Results for the Quarter Ended 30 September 2011
Immediate Release 31 October 2011
Centamin Egypt Limited
Results for the Quarter Ended 30 September 2011
Centamin Egypt Limited ("Centamin" or "the Company") (LSE: CEY, TSX: CEE) is pleased to announce its results for the three months to 30 September 2011.
HIGHLIGHTS
· Gold production of 50,539 ounces achieved from the Sukari Gold Mine, 67% higher than the corresponding period last year and 5% higher than the previous quarter
· Cash operating cost of US$635 per ounce, US$3 an ounce lower than the corresponding period last year (US$638/oz) and 5% higher than the previous quarter (US$606/oz)
· Average gold sales price received of US$1,721 per ounce, 39% higher than the corresponding period last year (US$1,239) and 11% higher than the previous quarter (US$1,545)
· Mining production rates returned to normal during the quarter as the issuing of explosive products by Police Blast Inspectors continued uninterrupted from late July
· Process plant throughput reached a quarterly record of 954kt, 58% higher than the corresponding period last year and 12% higher than the previous quarter
· The second secondary crusher was successfully commissioned and the Company is progressing towards achieving a consistent 5Mtpa processing rate
· The Stage 4 10Mtpa plant expansion remains on schedule for commissioning in Q1 2013 with expenditure to date US$24.6 million
· Approval and commencement of the Ptah decline that will access the central "keel" of the Sukari orebody (Julius Zone)
· Regional exploration on the Sukari licence continued, with positive results continuing to be received from the V-Shear prospect, including 28m @ 2.98 g/t (from 11m)
· Operating profit of US$43.4 million with cash and liquid assets of US$201.3 million as at 30 September 2011
· The Company remains on course to achieve production guidance of 200-210,000 ounces in 2011 at a cash cost of approximately US$550 per ounce
|
|
Q3 2011 |
Q2 2011 |
Q3 2010 |
|
Total Gold Production (oz) |
50,539 |
47,991 |
30,243 |
|
Cash Operating Cost of Production (US$/oz) |
635 |
606 |
638 |
|
Average Sales Price (US$) |
1,721 |
1,545 |
1,239 |
|
Revenue (US$M) |
89.1 |
78.0 |
38.8 |
|
EBITDA (US$M) |
62.0 |
58.3 |
28.6 |
|
Basic EPS (cents) |
3.97 |
4.42 |
1.43 |
Josef El-Raghy, Chairman of Centamin, said: "The Sukari Gold Project has performed in line with management expectations in August and September, generating strong earnings once again and underpinning gold production, which will deliver on the production guidance given for 2011. The investment in our assets, along with both major surface and underground expansion projects, provides the platform to grow the business significantly in 2012 and beyond."
Centamin will host a conference call on Monday 31 October 2011 at 11:00am (London, UK time) to update investors and analysts on its results. Participants may join the call by dialling one of the following three numbers, approximately 10 minutes before the start of the call.
From UK: (toll free) 0800 368 1895
From Canada: (toll free) 1866 561 8617
From rest of world: +44 (0) 203 140 0693
Participant pass code: 713493#
A live audio webcast of the call will be available on:
http://mediaserve.buchanan.uk.com/2011/centamin311011/registration.asp
For more information please contact:
|
About Centamin Egypt Limited
Centamin is a mineral exploration, development and mining company that has been actively exploring in Egypt since 1995. The principal asset of Centamin is its interest in the Sukari Gold Mine (resources of 14.5Moz and reserves of 9.1Moz), located in the Eastern Desert of Egypt. Construction at the Sukari Gold Project commenced in March 2007 with first gold being produced on 26 June 2009.
The Sukari Gold Mine is the first large-scale modern gold mine in Egypt. Centamin's operating experience in Egypt gives it a significant first-mover advantage in acquiring and developing other gold projects in the prospective Arabian-Nubian Shield.
In 2011 Centamin acquired Sheba Exploration Plc and now has interests in 4 mineral licences in Ethiopia where it is conducting further exploration activities.
CHIEF EXECUTIVE OFFICER'S STATEMENT
Operational Performance
Gold production was in line with the Company's revised targets, with open pit mine production rates recovering rapidly during August following a return to normal issuing activities by Police Blast Inspectors. With higher material movements from the open pit, focus returned to Stage 2 pit development and completion of the Stage 1 pit. As a result, nearly a million tonnes of low grade oxide ore was delivered to the Dump Leach operation in preparation for irrigation, and bench working areas increased, providing improved productivities.
Underground stope production increased late in the quarter as multiple stopes came on line whilst development continued in the Amun Decline, as well as in various ore drive and cross cut developments. The progress on these fronts collectively delivered the highest quarterly ore production from the underground to date.
The process plant also delivered record quarterly throughput, driven by both improved productivity as a result of the commissioning of the second secondary crusher as well as improved overall plant availability. Plant metallurgical recoveries, whilst continuing to improve, could and should be better given recoveries were hampered by downtime affecting the ultra fine grinding circuit (liner replacement) and the tails thickener (rake and pump repair). Both areas are now on line and operational.
Underground operating cost per ounce was lower than expected due to the costs of stoping being relatively low compared to the overall contribution in ounces from the underground operation. Conversely the open pit operating cost per ounce was higher than expected due to low material movement in July and resultant lower feed grades due to pit development being behind schedule as a result of the now resolved blast product issues. In addition one-off insurance payments, maintenance costs and a change in lubricant supplier for the power plant added to cost pressure.
It is expected that in the coming quarters these two production areas will increase and decrease respectively in production ounces and relative cost per ounce.
