Centamin has produced 125,090 ounces of gold from Al-Sukari gold mine with gross revenue of $222.2 million during Q1 2020, according to a press release.
The company’s production has exceeded Q1 2019’s by 8%, in addition to having no material supply chain impacts from the coronavirus (COVID-19) during this period. The company sold 139,784 ounces, a 26% increase from 2019’s, with an average price of $1,587 per ounce.
Additionally, absolute production costs amounted to $82.4 million, a 15% year-on-year (YoY) increase, as a result of decreasing mining inventories in Q1 2020, while unit production costs reached $659 per ounce produced, a 4% increase YoY.
The statement shows that net cash of $110.5 million was generated from operating activities, an 88% YoY improvement. After Sukari profit share distribution and Group investing activities, group free cash flow was $45.6 million, a 175%YoY improvement, driven by increased sales and gold price.
As a result of the pandemic outbreak, Centamin will reduce its capital expenditure for 2020 from $190 million to $150-$170 million, through a short term deferral of non-essential growth capital, optimization of capital projects and reductions in discretionary spend. Considering the current circumstance, Centamin notes that this is the best method to protect personnel as well as securing the company’s operations, adding that it is unlikely to impact guidance for 2020.
Furthermore, the company postponed all non-essential projects requiring mobilization of third-party project teams, such as the Sukari solar plant project and other exceptional regional exploration activities. Centamin also released that sustaining capital expenditure during Q1 2020, reached $20.2 million, while non-sustaining expenditure reached $1.7 million.