TIDMCEY
RNS Number : 2631F
Centamin PLC
11 November 2015
For immediate release 11 November 2015
Centamin plc ("Centamin" or "the Company")
(LSE:CEY, TSX:CEE)
Centamin plc Results for the Third Quarter and Nine Months Ended
30 September 2015
Centamin plc ("Centamin" or "the Company") and its subsidiaries
(the "Group") (LSE: CEY, TSX: CEE) is pleased to announce its
results for the third quarter ended 30 September 2015.
Operational Highlights(1),(2)
-- Gold production of 105,413 ounces was in line with the second
quarter and a 13% increase on Q3 2014.
-- Cash cost of production of US$767 per ounce and all-in
sustaining costs (AISC) of US$918 per ounce, versus US$706 per
ounce and US$853 per ounce respectively in the previous
quarter.
-- 2015 production guidance of between 430,000 and 440,000
ounces. With higher anticipated fourth quarter production and our
continued focus on cost control, we expect to achieve below the
previously guided cash cost of production of US$700 per ounce and
AISC of US$950 per ounce.
-- Process plant throughput of 2.67Mt was 7% above the 10Mtpa
nameplate capacity.
-- Open pit mining rates and grades in line with forecast.
Underground mine delivered 312kt of ore, an 11% increase on Q2
2015, at an average grade of 6.45g/t in line with the mining
plan.
-- Exploration drilling in Burkina Faso and Côte d'Ivoire has
outlined mineralisation over a number of prospects, and has
identified structurally controlled higher-grade zones.
-- Updated Sukari Resource and Reserve estimate announced in
September 2015. Total combined open pit and underground Mineral
Reserve estimate of 8.8 Moz, up 7% from 8.2 Moz at 30 September
2013.
Financial Highlights(1),(2)
-- EBITDA of US$31.3 million was down 16% on Q2 2015, with a 5%
reduction in gold prices together with increased operating costs
and an adverse movement in production inventory and ore
stockpiles.
-- Centamin remains debt-free and un-hedged with cash, bullion
on hand, gold sales receivable and available-for-sale financial
assets of US$216.1 million at 30 September 2015.
-- Basic earnings per share of 0.55 cents; down 67% on Q2 2015
due to the factors affecting EBITDA and a 36% increase in
depreciation and amortisation, following the reserve update at 30
June 2015 and a consequent increase in the amortisation charge for
capitalised underground development.
Legal Developments in Egypt
-- The Supreme Administrative Court appeal and Diesel Fuel Oil
court case are both still on-going. Centamin is aware of the
potential for the legal process in Egypt to be lengthy and it
anticipates a number of hearings and adjournments before decisions
are reached. Operations continue as normal and any enforcement of
the Administrative Court decision has been suspended pending the
appeal ruling.
Q3 2015 Q2 2015 Q3 2014
------------------------- ----------- -------- -------- --------
Gold produced ounces 105,413 107,781 93,624
Gold sold ounces 104,803 104,168 91,575
Cash cost of production
(1,2) US$/ounce 767 706 771
AISC (1,2) US$/ounce 918 853 NR
Average realised gold
price US$/ounce 1,131 1,188 1,267
------------------------- ----------- -------- -------- --------
Revenue US$'000 118,529 124,192 116,116
EBITDA (1,2) US$'000 31,304 37,308 37,810
Profit before tax (2) US$'000 6,253 18,841 15,821
EPS (2) US cents 0.55 1.65 1.39
Cash generated from
operations (2) US$'000 31,261 49,729 31,236
------------------------- ----------- -------- -------- --------
(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
(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)
NR - Not Reported.
Andrew Pardey, CEO of Centamin, commented: "Gold output from
Sukari during the third quarter was comparable with both the first
and second quarters and in line with our forecast for the period,
with production continuing to build on the progressive ramp-up of
the expanded operation. Plant productivity remained significantly
above the 10Mtpa nameplate capacity and the ongoing process of
optimisation is expected to deliver our base case rate of 11Mtpa
during the fourth quarter. The underground mine has now delivered
consecutive quarters at production rates significantly in excess of
our annual forecast and at consistent grades of at least 6g/t,
therefore demonstrating the potential for this part of the
operation to sustain production in excess of our longer-term
forecasts. Further development of the open pit has now set the
stage to deliver the required tonnages at grades in the region of
the reserve average from the fourth quarter onwards. Full year
guidance is between 430,000 and 440,000 ounces at a cash cost of
production of below US$700 per ounce and below the previously
guided AISC of US$950 per ounce."
Centamin will host a conference call on Wednesday, 11th November
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
Participant code: 42792283#
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: 663773#
Via audio link at http://www.centamin.com/centamin/investors
________________________________
CHIEF EXECUTIVE OFFICER'S REPORT
Third quarter gold production of 105,413 ounces was in line with
our forecast and was comparable with both the first and second
quarters. The average realised gold price fell by 5% on the
previous quarter which, together with a 6% increase in mine
production costs and a US$3.2 million increase of the movement in
production inventory and ore stockpiles, resulted in EBITDA of
US$31.3 million, down 16% on the second quarter and down 17% on Q3
2014.
Sukari has continued to deliver competitive returns, as
reflected by all-in sustaining costs (AISC) of US$918 per ounce for
the quarter, below our original full year guidance of US$950 per
ounce mainly due to further re-scheduling of certain sustaining
capital cost items. We expect full year production of between
430,000 and 440,000 ounces. With higher anticipated fourth quarter
production and our continued focus on cost control, we expect to
achieve below the previously guided cash cost of production of
US$700 per ounce and AISC of US$950 per ounce.
Positive cash flow saw Centamin's balance sheet further
strengthened, ending the period with US$216.1 million of cash,
bullion on hand, gold sales receivable and available-for-sale
financial assets. The cash and cash equivalents component of this
total increased during the quarter by US$15.6 million. There was a
US$12.2 million reduction in gold sales receivables during the
quarter, offset by a US$11.1 million reduction in trade and other
payables.
Safety remains a priority and therefore it is pleasing to note
that during the period we reached our safety target of zero lost
time injuries.
Processing rates were 7% above the 10Mtpa nameplate capacity,
with continuing optimisation focussing on the secondary crusher
liners and improvements to the screen configurations. Scheduled
work around the CIL circuit impacted recoveries, which fell back to
88.2% from the 90.3% level achieved in the second quarter, with a
return towards the higher levels expected during the fourth quarter
as the work is completed.
The open pit delivered total material movement of 14,344kt, an
increase of 5% on Q2 2015 due to improved fleet utilisation and
productivity, with further improvements and therefore higher mining
rates expected during the fourth quarter. Pit development has
progressed over the year to date according to the mine plan and
mined ore grades of 0.74g/t were in line with our forecast.
The underground mine delivered 312kt of ore, an 11% increase on
Q2 2015, at an average grade of 6.45g/t in line with the mining
plan. The focus for the operation remains to consistently deliver
ore at an average grade of at least 6g/t.
Production rates are expected to increase to a rate of
450,000-500,000 ounces per annum from the fourth quarter onwards,
driven by ongoing optimisation of the processing plant to deliver
our base case expectation of 11Mtpa, and an increase in open pit
ore grades towards the reserve average of 1.03g/t. Our longer-term
production and cost forecasts remain unchanged and there remains
scope for significant additional production increases as
productivity in the various areas of the expanded Sukari operation
is further optimised.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
An updated resource and reserve estimate for Sukari in September
provided further support to our production forecasts and our
expectation of a long life and low cost operation that will
continue to generate significant cash flow even under the current
weak gold price environment. Open pit reserves of 8.3 million
ounces increased over the previous estimate by approximately 0.5
million ounces, net of mining depletion. This increase was due to
lower mining and processing costs associated with the recent
reduction in international fuel prices and continued drilling from
the underground. The estimate was based on assumptions
conservatively above current operating costs. Reserves were based
on a US$1,300 per ounce gold price, consistent with previous
estimates and allowing for comparisons exclusive of short-term
volatility in the gold market over the expected plus 19-year life
of the operation. Continued growth of the underground resource and
reserve demonstrates the ongoing potential for further material
increases over the coming years as development and drilling
continues to extend along strike and at depth.
Our exploration programmes in West Africa continue to build
momentum. In Burkina Faso, at the Wadaradoo, Napalapera and Torkera
prospects, drilling has indicated the presence of structurally
controlled high-grade mineralised zones in addition to extensive
lower-grade mineralisation. In Côte d'Ivoire, first-pass drilling
over targets defined by geochemical and geophysical surveys has
outlined mineralised zones over a number of prospects. We continue
to test the potential for lateral and depth extensions at these
more advanced prospects, whilst also progressing the numerous other
prospects within our significant land packages.
