Centamin — Q3 2011 Earnings Presentation
28 slides from Centamin's earnings presentation, Oct 31, 2011
Slide 1: Centamin Egypt: Positioned for Growth, Q3 2011 Results
Centamin Egypt Positioned for Growth Q3 2011 Results 31 October 2011
Slide 2: Forward Looking Statements
2 Forward Looking Statements There are risks associated with an investment in the shares of Centamin. Recipients of this presentation should review the risk factors and other disclosures regarding Centamin contained in the preliminary prospectus of Centamin that has been filed with Canadian securiti
Slide 3: Q3 Highlights
3 Q3 Highlights • Q3 2011 production: 50,549oz Q3 production guidance met • Q3 2011 gold sold: 51,570oz • On track to produce 200-210,000oz in CY 2011 at a cash cost of US$550/oz • Average cash cost of US$635 per ounce Strong cash position • Operating profit of US$43.4m • Cash and liquid assets bala
Slide 4: Operational Review: Back on Track
4 Operational Review: Back on Track Q3 2011 Q2 2011 Q3 2010 Open Pit Ore Mined (‘000 tonnes) 2,129 1,039 1,682 Total Mined (OP only) (‘000 tonnes) 5,847 3,030 4,916 Ore Processed (‘000 tonnes) 954 850 605 Head Grade (g/t) 1.82 1.82 1.75 Gold Recovery (%) 85.5 85.0 82.6 Gold Production (ounces) 50,53
Slide 5: Increased Gold Production
5 Increased Gold Production Gold Production Cash Cost Per Ounce 60,000 700 600 50,000 500 Ounces Produced 40,000 400 US$ 30,000 300 20,000 200 10,000 100 0 0 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Quarter Quarter • Gold production 67% higher than Q3 2010, 5%
Slide 6: Open Pit and Underground Performing Well
6 Open Pit and Underground Performing Well Open Pit Production Underground Ore Production 7,000 3 70,000 6,000 2.5 60,000 Ore Extracted (tonnes) Strip ratio (waste:ore) 5,000 50,000 2 Tonnes ('000) 4,000 40,000 1.5 3,000 30,000 1 2,000 20,000 1,000 0.5 10,000 0 0 0 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3
Slide 7: Record Quarterly Plant Throughput
7 Record Quarterly Plant Throughput Ore Processed and Feed Grade Plant Productivity 1,200 2.5 530 90 520 1,000 510 2 85 Throughput rate (tph) 500 Availability (%) 800 Tonnes ('000) 490 Headgrade 1.5 80 480 600 470 1 75 460 400 450 0.5 440 70 200 430 0 0 420 65 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
Slide 8: Financial Review
8 Financial Review FINANCIAL HIGHLIGHTS • Q3 2011 revenues of US$89.1m, 129% US$’000 (unaudited) Q3 2011 Q3 2010 increase on Q3 2010 Revenue 89,100 38,838 • Cash margins of US$1086/oz, up 81% on Other income 224 64 Q3 2010 Mine production costs (23,620) (13,715) Production royalty (2,328) (1,161) •
Slide 9: Record Cash Margins
9 Record Cash Margins Gold Sales and Average Realised Cash Margin Price 1,200 70,000 2000 1800 1,000 60,000 1600 Average realised price 50,000 1400 800 Ounces sold 1200 40,000 US$/oz 1000 600 30,000 800 20,000 600 400 400 10,000 200 200 0 0 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Quarter 0 Q3 2010 Q
Slide 10: Robust Cash Generation
10 Robust Cash Generation • Cash balance of US$201.3m as at 30 September CASH FLOW 2011 US$’000 (unaudited) Q3 2011 Q3 2010 Net cash flow from operating activities 62,514 16,146 • Cash generated from operations of US$62.5m, 287% increase on Q3 2010 Net cash flow from investing activities (52,985) (1
Slide 11: Strategy: Positioning Centamin for growth
11 Strategy: Positioning Centamin for growth 1. Growth of Sukari • Focus on delivering ramp up of production to 500,000oz/annum run rate • Continuing to grow existing resource base 1. Growth of Sukari • Maiden grade controlled underground ore reserve of 126,000t @ 11.9g/t announced in Q2 2. Growth o
Slide 12: 1. Growth of Sukari: Continued Exploration of the Hill
12 1. Growth of Sukari: Continued Exploration of the Hill • Current resources of 14.5Moz (10.99Moz M&A, 3.5Moz Inferred) / Reserves of 9.1Moz • Next resource update due in Q4 2011 • Underground maiden reserve announced in Q2 • Drilling to the north of the hill: — Drilling with modified inclined diam
Slide 13: Stage 4: Doubling Capacity to 10Mtpa
13 Stage 4: Doubling Capacity to 10Mtpa • Conventional SAG and ball mill expansion – new plant will sit alongside the existing plant • GBM appointed as contractor and front end engineering complete • Estimated capital cost of US$255m (excluding contingency) - US$24.6m expenditure as at end of Sept 2
Slide 14: Underground Progressing Well
14 Underground Progressing Well • Q3 Production: 58,000t @ 10.4g/t (Q2 2011: 43,000t @ 12.5g/t) • Good ground conditions with little groundwater • High average plant feed grade: ~10-12g/t • Maiden grade controlled underground ore reserve: 126,000t @ 11.9 g/t with definition drilling ongoing • Expand
