICIES
Basis of preparation
These unaudited interim condensed consolidated financial
statements have been prepared in accordance with IAS 34 "Interim
Financial Reporting" (IAS 34) as adopted by the European Union and
as issued by the International Accounting Standards Board ("IASB")
and the requirements of the Disclosure and Transparency Rules (DTR)
of the Financial Conduct Authority (FCA) in the United Kingdom as
applicable to interim financial reporting. These unaudited interim
condensed consolidated financial statements are not affected by
seasonality.
The unaudited interim condensed consolidated financial
statements represent a 'condensed set of financial statements' as
referred to in the DTR issued by the FCA. Accordingly, they do not
include all of the information required for a full annual financial
report and are to be read in conjunction with the Group's financial
statements for the year ended 31 December 2015, which were prepared
in accordance with International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards Board
("IASB") and adopted for use by the European Union and IFRS as
issued by the IASB. The financial statements for the year ended 31
December 2015 have been filed with the Jersey Financial Services
Commission. The financial information contained in this report does
not constitute statutory accounts under the Companies (Jersey) Law
1991, as amended. The financial information for the year ended 31
December 2015 is based on the statutory accounts for the year ended
31 December 2015. Readers are referred to the auditor's report to
the Group financial statements as at 31 December 2015 (available at
www.centamin.com).
The accounting policies applied in these interim financial
statements are consistent with those used in the annual
consolidated financial statements for the year ended 31 December
2015 except for the adoption of a number of amendments issued by
the IASB and endorsed by the EU which apply for the first time in
2016. The new pronouncements do not have a significant impact on
the accounting policies, methods of computation or presentation
applied by the Group and therefore the prior period consolidated
financial statements have not been restated. The Group has not
early adopted any amendments, standards or interpretations that
have been issued but are not yet effective.
The preparation of these interim condensed consolidated
financial statements requires the use of certain significant
accounting estimates and judgment by management in applying the
Group's accounting policies. There have been no changes to the
areas involving significant judgment and estimates that have been
set out in Note 4 of the Group's annual audited consolidated
financial statements for the year ended 31 December 2015.
Going concern
These financial statements for the period ended 30 September
2016 have been prepared on a going concern basis, which contemplate
the realisation of assets and liquidation of liabilities during the
normal course of operations.
As discussed in Note 7, during 2012 the operation of the mine
was affected by two legal actions. The first of these followed from
a decision taken by Egyptian General Petroleum Corporation ("EGPC")
to charge international, not local (subsidised) prices for the
supply of DFO, and the second arose as a result of a judgment of
the Administrative Court of first instance in relation to, amongst
other matters, the Company's 160km(2) exploitation lease. In
relation to the first decision, the Company remains confident that
in the event that it is required to continue to pay international
prices, the mine at Sukari will remain commercially viable.
Similarly, the Company remains confident that the appeal it has
lodged in relation to the decision of the Administrative Court will
ultimately be successful, although final resolution of it may take
some time. On 20 March 2013 the Supreme Administrative Court upheld
the Company's application to suspend the decision until the merits
of the Company's appeal were considered and ruled on, thus
providing assurance that normal operations will be able to continue
during this process.
In the unlikely event that the Group is unsuccessful in either
or both of its legal actions, and that the operating activities are
restricted to a reduced area, it is the director's belief that the
Group will be able to continue as going concern.
NOTE 1: ACCOUNTING POLICIES (CONTINUED)
The directors have a reasonable expectation that the Group will
have adequate resources to continue in operational existence for
the foreseeable future. Thus they continue to adopt the going
concern basis of accounting in preparing these interim condensed
consolidated financial statements.
NOTE 2: SEGMENT REPORTING
The Group is engaged in the business of exploration for and
mining of metals only, which represents a single operating segment.
The Board is the Group's chief operating decision maker within the
meaning of IFRS 8.
Non-current assets other than financial instruments by
country:
30 September 31 December
2016
(Unaudited) 2015
US$'000 (Audited)
US$'000
Egypt 911,464 970,376
Ethiopia - 336
Burkina Faso 102,146 76,209
Côte d'Ivoire 13,480 5,316
Australia 3 2
Jersey 77 115
--------- ---------
1,027,170 1,052,354
--------- ---------
NOTE 3: REVENUE
An analysis of the Group's revenue for the period, from
continuing operations, is as follows:
Three Months Ended Nine Months Ended
30 September (Unaudited) 30 September (Unaudited)
2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Gold sales 200,562 118,339 528,279 377,514
Silver sales 283 190 801 686
200,845 118,529 529,080 378,200
------------- ------------ ------------- ------------
NOTE 4: PROFIT BEFORE TAX
Profit for the period has been arrived at after
crediting/(charging) the following gains/(losses) and expenses:
Three months ended Three months ended
30 September 2016 30 September 2015
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Finance income
------------ ------------- ------- ------------ ------------- -------
Interest received 143 - 143 38 - 38
------------ ------------- ------- ------------ ------------- -------
Expenses
Cost of sales
Mine production costs (70,430) (5,639) (76,069) (69,789) (11,179) (80,968)
Movement in inventory 6,387 (227) 6,160 (334) 595 261
Depreciation and Amortisation (28,438) - (28,438) (25,076) - (25,076)
-------- ------- -------- -------- --------- ----------
(92,481) (5,866) (98,347) (95,199) (10,584) (105,783)
-------- ------- -------- -------- --------- ----------