Production Statistics(4)
|
|
|
Q3 2011 |
Q2 2011 |
Q1 2011 |
Q4 2010 |
Q3 2010 |
|
Ore Mined - Open Pit(1) |
('000t) |
2,129 |
1,039 |
1,212 |
2,123 |
1,682 |
|
Ore Grade Mined - Open Pit |
Au g/t |
0.96 |
NR |
NR |
NR |
NR |
|
Total Open Pit Material Mined |
('000t) |
5,847 |
3,030 |
4,552 |
5,975 |
4,916 |
|
Strip Ratio |
waste/ore |
1.8 |
1.9 |
2.8 |
1.8 |
1.9 |
|
|
|
|
|
|
|
|
|
Ore Mined - Underground Development |
('000t) |
47 |
39 |
41 |
40 |
- |
|
Ore Mined - Underground Stopes |
('000t) |
11 |
4 |
- |
- |
- |
|
Ore Grade Mined - Underground |
Au g/t |
10.4 |
NR |
NR |
NR |
|
|
|
|
|
|
|
|
|
|
Ore Processed |
('000t) |
954 |
850 |
741 |
773 |
605 |
|
Head Grade |
(g/t) |
1.82 |
1.82 |
1.94 |
2.30 |
1.75 |
|
Gold Recovery |
(%) |
85.5 |
85.0 |
86.7 |
88.1 |
82.6 |
|
Gold Produced - Dump Leach |
(oz) |
2,921 |
2,765 |
2,676 |
2,387 |
3,049 |
|
Gold Produced - Total(2) |
(oz) |
50,539 |
47,991 |
45,204 |
53,189 |
30,243 |
|
|
|
|
|
|
|
|
|
Surface Operations Cost of Production |
$/oz |
843 |
NR |
|
|
|
|
U/ground Operations Cost of Production |
$/oz |
208 |
NR |
|
|
|
|
Cash Operating Cost of Production (3) |
$/oz |
635 |
606 |
525 |
498 |
638 |
|
|
|
|
|
|
|
|
|
Gold Sold |
(oz) |
51,570 |
50,262 |
63,240 |
35,150 |
31,228 |
|
Average Sales Price |
US$/oz |
1,721 |
1,545 |
1,405 |
1,369 |
1,239 |
Notes:-
(1) Ore mined includes 977kt @0.55.g/t delivered to the dump leach.
(2) Gold produced is gold poured and does not include gold-in-circuit at period end.
(3) Cash operating costs excludes royalties, exploration and corporate administration expenditure.
(4) With the commencement of underground commercial production the company will henceforth report underground tonnes, grade and cost/oz.
NR - Not Reported
Open Pit Operations
Staged pit development progressed well during the quarter, with mining focused primarily in the Stage 1 and 2 pits, taking development down to 1016RL and 1100RL respectively. Total material movement from the open pit totalled 5,847kt, which resulted in an increase in high grade ROM stocks (>0.9g/t) to 706kt and an additional 977kt delivered to the dump leach operation.
An additional three CAT 785s dump trucks were commissioned during the quarter to cater for the longer hauls as pit development proceeds at depth and along strike.
Pioneering work continued in the Stage 3 pit in preparation for large scale load and haul activities to commence in 2012.
Underground Operations
Development of the Amun Decline advanced 101m during the quarter, almost reaching the 845 Level take off point. An exploration drive commenced at the 850 Level, which will be used as a platform for extensive down dip and exploratory drilling to determine the broad extent of the Amun Deeps zone. This programme is scheduled to commence late in the first quarter of 2012.
Ore drive development continued on the 890 and 875 Levels (668m) with cross cut development taking place on the 860 (exhaust drive) and 850 levels (122m) with the Main Exhaust Fan successfully installed and commissioned.
Five production slot rises were completed, with stoping commencing on the 920 and 905 Levels bringing a total of four stopes on line by the end of the quarter and contributing approximately 11kt of ore with the balance of 47kt of ore coming from development. With stope development now advanced, a larger contribution of ore production from stope extraction can be expected in the coming quarters.
Process Operations
The process plant achieved a record throughput of 954kt during the quarter, as the Stage 3 secondary crushing circuit continued to be optimised and overall plant availability improved. This delivered a 12% improvement in throughput from the previous quarter. Metallurgical recoveries also continued to improve with better grind and reagent control, but were hampered mid-month with downtime affecting the fine grind circuit as well as the tails thickener. Both of these areas are back on line.
Dump Leach Operations
A total of 2,921 ounces was recovered from the dump leach operation during the quarter, with approximately 977kt @ 0.55g/t delivered for new cell development. This has brought the total ore placed on dump leach pads to approximately 5.1Mt @ 0.50g/t.
Stage 4 Expansion
The 10Mtpa project expansion progressed during the quarter with detailed engineering of the process plant 46% complete. Tender designs have been issued for major equipment items with equipment packages awarded in all key areas. The power plant EPC contract was awarded to Wartsila, a Finnish corporation which manufactures and services power sources and other equipment in natural resources sector, with detailed design and ordering of equipment commencing during the quarter.
Sea water pipeline engineering and design to double the volume of water delivered to Sukari progressed, with tender packages scheduled to go out during the fourth quarter. Initial deposits for mining mobile equipment have been placed with production slots locked in. Tails storage facility expansion has commenced in preparation for the larger deposition rates expected with the expanded plant operations.
As at the end of the quarter the project remained on schedule for commissioning in Q1 2013 with expenditure to date of US$24.6 million.
Underground Expansion
Board approval was received to commence the Ptah Decline that will access the high grade Julius Zone at depth in the northern extent of the Sukari main deposit. It is envisaged that this development will increase the underground production rate to approximately 500,000 tonnes per year from 2013. The anticipated capital cost of accessing this high grade zone will be US$18 million.
