Centamin falls short of expected 2015 gold output targets

Gold Miner Centamin said it expected to produce 420,000 ounces of gold at its only operating mine in Egypt in 2015, falling short of some analyst expectations.

The Thursday update represented an 11% jump from the 377,261 ounces produced in 2014, but falls short of the Sukari mine’s supposedly expanded capacity of 450,000-500,000 ounces.

The company had initially said that it expected an annual production rate of 450,000 to 500,000 ounces one year after the expansion of its ore-processing plant, which was completed in the third quarter.

Centamin's 2014 production forecast was cut in November, citing lower-grade ore mined in the fourth quarter and reduced productivity in October.

Josef El-Raghy, Chairman of Centamin, said: “There remains scope for further increases during the coming quarters as the plant is fully optimised and open pit mining rates increase. Despite the weak gold price environment, we exit the year with a robust financial and operating base on which to continue delivering our growth strategy."

Broker Shore Capital was one of those disappointed, but noted that as the company had mentioned the “scope for further increases" during the coming quarters as the plant became fully optimised, "so the guidance could well prove to be another low-ball to cater for potential underperformance".

Investec said the guidance was below its own analyst’s forecast of 458,000oz, although this had been under the assumption of higher cash costs of $769 per oz, but likewise suggested that Centamni was "perhaps being cautious again, given the revision that was necessary in 2014."