NOTE 4: PROFIT BEFORE TAX (CONTINUED)
Three months ended Three months ended
30 September 2016 30 September 2015
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
Other operating US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
costs
Fixed royalty -
attributable
to the
Egyptian
government (6,013) - (6,013) (3,547) - (3,547)
Corporate costs (3,889) - (3,889) (3,620) - (3,620)
Other expenses (144) - (144) (35) - (35)
Foreign
exchange gain,
net 1,296 - 1,296 572 - 572
Provision for
restoration
and
rehabilitation
- unwinding of
discount (145) - (145) (90) - (90)
Depreciation (22) - (22) (14) - (14)
(8,917) - (8,917) (6,734) - (6,734)
----------------------- ----------------------- ---------------- ------------------------ ---------------------- -----------------
Impairment of
available
for sale
financial
assets (8) - (8) 203 - 203
----------------------- ----------------------- ---------------- ------------------------ ---------------------- -----------------
Nine months ended Nine months ended 30
30 September 2016 September 2015
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Finance income
------------ ------------- ------- ------------ ------------- -------
Interest received 463 - 463 136 - 136
------------ ------------- ------- ------------ ------------- -------
Expenses
Cost of sales
Mine production costs (200,735) (14,797) (215,532) (202,119) (33,314) (235,433)
Movement in inventory 4,353 (2,172) 2,181 1,399 (2,110) (711)
Depreciation and Amortisation (83,551) - (83,551) (68,033) - (68,033)
---------- -------- ---------- ---------- --------- ----------
(279,933) (16,969) (296,902) (268,753) (35,424) (304,177)
---------- -------- ---------- ---------- --------- ----------
Other operating costs
Fixed royalty - Attributable
to the Egyptian government (15,837) - (15,837) (11,318) - (11,318)
Corporate costs (10,850) - (10,850) (10,797) - (10,797)
Other expenses (240) - (240) (98) - (98)
Foreign exchange gain,
net 2,612 2,612 1,554 - 1,554
Provision for restoration
and rehabilitation
- unwinding of discount (436) - (436) (271) - (271)
Depreciation (75) - (75) (44) - (44)
---------- -------- ---------- ---------- --------- ----------
(24,826) - (24,826) (20,974) - (20,974)
---------- -------- ---------- ---------- --------- ----------
Impairment of available
for sale financial
assets 145 - 145 474 - 474
---------- -------- ---------- ---------- --------- ----------
NOTE 4: PROFIT BEFORE TAX (CONTINUED)
Exceptional items
The directors consider that items of income or expense which are
material by virtue of their unusual, irregular or non-recurring
nature should be disclosed separately if the consolidated financial
statements are to fairly present the financial position and
underlying business performance. In order to allow a better
understanding of the financial information presented within the
consolidated financial statements, and specifically the Group's
underlying business performance, the effect of exceptional items
are shown below.
Three Months Ended Nine Months Ended
30 September (Unaudited) 30 September (Unaudited)
2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Included in Cost of sales
Mine production costs (5,639) (11,179) (14,797) (33,314)
Movement in inventory (227) 595 (2,172) (2,110)
------------ ------------- ------------ -------------
(5,866) (10,584) (16,969) (35,424)
------------ ------------- ------------ -------------
In January 2012 the Company received a letter from Chevron to
the effect that Chevron would not be able to continue supplying DFO
to the mine at Sukari at local subsidised prices. It is understood
that the reason that this letter was issued was that Chevron had
received a letter instructing it to do so from the Egyptian General
Petroleum Corporation ("EGPC"). It is further understood that EGPC
itself took the decision to issue this instruction because it had
received legal advice from the Legal Advice Department of the
Council of State (an internal government advisory department) that
companies operating in the gold mining sector in Egypt were not
entitled to such subsidies. In addition, the Company received a
demand from Chevron in 2012 for the repayment of fuel subsidies
received in the period from late 2009 through to January 2012, for
EGP403 million (approximately US$45.0 million at current exchange
rates).
The Group has taken detailed legal advice on this matter (and,
in particular, on the opinion given by Legal Advice Department of
the Council of State) and in consequence, in June 2012 lodged an
appeal against EGPC's decision in the Administrative Courts. Again,
the Group believes that its grounds for appeal are strong and that
there is every prospect of success. However, as a practical matter,
and in order to ensure the continuation of supply, the Group has
since January 2012 advanced funds to its fuel supplier, based on
the international price for diesel. As at the date of the financial
statements, no final decision had been taken by the courts
regarding this matter. During the quarter (and as set out above)
the Group received an unfavourable State Commissioner's report in
the case. However, the report is non-binding and the Group's legal
advisors remain of the view that the Group has a strong case.
Furthermore, the Group remains of the view that an instant move to
international fuel prices is not a reasonable outcome and will look
to recover funds advanced thus far should the court proceeding be
concluded in its favour. However, management recognises the
practical difficulties associated with re-claiming funds from the
government and for this reason has, fully provided against the
prepayment of US$224.4 million to 30 September 2016, as an
exceptional item, of which US$5.8 million and US$16.9 million was
provided for during Q3 2016 and the nine months to 30 September
2016 respectively, as follows:
(a) a US$5.6 million and US$14.8 million increase in mine
production costs included in cost of sales; and
(b) a US$0.2 million and US$2.1 million decrease in the valuation of stores inventories.
NOTE 5: PREPAYMENTS
30 September 31 December
2016
(Unaudited) 2015
US$'000 (Audited)
US$'000
Non-current Prepayments
Advance payment to EMRA -28,750
------
Centamin elected to make advance payments against future profit
share from 2013 onwards and the value of these payments amounted to
US$28.75 million. These payments were recovered by PGM during the
quarter by way of net off against EMRA's entitlement to profit
share during the period.
