Posted on by

Record free cash flow and robust gold…

Record free cash flow and robust gold…

  • Gold production: 131,000 ounces were produced in the quarter.

  • Gold sales: Almost 150,000 ounces sold.

  • Cash costs: $766 per ounce.

  • Total maintenance costs: Just over $250 per ounce.

  • Revenue: During this period, it generated $369 million.

  • Free cash flow: $103 million, up 730% year over year and up nearly 220% quarter over quarter.

  • Cash and liquids: Just over $240 million.

  • Gold recovery rate: Over 89%, an increase of 1% compared to last year.

  • Average grade: 1.43 g per ton, an increase of 14% over the previous year.

  • Processing volume: 3 million tons, an increase of 8% over the previous year.

Release date: October 17, 2024

For the full transcript of the conference call, please see the full conference call minutes.

Positive points

  • Centamin PLC (CELTF) produced 131,000 ounces of gold in the third quarter, with sales coming in at nearly 150,000 ounces due to timing from the second quarter.

  • With cash costs of $766 per ounce and all-in sustaining costs of just over $250 per ounce, the company maintained strong cost controls.

  • Quarterly revenue was $369 million, with free cash flow increasing significantly to $103 million, an increase of 730% year-over-year.

  • Centamin PLC (CELTF) has a solid balance sheet with over $240 million in cash and liquid assets.

  • The company is on track to meet its production and cost forecasts for the year, with continued momentum expected in the fourth quarter.

Negative points

  • The company reported several lost time injuries (LTIs) during the quarter, indicating safety concerns.

  • Due to UK takeover law relating to the Anglo Gold transaction, restrictions remain on discussing certain details.

  • The company is still awaiting completion of government engagement and approval processes in West Africa.

  • Despite the strong performance, there is uncertainty about the company’s future structure due to the planned takeover by Anglo Gold.

  • The company faces challenges in maintaining operational safety, with the Group Lost Time Injury Frequency Rate (LTIFR) at 0.65 per million hours worked.

Q&A highlights

Q: Can you provide an update on the Anglo Gold transaction and any restrictions on what can be discussed? A: Michael Stoner, Head of Corporate, mentioned that due to the UK Takeover Code, there are restrictions on discussing details beyond what is disclosed in the 2.7 Announcement and Plan Document. The focus should continue to be on the operational performance of the quarter.

Q: How did Centamin perform in terms of production and cost control in the third quarter of 2024? A: Martin Horgan, CEO, reported strong performance with production of 131,000 ounces and sales of just under 150,000 ounces. Cash costs were $766 per ounce and total sustaining costs were just over $250 per ounce. This performance allowed Centamin to maintain its production guidance and benefit from strong gold prices, generating revenue of $369 million and free cash flow of $103 million.

Q: What are the safety performance metrics for the quarter? A: Martin Horgan recorded two lost-time injuries (LTIs) during the quarter, one at the Sukari mine and another at the EDX exploration site in Egypt. The group LTIFR was 0.65 per million hours worked, with an overall reportable injury rate of 1.96 per million hours worked. Safety remains a key focus, with proactive measures being implemented.

Q: What progress has been made on the Sukari and West Africa projects? A: Martin Horgan highlighted the completion of the major earthmoving project at Sukari and ongoing underground development. In West Africa, Centamin continues to work with the government to apply for permits and mining licenses and hopes to complete these by the end of the year. Technology and community engagement efforts are underway.

Q: Were there any questions from the conference management or the webcast? A: Michael Stoner confirmed that there were no questions from the conference chair or the webcast, leading to Martin Horgan’s closing comments.

For the full transcript of the conference call, please see the full conference call minutes.

This article first appeared on GuruFocus.