UK gold miner Centamin seeks buyer for W. African project

Looking for partner/buyer for Batie West project

  
Gold ore mined at the Cononish gold mine is displayed in the Hunterian Museum at Glasgow University in Glasgow, Scotland March 26, 2014.

Gold ore mined at the Cononish gold mine is displayed in the Hunterian Museum at Glasgow University in Glasgow, Scotland March 26, 2014.

Reuters/Suzanne Plunkett

Gold miner Centamin reported a smaller than expected fall in first-half earnings on Thursday and said it was looking for a buyer or partner for its Burkina Faso project.

The London-listed miner, which operates the Sukari Gold Mine in Egypt, said an internal review showed the Batie West project in Burkina Faso did not meet its investment criteria.

First-half earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at $190.4 million, down from $256.2 million a year earlier, but 8% ahead of analysts' average estimate.

Earnings fell largely due to a planned reduction in gold production at Sukari, which pushed overall output lower by 20% year-on-year to 204,275 ounces, the company said.

The production cuts are part of a three-year reset plan for the Sukari mine.

Centamin shares, part of the FTSE midcap index, were down 3% to 102.85 pence at 0955 GMT.

Investors seem to be taking a "wait and watch approach," said BMO Capital Markets analyst Raj Ray.

"The market will be looking to the Sukari Phase 2 life-of-mine review in Q4/21 to get a better idea for the long-term potential of the Sukari asset. So despite earnings exceeding expectations ... there does not seem to be a rush to own the stock at this point."

Average realised gold prices rose 9% in the first half, Centamin said, as safe-haven buying due to the COVID-19 pandemic boosted bullion prices.

The company also declared an interim dividend of 4 cents per share, down from 6 cents a year earlier. It kept its guidance for production, cost and capital spending for the full year.

(Reporting by Shanima A in Bengaluru Editing by Uttaresh.V and Mark Potter) ((shanima.a@thomsonreuters.com; (Within UK +44 20 7542 1810; Outside UK+91 80 6182 2587; Direct: +91 77 6034 7399 );))


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