Centamin remains committed to its policy of being 100% exposed
to the gold price through its un-hedged position.
The two litigation actions, Supreme Administrative Court appeal
(SAC Appeal) and Diesel Fuel Oil court case (DFO Case), progressed
during the quarter and are described in further detail in Note 7 to
the financial statements. In respect of the former, the Company
continues to believe that it has a strong legal position and, in
addition, that it will ultimately benefit from law 32/2014, which
came into force in April 2014 and which restricts the capacity for
third parties to challenge any contractual agreement between the
Egyptian government and an investor. Law 32/2014 is currently under
review by the Supreme Constitutional Court of Egypt. We are aware
of the potential for the legal process in Egypt to be slow and for
cases to be subject to delays and adjournments but we remain
confident of the merits of the two cases.
OPERATIONAL REVIEW
Sukari Gold Mine:
9 Months 9 Months
ended ended 30
30 September September
Q3 2015 Q2 2015 Q3 2014 2015 2014
---------------------------------- ------- ------- ------- ------------- ----------
OPEN PIT MINING
Ore mined (1) ('000t) 2,204 1,751 2,693 6,518 6,813
Ore grade mined
(Au g/t) 0.74 0.76 0.74 0.76 0.68
Ore grade milled
(Au g/t) 0.69 0.75 0.82 0.79 0.82
Total material mined
('000t) 14,344 13,671 11,406 44,012 31,015
Strip ratio (waste/ore) 5.51 6.81 3.20 5.75 3.60
---------------------------------- ------- ------- ------- ------------- ----------
UNDERGROUND MINING
Ore mined from development
('000t) 154 127 120 409 349
Ore mined from stopes
('000t) 158 155 128 449 335
Ore grade mined
(Au g/t) 6.45 6.30 6.67 6.26 6.38
---------------------------------- ------- ------- ------- ------------- ----------
Ore processed ('000t) 2,673 2,667 2,388 7,817 5,831
Head grade (g/t) 1.35 1.32 1.40 1.38 1.46
Gold recovery (%) 88.2 90.3 88.0 88.9 88.2
Gold produced -
dump leach (oz) 2,697 4,715 3,587 12,506 12,902
Gold produced -
total (2) (oz) 105,413 107,781 93,624 321,427 249,145
Cash cost of production(3)
(4) (US$/oz) 767 706 771 730 767
Open pit mining 272 224 250 247 248
Underground mining 49 48 65 48 65
Processing 384 381 405 378 395
G&A 62 53 51 57 59
AISC(3) (4) (US$/oz) 918 853 NR 876 NR
---------------------------------- ------- ------- ------- ------------- ----------
Gold sold (oz) 104,803 104,168 91,575 300,546 249,882
Average realised
sales price (US$/oz) 1,131 1,188 1,267 1,256 1,284
---------------------------------- ------- ------- ------- ------------- ----------
(1) Ore mined includes 21kt @ 0.46g/t delivered to the dump
leach pad in Q3 2015 (132kt @ 0.43 g/t in Q3 2014).
(2) Gold produced is gold poured and does not include gold-in-circuit at period end.
(3) Cash cost exclude royalties, exploration and corporate
administration expenditure. Cash cost 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).
NR - Not Reported.
Health and safety - Sukari
The lost time injury (LTI) frequency rate for Q3 2015 was zero
per 200,000 man-hours (Q3 2014: 0.45 per 200,000 man-hours), with a
total of 1,286,733 man-hours worked (Q3 2014: 1,345,096). This is
in line with our target of zero injuries and having every employee
go home safely every day. Centamin views its low LTI frequency rate
as a solid achievement particularly as Sukari is the first modern
gold mine in Egypt.
Open pit
The open pit delivered total material movement of 14,344kt, an
increase of 5% on Q2 2015 due to improved fleet utilisation and
productivity, and a 26% increase on the prior year period. Mining
continued to focus on the Stage 3A and 3B areas and the northern
and eastern walls of the open pit, in line with the mine plan.
Open pit ore production was 2,204kt (up 26% on the previous
quarter) at 0.74g/t. The average head grade to the plant of 0.69g/t
was marginally below our original forecast due to some rescheduling
of lower grade material, with grades mined and milled increasing by
the end of the quarter, as expected. The ROM ore stockpile balance
decreased by 297kt to 1,030kt by the end of the quarter.
Further improvements in fleet utilisation and productivity are
expected to deliver continued increases in ore mining rates during
the fourth quarter. With pit development having progressed over the
year to date in line with the mine plan, grades remain set to
increase towards the reserve average of 1.03g/t during the fourth
quarter.
Underground mine
Ore production from the underground mine was 312kt, an 11%
increase on Q2 2015 and a 26% increase on the corresponding quarter
from the prior year. The ratio of stoping-to-development ore mined
decreased slightly, with 51% of ore from stoping (158kt; up 2% on
Q2) and 49% from development (154kt; up 21% on Q2).
Grades were in line with forecast with an average mined grade of
6.45g/t, comprising ore from stoping at 7.3g/t and from development
at 5.5g/t.
Development during the quarter, including the Amun and Ptah
decline, advanced a total of 2,201 metres. Development within
mineralised areas of Amun accounted for 1,499 metres and took place
between the 815 and 695 levels (245 to 365 metres below the
underground portal), including advance of the Amun decline through
areas of low-grade ore. Ptah development in mineralised areas took
place over 511 metres on the P810 and P790 levels (250 and 270
metres below the underground portal).
The Hannibal drive, aimed at providing access for future pit
development through the second-highest point of Sukari Hill, was
completed to breakthrough and subsequently blasted.
A total of 2,780 metres of grade control diamond drilling were
completed, aimed at short-term stope definition, drive direction
optimisation and underground resource development. A further 5,602
metres of drilling continued to test the depth extensions below the
current Amun and Ptah zones, and included 137m drilled from the
Hannibal drive to test for mineralisation around the top of Sukari
Hill.
Processing
Quarterly throughput at the Sukari process plant was 2,673kt, a
12% increase on the prior year reflecting the ramp-up of ore
treatment through the new Stage 4 plant circuit. Processed tonnages
were in line with the second quarter and 7% above the nameplate
capacity of 10Mtpa as optimisation of the secondary crushers liners
continued along with improvements to the screen configurations.
Plant productivity of 1,342 tonnes per hour (tph) represented a 7%
increase on the prior year period and a 1% decrease on the second
quarter.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
Plant metallurgical recoveries were 88.2%, a 0.2% increase on
the prior year period but 2.3% down on the second quarter due to
the adverse impact of scheduled work around the CIL circuit. The
majority of this work was completed within the quarter and
recoveries are expected to improve again during the fourth
quarter.
The dump leach operation produced 2,697oz, a 43% decrease on the
second quarter and a 25% decrease on the prior year period due to
the scheduled reduction in availability of suitable ore.
Exploration
Sukari
Drilling from underground remains a focus of the Sukari
exploration programme as new development provides improved access
to test potential high-grade extensions of the deposit. The ore
body has not yet been closed off to the north, south or at depth
and further underground drilling of the Sukari deposit will take
place during 2015, predominantly from both the Amun and Ptah
declines.
Selected results received during the third quarter from the
underground drilling programme, which are in addition to results
disclosed previously, include the following:
Amun and Ptah significant diamond drill intersections, downhole.
(Note the underground portal is located at the 1060m RL
elevation).
Hole Number From Interval Gold Target
(m) (m) (g/t)
------ -------------- ------ --------- ------- --------------------------
AMUN UGRSD0411 275.8 2.3 39.1 Quartz vein 535m RL
------ -------------- ------ --------- ------- --------------------------
UGRSD0411 242.0 6.3 13.1 Quartz vein 570m RL
--------------------- ------ --------- ------- --------------------------
UGRSD0411 268.0 13.2 48.2 Breccia 545m RL
--------------------- ------ --------- ------- --------------------------
UGRSD0412B 121.4 10.6 16.4 Western contact 675mRL
--------------------- ------ --------- ------- --------------------------
Quartz vein at Western
UGRSD0417 78.8 21.1 46.1 contact 710mRL
--------------------- ------ --------- ------- --------------------------
UGRSD0417 203.2 0.6 129.0 Western contact 640mRL
--------------------- ------ --------- ------- --------------------------
Quartz vein near Western
UGRSD0533 47.0 9.0 9.9 contact 815mRL
--------------------- ------ --------- ------- --------------------------
Breccia at Western
PTAH UGRSD0534 164.1 0.9 85.2 contact 710mRL
------ -------------- ------ --------- ------- --------------------------
Breccia near Western
UGRSD0540 107.0 1.0 55.3 contact 770mRL
--------------------- ------ --------- ------- --------------------------
Stockwork lode near
UGRSD0545 86.0 5.0 50.8 Western contact 790mRL
--------------------- ------ --------- ------- --------------------------
Stockwork lode at Western
UGRSD0569_W1 265.1 21.9 12.5 contact 625mRL
--------------------- ------ --------- ------- --------------------------
Burkina Faso
Centamin's systematic exploration programme includes geological
mapping, geophysical surveys, soil sampling, auger drilling,
aircore (AC) drilling, reverse circulation (RC) and diamond (DD)
drilling.
