Gold Lower Prices Forces Centamin to Increase Production in Egypt

Centamin gold mine in Egypt

Egypt-focused gold miner Centamin said centre earnings fell by more than 1/3 in the third quarter. Profits hit by a pointed fall in bullion charges, but said it was well-placed to exceed an aimed at boost in full-year yield.

Profits before interest, tax, depreciation and amortization (EBITDA) came in just merely over $43 million for the three months to September, slightly smaller than some analysts had anticipated.

That earnings were down 36% lower on the same period last year, due to gold price decline, which strike a beside three-year reduced in June. The cost at which Centamin traded bullion in the quarter shrank by more than a fifth compared to last year, 2013.

But Centamin said its production cost in the quarter shrank to $693 per oz, lower than last year’s $724 per oz. Centamin concluding production in on 2013 guidance of $700 per ounce.

The business – which last month described quarterly output underneath the previous three months due to smaller grades, but up on last year – furthermore verified it expected to exceed its 2013 output to 320,000 ounces at its sole-operating mine.

Sukari, the first large-scale up to date gold mine in Egypt, is around 435 miles (700 km) from Cairo and has appeared mostly unscathed from a signal of political turmoil which begun in July.

Centamin’s head of business development, Andy Davidson, commented on the political unrest in Egypt “There has been no knock-on effect on the operation”.

The business, which is in the processing of appealing a court ruling against it in Egypt, repeated it was on track to start commissioning a new part of its mine in the fourth quarter.

Centamin furthermore said it would take a $11.9 million writedown in relative to its buying into in Nyota Minerals, a new discovering in Ethiopia. Centamin has been trading down its shares but still retains a 14.4% stake.

Davidson said: “We are still committed to Ethiopia. But we couldn’t find a way ahead with Nyota, hence the writedown”.

Centamin says it designs to extend to diversify through acquisitions in the district and last month hit a junction venture agreement with juvenile miner Alecto Minerals to chase other opportunities in Ethiopia.

Centamin portions were down 1.6 percent at 0810 GMT, selling at just under 50 pence and underperforming a 1% rise in the broader UK-listed excavation sector.