Exploration
Sukari Main
Surface diamond drilling continued in the main Sukari deposit on Sukari Hill with 12,734m completed during the quarter. The most significant intercepts included:
D1673 33m @ 2.83 g/t (from 105m)
D1682 73m @ 1.42 g/t (from 472m)
D1684 71m @ 2.59 g/t (from 519m)
As the underground mine further develops it is envisaged that the remaining surface drilling for the main deposit will be limited to two modified surface inclined rigs to target the northern part Sukari Hill, which has historically been difficult to reach. The balance of resource definition drilling will be undertaken from underground drill points and within exploration drives. The Company plans to announce a resource update in Q4 2011.
Sukari Regional Exploration
Both RC and diamond drilling continued on the V-Shear prospect completing 1000m of RC and 1290m diamond drilling during the quarter. The most significant intercepts (all RC) are as follows:
VSRC002 4m @ 100.7 g/t (from 30m) and
10m @ 4.71 g/t (from 151m)
VSRC007 28m @ 2.98 g/t (from 11m) and
12m @ 2.15 g/t (from 52m)
Ethiopia
Mobilisation of resources and personnel into Ethiopia commenced during the quarter with drilling commencement expected at Una Deriam in Q4 2011.
Harry Michael
Chief Executive Officer
31 October 2011
COMPETENT PERSONS STATEMENT
Quality Assurance and Control and Qualified Person
The information in this report that relates to ore reserves has been compiled by Mr Andrew Pardey. Mr Pardey is a Member of the Australasian Institute of Mining and Metallurgy and is a full time employee of the Company. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a "Competent Person" as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in the "National Instrument 43-101 of the Canadian Securities Administrators" and "CIM Definition Standards For Mineral Resources and Mineral Reserves" of December 2005 as prepared by the CIM Standing Committee on Reserve Definitions of the Canadian Institute of Mining. Mr Pardey's written consent has been received by the Company for this information to be included in this report in the form and context which it appears.
The information in this report that relates to mineral resources is based on work completed independently by Mr Nicolas Johnson, who is a Member of the Australian Institute of Geoscientists. Mr Johnson is a full time employee of Hellman and Schofield Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a "Competent Person" as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in "National Instrument 43-101 of the Canadian Securities Administrators". Mr Johnson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Information in this report which relates to exploration, geology, sampling and drilling is based on information compiled by geologist Mr Richard Osman who is a full time employee of the Company, and is a member of the Australasian Institute of Mining and Metallurgy with more than five years' experience in the fields of activity being reported on, and is a 'Competent Person' for this purpose and is a "Qualified Person" as defined in "National Instrument 43-101 of the Canadian Securities Administrators". His written consent has been received by the Company for this information to be included in this report in the form and context which it appears.
All exploration and resource samples were analysed by Ultra Trace Pty Ltd, Canning Vale, Western Australia. All mine based production samples were analysed by Sukari Assay Laboratory, Egypt.
Refer to the updated Technical Report which was filed in December 2010 for further discussion of the extent to which the estimate of mineral resources/reserves may be materially affected by any known environmental, permitting, legal, title, taxation, socio-political, or other relevant issue.
FORWARD LOOKING STATEMENTS
Certain information contained in this report, including any information on Centamin's plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute forward-looking statements. Such statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties. Centamin cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Centamin to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements. These factors include the inherent risks involved in exploration and development of mineral properties, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of Centamin.
Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell Centamin securities.
FINANCIAL STATEMENTS
FOR THE QUARTER ENDED
30 SEPTEMBER 2011
CONTENTS
MMANAGEMENT DISCUSSION AND ANALYSIS 1
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 12
UNAUDITED CONDENSED CONSOLIDATEDSTATEMENT OF FINANCIAL POSITION 13
UNAUDITED CONDENSED CONSOLIDATED OF CHANGES IN EQUITY 14
UNAUDITED CONDENSED CONSOLIDATEDINTERIM STATEMENT OF CASH FLOWS 15
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 16
CERTIFICATES OF INTERIM FILINGS 28
MANAGEMENT DISCUSSION AND ANALYSIS
The following Management's Discussion and Analysis of the Financial Condition and Results of Operations ("MD&A") for Centamin Egypt Limited (the "Company" or "Centamin") should be read in conjunction with Unaudited Interim Consolidated Financial Statements for the three months ended 30 September 2011 and related notes thereto. The effective date of this report is 31 October 2011.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Australia. The financial statements are prepared using the same accounting policies and methods of application as those disclosed in Note 1 to the consolidated financial statements for the period ended 30 September 2011, but they do not include all the disclosures required by Australian Accounting Standards for annual financial statements.
In addition to these Australian requirements, further information has been included in the Unaudited Interim Consolidated Financial Statements for the three months ended 30 September 2011 in order to comply with applicable Canadian securities law, as the Company is listed on the Toronto Stock Exchange.
Additional information relating to the Company, including the Company's most recent Annual Report for the period ended 31 December 2010, Financial Report for the Half Year Ended 30 June 2011, and other public announcements is available at www.centamin.com.
All amounts in this MD&A are expressed in United States dollars unless otherwise identified.
FORWARD LOOKING STATEMENTS
Some of the statements contained in this MD&A, including those relating to strategies and other statements, are predictive in nature, and depend upon or refer to future events or conditions, or include words such as "expects", "intends", "plans", "anticipates", "believes", "estimates" or similar expressions that are forward looking statements. Forward looking statements include, without limitations, the information concerning possible or assumed further results of operations as set forth herein. These statements are not historical facts but instead represent only expectations, estimates and projections regarding future events and are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations generally.