The strategy for 2015 is to continue to systematically explore
the entire 160km strike length of the belt and drill-test the
numerous prospects. It is expected this will lead into further
resource development work in late 2015 progressing into 2016.
A signed ministerial decree approving the Tiopolo mining
licence, which hosts the existing Indicated resource of 1.92
million ounces and Inferred resource of 1.33 million ounces, was
issued on 5th March 2015. A subsequent application has been made to
postpone development and continue exploration, as provisioned in
the Burkina Faso Mining Code.
During the quarter RC/DD drilling has occurred at a number of
prospects, including Wadaradoo and Napelapera. AC drilling has
targeted areas in close proximity to known mineralisation at
Torkera and Wadaradoo. Auger drilling has continued first pass
evaluation at Danhal, and detailed ground coverage around
Wadaradoo. The drilling fleet comprised 3 RC/DD rigs (31,504m RC
and 1,272m DD drilled), 2 AC rigs (26,031m drilled) and 3 Auger
rigs (13,439m drilled).
An IP geophysical survey commenced and was still ongoing at the
end of the quarter. To date, five untested chargeability anomalies
have been identified. The most significant of these is located 3km
west of Aminbiri, near the contact of the Batie West Shear Zone
with granodiorite. The targets are being ranked and prioritised for
drill testing.
Exploration at Wadaradoo has focused on the Wadaradoo Main and
Wadaradoo East areas. Drilling at Wadaradoo Main has continued to
target a south-plunging shoot on the main 020deg structure and two
320-330deg trending structures. The shoot was intersected in 2
drill holes; with mineralised zones of 2m @ 7.8g/t and 19m @ 3.3
g/t Au in drill hole WDRD491; and 7m @ 2.2g/t and 13m @ 8.2g/t in
drill hole WDRC492. A number of other structural targets have been
identified in the immediate vicinity. Mapping, Auger and AC
drilling are currently covering these areas as a precursor to RC
drilling.
At Wadaradoo East, exploration has targeted the higher-grade
lenses within a broad halo of low-grade mineralisation. Increasing
data has helped to improve our understanding of the geological
controls and therefore the predictability of mineralised zones.
Zones of higher-grade mineralisation can now be traced for 200m
along strike and remain open in all directions. Exploration will
continue down dip and along strike.
Wadaradoo significant RC and DD drill intersections,
downhole
From Interval Gold
HoleID (m) (m) (g/t)
--------- ----- --------- -------
WDRC118 140 10 1.99
--------- ----- --------- -------
WDRC394 194 10 3.30
--------- ----- --------- -------
WDRC432 61 17 1.32
--------- ----- --------- -------
WDRC440 191 5 5.30
--------- ----- --------- -------
WDRC450 39 2 34.60
--------- ----- --------- -------
WDRC472 42 4 6.46
--------- ----- --------- -------
WDRC485 66 2 27.20
--------- ----- --------- -------
WDRC492 225 13 8.18
--------- ----- --------- -------
WDRC493 224 3 8.78
--------- ----- --------- -------
WDRC495 124 7 3.00
--------- ----- --------- -------
WDRD117 164 11 3.39
--------- ----- --------- -------
WDRD351 329 14 2.46
--------- ----- --------- -------
WDRD395 217 14 5.26
--------- ----- --------- -------
WDRD395 238 17 2.99
--------- ----- --------- -------
WDRD423 262 8 4.31
--------- ----- --------- -------
WDRD423 275 5 4.81
--------- ----- --------- -------
WDRD424 248 10 3.03
--------- ----- --------- -------
WDRD491 270 19 3.30
--------- ----- --------- -------
Two permits covering a total area of 6.46km(2) along strike of
Napelapera were granted in the third quarter. A programme
consisting of 48 RC drill holes was completed to test extensions of
the main Napelapera mineralised structure to the south, and also
other nearby targets. Assays received to date (including those
summarised in the table below) highlight a zone of higher-grade
mineralisation. Further work will be determined once all results
are received and analysed.
Napelapera significant RC and DD drill intersections,
downhole
From Interval Gold
HoleID (m) (m) (g/t)
--------- ----- --------- -------
NPRC383 8 2 7.45
--------- ----- --------- -------
NPRC398 6 4 2.62
--------- ----- --------- -------
NPRC399 16 7 12.33
--------- ----- --------- -------
NPRC402 58 11 1.87
--------- ----- --------- -------
NPRC404 69 13 4.99
--------- ----- --------- -------
NPRC405 103 4 12.27
--------- ----- --------- -------
NPRC406 55 14 1.67
--------- ----- --------- -------
NPRC407 78 9 1.38
--------- ----- --------- -------
NPRC409 17 10 1.40
--------- ----- --------- -------
NPRC418 70 4 6.19
--------- ----- --------- -------
Drilling at Torkera has returned encouraging results, as
highlighted below. The drill programme targeted mineralised shoots
which plunge moderately to the north. Results indicate that the
stacked shoots have good continuity and remain open down plunge.
Gold mineralisation at this prospect is associated with quartz
veining, with low sulphide abundance, and is concentrated along a
sharp basalt/volcanoclastic contact. A follow up drill program is
being designed.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
Tokera significant RC and DD drill intersections, downhole
Gold
HoleID From Interval (g/t)
--------- ----- --------- -------
TKRC087 155 6 4.81
--------- ----- --------- -------
TKRC088 3 10 5.43
--------- ----- --------- -------
TKRC088 34 9 2.21
--------- ----- --------- -------
TKRD085 125 11 5.33
--------- ----- --------- -------
TKRD090 179 5 4.29
--------- ----- --------- -------
Côte d'Ivoire
Centamin now has four permits in Côte d'Ivoire covering a
c.1,517km(2) area across the border from Batie West in Burkina Faso
(see previous section). Field work continued in the third quarter
and the completed airborne magnetic and radiometric survey
continues to be used for geological interpretation and target
generation. First pass RC drilling on priority targets is planned
during the remainder of 2015, aimed at a path towards resource
development in 2016.
The Danoa licence, west of the Kalamon licence, was granted by
the Ministry of Mines in July. It is believed this licence contains
the extension of the Napelapera mineralised structure southward
into Cote d'Ivoire. AC drilling commenced in September, aimed at
testing approximately 4km of strike length, including 2km with
large artisanal workings centred over quartz veining.
Three permits remain under application and are expected to be
granted in 2016, following which exploration will focus on regional
surface geochemistry aimed at identifying anomalies for first-pass
drilling.
Soil sampling progressed on the Doropo West, Varale and Kalamon
permits. A 7,349m auger drilling program, utilising two rigs, in
eastern Kalamon and Doropo West was completed in August. A
trenching program commenced towards the end of the quarter on soil
and magnetic anomalies defined over the 'Greenstones Extend' zone,
west of the village of Varale.
AC drilling commenced during the quarter with 23,553 metres
completed to date. Key intersections are highlighted below for the
Kekeda, Souwa and Tchouahinin prospects. IP surveys and RC drilling
programs are under preparation for the Kekeda and Souwa
prospects.
Côte d'Ivoire significant AC drill intersections, downhole
Prospect HoleID From Gold
Interval (g/t)
------------- ---------- ----- --------- -------
Kekeda DPAC0145 20 18 0.97
------------- ---------- ----- --------- -------
Kekeda DPAC0146 20 10 9.82
------------- ---------- ----- --------- -------
Kekeda DPAC0147 18 4 5.51
------------- ---------- ----- --------- -------
Kekeda DPAC0148 12 8 2.68
------------- ---------- ----- --------- -------
Kekeda DPAC0149 2 16 1.79
------------- ---------- ----- --------- -------
Kekeda DPAC0166 6 6 5.44
------------- ---------- ----- --------- -------
Souwa DPAC0346 8 5 4.33
------------- ---------- ----- --------- -------
Souwa DPAC0361 14 12 0.98
------------- ---------- ----- --------- -------
Souwa DPAC0368 2 10 1.70
------------- ---------- ----- --------- -------
Souwa DPAC0404 6 7 4.98
------------- ---------- ----- --------- -------
Souwa DPAC0405 0 18 0.80
------------- ---------- ----- --------- -------
Tchouahinin DPAC0517 4 4 2.50
------------- ---------- ----- --------- -------
Tchouahinin DPAC0540 26 12 1.00
------------- ---------- ----- --------- -------
Ethiopia
Drilling at Una Deriem continued to test the eastern soil
anomaly, which runs parallel to the main soil anomaly, on 400m
spaced lines. Results from the eastern structure continued to show
patchy low grade intercepts, as highlighted below. A review of the
project is being undertaken.
