Centamin share price jumps as it ramps up gold production

Jessica Morris
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Gold bars are displayed at Shinhan Bank
Centamin said there could be more production increases (Source: Getty)

Shares in London-listed Centamin sparkled today after the gold miner ramped up production at its flagship mine.

Centamin shares rose as much as 7.1 per cent to 97p in late morning trade, giving the company a market capitalisation of £1.1bn.

Centamin said production from the Sukari gold mine in Egypt rose by 6.5 per cent to 125,268 ounces in the first quarter of 2016. This helped it to increase 16 per cent from a year earlier.

"Centamin continued its solid operational performance in the first quarter, [with] the production numbers representing a strong start against its 2016 full-year guidance," analysts at Stifel wrote in a note.

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Centamin maintained its full year production guidance of 470,000 ounces. It added continued expansion at Sukari could bolster production further in the coming quarters.

While Centamin didn't give any guidance on costs, analysts expect them to be largely in line with its estimates of $900 per ounce this year.

The amount of gold it extracted from deposits was 4.3 per cent higher than the previous quarter, and also above the miner's target rate of 11m tonnes per year.

The amount of material moved from the open pit at Sukari swelled 10 per cent during this period, contributing 7.9 per cent more production.

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As the open pit contributed more, the underground operation delivered 6.3 per cent less ore than in the last quarter of 2015. However, Centamin said that the underground operation's production was still beating estimates.

"The open pit delivered an increase in material movement over the previous quarter, and the underground mine continues to deliver production rates in excess of our base case forecast," Andrew Pardey, chief executive of Centamin, said.

"Continuing optimisation of the expanded Sukari processing and mining operations supports the potential for further productivity increases over the coming quarters," he added.