Gold miner Centamin, whose shares have surged 219 per cent in the past 12 months, has upped its production guidance and lowered its estimated costs for this year after a 30 per cent year-on-year increase in the amount of shiny stuff it dug out of the ground in the three months to the end of June.
The FTSE 250 group has raised its full year production guidance to between 520,000 and 540,000 ounces, a significant increase on the 470,000 ounces it had previously expected to produce this year. It has also lowered its estimated cash costs of production to a range between $530 and $550 from a previous expectation of $680.
Centamin, whose flagship mine, Sukari, is based in Egypt, has changed its full year forecasts after what it described as a “strong” start to the year. Second quarter production, of 140,306 ounces, was a 30 per cent increase on the same period in 2015, and a 12 per cent increase in the first quarter.
Pre-tax profits during the second quarter surged to $73.4m from $18.8m a year earlier as gold prices rose, while production costs were lower. Operating profit was also considerably higher, at $101.6m in the second quarter, up from $37.3m a year ago and a 51 per cent increase on the first quarter.
Cash costs of production during the latest quarter were $461 from $706 a year ago and $603 in the first quarter.
Andrew Pardey, chief executive of Centamin said:
The Sukari operation has continued to build on the strong start to the year, with total first half production of 265,574 ounces of gold. The continued optimisation of the processing operation saw plant throughput increase further during the second quarter, remaining above our base case forecast rate of 11Mt per annum. The open pit delivered an increase in ore material movement and the underground mine continued to deliver both tonnes and grade in excess of our base case forecast.
Our 2016 guidance has been updated to reflect the strong first half, with expected full year production of between 520,000 and 540,000 ounces at a cash cost of production of US$530 to US$550 per ounce and AISC of US$720 to US$750 per ounce. The key focus for the operation during the coming quarters remains on realising the potential for sustained productivity and cost improvements.
Shares in gold miners have jumped since Britain’s vote to leave the EU at the end of June, as investors have flocked to assets that are perceived as safer bets.
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