Una Deriem significant diamond drill intersections, downhole
From Interval Gold
HoleID (metres) (metres) (g/t)
--------- ---------- ---------- -------
UDM0060 28 29 1.24
--------- ---------- ---------- -------
UDM0062 120 1 35.40
--------- ---------- ---------- -------
UDM0067 11 3 8.73
--------- ---------- ---------- -------
UDM0067 135 29 0.79
--------- ---------- ---------- -------
The BLEG results received for the Ondonok Dabus licence in
western Ethiopia showed a number of anomalous samples, particularly
in the northern portion of the licence area. A review of the data
is being undertaken.
FINANCIAL REVIEW
Centamin has a strong and flexible financial position with no
debt and no hedging. The Company held cash, bullion on hand, gold
sales receivables and available-for-sale financial assets of
US$216.1 million at 30 September 2015, up from US$212.6 million at
30 June 2015. The cash and cash equivalents component of this total
increased during the quarter by US$15.6 million. For further
information, please see the "Non-GAAP Financial Measures"
section.
At 30 September At 30 September
2015 2014
---------------------- ----------------- -----------------
Cash at Bank US$190.6 million US$109.9 million
---------------------- ----------------- -----------------
Gold Sales Receivable US$12.0 million US$20.0 million
---------------------- ----------------- -----------------
Available for US$0.2 million US$0.6 million
sale financial
assets
---------------------- ----------------- -----------------
Bullion on hand US$13.3 million US$9.8 million
---------------------- ----------------- -----------------
Total US$216.1 million US$140.3 million
---------------------- ----------------- -----------------
The trade and other receivables balance reduced by US$10.6
million to US$15.0 million at the end of the period, mainly due to
the US$12.2 million reduction in the gold sales receivables noted
in the above table. The impact from this reduction on working
capital was offset by a corresponding US$11.1 million reduction in
the trade and other payables balance to US$26.3 million at the end
of the period.
Centamin's unit cash cost of production was US$767 per ounce, an
increase of US$61 over the second quarter due to a reduction in
process plant recovery rates and increased open pit mining costs
associated with higher maintenance charges and blast hole drilling
rates.
During the remainder of the year the cash cost of production is
expected to reduce, due to a reversal of the factors described
above and as increasing plant throughput and improving grades drive
higher quarterly production rates.
A breakdown of capital expenditure for the Group during the
period is as follows:
US$ million
---------------------- ------------
Open pit development -
---------------------- ------------
Underground mine
development (1) 7.7
---------------------- ------------
Other sustaining
capital expenditure 1.0
---------------------- ------------
TOTAL SUSTAINING
CAPEX - SUKARI 8.7
---------------------- ------------
EXPLORATION 6.2
---------------------- ------------
(1) Includes underground development drilling
AISC were US$918 per ounce, below the original full year
guidance of US$950 per ounce mainly due to further re-scheduling of
certain sustaining capital cost items.
EBITDA for the period was US$31.3 million, down 16% on the
previous quarter. The key contributing factors were:
(a) a 5% or a US$5.7 million decrease in revenue, driven by a
comparable reduction in the average realised gold price; partially
offset by
(b) a 6% or a US$4.4 million increase in mine production costs, and
(c) a US$3.2 million increase of the movement in production
inventory and ore stockpiles; resulting from a US$0.3 million
positive movement in the third quarter against a US$3.0 million
negative movement in the previous quarter.
Basic earnings per share for the period was 0.55 US cents, down
67% on the previous quarter. In addition to the factors listed
above, the key contributing factor was a 36% increase in applicable
depreciation and amortisation expense from $18.5 million in Q2 2015
to $25.1 million in this quarter. This is as a result of the
reserve update at 30 June 2015 and a consequent increase in the
amortisation charge for capitalised underground development.
As noted in Subsequent Events, further to the declaration of an
interim dividend of 0.97 cent per share (US$0.0097) on Centamin plc
ordinary shares (totaling approximately US$11 million), the interim
dividend for the half year period ending 30 June 2015 was paid on 9
October 2015 to shareholders on the register on the Record Date of
4 September 2015.
CORPORATE UPDATE
BDO LLP have recently been engaged to provide internal audit
services to the Group. The partner in charge of the engagement is
working with the chairman of the Audit and Risk Committee to define
the scope of work for 2015 and 2016. Further details of the work
carried out by the internal auditor and scope of the engagement
will be published in the 2015 Annual Report.
LEGAL ACTIONS
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
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. 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 (SAC) will
rule in Centamin's favour, based on the legal merit 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.
It should be noted that law 32/2014, was passed in April 2014,
restricting the capacity for third parties to challenge any
contractual agreements between the Egyptian government and an
investor. The Company's legal advisers have confirmed that Centamin
is likely to benefit from this law in the SAC Appeal. The validity
of law 32/2014 is currently being challenged in the Egyptian
Constitutional Court but Centamin believes the challenge is
unlikely to succeed and that the original claim in relation to the
Sukari Concession Agreement, which was brought by a third party and
is subject to an on-going court appeal, should, in due course, be
dismissed under the provisions of law 32/2014.
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 our fuel supplier, Chevron, based on the
international price for diesel. The Company has fully provided
against the prepayment of US$197.7 million as an exceptional item,
of which US$11.1 million was provided for during Q3 2015. Refer to
Notes 4 and 5 of the accompanying interim condensed consolidated
financial statements for further details on the impact of this
exceptional provision on the Group's results for Q3 2015.
In November 2012 the Group received a further demand from
Chevron for the repayment of fuel subsidies received in the period
from late 2009 through to January 2012, for EGP403 million
(approximately US$52.0 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 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.
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 to date 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.
COST RECOVERY AND PROFIT SHARE
Based on the Company's calculation there was no 'Net Profit
Share' due to EMRA as at 30 September 2015, nor is any likely to be
due as at 30 June 2016. It is expected that there will be profit
share due to EMRA for the Sukari Gold Mine ("SGM") financial year
ending 30 June 2017, based on budgeted production, operating
expense forecasts and gold price. Centamin has elected to make
advance payments against future profit share since 2013 to the
value of US$28.75 million, in order to demonstrate goodwill towards
the Egyptian government. No additional payments were made during
the period.
OUTLOOK
We remain focussed at Sukari on realising the potential for
further production growth whilst maintaining a strong control on
costs, with the objective of generating substantial free cash flow
even under the current challenging gold prices. As highlighted by
our interim dividend, paid in October, we intend to continue
returning 15-30% of this free cash flow to our shareholders, in
line with our dividend policy, and to allocate the remainder
towards our medium and long-term objective of organic growth aimed
at realising incremental shareholder value and returns.
Safety remains a priority and we continue to target a lost time
injury frequency rate of zero.
Guidance for 2015 is between 430,000 and 440,000 ounces at below
US$700/oz cash cost of production and below US$950/oz AISC.
Production is expected to achieve the 450,000-500,000 ounce per
annum target rate during the fourth quarter of this year.
Development of the open pit has progressed well during the
course of the year to date and higher-grade ore is expected to be
mined during the fourth quarter. Delivery of the required tonnages
is expected to be sustained thereafter on an annual basis at around
the reserve average grade of 1.03g/t.
Exploration at Sukari will continue to prioritise extensions of
the high-grade underground resource and reserve and we continue to
expect this to support a long-term life of the operation.
Outside of Sukari, we continue to expect a total exploration
expenditure of approximately US$25 million in 2015, with the
largest proportion on the advanced exploration programme in Burkina
Faso. Our exploration tenements in Côte d'Ivoire and Ethiopia are
green field exploration sites and therefore require lower
exploration spend. In line with our overall exploration strategy,
the actual expenditure on these projects is results-driven and the
current estimated expenditures are therefore subject to on-going
revisions.
We will continue to evaluate potential opportunities to grow the
business through the acquisition of projects offering the potential
for the Company to deliver on its strategic objectives.
