LSE- and TSX-listed gold miner Centamin reports that the scheduled processing of lower-grade ore from the Sukari openpit, alongside the planned underground ventilation upgrades and mill maintenance during the quarter ended March 31, contributed to slightly lower production year-on-year.

The company’s flagship Sukari mine, in Egypt, produced 104 821 oz in the first quarter, a 1% decrease year-on-year.

CEO Martin Horgan says the company’s commitment to cost control meant that its all-in sustaining costs (AISC) on an absolute basis decreased by 3% quarter-on-quarter and 6% year-on-year; albeit the lower production coupled with the timing of gold sales resulted in a temporary increase in reported unit costs.

“With improved ventilation and the processing of lower-grade openpit ore substantially completed during the first quarter, we expect production rates to increase for the balance of the year and reaffirm our 2024 production and cost guidance ranges,” he says.

Gold sales for the quarter were 92 494 oz, a 14% decrease year-on-year. However, the company closed the period with 19 241 oz of gold bullion on hand which was sold at the start of the second quarter.

The average realised gold price for the quarter was $2 062/oz, up 8% year-on-year.

Revenues generated were $191-million, a 7% decrease year-on-year, driven by lower gold sales partially offset by a higher realised gold price.

Unit cash costs of production were $1 088/oz, a 16% increase year-on-year. The AISC of $1 519/oz, a 13% increase year-on-year, reflected the lower gold sales. In absolute terms, AISC decreased both year-on-year and quarter-on-quarter, by $5-million and $9-million, respectively.

Meanwhile, Centamin notes that key capital projects progressed as scheduled during the first quarter, including the Tailings Storage Facility (TSF) 2 embankment raise, the north dump leach expansion, underground ventilation upgrades – namely the installation of additional fans, underground and openpit equipment purchases, and the ongoing waste-stripping programme which remains on track for completion during the second quarter.

The company reports that its capital expenditure (capex) for the quarter was $46-million, with the money spent on raising TSF 2, openpit and underground fleet purchases, equipment rebuilds, underground ventilation upgrades and waste mining.

Centamin also reports a robust balance sheet, with cash and liquid assets of $167-million, as at March 31, and total liquidity of $317-million including an undrawn $150-million sustainability-linked revolving credit facility.

The company reiterates its full-year production guidance of 470 000 oz/y to 500 000 oz/y weighted towards the second half of the year, as well as its cash cost guidance of $700/oz to $850/oz produced and the AISC guidance of $1 200/oz to $1 350/oz sold.

Adjusted capex guidance for the full year is $215-million.

This includes $112-million of sustaining capex and $103-million of non-sustaining capex, of which $58-million is allocated to growth projects that are funded from Centamin treasury and cost recovered over three years.

HEALTH AND SAFETY

At Sukari, Centamin notes that it surpassed a new lost time injury- (LTI-) free record of 12.5-million hours, outperforming the previous benchmark of 9.8-million hours established in March 2023.

In the first quarter, there was one LTI resulting in a group LTI frequency rate of 0.32 per one-million site-based hours worked.

The total recordable injury frequency rate for the first quarter was 1.28 per one-million site-based hours worked.

EXPLORATION PROJECTS

The total expensed exploration and development spend for the quarter was $6-million.

The group exploration budget for this year is $23-million, including $14-million to complete the Doropo definitive feasibility study (DFS), an environmental- and social-impact assessment (ESIA), permitting and financing assessment and $9-million for Centamin’s Eastern Desert Exploration (EDX) programme.

Centamin notes that work at Doropo continued to progress well, notably with submission of the draft ESIA report to government for approval and permitting.

“Community consultation continues in parallel, alongside the commencement of a suite of pilot livelihood improvement projects,” it points out.

The company says the Doropo ESIA submitted to the Côte d’Ivoire government will, alongside the DFS, form the basis for the mining licence application in mid-2024.

DFS work included preliminary whittle shell selection and ongoing cost estimates using the mining contractor submissions, metallurgical testwork and infrastructure and flowsheet design finalisation, and completion of hydrology, sterilisation and geotechnical drilling.

“We continue to advance organic growth opportunities within our portfolio. We are actively following up on the recent exploration successes from our EDX drilling programme and are progressing well towards completion of the DFS for the Doropo project in Côte d’Ivoire by mid-year,” says Horgan.

EASTERN DESERT EXPLORATION

In the Nugrus block surrounding the Sukari Mining Concession, detailed mapping of Little Sukari and Umm Majal was completed, alongside the initiation of ground-based geophysics, consisting of induced polarisation and magnetic surveys over these targets.

Additionally, a contractor has been selected for the second phase of drilling, scheduled to start in the second quarter. In the Um Rus block, follow-up work on soil and rock chip samples from bulk leach extractable gold (BLEG) anomalies was completed.

Finally, in the Nadj block, a remote camp was established, and the BLEG sampling programme was successfully concluded with the collected samples being prepared for analysis in overseas laboratories.