EMRA is entitled to a share of 50% of SGM's net production
surplus ("EMRA Profit Share") (defined as revenue less payment of
the fixed royalty to Arab Republic of Egypt ("ARE") and recoverable
costs). However, in accordance with the terms of the Concession
Agreement, in the first and second years in which there is a Profit
Share, PGM will be entitled to an additional 10% of net production
surplus and an additional 5% in the third and fourth years.
EMRA and PGM will benefit from advance distributions of profit
share which will be made on a proportionate basis in accordance
with the terms of the Concession Agreement. Future distributions
will take into account ongoing cash flows, historic costs that are
still to be recovered and any future capital expenditure.
Subsequent to the period end a further distribution of profit share
of US$6.67m was made to EMRA.
Payments made to EMRA pursuant to the provisions of the
Concession Agreement are recognised as a variable charge in the
income statement (below profit after tax) of Centamin, which leads
to a reduction in the earnings per share. The profit share payments
during the year will be reconciled against SGM's audited June 2017
financial statements. Any variation between payments made during
the year (which are based on the Company's estimates) and the
audited financial statements, may result in a balance due and
payable to EMRA or advances to be offset against future
distributions.
Current Prepayments
Fuel advance down payments 2,818 3,169
Other prepayments 1,128 1,161
----- -----
3,946 4,330
----- -----
The cumulative fuel prepayment recognised and provision charged
as at 30 September 2016 is as follows:
Movement in fuel prepayments
Balance at the beginning of the period - -
Fuel prepayment recognised 224,436 208,204
Fuel advance down payment 3,169 3,169
Less: Provision charged to (2) :
Mine production costs (see Note 4) (209,953) (195,155)
Property, plant and equipment (14,014) (11,852)
Inventories (821) (1,197)
Balance at the end of the period 2,818 3,169
--------- ---------
(2) Refer to Note 4, Exceptional Items, for further details.
NOTE 6: COMMITMENTS
The following is a summary of the Company's outstanding
commitments as at 30 September 2016:
Payments due Total < 1 year 1 to 5 >5 years
US$'000 US$'000 years US$'000
US$'000
Operating Lease Commitments(1) -
--------- --------- --------- ---------
Total commitments 92 46 46 -
--------- --------- --------- ---------
(1) Operating lease commitments are limited to office premises
in Jersey.
NOTE 7: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
Fuel Supply
As set out in note 4 above, in January 2012, the Group received
a letter from Chevron to the effect that Chevron would only be able
to supply DFO (Diesel Fuel Oil) to the mine at Sukari at
international prices rather than at local subsidised prices. It is
understood that the reason that this letter was issued was that
Chevron had received a letter instructing it to do so from the
EGPC. It is further understood that EGPC itself issued this
instruction because it had received legal advice from the Legal
Advice Department of the Council of State (an internal government
advisory department) that companies operating in the gold mining
sector in Egypt were not entitled to such subsidies. In November
2012, the Group received a further demand from Chevron for the
repayment of fuel subsidies received during the period from late
2009 through to January 2012, for EGP403 million (approximately
US$45.0 million at current exchange rates).
The Group has taken detailed legal advice on this matter (and,
in particular, on the opinion given by the Legal Advice Department
of the Council of State) and in June 2012 lodged an appeal against
EGPC's decision in the Administrative Courts. Again, the Group
believes that its grounds for appeal are strong and that there is a
good prospect of success. However, as a practical matter, and in
order to ensure the continuation of supply whilst the matter is
resolved, the Group has since January 2012 advanced funds to its
fuel supplier, based on the international price for fuel.
As at the date of this document, no decision had been taken by
the courts regarding this matter. During the quarter (and as set
out above) the Group received an unfavourable State Commissioner's
report in the case. However, the report is non-binding and the
Group's legal advisors remain of the view that the Group has a
strong case. The Group remains of the view that an instant move to
international fuel prices is not a reasonable outcome and will look
to recover funds advanced thus far should the court action be
successfully concluded. However, management recognises the
practical difficulties associated with reclaiming funds from the
government and for this reason has fully provided against the
prepayment of US$224.4 million, as an exceptional item. Refer to
Note 5 of these financial statements for further details on the
impact of this exceptional provision on the Group's results for Q3
2016.
No provision has been made in respect of the historic subsidies
prior to January 2012 as, based on legal advice, the Company
believes that, notwithstanding the unfavourable State
Commissioner's report, the prospects of a court finding in its
favour in relation to this matter remain very strong.
Supreme Administrative Court Appeal
On 30 October 2012, the Administrative Court in Egypt handed
down a judgment in relation to a claim brought by, amongst others,
an independent member of a previous parliament, in which he argued
for the nullification of the agreement that confers on the Group
rights to operate in Egypt. This agreement, the Concession
Agreement, was entered into between the Arab Republic of Egypt, the
Egyptian Mineral Resources Authority and Centamin's wholly--owned
subsidiary Pharaoh Gold Mines, and was approved by the People's
Assembly as Law 222 of 1994.
NOTE 7: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(CONTINUED)
In summary that judgment states that, although the Concession
Agreement itself remains valid and in force, insufficient evidence
had been submitted to Court in order to demonstrate that the
160km(2) exploitation lease between PGM and EMRA had received
approval from the relevant Minister as required by the terms of the
Concession Agreement. Accordingly, the Court found that the
exploitation lease in respect of the area of 160km(2) was not valid
although it stated that there was in existence such a lease in
respect of an area of 3km(2) . Centamin, however, is in possession
of the executed original lease documentation which clearly shows
that the 160km(2) exploitation lease was approved by the Minister
of Petroleum and Mineral Resources. It appears that an executed
original document was not supplied to the Court in the first
instance.