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 2015.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
(a) the condensed set of interim consolidated financial
statements for the quarter and half year ended 30 September 2015
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 Pierre Louw
11 November 2015 11 November 2015
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE QUARTER AND NINE MONTHS ENDED
30 SEPTEMBER 2015
CONTENTS
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 16-17
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION 18
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY 19
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
20
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 21
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED 30 SEPTEMBER
2015
Note 30 September 2015 30 September 2014
-------------------------------------- --------------------------------------
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
US$'000 (1) US$'000 US$'000 (1) US$'000
US$'000 US$'000
------------ ------------- --------- ------------ ------------- ---------
Revenue 3 118,529 - 118,529 116,116 - 116,116
Cost of sales 4 (95,199) (10,584) (105,783) (77,549) (16,420) (93,969)
------------ ------------- --------- ------------ ------------- ---------
Gross profit 23,330 (10,584) 12,746 38,567 (16,420) 22,147
Other operating
costs 4 (6,734) - (6,734) (6,579) - (6,579)
Impairment of
available-for-sale
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
financial assets 13 203 - 203 183 - 183
Finance income 4 38 - 38 70 - 70
Profit before
tax 16,837 (10,584) 6,253 32,241 (16,420) 15,821
Tax - - - - - -
Profit for the
period 16,837 (10,584) 6,253 32,241 (16,420) 15,821
------------ ------------- --------- ------------ ------------- ---------
EMRA Profit share - - - - - -
Profit for the
period after
EMRA Profit share 16,837 (10,584) 6,253 32,241 (16,420) 15,821
------------ ------------- --------- ------------ ------------- ---------
Profit for the
period attributable
to:
- the owners
of the parent 16,837 (10,584) 6,253 32,241 (16,420) 15,821
- Non-controlling - - -
interests
------------ ------------- --------- ------------ ------------- ---------
Other comprehensive
income
Items that may
be reclassified
subsequently
to profit or
loss:
Gains/(losses)
on available
for sale financial
assets (net of
tax) (75) - (75) (5) - (5)
Other comprehensive
income for the
period 13 (75) - (75) (5) - (5)
------------ ------------- --------- ------------ ------------- ---------
Total comprehensive
income for the
period net of
tax 16,762 (10,584) 6,178 32,236 (16,420) 15,816
------------ ------------- --------- ------------ ------------- ---------
Total comprehensive
income for the
period attributable
to:
- the owners
of the parent 16,762 (10,584) 6,178 32,236 (16,420) 15,816
- - - - - -
* Non-controlling interests
------------ ------------- --------- ------------ ------------- ---------
Earnings per
share:
Basic (cents
per share) 10 0.740 (0.194) 0.546 2.823 (1.438) 1.385
Diluted (cents
per share) 10 0.734 (0.197) 0.537 2.798 (1.425) 1.373
(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 MONTHS ENDED 30 SEPTEMBER
2015
Note 30 September 2015 30 September 2014
-------------------------------------- --------------------------------------
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
US$'000 (1) US$'000 US$'000 (1) US$'000
US$'000 US$'000
------------ ------------- --------- ------------ ------------- ---------
Revenue 3 378,200 - 378,200 321,464 - 321,464
Cost of sales 4 (268,753) (35,424) (304,177) (209,396) (45,175) (254,571)
------------ ------------- --------- ------------ ------------- ---------
Gross profit 109,447 (35,424) 74,023 112,068 (45,175) 66,893
Other operating
costs 4 (20,974) - (20,974) (18,930) - (18,930)
Impairment of
available-for-sale
financial assets 13 474 - 474 (546) - (546)
Finance income 4 136 - 136 326 - 326
Profit before
tax 89,083 (35,424) 53,659 92,918 (45,175) 47,743
Tax (8) - (8) - - -
Profit for the
period 89,075 (35,424) 53,651 92,918 (45,175) 47,743
------------ ------------- --------- ------------ ------------- ---------
EMRA Profit share - - - - - -
------------ ------------- --------- ------------ ------------- ---------
Profit for the
period attributable
to:
- the owners
of the parent 89,075 (35,424) 53,651 92,918 (45,175) 47,743
- Non-controlling - - - - - -
interests
------------ ------------- --------- ------------ ------------- ---------
Other comprehensive
income
Items that may
be reclassified
subsequently
to profit or
loss:
Losses on available
for sale financial
assets (net of
tax) (175) - (175) (5) - (5)
Other comprehensive
income for the
period 13 (175) - (175) (5) - (5)
------------ ------------- --------- ------------ ------------- ---------
Total comprehensive
income for the
period net of
tax 88,900 (35,424) 53,476 92,913 (45,175) 47,738
------------ ------------- --------- ------------ ------------- ---------
Total comprehensive
income for the
period attributable
to:
- the owners
of the parent 88,900 (35,424) 53,476 92,913 (45,175) 47,738
- - -
* Non-controlling interests
------------ ------------- --------- ------------ ------------- ---------
Earnings per
share:
Basic (cents
per share) 10 7.787 (3.097) 4.690 8.237 (4.005) 4.232
Diluted (cents
per share) 10 7.679 (3.054) 4.625 8.136 (3.956) 4.180
(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 2015
Note 30 September 31 December
2015 2014
(Unaudited) (Audited)
US$'000 US$'000
NON-CURRENT ASSETS
Property, plant and
equipment 11 885,960 928,964
Exploration and evaluation
asset 12 144,265 123,999
Prepayments 5 28,750 23,750
Other receivables 53 645
------------ -----------
Total non-current assets 1,059,028 1,077,358
------------ -----------
CURRENT ASSETS
Inventories 131,148 140,628
Available-for-sale
financial assets 13 189 409
Trade and other receivables 14,953 24,973
Prepayments 5 1,277 1,710
Cash and cash equivalents 16a 190,574 125,659
------------ -----------
Total current assets 338,141 293,379
------------ -----------
Total assets 1,397,169 1,370,737
------------ -----------
NON-CURRENT LIABILITIES
Provisions 3,286 3,015
------------ -----------
Total non-current liabilities 3,286 3,015
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
------------ -----------
CURRENT LIABILITIES
Trade and other payables 26,294 34,042
Provisions 1,553 307
------------ -----------
Total current liabilities 27,847 34,349
------------ -----------
Total liabilities 31,133 37,364
------------ -----------
Net assets 1,366,036 1,333,373
------------ -----------
EQUITY
Issued capital 8 665,010 661,573
Share option reserve 2,575 4,098
Accumulated profits 698,451 667,702
------------ -----------
Total Equity 1,366,036 1,333,373
------------ -----------
TOTAL EQUITY ATTRIBUTABLE
TO:
* owners of the parent 1,366,036 1,333,373
- -
* non-controlling interest
Total Equity 1,366,036 1,333,373
------------ -----------
The above Unaudited Interim Condensed Consolidated Statement of
Financial Position should be read in conjunction with the
accompanying notes.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2015
Share
Issued options Accumulated
Capital reserve profits Total Equity
US$'000 US$'000 US$'000 US$'000
-------- -------- ----------- --------------
Balance as at 1 January
2015 661,573 4,098 667,702 1,333,373
Profit for the period - - 53,651 53,651
Other comprehensive
income for the period - - (175) (175)
-------- -------- ----------- --------------
Total comprehensive
income for the period - - 721,178 1,386,849
Dividend paid - - (22,727) (22,727)
Transfer of share
based payments 3,437 (3,437) - -
Recognition of share
based payments - 1,914 - 1,914
Balance as at 30 September
2015 665,010 2,575 698,451 1,366,036
-------- -------- ----------- --------------
Share
Issued options Accumulated Total Equity
Capital reserve profits US$'000
US$'000 US$'000 US$'000
-------- -------- ----------- --------------
Balance as at 1 January
2014 612,463 5,761 594,624 1,212,848
Profit for the period - - 47,743 47,743
Other comprehensive
income for the period - - (5) (5)
-------- -------- ----------- --------------
Total comprehensive
income for the period - - 47,738 47,738
Issue of shares 48,218 - - 48,218
Own shares acquired
in the period (1,743) - - (1,743)
Transfer of share based
payments 1,521 (1,521) - -
Recognition of share
based payments - 1,805 - 1,805
Available for sale
financial asset reserve - - (5) (5)
Balance as at 30 September
2014 660,459 6,045 642,357 1,308,861
-------- -------- ----------- --------------
The above Unaudited Interim Condensed Consolidated Statement of
Changes in Equity should be read in conjunction with the
accompanying notes.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
Nine Months
Three Months Ended Ended
30 September 30 September
Note 2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Cash flows from operating
activities
Cash generated in operating
activities 16(b) 31,299 31,306 132,401 79,137
Finance income (38) (70) (136) (326)
--------- --------
Net cash generated by
operating activities 31,261 31,236 132,265 78,811
--------- -------- --------- --------
Cash flows from investing
activities
Acquisition of property,
plant and equipment (9,562) (18,586) (25,073) (61,349)
Exploration and evaluation
expenditure (6,251) (8,083) (20,266) (21,161)
Proceeds from sale /
(Acquisition) of financial
assets - - - 91
Cash acquired through
Ampella Mining Limited
asset acquisition - - - 9,254
Finance income 38 70 136 326
--------- --------
Net cash used in investing
activities (15,775) (26,599) (45,203) (72,839)
--------- -------- --------- --------
Cash flows from financing
activities
Dividend paid - - (22,727) -
Own shares acquired
during the period - - - (1,743)
Net cash provided by
financing activities - - (22,727) (1,743)
--------- -------- --------- --------
Net decrease in cash
and cash equivalents 15,486 4,637 64,335 4,229
Cash and cash equivalents
at the beginning of
the period 174,978 106,398 125,659 105,979
Effect of foreign exchange
rate changes 110 (1,174) 580 (347)
--------- -------- --------- --------
Cash and cash equivalents
at the end of the period 16(a) 190,574 109,861 190,574 109,861
--------- -------- --------- --------
The above Unaudited Condensed Consolidated Statement of Cash
Flows should be read in conjunction with the accompanying
notes.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER
2015
NOTE 1: ACCOUNTING POLICIES
Basis of preparation
These unaudited interim condensed consolidated financial
statements have been prepared in accordance with International
Accounting Standard 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.