The forward looking statements contained in this MD&A are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. The future results of the Company may differ materially from those expressed in the forward looking statements contained in this MD&A due to, among other factors, the risks and uncertainties inherent in the business of the Company. The Company does not undertake any obligation to update or release any revisions to these forward looking statements to reflect events or circumstances after the date of this MD&A or to reflect the occurrence of unanticipated events.
GENERAL
Centamin is a mineral exploration and development company that has been actively exploring in Egypt since 1995. The principal asset of Centamin is its interest in the Sukari Gold Mine, located in the Eastern Desert of Egypt. The Sukari Gold Mine commenced construction in March 2007 with the first gold bar being produced on 26 June 2009. Now operational, Sukari is the first modern mine in Egypt, a country which in ancient times was a prolific producer of the yellow metal.
Optimal design throughput at the Sukari Gold Mine was achieved during December 2009. In January 2010, the Company announced that the Sukari Gold Mine had achieved yet another important milestone with the commencement of gold exports to a nominated overseas gold refinery.
The Sukari Gold Mine is the first large-scale modern gold mine developed in Egypt. Centamin's operating experience in Egypt gives it a significant first-mover advantage in acquiring and developing other gold projects in the prospective Arabian-Nubian Shield.
The accompanying Interim Consolidated Financial Statements for the quarter ended 30 September 2011 have been prepared in accordance with generally accepted accounting principles and have not been reviewed or audited by the Company's Auditors.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
30 September |
30 September |
||
|
|
2011 |
2010 |
2011 |
2010 |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
Revenue |
89,100 |
38,838 |
256,417 |
75,977 |
|
|
|
|
|
|
|
Other income |
224 |
64 |
2,344 |
187 |
|
|
|
|
|
|
|
Mine production costs |
(23,620) |
(13,715) |
(62,621) |
(24,644) |
|
|
|
|
|
|
|
Production royalty |
(2,328) |
(1,161) |
(7,328) |
(3,366) |
|
|
|
|
|
|
|
Corporate administration expenses |
(1,481) |
(1,335) |
(3,619) |
(3,842) |
|
|
|
|
|
|
|
Depreciation & amortisation |
(18,046) |
(13,802) |
(36,702) |
(25,565) |
|
|
|
|
|
|
|
Movement in production inventory |
2,665 |
4,540 |
1,061 |
11,980 |
|
|
|
|
|
|
|
Foreign exchange gain / (loss) |
(2,424) |
1,440 |
(436) |
2,224 |
|
|
|
|
|
|
|
Share based payments |
(577) |
(14) |
(1,138) |
(259) |
|
|
|
|
|
|
|
Other expenses |
(99) |
(153) |
(248) |
(555) |
|
|
|
|
|
|
|
Profit / (loss) before income tax |
43,414 |
14,702 |
147,730 |
32,137 |
|
|
|
|
|
|
|
Tax (expense)/income |
- |
- |
- |
- |
|
|
|
|
|
|
|
Net Profit / (Loss) for the period |
43,414 |
14,702 |
147,730 |
32,137 |
|
|
|
|
|
|
|
Profit / (Loss) per share |
|
|
|
|
|
- Basic (cents per share) |
3.97 |
1.43 |
|
|
|
- Diluted (cents per share) |
3.96 |
1.43 |
|
|
Revenuereported comprises proceeds from gold sales and interest revenue applicable on the Company's available cash and working capital balances and term deposit amounts. On a comparative year to date basis the Revenue figure is higher due to the commencement of commercial gold production and corresponding sales. Other income includes the proceeds of silver sales associated with gold production along with the marketing commission received by PGM.
Mine production costs represent the cost of mining and processing ore in addition to bullion refinery and transport costs. This figure also includes site administration costs.
Production royaltyrepresents the 3% royalty payable to the Egyptian Government for gold bullion and associated metals net off refinery and transport.
Corporate administration expenses reported comprise expenditure incurred for communications, consultants, directors' fees, stock exchange listing fees, share registry fees, employee salaries and general office administration expenses.
Depreciation and amortisation includes the depreciation of fixed assets and amortisation of waste material movement and preproduction costs incurred prior to announcing commercial production.
Movement in production inventory represents the change in broken ore stockpiles and gold in circuit for the period.
Foreign exchange loss reported is primarily attributable to the effect of the exchange rate movement of the Australian dollar against the United States dollar during the period.
Share based paymentsreported relate to the requirement to recognise the cost of granting options (or warrants) to directors, and employees under the Employee Share Option Plan, the Loan Funded Share Plans or for payment for services done under a contractual arrangement. Calculation of the cost is performed under A-IFRS over the option (or warrant) vesting period.
Other expensesreported comprise non-cash expenses of employee entitlements, bank charges and a rehabilitation provision.
The profit after tax of the consolidated entity for the three months ended 30 June 2011 was US$43,414,036.
SELECTED INFORMATION FROM THE UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
|
30 September 2011 |
31 December 2010 |
|
|
US$'000 |
US$'000 |
|
|
|
|
|
Total current assets |
267,212 |
192,943 |
|
|
|
|
|
Total non-current assets |
529,758 |
447,889 |
|
|
|
|
|
Total assets |
796,969 |
640,832 |
|
|
|
|
|
Total current liabilities |
19,095 |
19,112 |
|
|
|
|
|
Total non-current liabilities |
2,608 |
2,624 |
|
|
|
|
|
Total liabilities |
21,703 |
21,736 |
|
|
|
|
|
Net assets |
775,266 |
619,096 |
Current assetsreported have increased mainly due to the rise in inventory and cash relating to the Sukari operations.
Non-current assetsreported have increased during the period as a result of the expenditure incurred with regard to ongoing exploration and development activities at Sukari. The Company's accounting policy is to capitalise expenditure of this nature under the categories of Property, Plant and Equipment and Exploration, Evaluation & Development.