Upon notification of the judgment the Group took various steps
to protect its ability to continue to operate the mine at Sukari.
These included lodging a formal appeal before the Supreme
Administrative Court on 26 November 2012. In addition, in
conjunction with the formal appeal the Group applied to the Supreme
Administrative Court to suspend the initial decision until such
time as the court was able to consider and rule on the merits of
the appeal. On 20 March 2013 the Court upheld this application thus
suspending the initial decision and providing assurance that normal
operations would be able to continue whilst the appeal process was
under way.
EMRA lodged its own appeal in relation to this matter on 27
November 2012, the day after the Company's appeal was lodged,
supporting the Group's view in this matter. Furthermore, in late
December 2012, the Minister of Petroleum lodged a supporting appeal
and shortly thereafter publicly indicated that, in his view, the
terms of the Concession Agreement were fair and that the
exploitation lease was valid. The Minister of Petroleum also
expressed support for the investment and expertise that Centamin
brings to the country. The Company believes this demonstrates the
government's commitment to the Group's investment at Sukari and the
government's desire to stimulate further investment in the Egyptian
mining industry.
The Supreme Administrative Court has stayed the Concession
Agreement appeal until the Supreme Constitutional Court has ruled
on the validity of Law 32 of 2014. The Company continues to believe
that it has a strong legal position and, in addition, that it will
ultimately benefit from Law 32 which restricts the capacity for
third parties to challenge any contractual agreement between the
Egyptian government and an investor. This law, whilst in force and
ratified by the new parliament, is currently under review by the
Supreme Constitutional Court. If the Supreme Constitutional Court
rules that Law 32 is invalid, the Group remains confident that its
appeal will be successful on the merits.
The Company does not yet know when the appeal will conclude,
although it is aware of the potential for the process in Egypt to
be lengthy. The Company has taken extensive legal advice on the
merits of its appeal from a number of leading Egyptian law firms
who have confirmed that the proper steps were followed with regard
to the grant of the 160km(2) lease. It therefore remains of the
view that the appeal is based on strong legal grounds and will
ultimately be successful. In the event that the appellate court
fails to be persuaded of the merits of the case put forward by the
Group, the operations at Sukari may be adversely effected to the
extent that the Group's operation exceeds the exploitation lease
area of 3km(2) referred to in the original court decision.
The Company remains confident that normal operations at Sukari
will be maintained whilst the appeal case is heard.
Contingent Assets
There were no contingent assets at period-end (30 September
2016: nil, 31 December 2015: nil).
NOTE 8: ISSUED CAPITAL
Fully Paid Ordinary Shares Nine Months Ended Year Ended
30 September 2016 31 December 2015
(Unaudited) (Audited)
Number US$'000 Number US$'000
Balance at beginning of the period 1,152,107,984 665,590 1,152,107,984 661,573
Issue of shares (1) - (17) - 38
Transfer from share options reserve - 1,899 - 3,979
Balance at end of the period 1,152,107,984 667,472 1,152,107,984 665,590
------------- ------- -------------- --------
(1) Fully paid ordinary shares carry one vote per share and
carry the right to dividends.
NOTE 9: RELATED PARTY TRANSACTIONS
The related party transactions for the three months ended 30
September 2016 are summarised below:
- Salaries, superannuation contributions, bonuses, LTI's,
consulting and directors' fees paid to Directors during the three
months ended 30 September 2016 amounted to US$590,200 (30 September
2015: US$559,115).
- Mr J El-Raghy is a director and shareholder of El-Raghy
Kriewaldt Pty Ltd ("ELK"), which provides office premises to the
Company in Australia. All dealings with ELK are in the ordinary
course of business and on normal terms and conditions. Rent paid to
ELK during the three months ended 30 September 2016 amounted to
US$13,204 (30 September 2015: US$10,629).
The related party transactions for the nine months ended 30
September 2016 are summarised below:
- Salaries, superannuation contributions, bonuses, consulting
and directors' fees paid to Directors during the nine months ended
30 September 2016 amounted to US$1,798,143 (30 September 2015:
US$1,635,959).
- Mr J El-Raghy is a director and shareholder of El-Raghy
Kriewaldt Pty Ltd ("ELK"), which provides office premises to the
Company in Australia. All dealings with ELK are in the ordinary
course of business and on normal terms and conditions. Rent paid to
ELK during the nine months ended 30 September 2016 amounted to
US$38,697 (30 September 2015: US$33,822).
NOTE 10: EARNINGS PER SHARE
Basic earnings per share are calculated using the weighted
average number of shares outstanding. Diluted earnings per share
are calculated using the treasury stock method. In order to
determine diluted earnings per share, the treasury stock method
assumes that any proceeds from the exercise of dilutive stock
options and warrants would be used to repurchase common shares at
the average market price during the period, with the incremental
number of shares being included in the denominator of the diluted
earnings per share calculation. The diluted earnings per share
calculation exclude any potential conversion of options and
warrants that would increase earnings per share.
