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Profits of Egypt's biggest gold miner shrink in Q1 of 2014 Drop in production lessens Q1 profits, but company says output of Sukari mine will increase until the year's end thanks to expansion
Egypt's biggest gold producer Centamin on Thursday stated lower profits in the first quarter of 2014 due to a drop in production, as compared with both the previous quarter and the same period of last year. Centamin's earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $34.3 million for the quarter which ended March 31 – down from $81.7 million a year earlier. EBITDA recorded $45.7 million in the fourth quarter of 2013. The Australia-based company attributed the profits' fall to a 19 percent reduction quarter-on-quarter in gold output from its principal asset, the Sukari Gold Mine, located in the Eastern Desert, 700 km from Cairo. According to the company's statement, total gold production stood at 74,241 ounces in the period between January and March 2014, while it recorded 91,546 ounces between October and December 2013 and 87,016 ounces in the first quarter of last year. Cash costs for the first quarter at $744 per ounce were up 5 percent on the previous quarter, but the company said costs would fall as production increased. Centamin expects stage four of Sukari's expansion to offset the production decrease as the commissioning stages are underway. "Consistently high levels of productivity have again been achieved with the process plant at Sukari, with minimal impact from the Stage 4 commissioning activities. Although underground performance has impacted Q1, we are pleased to confirm that commissioning of Stage 4 is proceeding as planned, with Sukari achieving a major milestone towards the end of Q1: the first ore was fed through the new circuit," Josef El-Raghy, Centamin's chairman, was quoted as saying in the statement. "We expect plant output, and hence quarterly production rates, to increase through the rest of the year as commissioning continues. Our forecasted 2014 production and the continued increase towards Sukari's long-term target of 450,000 to 500,000 ounces per annum remain on track," he added. Centamin hopes that a law approved in Egypt last month will result in the dismissal of a legal case which has put its Sukari mine licence in jeopardy. In 2012, an Egyptian court ruled that Centamin's right to operate its Sukari mine was invalid, the latest in a string of difficulties the company has faced in the country. The new law prevents third parties from challenging contracts made with the government and could include Centamin, as the challenge against it was brought by a third party. http://english.ahram.org.eg/News/101385.aspx