Current liabilities reported have decreased compared to the comparative period, due to improved cash flows from production.
Non-current liabilities reported during the period have decreased marginally.
SELECTED INFORMATION FROM THE UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
|
Three Months Ended 30 September 2011 |
Nine Months Ended 30 September 2011 |
|
|
US$'000 |
US$'000 |
|
|
|
|
|
Total equity at beginning of period |
724,405 |
619,096 |
|
|
|
|
|
Movement in issued equity |
6,836 |
7,405 |
|
|
|
|
|
Movement in reserves |
611 |
1,035 |
|
|
|
|
|
Profit for the period |
43,414 |
147,730 |
|
|
|
|
|
Total equity at end of period |
775,266 |
775,266 |
Issued equityreported has increased due to the issuance of shares relating to the Sheba acquisition.
Reservesreported have reduced marginally due to the exercise and subsequent transfer to issued equity of employee share based options.
Profit for the three months ended 30 September 2011 is analysed under the section Consolidated Income Statement.
SELECTED INFORMATION FROM THE UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
30 September |
30 September |
||
|
|
2011 |
2010 |
2011 |
2010 |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
Net cash flow from operating activities |
62,514 |
16,146 |
116,881 |
40,769 |
|
Net cash flow from investing activities |
(52,985) |
(18,299) |
(117,706) |
(46,790) |
|
Net cash flow from financing activities |
8,000 |
1,581 |
8,147 |
9,887 |
|
|
|
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
17,529 |
(572) |
7,322 |
3,866 |
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the financial period |
146,347 |
31,326 |
154,338 |
26,941 |
|
|
|
|
|
|
|
Effects of exchange rate changes |
(3,593) |
1,522 |
(1,378) |
1,469 |
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the financial period |
160,282 |
32,276 |
160,282 |
32,276 |
Net cash flow from operating activities reported comprises receipts from gold sales, offset by operating and corporate administration costs. On a comparative quarterly and annual basis, net cash flow is higher due to increased gold production and a higher gold price.
Net cash flow from investing activities reported comprises exploration expenditure and capital development expenditures at Sukari including the acquisition of Financial and Mineral Assets, offset by interest revenue received. On a comparative quarterly basis, expenditure is higher.
Net cash flow from financing activities reported largely comprises of valuation and exercising of shares issued under the LFSP and options under the ESOP respectively.
FOREIGN INVESTMENT IN EGYPT
Foreign investments in the petroleum and mining sectors in Egypt are governed by individual production sharing agreements (concession agreements) between foreign companies and the Ministry for Petroleum and Mineral Resources or the Egyptian Mineral Resource Authority ("EMRA") (as the case may be) and are individual Acts of Parliament.
Title, exploitation and development rights to the Sukari Gold Mine are granted under the terms of the Concession Agreement promulgated as Law No. 222 of 1994, signed on 29 January 1995 and effective from 13 June 1995. The Concession Agreement was issued by way of Presidential Decree after the approval of the People's Assembly in accordance with the Egyptian Constitution and Law No. 61 of 1958. The Concession Agreement was issued in accordance with the Egyptian Mines and Quarries Law No. 86 of 1956 which allows for the Ministry to grant the right to parties to explore and mine for minerals in Egypt.
Whilst the Company is the first foreign company to develop a modern large-scale gold mine in Egypt there is significant foreign investment in the petroleum sector. Several large multinational oil and gas companies operate successfully in Egypt, some of which have long histories in the country and have dedicated significant amounts of capital. The Company believes that the successful track record of foreign investment established by these companies in the petroleum sector is an important indication of the ability of foreign companies to attract financing and receive development approvals for the construction of major projects in Egypt.
OVERVIEW OF SUKARI CONCESSION AGREEMENT
Pharaoh Gold Mines NL ("PGM") a 100% wholly owned subsidiary of the Company, EGSMA (now "EMRA") and the Arab Republic of Egypt ("ARE") entered into the Concession Agreement dated 29 January 1995, granting PGM and EMRA the right to explore, develop, mine and sell gold and associated minerals in specific concession areas located in the Eastern Desert of Egypt identified in the Concession Agreement. The Concession Agreement came into effect under Egyptian law on 13 June 1995.
The initial term of the Concession Agreement was for one year and was extended by the parties for three two-year periods. In accordance with the terms of the Concession Agreement, PGM undertook a feasibility study to support its application to EMRA for a "Commercial Discovery" (within the meaning of the Concession Agreement) with respect to the Sukari Gold Mine. On 09 November 2001, EMRA notified PGM that the feasibility submission had demonstrated that a Commercial Discovery had been made at Sukari. As a result, the Concession Agreement was converted from exploration to exploitation status and PGM, together with EMRA, were granted an Exploitation Lease over 160 km2 surrounding the Sukari Gold Mine site. The Exploitation Lease was signed by PGM, EMRA and the Egyptian Minister of Petroleum and gives tenure for a period of 30 years, commencing 24 May 2005 and extendable by PGM for an additional 30 years upon PGM providing reasonable commercial justification.
Following demonstration of a Commercial Discovery, PGM and EMRA were required to establish an operating company owned 50% by each party (the "Operating Company"). The Operating Company, named Sukari Gold Mining Company, was incorporated under the laws of Egypt on 27 March 2006. The Operating Company was formed to conduct exploration, development, exploitation and marketing operations in accordance with the Concession Agreement. The registered office of the Operating Company is at 361 El-Horreya Road, Sedi Gaber, Alexandria, Egypt.