Slide 15: Secondary Decline Development
15 Secondary Decline Development • Development of Ptah decline commenced in October 2011 and due to be completed by end of 2012 • Budget of US$18m • Ptah decline will move towards the north of Sukari hill and provide access to the high grade Julius zone • Current decline is inside the pit shell – th
Slide 16: 2. Growth on Existing Licence: Regional Exploration
16 2. Growth on Existing Licence: Regional Exploration Regional Exploration: 160km2 tenement area • Seven other defined prospects on Sukari licence area besides Sukari hill • Exploration currently focused on Quartz Ridge and V-Shear V-Shear • Rock chip samples of >100g/t • Both RC and diamond drilli
Slide 17: 3. Growth Beyond Sukari: Strategic Investment in Ethiopia
17 3. Growth Beyond Sukari: Strategic Investment in Ethiopia Acquisition of Sheba • Acquisition of Sheba is part of defined growth strategy into other countries in the Arabian-Nubian shield • Add value to the Sheba properties through exploration and development • Drill ready targets in a highly pros
Slide 18: Sheba Licences Overview
18 Sheba Licences Overview Una Deriam: 95km2 / 100% ownership – 10km long soil/rock chip gold anomaly – Major regional structure underlain by granite intrusives – 2 previous open hole percussion holes which reported significant +20m Au intersections – 2,000m of diamond drilling planned for Q4 2011 F
Slide 19: Focusing on Delivery: 2011 Targets and Objectives
19 Focusing on Delivery: 2011 Targets and Objectives • Deliver on 2011 guidance – Achieve 2011 production and cash cost targets • Continue to make solid progress on Sukari expansion – Complete commissioning of Stage 3 expansion and consistently achieve 5Mtpa throughput – Detailed engineering of the
Slide 20: Centamin Egypt Limited
20 Centamin Egypt Limited CONTACT US Josef El-Raghy, Chairman + 61 (8) 9316 2640 or + 203 5411 259 Katharine Sutton, Head of Investor Relations katharine.sutton@centamin.com
Slide 21: Appendix
Centamin Egypt Positioned for Growth Q3 2011 Results Appendix 31 October 2011
Slide 22: The Sukari Gold Project
22 The Sukari Gold Project • Open pit and underground mine located in the Resources and Reserves 14.5Moz* / 9.1Moz eastern desert of Egypt Production 2010: 150,289oz – 900km from Cairo 2011 forecast: 200-210,000oz – 25km from Red Sea 2014: circa 500,000oz • Large scale, low cost producing asset Life
Slide 23: Strong and Flexible Financial Position
23 Strong and Flexible Financial Position Cash Generation US$62m EBITDA (3 months to 30 Sept 2011) Stage 4 capex: Selective Cash Balance US$255m M&A US$201.3m cash (as at 30 Sept 2011) 2011 Exploration: Sustaining capex: Debt and Hedge US$10m US$4.1m Free 100% exposure to high gold price Highly cash
Slide 24: Egypt: Country Overview
24 Egypt: Country Overview • Parliamentary elections expected in November Politics 2011 • Presidential elections expected in 2012 Concession • Centamin’s concession agreement unchanged since signing in 1994 – enshrined as Law 222 by Agreement National Assembly • Rich gold deposits throughout the Ara
Slide 25: The Arabian-Nubian Shield
25 The Arabian-Nubian Shield • Arabian-Nubian Shield is recognised as an emerging mining region, particularly for precious metals • Geology in other areas of the Shield is similar to Sukari Bulghan Sukhaybarat • Limited exploration in the region using modern Mahd ad Dahab techniques Al Amar Sukari J
Slide 26: Ethiopia: Country Overview
26 Ethiopia: Country Overview • Favourable government policies ― Corporate tax of 35% - negotiable breaks and holidays ― Royalty of 8% at discretion of the Minister • Modern Mining Act (Proclamation) effected in 2010 ― Demonstrates government’s support for mining industry ― 5% government free-carrie
Slide 27: Global Resources and Reserves
27 Global Resources and Reserves Sukari Global Resource 0.5g/t Cut-off Au Tonnes Grade Gold (Mt) (g/t Au) (Moz) Measured & Indicated 253.73 1.45 10.99 Inferred 68.9 1.6 3.5 TOTAL 304.6 1.48 14.5 Notes to table: Figures in table may not add correctly due to rounding. Proven and probable ore reserves
Slide 28: Investment Summary: Positioned For Growth
28 Investment Summary: Positioned For Growth Production Growth • FTSE 250 gold producer rapidly ramping up to 500,000/oz run rate • On track to produce 200-210,000oz at cash cost of US$550/oz in CY 2011 Resource Growth • Sukari is one of the largest gold resources not held by a major – 14.5Moz* and