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 2014, 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 2014 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 2014 is based on the statutory accounts for the year ended
31 December 2014. Readers are referred to the auditor's report to
the Group financial statements as at 31 December 2014 (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
2014 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
2015. 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.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
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 2014.
Going concern
These financial statements for the period ended 30 September
2015 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 the prior year 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 are
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.
The directors have a reasonable expectation that the Group will
have adequate resources to continue in operational existence for
the foreseeable future. Therefore 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
2015
(Unaudited) 2014
US$'000 (Audited)
US$'000
Egypt 982,769 1,017,003
Ethiopia 12,378 10,327
Burkina Faso 61,381 48,893
Cote d'Ivoire 2,372 977
Australia 1 2
United Kingdom 127 156
------------ -----------
1,059,028 1,077,358
------------ -----------
NOTE 3: REVENUE
An analysis of the Group's revenue for the period, from
continuing operations, is as follows:
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Gold sales 118,339 115,987 377,514 320,911
Silver sales 190 129 686 553
-------- -------- -------- --------
118,529 116,116 378,200 321,464
-------- -------- -------- --------
NOTE 4: PROFIT BEFORE TAX
Profit for the period has been arrived at after crediting /
(charging) the following gains / (losses) and expenses:
Three months ended Three months ended
30 September 2015 30 September 2014
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Finance income
Interest received 38 - 38 70 - 70
------------ ------------- ------- ------------ ------------- -------
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 4: PROFIT BEFORE TAX (CONTINUED)
Three months ended 30 Three months ended 30 September
September 2015 2014
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
Expenses US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Cost of sales
Mine production
costs (69,789) (11,179) (80,968) (55,384) (16,639) (72,023)
Movement in
production inventory
and ore stockpiles (334) 595 261 (106) 219 113
Depreciation
and Amortisation (25,076) - (25,076) (22,059) - (22,059)
------------ ------------- ---------- ------------ ------------- --------
(95,199) (10,584) (105,783) (77,549) (16,420) (93,969)
------------ ------------- ---------- ------------ ------------- --------
Three months ended Three months ended
30 September 2015 30 September 2014
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
Other operating US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
costs
Fixed royalty
- attributable
to the Egyptian
government (3,547) - (3,547) (3,475) - (3,475)
Corporate costs (3,620) - (3,620) (3,131) - (3,131)
Other expenses (35) - (35) (45) (45)
Other income - - - 379 - 379
Foreign exchange
gain, net 572 - 572 (184) - (184)
Provision for
restoration
and rehabilitation
- unwinding
of discount (90) - (90) (134) - (134)
Depreciation (14) - (14) 11 - 11
(6,734) - (6,734) (6,579) - (6,579)
------------ ------------- ------- ------------ ------------- ---------
Impairment of
available for
sale financial
assets 203 - 203 183 - 183
------------ ------------- ------- ------------ ------------- ---------
Nine months ended Nine months ended
30 September 2015 30 September 2014
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Finance income
Interest received 136 - 136 326 - 326
------------ ------------- ------- ------------ ------------- -------
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 4: PROFIT BEFORE TAX (CONTINUED)
Nine months ended Nine months ended
30 September 2015 30 September 2014
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
Expenses US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Cost of sales
Mine production
costs (202,119) (33,314) (235,433) (147,617) (44,172) (191,789)
Movement in
production inventory
and ore stockpiles 1,399 (2,110) (711) (4,561) (1,003) (5,564)
Depreciation
and Amortisation (68,033) - (68,033) (57,218) - (57,218)
------------ ------------- ---------- ------------ ------------- ---------
(268,753) (35,424) (304,177) (209,396) (45,175) (254,571)
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
------------ ------------- ---------- ------------ ------------- ---------
Nine months ended Nine months ended
30 September 2015 30 September 2014
Before Before
exceptional Exceptional Total exceptional Exceptional Total
items items items items
Other operating US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
costs
Fixed royalty
- Attributable
to the Egyptian
government (11,318) - (11,318) (9,619) - (9,619)
Corporate costs (10,797) - (10,797) (10,803) - (10,803)
Other income - - - 379 - 379
Other expenses (98) - (98) (104) - (104)
Foreign exchange
gain, net 1,553 - 1,553 1,664 - 1,664
Provision for
restoration
and rehabilitation
- unwinding
of discount (271) - (271) (403) - (403)
Depreciation (44) - (44) (44) - (44)
(20,973) - (20,973) (18,930) - (18,930)
------------ ------------- ---------- ------------ ------------- ---------
Impairment of
available for
sale financial
assets 474 - 474 (546) - (546)
------------ ------------- ---------- ------------ ------------- ---------
Exceptional items
The directors consider that items of income or expense which are
material by virtue of their unusual, irregular or non-recurring
nature should be disclosed separately if the consolidated financial
statements are to fairly present the financial position and
underlying business performance. In order to allow a better
understanding of the financial information presented within the
consolidated financial statements, and specifically the Group's
underlying business performance, the effect of exceptional items
are shown below.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 4: PROFIT BEFORE TAX (CONTINUED)
Exceptional items (continued)
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Included in Cost of
sales
Mine production costs (11,179) (16,639) (33,314) (44,172)
Movement in production
inventory and ore
stockpiles 595 219 (2,110) (1,003)
--------- -------- --------- --------
(10,584) (16,420) (35,424) (45,175)
--------- -------- --------- --------
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$52.0 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, Chevron,
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. 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$11.1 million and US$32.0
million made during Q3 2015 and the nine months to 30 September
2015 respectively, as an exceptional item, as follows:
(a) a US$11.2 million increase and a US$33.3 million increase in
direct mine production costs, and
(b) a US$0.1 million decrease and a US$1.3 million increase in stores inventories.
In addition, there was a US$0.6 million decrease and a US$2.1
million increase in mining stockpiles and ore in circuit. This has
resulted in a net decrease of US$10.6 million and US$35.4 million
in the profit and loss in Q3 2015 and the nine months to 30
September 2015 respectively.
NOTE 5: PREPAYMENTS
30 September 31 December
2015
(Unaudited) 2014
US$'000 (Audited)
US$'000
Non-current Prepayments
------------ -----------
Advance payment to EMRA (1) 28,750 23,750
------------ -----------
(1) With a view to demonstrating goodwill toward the Egyptian
government, PGM has made advance payments to EMRA which will be
netted off against future Profit Share that becomes payable to
EMRA.
Nine Months Year
Ended
30 September Ended
2015
(Unaudited) 31 December
US$'000 2014
(Audited)
US$'000
Current Prepayments
Prepayments 1,277 1,710
Fuel prepayments - -
------------- ------------
Prepayments 1,277 1,710
------------- ------------
Movement in fuel prepayments (1)
Balance at the beginning of the - -
period
Fuel prepayment recognised 31,969 68,737
Less: Provision charged to (2)
:
Mine production costs (see Note
4) (33,314) (61,564)
Property, plant and equipment - (6,953)
Inventories 1,345 (220)
Balance at the end of the period - -
------------- ------------
(1) The cumulative fuel prepayment recognised and provision
charged as at 30 September 2015 is as follows:
Fuel prepayment recognised (US$'000) 197,701
Provision charged to:
Mine production costs (US$'000) 184,663
Property, plant and equipment (US$'000) 11,852
Inventories (US$'000) 1,186
(2) Refer to Note 4, Exceptional Items, for further details.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 6: COMMITMENTS
The following is a summary of the Company's outstanding
commitments as at 30 September 2015:
Payments due Total < 1 year 1 to 5 >5 years
US$'000 US$'000 years US$'000
US$'000
Operating Lease Commitments(1) 168 56 112 -
--------- --------- --------- ---------
Total commitments 168 56 112 -
--------- --------- --------- ---------
(1) Operating lease commitments are limited to office premises
in Jersey. As a result of the completion of Stage 4 in the prior
year, the Group had no commitments for capital expenditure as at 30
September 2015.