The ARE is entitled to a royalty of 3% of net sales revenue from the sale of gold and associated minerals from the Sukari Gold Mine, payable in cash in each calendar half year. Net sales revenue is calculated by deducting from sales revenue all shipping, insurance, smelting and refining costs, delivery costs not payable by customers, all commercial discounts and all penalties (relating to the quality of gold and associated minerals shipped).
Under the Concession Agreement, PGM solely funds the Operating Company but is entitled to recover the following costs and expenses payable from sales revenue (excluding the royalty payable to ARE):
· all current operating expenses incurred and paid after the initial commercial production;
· exploration costs, including those accumulated to the commencement of commercial production (at the rate of 33.3% per annum); and
· exploitation capital costs, including those accumulated prior to the commencement of commercial production (at the rate of 33.3% per annum).
Recovery of capital costs shall include interest on a maximum of 50% of borrowings from financial institutions not affiliated with PGM provided that PGM shall use best efforts to obtain the most favourable rate of interest, not to exceed LIBOR + 1%.If costs recoverable by PGM exceed the sales revenue (excluding any royalty payable to ARE) in any financial year, the excess is carried forward for recovery in the next financial year or years until fully recovered, but in no case after the termination of the Concession Agreement.
After deduction of the royalty payments and recoverable expenses by PGM, the remainder of the sales revenue from the Sukari Gold Mine will be shared equally by PGM and EMRA except that for the first and second years in which there are net proceeds for the entire year, an additional 10% of such proceeds will be paid to PGM as an incentive (i.e. 60% to PGM and 40% to EMRA), and for each of the next two years in which there are net proceeds for the entire year, an additional 5% of such proceeds will be paid to PGM (i.e. 55% to PGM and 45% to EMRA).
In addition, under the Concession Agreement, certain tax exemptions have been granted, including the following:
· commencing on the date of commercial production, PGM will be entitled to a 15 year exemption from any taxes imposed by the Egyptian government. The parties intend that the Operating Company will in due course file an application to extend the tax-free period for a further 15 years. The extension of tax-free period requires that certain activities in remote areas of the lands under the Concession Area have been programmed and agreed by all parties;
· PGM, EMRA and the Operating Company are exempt from custom taxes and duties with respect to the importation of machinery, equipment and consumable items required for the purpose of exploration and mining activities at Sukari;
· PGM, EMRA, the Operating Company and their respective buyers will be exempt from any duties or taxes on the export of gold and associated minerals produced from the Sukari Gold Mine;
· PGM will at all times be free to transfer in US dollars or other freely convertible foreign currency any cash of PGM representing its share of net proceeds and recovery of costs, without any Egyptian government limitation, tax or duty; and
· PGM's contractors and sub-contractors are entitled to import machinery, equipment and consumable items under the "Temporary Release System" which provides exemption from Egyptian customs duty.
Under the Concession Agreement, all land at Sukari shall be the property of EMRA as soon as it is purchased. The title to the fixed and movable assets are to be transferred by PGM to EMRA as soon as their costs are recovered by PGM, with PGM being entitled to use all fixed and movable assets during the term of the Exploitation Lease and any extensions thereof.
In case of national emergency, due to war or imminent expectation of war or internal causes, ARE may requisition all or part of the production from the areas that are the subject of the Concession Agreement, and require the Operating Company to increase production to the utmost extent. ARE may also requisition the mine itself and, if necessary, related facilities. In the event of any requisition, ARE must indemnify EMRA and PGM for the period during which the requisition is maintained.
ARE has the right to terminate the Concession Agreement in the following circumstances:
· PGM has knowingly submitted any material false statements to the Egyptian government;
· PGM assigns any interest to any unrelated party without the written consent of the Egyptian government;
· PGM does not comply with any final decision reached as a result of provisions in the Concession Agreement with respect to disputes and arbitration;
· PGM intentionally extracts any mineral other than gold and associated minerals authorized by the Concession Agreement without the approval of the Egyptian government; or
· PGM commits any material breach of the Concession Agreement.
If the Egyptian government deems that any one of the foregoing causes exists, the government is required to give PGM 90 days' notice to remedy the defaults. If the default remains unremedied at the expiration of the grace period, the Egyptian government may terminate the Concession Agreement.
ACCOUNTING CONSOLIDATION OF SUKARI GOLD MINES
The operating company of Sukari, Sukari Gold Mines ("SGM"), is jointly owned by PGM and EMRA on a 50% equal basis. For accounting purposes, SGM is wholly consolidated within the Centamin group of companies, due to the nature and rights conferred to PGM under the Concession Agreement as described above. PGM has the primary right to recoup the cost of capital invested to date from net revenues of SGM prior to any distribution of dividends (or profit sharing) between PGM and EMRA. Once PGM has fully recouped its cost of capital, net revenues will be distributed between PGM and EMRA on the basis set out above. The distribution of profits to EMRA will be shown as a charge to the profit and loss account of the consolidated Centamin group of companies.