Three Months Ended Nine Months Ended
30 September 30 September
(Unaudited) (Unaudited)
2016 2015 2016 2015
Cents Per Cents Per Cents Per Cents
Share Share Share Per Share
Basic EPS (before profit
share) 8.108 0.546 17.957 4.690
Diluted EPS (before profit
share) 8.075 0.537 17.862 4.625
------------ ------------ ------------ -------------
Basic EPS (after profit
share) 5.620 0.546 15.465 4.690
Diluted EPS (after profit
share) 5.597 0.537 15.383 4.625
------------ ------------ ------------ -------------
NOTE 10: EARNINGS PER SHARE (CONTINUED)
Basic earnings per share
The earnings and weighted average number of ordinary shares used
in the calculation of basic earnings per share are as follows:
Three Months Nine Months Ended
Ended 30 September
30 September (Unaudited)
(Unaudited)
2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Earnings used in the calculation
of basic EPS(1) 93,690 6,253 207,149 53,651
---------- ---------- ---------- ----------
Earnings used in the calculation
of basic EPS(2) 64,939 6,253 178,399 53,651
---------- ---------- ---------- ----------
(1) Before profit share
(2) After profit share
Three Months Ended Nine Months Ended
30 September 30 September
(Unaudited) (Unaudited)
2016 2015 2016 2015
No. No. No. No.
Weighted average number of ordinary
shares for the purpose of basic
EPS 1,155,537,983 1,146,114,943 1,153,597,655 1,143,955,365
------------- ------------- ------------- -------------
Diluted earnings per share
The earnings and weighted average Three Months Ended Nine Months Ended
number of ordinary shares used 30 September 30 September
in the calculation of diluted (Unaudited) (Unaudited)
earnings per share are as follows:
2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Earnings used in the calculation
of diluted EPS(1) 93,690 6,253 207,149 53,651
----------- ----------- ---------- ----------
Earnings used in the calculation
of diluted EPS(2) 64,939 6,253 178,399 53,651
----------- ----------- ---------- ----------
(1) Before profit share
(2) After profit share
Three Months Ended Nine Months Ended
30 September 30 September
(Unaudited) (Unaudited)
2016 2015 2016 2015
No. No. No. No.
Weighted average number of ordinary
shares for the purpose of diluted
EPS 1,160,282,883 1,165,023,281 1,159,698,135 1,159,942,550
------------- ------------- ------------- -------------
Weighted average number of ordinary
shares for the purpose of basic
EPS 1,155,537,983 1,146,114,943 1,153,597,655 1,143,955,365
Shares deemed to be issued for
no consideration in respect of
employee options 4,744,900 18,908,338 6,100,480 15,987,185
------------- -------------- ------------- --------------
Weighted average number of ordinary
shares used in the calculation
of diluted EPS 1,160,282,883 1,165,023,281 1,159,698,135 1,159,942,550
------------- -------------- ------------- --------------
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Nine Months Ended
30 September 2016 Office Land Plant Mining Mine Development Capital
(Unaudited) equipment and buildings and equipment equipment properties WIP Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Cost
Balance at 31
December 2015 5,535 1,190 582,854 241,342 316,278 32,468 1,179,667
Additions 457 829 1,254 2,827 8,745 40,903 55,015
Transfers 17 - - 468 47,523 (7,289) 40,719
Disposal - - - (234) - - (234)
----------- --------------- --------------- ----------- ----------------- -------- ---------
Balance at 30
September 2016 6,009 2,019 584,108 244,403 372,546 66,082 1,275,167
----------- --------------- --------------- ----------- ----------------- -------- ---------
Accumulated
depreciation
Balance at 31
December 2015 (4,867) (293) (98,504) (100,822) (103,714) - (308,200)
Depreciation and
amortisation (416) (85) (22,064) (21,515) (39,100) - (83,180)
Disposal - - - 234 - - 234
----------- --------------- --------------- ----------- ----------------- -------- ---------
Balance at 30
September 2016 (5,283) (378) (120,568) (122,103) (142,814) - (391,146)
----------- --------------- --------------- ----------- ----------------- -------- ---------
Year Ended 31
December 2015
(Audited)
Cost
Balance at 31
December 2014 5,401 1,186 565,836 221,178 232,921 116,772 1,143,294
Additions 103 8 147 3,779 - 28,781 32,818
Increase in rehabilitation
asset - - - - 3,762 - 3,762
Disposals - - - (202) - - (202)
Transfers 31 - 16,871 16,561 79,621 (113,084) -
-------- ------ --------- ---------- ---------- ---------- ---------
Balance at 31
December 2015 5,535 1,194 582,854 241,316 316,304 32,469 1,179,672
-------- ------ --------- ---------- ---------- ---------- ---------
Accumulated depreciation
Balance at 31
December 2014 (4,280) (234) (67,980) (72,339) (69,497) - (214,330)
Depreciation and
amortisation (587) (59) (30,524) (28,663) (34,218) - (94,051)
Disposals - - - 176 - - 176
-------- ------ --------- ---------- ---------- ---------- ---------
Balance at 31
December 2015 (4,867) (293) (98,504) (100,826) (103,715) - (308,205)
-------- ------ --------- ---------- ---------- ---------- ---------
Net book value
As at 31 December
2015 668 901 484,350 140,490 212,589 32,469 871,467
-------- ------ --------- ---------- ---------- ---------- ---------
As at 30 September
2016 726 1,641 463,540 122,300 229,732 66,082 884,021
-------- ------ --------- ---------- ---------- ---------- ---------
NOTE 12: EXPLORATION AND EVALUATION ASSETS
Nine Months Year Ended
Ended 31 December
30 September 2015
2016
(Unaudited) (Audited)
US$'000 US$'000
Balance at the beginning of the period 152,077 123,999
Expenditure for the period 38,634 34,372
Transfer to Property Plant & Equipment (47,523) -
Impairment of exploration and evaluation
asset (122) (6,294)
------------- ------------
Balance at the end of the period 143,066 152,077
------------- ------------
The exploration and evaluation asset relates to the drilling,
geological exploration and sampling of potential ore reserves and
can be attributed to Egypt (US$27.3m) Burkina Faso (US$102.2m) and
Côte d'Ivoire (US$13.5m).
