Egypt-focused gold miner Centamin’s revenue for the year ended December 31 decreased by 12% year-on-year to $733-million.

Revenue was generated from gold sales of 407 252 oz, 13% less than the 468 681 oz sold in 2020.

In terms of production, the miner produced 8% less gold year-on-year in 2021, at 415 370 oz.

This resulted in a 25% reduction in its earnings before interest, taxes, depreciation and amortisation to $329-million, at a 45% margin.

The miner’s basic earnings a share for the year were 35% down, at $0.09 apiece, while the average realised gold price increased by 2%, from $1 766/oz in 2020, to $1 797/oz in 2021.

Centamin’s cash costs for 2021 were 11% higher, at $359.87-million, while its all-inclusive sustaining costs (AISC) also increased, going up 3% in the year to $502.36-million.

As for capital expenditure, the miner spent 74% more year-on-year in 2021 at $240.87-million, while operating cash flow decreased by 32% from $453.3-million in 2020 to $309.88-million in 2021.

Considering these metrics, Centamin swung to an adjusted free cash flow deficit of $5.99-million in 2021, down 104% from the $141.77-million reported in 2020.

Nonetheless, the miner achieved $27-million worth of gross cost savings in 2021, for a cumulative $71-million of the $150-million cost-saving target by 2024 achieved.

Centamin, which is listed on the LSE and the TSX, remains debt- and hedge-free.

As such, Centamin’s board proposes a final dividend of $0.05 apiece, equating to $58-million, to be distributed to shareholders, subject to shareholder approval at the annual general meeting on May 10. This brings the distribution to shareholders for the full year 2021 to a total of  $105-million.

“Delivery towards our strategic objectives was the standout achievement in 2021, placing Centamin in a much stronger position going forward and laying the foundations for long-term success,” says CEO Martin Horgan.

In addition, during the period, Centamin made several payments to governments, including $75.2-million in profit share, $3.76-million in corporate taxes, $22.3-million in royalties, $328 976 in mining and other licence fees, and $159 165 in community investment and donations to the government of Egypt.

To the government of Burkina Faso, Centamin paid over $91 564 in exploration licence fees, $1.11-million in mining and other licence fees, and $29 394 in community investment and donations.

In Côte d’Ivoire, the miner paid over $91 869 in exploration licence fees and $143 110 in community investment and donations to the government.

SAFETY & OUTLOOK

In terms of safety, the miner’s Sukari gold mine achieved a new record of 5.2-million hours of being free of lost-time injuries in 2021.

This year, Centamin intends to keep its guidance unchanged, with gold production expected to be between 430 000 oz and 460 000 oz; with cycles split 45% in the first half and 55% in the second half. This is driven by lower scheduled tonnes from the underground in the first half as the mine transitions to owner-operator status.

As for cash costs this year, the miner has earmarked the range at between $900/oz and $1 000/oz of gold produced, while it expects to spend $225.5-million, split between spending 65% in the first and 35% in the second half as a result of capital earmarked for solar projects, paste fill and underground contractor equipment purchase in the first quarter.

Exploration expenditure is targeted at $25-million.

In terms of AISC this year, Centamin is targeting $1 275/oz to $1 425/oz of gold sold.

Also this year, the miner expects to undertake a prefeasibility study for its Côte d’Ivoire-based Doropo project, update the group’s exploration programme, review its group capital structure; and, at the Sukari mine, conduct an underground expansion study, commission a 36 MW solar power plant and update the mine’s mineral reserve and resource.

He adds that the company completed a value assessment and ranking of its organic growth pipeline, resulting in progressing the Doropo project to prefeasibility stage and secured 3 000 km² of exploration ground in the highly-prospective Egyptian Eastern Desert.

“The completion of our Sukari life-of-asset review delivered a significant mineral reserve uplift, identified further growth and cost savings opportunities, and underpinned a robust 12-year life-of-mine plan with a clear roadmap to achieving a consistent 500 000 oz production profile,” says Horgan.