COMMERCIAL PRODUCTION
The production summary for Sukari Gold Mine is as follows:
|
|
|
Q3 2011 |
Q2 2011 |
Q1 2011 |
Q4 2010 |
Q3 2010 |
|
Ore Mined - Open Pit(1) |
('000t) |
2,129 |
1,039 |
1,212 |
2,123 |
1,682 |
|
Ore Grade Mined - Open Pit |
Au g/t |
0.96 |
NR |
NR |
NR |
NR |
|
Total Open Pit Material Mined |
('000t) |
5,847 |
3,030 |
4,552 |
5,975 |
4,916 |
|
Strip Ratio |
waste/ore |
1.8 |
1.9 |
2.8 |
1.8 |
1.9 |
|
|
|
|
|
|
|
|
|
Ore Mined - Underground Development |
('000t) |
47 |
39 |
41 |
40 |
- |
|
Ore Mined - Underground Stopes |
('000t) |
11 |
4 |
- |
- |
- |
|
Ore Grade Mined - Underground |
Au g/t |
10.4 |
NR |
NR |
NR |
|
|
|
|
|
|
|
|
|
|
Ore Processed |
('000t) |
954 |
850 |
741 |
773 |
605 |
|
Head Grade |
(g/t) |
1.82 |
1.82 |
1.94 |
2.30 |
1.75 |
|
Gold Recovery |
(%) |
85.5 |
85.0 |
86.7 |
88.1 |
82.6 |
|
Gold Produced - Dump Leach |
(oz) |
2,921 |
2,765 |
2,676 |
2,387 |
3,049 |
|
Gold Produced - Total(2) |
(oz) |
50,539 |
47,991 |
45,204 |
53,189 |
30,243 |
|
|
|
|
|
|
|
|
|
Surface Operations Cost of Production |
$/oz |
843 |
NR |
|
|
|
|
U/ground Operations Cost of Production |
$/oz |
208 |
NR |
|
|
|
|
Cash Operating Cost of Production (3) |
$/oz |
635 |
606 |
525 |
498 |
638 |
|
|
|
|
|
|
|
|
|
Gold Sold |
(oz) |
51,570 |
50,262 |
63,240 |
35,150 |
31,228 |
|
Average Sales Price |
US$/oz |
1,721 |
1,545 |
1,405 |
1,369 |
1,239 |
Notes:-
(1) Ore mined includes 977kt @0.55.g/t delivered to the dump leach.
(2) Gold produced is gold poured and does not include gold-in-circuit at period end.
(3) Cash operating costs excludes royalties, exploration and corporate administration expenditure.
(4) With the commencement of underground commercial production the company will henceforth report underground tonnes, grade and cost/oz.
NR - Not Reported
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal source of liquidity as at 30 September 2011 is cash of US$160.3M (30 September 2010 - US$32.3M). The majority has been invested in rolling short term higher interest money market deposits.
The following is a summary of the Company's outstanding commitments as at 30 September 2011:
|
Payments due |
Total US$'000 |
< 1 year US$'000 |
1 to 5 years US$'000 |
>5 years US$'000 |
|
Creditors and provisions |
17,927 |
15,320 |
2,608 |
|
|
Employee Entitlements |
724 |
- |
724 |
|
|
Tax Liabilities |
444 |
444 |
- |
|
|
Total commitments |
19,095 |
15,763 |
3,332 |
|
The Company's financial commitments are limited to controllable discretionary spending on work programmes at the Sukari Gold Mine, administration expenditure at the Egyptian and Australia office locations and for general working capital purposes.
OUTSTANDING SHARE INFORMATION
As at 31 October 2011, the Company has 1,095,297,381 fully paid ordinary shares issued and outstanding. The following table sets out the fully paid ordinary shares on issue, and the outstanding unquoted options on issue:
|
As at 31 October 2011 |
Number |
|
|
|
|
Shares on Issue |
1,095,297,381 |
|
Options issued but not exercised |
2,630,150 |
|
|
1,097,927,531 |
SEGMENT DISCLOSURE
The Company's reportable operating segments are based on strategic business units.
· Sukari Gold Mine
Centamin's primary asset is the Sukari mine in Egypt. In June 2009, first gold was produced and with successful commissioning of the Process Plant, commercial production commenced in April 2010.
· Exploration
The Company is engaged in the business of exploration for precious and base metals in Egypt and Ethiopia.
· Corporate
The corporate segment is responsible for regulatory reporting and corporate administration.
SIGNIFICANT ACCOUNTING ESTIMATES
Management is required to make various estimates and judgements in determining the reported amounts of assets and liabilities, revenues and expenses for each period presented and in the disclosure of commitments and contingencies. The significant areas where management uses estimates and judgements in preparing the consolidated financial statements are the determination of carrying values and impaired values of exploration assets.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision reflects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The Company capitalises exploration, evaluation and development expenditure incurred on ongoing projects. The recoverability of this capitalised exploration expenditure is entirely dependent upon returns from the successful development of mining operations or from the surpluses from the sale of the projects or the subsidiary companies that controls the projects. At the point that it is determined that any capitalised exploration expenditure is definitely not recoverable, it is written off.
INTERNAL CONTROLS
Disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is gathered and reported to management, including the CEO and CFO, on a timely basis so that appropriate decisions can be made regarding public disclosure. Management, with the participation of the certifying officers, has evaluated the effectiveness of the design and operation, as of 30 September 2011, of the Company's disclosure controls and procedures (as defined by the Canadian Securities Administrators). Based on that evaluation, the certifying officers have concluded that such disclosure controls and procedures are effective and designed to ensure that material information relating to the Company and its subsidiaries is known to them by others within those entities.
Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of our financial reporting and compliance with Canadian generally accepted accounting principles in our financial statements. Management has evaluated the design of internal control over financial reporting and has concluded that such internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in Canada. In addition, there have been no changes in the Company's internal control over financial reporting during the quarter ended 30 September 2011 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
RISKS AND UNCERTAINTIES
The operations of the Company are speculative due to the high risk nature of its business which includes the acquisition, financing, exploration, development and operation of mining properties. These risk factors could materially affect the Company's future operations and could cause actual events to differ materially from those described in forward-looking statements relating to the Company.
Calculation of Mineralisation, Resources and Reserves
There is a degree of uncertainty attributable to the calculation of mineralisation, resources and reserves and corresponding grades being mined or dedicated to future production. Until reserves or mineralisation are actually mined and processed, the quantity of mineralisation and reserve grades must be considered estimates only. In addition, the quantity of reserves and mineralisation may vary depending on commodity prices. Any material change in quantity of reserves, mineralisation, grade or stripping ratio may affect the economic viability of a project. In addition, there can be no assurance that recoveries from laboratory tests will be duplicated in tests under on-site conditions or during production.
