Centamin Egypt fourth quarter output lower than expected

Thursday July, 29, 2010

Gold production by Centamin Egypt Ltd fell below the 30,236 expected in quarter to end June, but Centamin said production of estimated 200,000 ounces in 2010 would not be affected.

Low output caused production to fall to 30,236 ounces in the fourth quarter, from 36,621 ounces in its third quarter to end March, on lower grades, with cash operating costs averaging $569 an ounce and above Q3's $403 an ounce, higher than expected.

"While today's production figure was lower than we forecast, we see no major issue going forward because the contributing factors are now largely dealt with, as demonstrated by the full-year guidance being retained at 200,000 oz with cash costs under $400/oz," said Brock Salier, an analyst at Ambrian Capital.

A maiden operating profit of $19.1 million was posted by the FTSE 250 gold producer after the company sold 30,759 ounces of gold in the fourth quarter.

Centamin has continued to grow proven and probable ore reserves at its flagship Sukari project in Egypt. Even after around 100,000 ounces were mined, Total resources at the end of June totalled 14.5 million ounces, up from 13.7 million ounces estimated last December.