What are the recent business developments unveiled by Centamin during Q1 FY21?

Summary

  • Centamin PLC had shown revenue growth of around 26% during Q1 FY21 as compared to Q4 FY20.
  • The Group had generated a free cash flow of USD 9.4 million during Q1 FY21.
  • CEY had net cash and liquid assets of USD 330.7 million as of 31 March 2021.

Centamin PLC (LON: CEY) is the LSE listed mining stock. CEY’s shares have generated a return of around negative 25.00% in the last 12 months. The Company is a constituent of the FTSE 250 index.

On 11 May 2021, CEY will have Annual General Meeting.

Company Overview

Centamin PLC (LON: CEY) is a Gold Mining Company, specializes in the exploration and development of minerals. It owns Sukari Gold Mine in Egypt with a current production capacity of 500,000 ounces per annum.

(Source: Company presentation)

A brief about Gold ETF

Global gold ETFs had demonstrated a net outflow of 107.5 tonnes during March 2021. Moreover, it had shown substantial outflow for the four months out of the last five months. The net outflow during March 2021 remained among the top 10 worst outflows historically for the second month in a row. Overall, the global Asset under management (AuM) stood at around 3,574 tonnes, similar to the levels seen during June 2020. The gold ETF holdings had dropped by approximately 9% in tonnage terms from their peak levels witnessed during November 2020.

Production Highlights (for the three months ended 31 March 2021, as of 22 April 2021)

 (Source: Company result)

The Company’s Gold production from the Sukari Gold Mine had shown an increase of 53% during Q1 FY21 as compared to Q4 FY20, and it stood around 104,047 ounces. However, the Q1 FY21 production remained 17% lower when compared with Q1 FY20. The improved quarterly production illustrated a 34% increase in feed grade. Moreover, the gold sales had witnessed a QoQ increase of 34% to 106,573 ounces. Meanwhile, the average realized gold price went down by 6% during Q1 FY21 due to weaker spot gold price.

CEY had generated a growth of 26% in revenues to USD 189.9 million during Q1 FY21 as compared to Q4 FY20, driven by a higher volume of gold sales. The Company had shown a QoQ drop of around 9% in AISC (All-in sustaining cost) during Q1 FY21, driven by the reduction in sustained capital expenditure during the quarter. Furthermore, CEY had also demonstrated a significant decline of 23% in capital expenditure to USD 37.0 million during Q1 FY21. The Group had generated a free cash flow of USD 9.4 million during Q1 FY21. With regards to the financial position, CEY had net cash and liquid assets of USD 330.7 million as of 31 March 2021.

Share Price Performance Analysis of Centamin PLC

 

(Source: Refinitiv, Thomson Reuters)

CEY shares were trading at GBX 115.50 and were up by close to 0.79% as of 22 April 2021 at 11:13 AM GMT. CEY’s 52-week Low and High were GBX 100.10 and GBX 233.30, respectively. Centamin PLC had a market capitalization of around £1.33 billion.

Business Outlook

CEY had provided proper financial guidance for FY21. The Company had anticipated total gold production ranging from 400,000 ounces to 430,000 ounces for FY21. It had expected total production split equally into H1 FY21 and H2 FY21. Moreover, the cost was anticipated to be ranging from USD 800 per ounce to USD 900 per ounce, while the AISC was estimated in the range between USD 1,150 per ounce to USD 1,250 per ounce during FY21. The Company would expect to incur a capital expenditure of USD 225 million, and it would spend 55% of the total estimated capex during H2 FY21 due to Sukari solar project and paste-fill plant construction timelines. Overall, the Company had delivered robust production output during Q1 FY21.

(Source: Company presentation)

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