NOTE 13: AVAILABLE-FOR-SALE FINANCIAL ASSETS
The unrealised losses on available-for-sale investments
recognised in other comprehensive income were as follows:
Three Months Ended Nine Months Ended
30 September (Unaudited) 30 September (Unaudited)
2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Profit / (Loss) on fair value
of investment - other comprehensive
income - (75) 61 (175)
------------- ------------ ------------- ------------
The available for sale financial asset at period-end relates to
a 5.33% (2015: 6.66%) equity interest in Nyota Minerals Limited
("NYO"), a listed public company, as well as a 0.43% (2015: 0.96%)
equity interest in KEFI Minerals plc ("KEFI").
NOTE 14: SHARE BASED PAYMENTS
No share based payments were awarded or granted to Employees
during the third quarter.
NOTE 15: FINANCIAL INSTRUMENTS' FAIR VALUE DISCLOSURES
The Group has no financial instruments with fair values that are
determined by reference to significant unobservable inputs, i.e.
those that would be classified as level 3 in the fair value
hierarchy, nor have there been any transfers of assets or
liabilities between levels of the fair value hierarchy.
The Group's interest in Nyota Minerals Limited and KEFI Minerals
plc is classified as an available for sale financial asset (see
note 13). The Group carries its interest in Nyota Minerals Limited
and KEFI Minerals plc at fair value, and measures its interest
using Level 1 unadjusted quoted prices.
The directors consider that the carrying amounts of financial
assets and financial liabilities carried at amortised cost
approximate their fair value.
NOTE 16: NOTES TO THE STATEMENTS OF CASH FLOWS
(a) Reconciliation of cash and cash equivalents
For the purpose of the statements of cash flows, cash and cash
equivalents includes cash on hand and at bank and deposits.
Three Months Ended Nine Months Ended
As at 30 September As at 30 September
(Unaudited) (Unaudited)
2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Cash and cash equivalents 388,352 190,574 388,352 190,574
--------- --------- --------- ---------
NOTE 16: NOTES TO THE STATEMENTS OF CASH FLOWS (CONTINUED)
(b) Reconciliation of profit for the period to cash flows from
operating activities
Three Months Ended Nine Months Ended
30 September 30 September
(Unaudited) (Unaudited)
2016 2015 2016 2015
US$'000 US$'000 US$'000 US$'000
Profit for the period 93,690 6,253 207,149 53,651
Add/(less) non-cash items:
Depreciation / amortisation of
property, plant and equipment 28,460 25,089 83,626 68,078
EMRA prepayment offset (28,750) - (28,750) -
Increase / (Decrease) in provisions 5,868 (64) 3,828 1,516
Foreign exchange rate (gain)
/ loss, net (1,136) (682) (2,083) (2,133)
Impairment of available-for-sale
financial assets 8 (203) (145) (474)
Share based payment expense 704 556 1,774 1,915
Changes in working capital during
the period :
(Increase) / Decrease in trade
and other receivables 19,939 10,758 5,938 10,020
Decrease / (Increase) in inventories (8,690) (491) 4,411 9,479
(Increase) / Decrease in prepayments 26,705 (572) 29,134 (4,567)
Decrease / (Increase) in trade
and other payables 3,166 (9,345) (8,097) (5,084)
Cash flows generated from operating
activities 139,965 31,299 296,785 132,401
--------- --------- --------- --------
(c) Non-cash financing and investing activities
There have been no non-cash financing and investing activities
during the current or comparative period quarter.
NOTE 17: SUBSEQUENT EVENTS
Further to the declaration of an interim dividend of 2 US cent
per share (US$0.02) on Centamin plc ordinary shares (totalling
approximately US$23 million), the interim dividend for the half
year period ending 30 June 2016 was paid on 7 October 2016 to
shareholders on the register on the Record Date of 9 September
2016.
Subsequent to the period end a further distribution of profit
share of US$6.67m was made to EMRA. Further details are set out in
Note 5 of these financial statements.
Other than the above, there has not arisen in the interval
between the end of the financial period and the date of this report
any item, transaction or event of a material and unusual nature
likely in the opinion of the Directors of the Company to affect
significantly the operations of the company, the results of those
operations, or the state of affairs of the Company in subsequent
financial periods.
NON-GAAP FINANCIAL MEASURES
Three non-GAAP financial measures are used in this report:
1) EBITDA: "EBITDA" is a non-GAAP financial measure, which
excludes the following from profit before tax:
-- Finance costs;
-- Finance income; and
-- Depreciation and amortisation.
Management believes that EBITDA is a valuable indicator of the
Group's ability to generate liquidity by producing operating cash
flow to fund working capital needs and fund capital expenditures.
EBITDA is also frequently used by investors and analysts for
valuation purposes whereby EBITDA is multiplied by a factor or
"EBITDA multiple" that is based on an observed or inferred
relationship between EBITDA and market values to determine the
approximate total enterprise value of a company. EBITDA is intended
to provide additional information to investors and analysts and
does not have any standardised definition under IFRS and should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. EBITDA excludes the
impact of cash cost of production and income of financing
activities and taxes, and therefore is not necessarily indicative
of operating profit or cash flow from operations as determined
under IFRS. Other companies may calculate EBITDA differently. The
following table provides a reconciliation of EBITDA to profit for
the year attributable to the Company.
