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Centamin maintains guidance but defers some capital expenditures

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(Kitco News) - Centamin Plc (TSX: CEE; LSE: CEY) said Monday that operations have not been interrupted by the COVID-19 pandemic so far and the company is maintaining its guidance for the full year, although it deferred some capital expenditures.

Centamin, which operates the Sukari mine in Egypt, also reported delayed financial results for 2019, listing higher revenue, cash flow and profit.

Further, Centamin announced that James Rutherford will take over as the independent non-executive chairman, effective June 29 after the annual general membership meeting. He is currently deputy non-executive chairman and will succeed outgoing chairman Josef El-Raghy.

“We have made a good start to 2020 with production and costs on track,” said Ross Jerrard, chief financial officer.

Centamin kept full-year guidance of 510,000 to 540,000 ounces of gold, with production weighted 55% to the second half of the year. All-in sustaining costs are seen at between $870 and $920 per ounce sold, the company said. Open-pit material is expected to contribute 80% of the output, driven by higher-grade ore. In April, the company reported first-quarter gold production of 125,090 ounces from Sukari.

Meanwhile, non-essential capital expenditures have been temporarily deferred, including the Sukari solar plant, in order to minimize additional contractors and other non-operating traffic at sites while restrictions related to COVID-19 are in place, the company said. As a result, 2020 capital expenditures are now expected to be in a lower range of $150 million to $170 million, compared to $190 million previously.

Jerrard said the company’s “clean balance sheet, with no debt nor hedging, offers pure exposure to the gold price.”

For 2019, the company said gross revenue of $658.1 million was up 7% from the year before, while the profit after taxes was up 13% to $172.9 million. Basic earnings per share rose 17% to 7.59 cents. Free cash flow was put at $74.3 million, a 17% improvement from 2018.

Centamin listed 2019 production of 480,528 gold ounces, up 2% from 472,418 in the prior year. Sales of 470,020 ounces during 2019 were down 3% from 484,322. Jerrard commented that operational improvements were made at Sukari during 2019.

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