Centamin left with big challenge to hit full year target

Third quarter production at Egyptian gold miner Centamin was up 15% on the same period last year, below some analysts' expectations, but the company was bullish about meeting its optimistic full-year target.

After producing an estimated 93,624oz of gold in the quarter from its Sukari gold mine the company has so far unearthed around 250,000oz in the year to date, leaving production of 170,000oz in the fourth quarter in order to meet that target.

Chairman Josef El-Raghy pointed out that there was scope for further increases in plant throughput during the coming quarters as the new processing plant is fully optimised.

Average grades from both underground and open pit mining increased over the three-month period and are expected to improve further during the fourth quarter, which the company believes will drive the increased gold production levels necessary to hit the target.

Open pit production increased 50% from the second quarter, while underground production increased 8%. Process plant throughput increased 22% to 2,388kt, towards the 10m tonnes per year target run rate.

El-Raghy said management continued to look forward to delivering Sukari's long-term target of 450,000oz-500,000oz per year from 2015 onwards.

Broker Westhouse said production was below its expectations and analysts believe that full-year guidance “looks increasingly challenging”.

It added that the company is in the late stages of discussions over whether to increase the daily usage of ammonium nitrate, which will enable it to increase mining rates to feed the expanded plant.

“We believe the company will not be unduly impacted by this, so long as the approval is granted before the end of 2015.”