Reconciliation of profit before tax to EBITDA:
Quarter ended Quarter ended Quarter ended Quarter ended
30 September 30 September 30 September 30 September
2016 2016 2015 2015
Before Exceptional Including Before Exceptional Including
items Exceptional items Exceptional
items(1) items(1)
US$'000 US$'000 US$'000 US$'000
Profit before
tax 99,581 93,715 16,837 6,253
Finance income (143) (143) (38) (38)
Depreciation
and amortisation 28,460 28,460 25,089 25,089
EBITDA 127,898 122,032 41,888 31,304
-------------------- -------------- -------------------- --------------
Nine months Nine months Nine months Nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2016 2015 2015
Before Exceptional Including Before Exceptional Including
items Exceptional items Exceptional
items(1) items(1)
US$'000 US$'000 US$'000 US$'000
Profit before
tax 224,928 207,960 89,083 53,659
Finance income (463) (463) (136) (136)
Depreciation
and amortisation 83,626 83,625 68,077 68,077
EBITDA 308,091 291,122 157,024 121,600
----------------------- ----------------------- -------------------- --------------
(1) Profit before tax, Depreciation and amortisation and EBITDA
includes an exceptional provision to reflect the removal of fuel
subsidies (refer to Note 4).
2) Cash cost of production and all-in sustaining costs per ounce
calculation: Cash cost of production and AISC are non-GAAP
financial measures. Cash cost of production per ounce is a measure
of the average cost of producing an ounce of gold, calculated by
dividing the operating costs in a period by the total gold
production over the same period. Operating costs represent total
operating costs less administrative expenses, royalties,
depreciation and amortisation. Management uses this measure
internally to better assess performance trends for the Company as a
whole. The Company believes that, in addition to conventional
measures prepared in accordance with GAAP, certain investors use
such non-GAAP information to evaluate the Company's performance and
ability to generate cash flow. The Company believes that these
measures provide an alternative reflection of the Group's
performance for the current period and are an alternative
indication of its expected performance in future periods. Cash cost
of production is intended to provide additional information, does
not have any standardised meaning prescribed by GAAP and should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. This measure is not
necessarily indicative of operating profit or cash flow from
operations as determined under GAAP. Other companies may
calculate
these measures differently.
During June 2013 the World Gold Council (WGC), an industry body,
published a Guidance Note on 'all in sustaining costs' metric,
which gold mining companies can use to supplement their overall
non-GAAP disclosure. AISC is an extension of the existing 'cash
cost' metric and incorporates all costs related to sustaining
production and in particular recognising the sustaining capital
expenditure associated with developing and maintaining gold mines.
In addition, this metric includes the cost associated with
developing and maintaining gold mines. In addition, this metric
includes the cost associated with corporate office structures that
support these operations, the community and rehabilitation costs
attendant with responsible mining and any exploration and
evaluation costs associated with sustaining current operations.
AISC US$/oz is arrived at by dividing the dollar value of the sum
of these cost metrics, by the ounces of gold sold.
Reconciliation of cash cost of production per ounce:
Quarter ended Quarter ended Quarter ended Quarter ended
30 September 30 September 30 September 30 September
2016 2016 2015 2015
Before Exceptional Including Before Exceptional Including
items Exceptional items Exceptional
items(1) items(1)
US$'000 US$'000 US$'000 US$'000
Mine production costs
(Note 4) 70,430 76,069 69,789 80,968
Less: Refinery and
transport (404) (404) (131) (131)
Movement in inventory (6,481) (6,431) - -
-------------------- -------------- -------------------- --------------
Cash cost of production 63,545 69,234 69,658 80,837
-------------------- -------------- -------------------- --------------
Gold Produced - Total 148,674 148,674 105,413 105,413
Cash cost of production US$427/oz US$466/oz US$661/oz US$767/oz
per ounce
Nine months Nine months Nine months Nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2016 2015 2015
Before Exceptional Including Before Exceptional Including
items Exceptional items Exceptional
items(1) items(1)
US$'000 US$'000 US$'000 US$'000
Mine production costs
(Note 4) 200,736 215,532 202,119 235,433
Less: Refinery and
transport (1,191) (1,191) (939) (939)
Movement in inventory (7,158) (4,820) - -
-------------------- -------------- -------------------- --------------
Cash cost of production 192,387 209,521 201,180 234,494
-------------------- -------------- -------------------- --------------
Gold Produced - Total 414,248 414,248 321,427 321,427
Cash cost of production US$464/oz US$506/oz US$626/oz US$730/oz
per ounce
Reconciliation of AISC per ounce:
Quarter Quarter ended Quarter Quarter ended
ended 30 September ended 30 September
30 September 2016 30 September 2015
2016 Including 2015 Including
Before Exceptional Before Exceptional
Exceptional items(1) Exceptional items
items items
US$'000 US$'000 US$'000 US$'000
Mine production costs(2)
(Note 4) 70,430 76,069 69,789 80,968
Movement in inventory (6,387) (6,160) - -
Royalties 6,013 6,013 3,547 3,547
Corporate administration
costs 3,889 3,889 3,620 3,620
Rehabilitation costs 145 145 90 90
Underground development 10,073 10,073 7,717 7,717
Other sustaining
capital exp. 7,019 7,019 1,016 1,016
By-product credit (282) (282) (190) (190)
-------------- -------------- -------------- --------------
AISC 90,900 96,766 85,589 96,768
-------------- -------------- -------------- --------------
Gold Sold - Total 150,201 150,201 104,803 104,803
AISC per ounce US$605/oz US$644/oz US$817/oz US$918/oz
(1) Mine production costs, cash cost of production, AISC, cash
cost of production per ounce, and AISC per ounce includes an
exceptional provision against prepayments recorded since Q4 2012 to
reflect the removal of fuel subsidies (refer to Note 4 of the
Financial Statements for further details).
