Centamin confirms potential to expand operations at Sukari mine

Centamin said on Tuesday that an independent study by Entech has shown the potential to expand underground operations its Sukari gold mine in Egypt.

Operations can be expanded to 1.5m tonnes per annum (Mtpa) of total ore mined. This is at the upper end of the previously indicated range and represents a 31% increase in ore mining rates from the current life of mine average of 1.1Mtpa.

At this mining rate, total material movement for the underground operation would be around 2Mtpa.

Chief executive Martin Horgan said: "Expansion of the Sukari underground mining capacity is a significant step towards delivering on our commitment to consistently produce 500,000 ounces per annum from the Sukari gold mine.

"The ability to expand the underground is a result of our transformed approach to mineral resource management which delivered a doubling of the underground reserve in 2021, coupled with the productivity and cost benefits that are being realised following the transition to owner mining. The expansion option that we are taking forward to the next phase of mine planning offers both low capital intensity and a lower level of execution risk."

Berenberg said in a note that the expanded 1.5Mtpa mining rate is ahead of its 1.2Mtpa expectation and should increase production to above 500kz, from 465koz, while pushing costs down from $1,386/oz in 2022 to the long-term target of less than $1,200/oz.

"Updated resource and reserve information should be published in Q4, which has the potential, through updated grades and an updated mine plan, to provide further incremental increases to production," it said.

Berenberg said it expects this announcement to be "a positive catalyst" for the stock.

The Sukari gold mine is Centamin’s flagship asset and Egypt's largest and first modern gold mine.