Centamin Q3 earnings drop despite higher gold output

JOHANNESBURG (miningweekly.com) – Despite having lifted gold production in the third quarter of the year, dual-listed Centamin posted lower earnings on the back of a weakened gold price, higher operating costs and an adverse movement in production inventory and ore stockpiles.

The group on Wednesday reported that earnings before interest, taxes, depreciation and amortisation fell 17%, from $37.8-million in the third quarter of 2014, to $31.3-million in the three months to September 30.

Basic earnings a share plunged from 1.39c in the three months to September 2014 to 0.55c in the quarter under review, while profit for the period dropped from $15.8-million to $6.3-million.

Centamin attributed the declines to a lower average realised gold price, a 6% increase in mine production costs and a $3.2-million increase of the movement of production inventory and ore stockpiles.

Revenue ticked up from $116-million in the corresponding quarter of the year before to $118-million in the quarter under review.

The cash cost of production fell from $771/oz in the three months to September 2014 to $767/oz in the quarter under review, while all-in sustaining costs (AISC) reached $918/oz.

Gold production of 105 413 oz was achieved during the third quarter - a 13% year-on-year rise.

The gold producer was on track to meet its full-year guidance of producing between 430 000 oz and 440 000 oz at a cash cost of production of below $700/oz and AISC below $950/oz.

Centamin ended the quarter with $216.1-million cash, bullion on hand, gold sales receivable and available-for-sale financial assets.