(2) Includes refinery and transport.
Nine months Nine months Nine months Nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2016 2015 2015
Before Exceptional Including Before Exceptional Including
items Exceptional items Exceptional
items(1) items
US$'000 US$'000 US$'000 US$'000
Mine production
costs(2) (Note
4) 200,736 215,532 202,119 235,433
Movement in inventory (4,352) (2,165) - -
Royalties 15,837 15,837 11,318 11,318
Corporate administration
costs 10,849 10,849 10,930 10,930
Rehabilitation
costs 436 436 271 271
Underground development 28,368 28,368 23,362 23,362
Other sustaining
capital exp. 17,254 17,254 7,028 7,028
By-product credit (801) (801) (686) (686)
-------------------- -------------- -------------------- --------------
AISC 268,327 285,310 254,342 287,657
-------------------- -------------- -------------------- --------------
Gold Sold - Total 415,671 415,671 300,546 300,546
AISC per ounce US$646/oz US$686/oz US$846/oz US$957/oz
(1) Mine production costs, cash cost of production, AISC, cash
cost of production per ounce, and AISC per ounce includes an
exceptional provision against prepayments recorded since Q4 2012 to
reflect the removal of fuel subsidies (refer to Note 4 of the
Financial Statements for further details).
(2) Includes refinery and transport.
3) Cash and cash equivalents, bullion on hand, gold sales
receivables and available-for-sale financial assets: This is a
non-GAAP financial measure any other companies may calculate these
measures differently.
Reconciliation to cash and cash equivalents, bullion on hand,
gold sales receivables and available-for-sale financial assets:
Quarter ended Quarter ended
30 September 30 September
2016 2015
US$'000 US$'000
Cash and cash equivalents (Note
16(a)) 388,352 190,574
Bullion on hand (valued at the
year-end spot price) 13,489 13,251
Gold sales receivable 14,850 12,042
Available-for-sale financial assets
(Note 13) 163 189
Cash, bullion, gold sales receivables
and available-for-sale financial
assets 416,854 216,056
-------------- --------------
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This document contains "forward-looking information" which may
include, but is not limited to, statements with respect to the
future financial or operating performance of Centamin plc
('Centamin' or 'the Company'), its subsidiaries (together 'the
Group'), affiliated companies, its projects, the future price of
gold, the estimation of mineral reserves and mineral resources, the
realization of mineral reserve and resource estimates, the timing
and amount of estimated future production, revenues, margins, costs
of production, estimates of initial capital, sustaining capital,
operating and exploration expenditures, costs and timing of the
development of new deposits, costs and timing of future
exploration, requirements for additional capital, foreign exchange
risks, governmental regulation of mining operations and exploration
operations, timing and receipt of approvals, consents and permits
under applicable mineral legislation, environmental risks, title
disputes or claims, limitations of insurance coverage and
regulatory matters. Often, but not always, forward-looking
statements can be identified by the use of words such as "plans",
"expects", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "targets", "aims", "anticipates" or
"believes" or variations (including negative variations) of such
words and phrases, or may be identified by statements to the effect
that certain actions, events or results "may", "could", "would",
"should", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and a variety of material factors, many of which are
beyond the Company's control which may cause the actual results,
performance or achievements of Centamin, its subsidiaries and
affiliated companies to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. Readers are cautioned that
forward-looking statements may not be appropriate for other
purposes than outlined in this document. Such factors include,
among others, future price of gold; general business, economic,
competitive, political and social uncertainties; the actual results
of current exploration and development activities; conclusions of
economic evaluations and studies; fluctuations in the value of the
U.S. dollar relative to the local currencies in the jurisdictions
of the Company's key projects; changes in project parameters as
plans continue to be refined; possible variations of ore grade or
projected recovery rates; accidents, labour disputes or slow-downs
and other risks of the mining industry; climatic conditions;
political instability, insurrection or war, civil unrest or armed
assault; labour force availability and turnover; delays in
obtaining financing or governmental approvals or in the completion
of exploration and development activities; as well as those factors
referred to in the section entitled "Principal risks affecting the
Centamin Group" section of the Management Discussion & Analysis
filed on SEDAR. The reader is also cautioned that the foregoing
list of factors is not exhausted of the factors that may affect the
Company's forward-looking statements.
Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are made as of the date
of this document and, except as required by applicable law, the
Company disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or results or otherwise. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
QUALIFIED PERSON AND QUALITY CONTROL
Information in this report which relates to exploration,
geology, sampling and drilling is based on information compiled by
geologist Mr Andrew Pardey and Christopher Boreham (Underground
Manager) who, as members of the Australasian Institute of Mining
and Metallurgy each have more than five years' experience in the
fields of activity being reported on, and are 'Competent Persons'
for this purpose and are "Qualified Persons" as defined in
"National Instrument 43-101 of the Canadian Securities
Administrators".
Refer to the latest technical report entitled "Mineral Resource
and Reserve Estimate for the Sukari Gold Project, Egypt" effective
30 June 2015 and dated 23 October 2015 and filed on SEDAR at
www.sedar.com, for further discussion of the extent to which the
estimate of mineral resources/reserves may be materially affected
by any known environmental, permitting, legal, title, taxation,
socio-political, or other relevant issues.
-------------------------------------------End of
Announcement------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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