NOTE 7: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
Fuel Supply
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
In January 2012, the Group received a letter from Chevron to the
effect that Chevron would only be able to supply DFO 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$52.0 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, Chevron, 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. 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 to date
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$197.7 million, as an
exceptional item. Refer to Notes 4 and 5 of the accompanying
financial statements for further details on the impact of this
exceptional provision on the Group's results for Q3 2015.
No provision has been made in respect of the historic subsidies
prior to January 2012 as, based on legal advice, the Company
believes that the prospects of a court finding in its favour in
relation to this matter remain very strong.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 7: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(CONTINUED)
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 ("EMRA") and Centamin's
wholly--owned subsidiary Pharaoh Gold Mines ("PGM"), and was
approved by the People's Assembly as Law 222 of 1994.
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 at 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 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 (31 December 2014:
nil).
NOTE 8: ISSUED CAPITAL
Fully Paid Ordinary Three Months Year Ended
Shares Ended
30 September 31 December
2015 2014
(Unaudited) (Audited)
Number US$'000 Number US$'000
Balance at beginning of the period 1,152,107,984 661,573 1,101,397,381 612,463
Issue of shares (1) - - 50,710,603 48,218
Own shares acquired during the
period - - - (1,743)
Transfer from share options reserve - 3,437 - 2,635
Balance at end of the period 1,152,107,984 665,010 1,152,107,984 661,573
------------- ------- -------------- --------
(1) Relates to the ordinary shares that were admitted to trading
as consideration for the acquisition of Ampella Mining Limited.
Fully paid ordinary shares carry one vote per share and carry
the right to dividends.
The authorised share capital is an unlimited number of no par
value shares.
As at the date of this report the Company held 5,993,041
ordinary shares in treasury. (2)
(2) Refers to shares held by the trustee pursuant to the
Deferred Bonus Share Plan
NOTE 9: RELATED PARTY TRANSACTIONS
The related party transactions for the three months ended 30
September 2015 are summarised below:
- Salaries, superannuation contributions, bonuses, share based
payments, consulting and Directors' fees paid to Directors during
the three months ended 30 September 2015 amounted to US$559,115 (30
September 2014: US$633,507).
- 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 2015 amounted to
US$10,629 (30 September 2014: US$13,225).
The related party transactions for the nine months ended 30
September 2015 are summarised below:
- Salaries, superannuation contributions, bonuses, share based
payments, consulting and Directors' fees paid to Directors during
the nine months ended 30 September 2015 amounted to US$1,635,959
(30 September 2014: US$2,144,146).
- 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 2015 amounted to
US$33,822 (30 September 2014: US$39,398).
NOTE 10: EARNINGS PER SHARE
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
Basic earnings per share are calculated using the weighted
average number of shares outstanding. Diluted earnings per share
are calculated using the treasury stock method. In order to
determine diluted earnings per share, the treasury stock method
assumes that any proceeds from the exercise of dilutive stock
options and warrants would be used to repurchase common shares at
the average market price during the period, with the incremental
number of shares being included in the denominator of the diluted
earnings per share calculation. The diluted earnings per share
calculation excludes any potential conversion of options and
warrants that would increase earnings per share.
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
Cents Cents Cents Cents
Per Share Per Share Per Share Per Share
Basic earnings per
share 0.546 1.385 4.690 4.232
------------- ------------- ------------- -------------
Diluted earnings per
share 0.537 1.373 4.625 4.180
------------- ------------- ------------- -------------
Basic earnings per share
The earnings and weighted average number of ordinary shares used
in the calculation of basic earnings per share are as follows:
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Earnings used in the
calculation of basic
EPS 6,253 15,821 53,651 47,743
---------- ---------- ---------- ----------
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
No. No. No. No.
Weighted average number
of ordinary shares
for the purpose of
basic EPS 1,146,114,943 1,141,953,267 1,143,955,365 1,128,044,065
------------- ------------- ------------- -------------
Diluted earnings per share
The earnings and weighted Three Months Nine Months
average number of ordinary Ended Ended
shares used in the 30 September 30 September
calculation of diluted (Unaudited) (Unaudited)
earnings per share
are as follows:
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Earnings used in the
calculation of diluted
EPS 6,253 15,821 53,651 47,743
---------- ---------- ---------- ----------
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 10: EARNINGS PER SHARE (CONTINUED)
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
No. No. No. No.
Weighted average number
of ordinary shares
for the purpose of
diluted EPS 1,165,023,281 1,152,099,098 1,159,942,550 1,142,059,235
------------- ------------- ------------- -------------
Weighted average number
of ordinary shares
for the purpose of
basic EPS 1,146,114,943 1,141,953,267 1,143,955,365 1,128,044,065
Shares deemed to be
issued for no consideration
in respect of employee
options 18,908,338 10,145,831 15,987,185 14,015,170
------------- ------------- ------------- -------------
Weighted average number
of ordinary shares
used in the calculation
of diluted EPS 1,165,023,281 1,152,099,098 1,159,942,550 1,142,059,235
------------- ------------- ------------- -------------
NOTE 11: PROPERTY, PLANT AND EQUIPMENT ((1)
Three Months
Ended 30
September Land Plant Mine
2015 Office and and Mining Development Stripping Capital
(Unaudited) equipment buildings equipment equipment properties Asset WIP Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Cost
Balance at
31 December
2014 5,383 1,142 565,811 220,654 228,192 - 121,252 1,142,434
Additions 553 44 18,333 19,334 73,056 - (84,977) 26,343
Transfers - - - - - -
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
Balance at
30 September
2015 5,936 1,186 584,144 239,988 301,248 - 36,275 1,168,777
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
Accumulated
depreciation
Balance at
31 December
2014 (4,254) (177) (67,744) (71,798) (69,497) - - (213,470)
Depreciation
and
amortisation (856) (104) (23,048) (21,866) (23,473) - - (69,347)
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
Balance at
30 September
2015 (5,110) (281) (90,792) (93,664) (92,970) - - (282,817)
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
Year Ended
31 December
2014 (Audited)
Cost
Balance at
31 December
2013 4,625 171 284,902 178,374 182,974 - 426,461 1,077,507
Additions 17 - 8 - 6,979 - 61,252 68,256
Decrease
in
rehabilitation
asset - - - - (5,161) - - (5,161)
Acquisition
of subsidiary 1,080 1,131 814 1,224 - - 3 4,252
Disposals (571) (160) (724) (391) - - (574) (2,420)
Transfers 232 - 280,811 41,447 43,400 - (365,890) -
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
Balance at
31 December
2014 5,383 1,142 565,811 220,654 228,192 - 121,252 1,142,434
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
Accumulated
depreciation
Balance at
31 December
2013 (3,051) (23) (42,747) (46,326) (34,774) - - (126,921)
Acquisition
of subsidiary (765) (146) (649) (1,224) - - - (2,784)
Depreciation
and
amortisation (730) (8) (24,456) (24,373) (34,723) - - (84,290)
Disposals 292 - 108 125 - - - 525
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
Balance at
31 December
2014 (4,254) (177) (67,744) (71,798) (69,497) - - (213,470)
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
Net book
value
As at 31
December
2014 1,129 965 498,067 148,856 158,695 - 121,252 928,964
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
As at 30
September
2015 826 905 493,352 146,324 208,278 - 36,275 885,960
----------- ----------- ----------- ----------- ------------ ---------- ---------- ----------
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
(1) Legal title of all operating assets of PGM pass to EMRA when
cost recovery of those assets is complete. The right of use of all
fixed and movable assets remains with PGM and SGM for no charge
over the life of mine.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 12: EXPLORATION AND EVALUATION ASSETS
Nine Months Year Ended
Ended
30 September 31 December
2015 2014
(Unaudited) (Audited)
US$'000 US$'000
Balance at the beginning of
the period 123,999 59,849
Expenditure for the period 20,266 28,841
Acquisition of Ampella Mining
Limited - 37,637
Impairment of exploration
and evaluation asset - (2,328)
------------- ------------
Balance at the end of the
period 144,265 123,999
------------- ------------
The exploration and evaluation asset relates to the drilling,
geological exploration and sampling of potential ore reserves.
