A string of positive updates and a recent uptick in the gold price has helped support strong gains for Egypt-focused gold miner Centamin (CEY).
The shares have risen by a third in value over the past six months, hitting their highest level since early 2021. It’s quite a turnaround after a long period of share price weakness.
The latest update from Sukari, a large gold mine located 700 kilometres from Cairo, was much more positive. On 13 December, Centamin, which also has interests in assets in Burkina Faso and the Ivory Coast, unveiled a 1.3-million-ounce increase in measured and indicated mineral resources at Sukari. After factoring in 12 months of mining depletion this added up to 11.11 million ounces of resource at Sukari, or a 13% uplift.
There was a smaller 5% increase in proven and probable mineral reserves to 6 million ounces and the open pit life of the mine was extended to 14 years. In October Centamin said it had produced 331,410 ounces of gold from Sukari in the first nine months of 2022.
EXTENDING THE LIFE OF SUKARI
Chief executive Martin Hogan said: ‘Our improved geological understanding has resulted in meaningful growth of both resources and reserves at unchanged cut-off grades.
‘The open pit mineral reserve gain replaced annual depletion for the first time since 2015, while the underground mineral reserves of 1.2 million ounces represents a threefold increase since 2020, net of mining depletion, which further supports the planned underground expansion project.’
The company has budgeted for 280,000 metres of drilling in 2023, with a focus on exploration, testing of surface targets and converting open pit resources to the reserves category.
Commenting on this latest announcement Berenberg said: ‘We view this as a positive release for the company as the additional ounces added to the underground should support the upcoming expansion study expected in the first half of 2023, while the ounces discovered at the open pit look to increase the life of mine beyond our current expectations.
‘We continue to believe that Centamin is a turnaround story with its Sukari asset (where we expect all-in sustaining cost to fall to $1,302 per ounce in the 2023 financial year, versus $1,370 per ounce in the 2022 financial year), while also offering production growth at Sukari, as well as development potential through the Doropo project in Ivory Coast (for which we expect the release of the pre-feasibility study in the first half of 2023).’