NOTE 13: AVAILABLE-FOR-SALE FINANCIAL ASSETS
The unrealised losses on available-for-sale investments
recognised in other comprehensive income were as follows:
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Loss on fair value of
investment - other comprehensive
income (75) (5) (175) (5)
-------- -------- -------- --------
The available for sale financial asset at period-end relates to
a 6.66% (2014: 11.40%) equity interest in Nyota Minerals Limited
("NYO"), a listed public company, as well as a 0.96% (2014: 1.6%)
equity interest in KEFI Minerals plc ("KEFI").
As a result of the prolonged decline in the fair value in the
prior year of the investment in Nyota, the prior period devaluation
had been recognised as an impairment loss in the Statement of
Comprehensive Income as follows.
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Impairment loss 203 183 474 (546)
-------- -------- -------- --------
NOTE 14: SHARE BASED PAYMENTS
No share based payments were awarded or granted to Employees
during the third quarter.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 15: FINANCIAL INSTRUMENTS' FAIR VALUE DISCLOSURES
The Group has no financial instruments with fair values that are
determined by reference to significant unobservable inputs, i.e.
those that would be classified as level 3 in the fair value
hierarchy, nor have there been any transfers of assets or
liabilities between levels of the fair value hierarchy.
The Group's interest in Nyota Minerals Limited and KEFI Minerals
plc is classified as an available for sale financial asset (see
note 13). The Group carries its interest in Nyota Minerals Limited
and KEFI Minerals plc at fair value, and measures its interest
using Level 1 unadjusted quoted prices.
The director's consider that the carrying amounts of financial
assets and financial liabilities carried at amortised cost
approximate their amortised cost.
NOTE 16: NOTES TO THE STATEMENTS OF CASH FLOWS
(a) Reconciliation of cash and cash equivalents
For the purpose of the statements of cash flows, cash and cash
equivalents includes cash on hand and at bank and deposits.
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Cash and cash equivalents 190,574 109,861 190,574 109,861
-------- -------- -------- --------
(b) Reconciliation of profit for the period to cash flows from
operating activities
Three Months Nine Months
Ended Ended
30 September 30 September
(Unaudited) (Unaudited)
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Profit for the period 6,253 15,821 53,651 47,743
Add/(less) non-cash items:
Depreciation / amortisation
of property, plant and
equipment 25,089 22,047 68,078 57,262
Inventory write off - 11 - -
Shares received in KEFI - (379) - (379)
Increase / (Decrease)
in provisions (64) 554 1,516 1,133
Foreign exchange rate
(gain) / loss, net (682) 323 (2,133) (420)
Impairment of available-for-sale
financial assets (203) 183 (474) 546
Share based payment expense 556 832 1,915 1,805
Changes in working capital
during the period :
(Increase) / Decrease
in trade and other receivables 10,758 (1,956) 10,020 2,950
Decrease / (Increase)
in inventories (491) 1,249 9,479 6,169
(Increase) / Decrease
in prepayments (572) (5,987) (4,567) (5,390)
Decrease / (Increase)
in trade and other payables (9,345) (1,391) (5,084) (32,281)
Cash flows generated
from operating activities 31,299 31,306 132,401 79,137
-------- -------- -------- ---------
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE AND NINE MONTHS ENDED 30 SEPTEMBER 2015
(CONTINUED)
NOTE 16: NOTES TO THE STATEMENTS OF CASH FLOWS (CONTINUED)
(c) Non-cash financing and investing activities
There have been no non-cash financing and investing activities
during the current or comparative period quarter other than the
Ampella asset acquisition as disclosed in Note 12.
NOTE 17: SUBSEQUENT EVENTS
Further to the declaration of an interim dividend of 0.97 cent
per share (US$0.0097) on Centamin plc ordinary shares (totalling
approximately US$11 million), the interim dividend for the half
year period ending 30 June 2015 was paid on 9 October 2015 to
shareholders on the register on the Record Date of 4 September
2015.
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.
The accompanying Form 52 109FS Certification of interim filings
are published, inter alia, for the purposes, of discharging the
Company's obligations arising in connection with the listing of its
shares on the Toronto Stock Exchange.
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 standardized 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 costs 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.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
Reconciliation of profit before tax to EBITDA:
Quarter Quarter Quarter Quarter
ended ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep
2015 2015 2014 2014
Before Including Before Including
Exceptional Exceptional Exceptional Exceptional
items items(1) items items(1)
US$'000 US$'000 US$'000 US$'000
------------------- ------------- ------------- ------------- -------------
Profit before
tax 16,837 6,253 32,241 15,821
------------------- ------------- ------------- ------------- -------------
Finance income (38) (38) (70) (70)
------------------- ------------- ------------- ------------- -------------
Depreciation
and amortisation 25,089 25,089 22,059 22,059
------------------- ------------- ------------- ------------- -------------
EBITDA 41,888 31,304 54,230 37,810
------------------- ------------- ------------- ------------- -------------
Nine months Nine months Nine months Nine months
ended ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep
2015 2015 2014 2014
Before Including Before Including
Exceptional Exceptional Exceptional Exceptional
Items Items(1) Items Items(1)
US$'000 US$'000 US$'000 US$'000
------------------- ------------- ------------- ------------- -------------
Profit before
tax 89,083 53,659 92,918 47,743
------------------- ------------- ------------- ------------- -------------
Finance income (136) (136) (326) (326)
------------------- ------------- ------------- ------------- -------------
Depreciation
and amortisation 68,077 68,077 57,218 57,218
------------------- ------------- ------------- ------------- -------------
EBITDA 157,024 121,600 149,810 104,635
------------------- ------------- ------------- ------------- -------------
(1) Profit before tax, Depreciation and amortisation and EBITDA
includes an exceptional provision to reflect the removal of fuel
subsidies (refer to Note 4 of the Financial Statements for further
details).
2) Cash cost and all-in sustaining costs (AISC) per ounce
calculation: Cash cost and AISC per ounce 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 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 the AISC 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 costs associated with developing and
maintaining gold mines. In addition, this metric includes the costs
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 per ounce is
arrived at by dividing the dollar value of the sum of these cost
metrics, by the ounces of gold produced.
Reconciliation of Cash Cost per Ounce:
Quarter Quarter Quarter Quarter
ended ended ended ended
30 Sep 30 Sep 30 Sep2014 30 Sep
2015 2015 Before 2014
Before Including Exceptional Including
Exceptional Exceptional Items Exceptional
Items Items(1) Items(1)
------------------------- ----------- ------------- ------------- ------------- -------------
Mine production
costs (Note 4) (US$'000) 69,789 80,968 55,384 72,023
------------------------- ----------- ------------- ------------- ------------- -------------
Less: Refinery
and transport (US$'000) (131) (131) (20) (20)
------------------------- ----------- ------------- ------------- ------------- -------------
Cash cost of production (US$'000) 69,658 80,837 55,364 72,003
------------------------- ----------- ------------- ------------- ------------- -------------
Gold Produced -
Total (oz) 105,413 105,413 93,624 93,624
------------------------- ----------- ------------- ------------- ------------- -------------
Cash cost per ounce (US$/oz) 661 767 592 771
------------------------- ----------- ------------- ------------- ------------- -------------
Reconciliation of AISC per ounce:
Quarter Quarter Quarter Quarter
ended ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep
2015 2015 2015 2015
Before Including Before Including
Exceptional Exceptional Exceptional Exceptional
Items Items(1) Items Items
------------------------------ ----------- ------------- ------------- ------------- -------------
Mine production
costs(2) (Note
4) (US$'000) 69,789 80,968
------------------------------ ----------- ------------- ------------- ------------- -------------
Royalties (US$'000) 3,547 3,547
------------------------------ ----------- ------------- -------------
Corporate and administration
costs (US$'000) 3,620 3,620
------------------------------ ----------- ------------- -------------
Rehabilitation
costs (US$'000) 90 90
------------------------------ ----------- ------------- -------------
Underground development (US$'000) 7,717 7,717
------------------------------ ----------- ------------- -------------
Other sustaining
capital expenditure (US$'000) 1,016 1,016
------------------------------ ----------- ------------- -------------
By-product credit (US$'000) (190) (190)
------------------------------ ----------- ------------- -------------
All-in sustaining
costs (US$'000) 85,588 96,768
------------------------------ ----------- ------------- -------------
Gold Produced -
Total (oz) 105,413 105,413
------------------------------ ----------- ------------- -------------
All in-sustaining
costs per ounce (US$/oz) 812 918 NR NR
------------------------------ ----------- ------------- ------------- ------------- -------------
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
Centamin (LSE:CEY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Centamin (LSE:CEY)
Historical Stock Chart
From Apr 2023 to Apr 2024