Infrastructure
Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges and port facilities are important determinants that affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Company's activities and profitability.
Title Matters
Any changes in the laws of Egypt relating to mining could materially affect the rights and title to the interests held there by the Company. No assurance can be given that applicable governments will not revoke or significantly alter the conditions of the applicable exploration and mining authorizations nor that such exploration and mining authorizations will not be challenged or impugned by third parties.
Mineral Prices
Factors such as inflation, foreign currency fluctuation, interest rates, supply and demand and industrial disruption have an adverse impact on operating costs, commodity prices and stock market prices and on the Company's ability to fund its activities. The Company's possible revenues and share price can be affected by these and other factors which are beyond the control of the Company. The market price of minerals, including industrial minerals, is volatile and cannot be controlled. The Company's ongoing operations are influenced by fluctuation in the world gold price. If the price of gold or other minerals should drop significantly, the economic prospects of the Company's current project could be significantly reduced or rendered uneconomic. There is no assurance that, even if commercial quantities of ore are discovered, a profitable market will continue to exist for the sale of products from that ore. Factors beyond the control of the Company may affect the marketability of any minerals discovered. Mineral prices have fluctuated widely, particularly in recent years. The marketability of minerals is also affected by numerous other factors beyond the control of the Company, including government regulations relating to royalties, allowable production and importing and exporting of minerals, the effect of which cannot be accurately predicted.
Funding Requirements
Mining exploration and development involves financial risk and capital investment. The capital development of the Sukari Gold Mine and the continuance of the Company's development and exploration activities depend upon the Company's ability to generate positive cash flows, obtain financing through the joint venturing of projects, private and public equity project financing, debt and/or other means. There is no assurance that the Company will be successful in obtaining additional financing on a timely basis, or at all.
Uninsured Risks
The mining business is subject to a number of risks and hazards including environmental hazards, industrial accidents, labour disputes, encountering unusual or unexpected geologic formations or other geological or grade problems, encountering unanticipated ground or water conditions, cave-ins, pit wall failures, flooding, rock bursts, periodic interruptions due to inclement or hazardous weather conditions and other acts of God. Such risks could result in damage to, or destruction of, mineral properties or facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. The Company maintains insurance against certain risks associated with its business in amounts that it believes to be reasonable. Such insurance, however, contains exclusions and limitations on coverage. There can be no assurance that such insurance will continue to be available, will be available at economically acceptable premiums or will be adequate to cover any resulting claim.
Foreign Operations
Operations, development and exploration activities carried out by the Company are or may be affected to varying degrees by taxes and government regulations relating to such matters as environmental protection, land use, water use, health, safety, labor, restrictions on production, price controls, currency remittance, maintenance of mineral rights, mineral tenure, and expropriation of property. There is no assurance that future changes in taxes or such regulation in the various jurisdictions in which the Company operates will not adversely affect the Company's operations. Industrial disruptions, work stoppages and accidents in the course of the Company's operations can result in future production losses and delays, which may adversely affect future profitability. The Company's principal asset is held outside of Australia in Egypt, North Africa. Although the operating environment in Egypt is considered favorable compared to that in other developing countries there are still political risks. The risks include, but are not limited to, terrorism, hostage taking, military repression, expropriation, extreme fluctuations in currency exchange rates, high rates of inflation and labor unrest. Changes in mining or investment policies or shifts in political attitudes may also adversely affect the Company's business. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, currency remittance, income taxes, maintenance of claims, environmental legislation, expropriation of property, land use, land claims of local people, water use and safety. The effect of these factors cannot be accurately predicted.
Exploration and Development Risks
The successful exploration and development of mineral properties is speculative and subject to a number of uncertainties which even a combination of careful evaluation, experience and knowledge may not eliminate. There is no certainty that the expenditures made or to be made by the Company in the exploration and development of its mineral properties or properties in which it has an interest will result in the discovery of mineralized materials in commercial quantities. Most exploration projects do not result in the discovery of commercially mineable deposits. While discovery of a base metal or precious metal bearing structure may result in substantial rewards, few properties that are explored are ultimately developed into producing mines. Major expenses may be required to establish reserves by drilling and to construct mining and processing facilities at a site. It is impossible to ensure that exploration programmes carried out by the Company will result in profitable commercial mining operations. The Company's operations are subject to all of the hazards and risks normally incident to mineral exploration, mine development and operation, any of which could result in damage to life or property, environmental damage and possible legal liability for any or all damage. Hazards such as unusual or unexpected formations, pressures or other conditions may also be encountered.
Environmental and Other Regulatory Requirements
The current or future operations of the Company, including development activities and, if warranted, commencement of production on properties in which it has an interest, require permits from various governmental authorities, and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health and safety, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities generally experience increased costs and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits. The Company believes it is in substantial compliance with all material laws and regulations that currently apply to its activities. However, there can be no assurance that all permits which the Company may require for the conduct of mineral exploration and development can be obtained or maintained on reasonable terms or that such laws and regulations would not have an adverse effect on any such mineral exploration or development which the Company might undertake. Amendments to current laws, regulations and permits governing operations and activities of mineral exploration companies, or more stringent interpretation, implementation or enforcement thereof, could have a material adverse impact on the Company.
Mining and Investment Policies
Changes in mining or investment policies or shifts in political attitude may adversely affect the Company's business. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, maintenance of claims, environmental legislation, land use, land claims of local people, water use and safety regulations. The effect of these factors cannot be accurately predicted.
Hedging and Foreign Exchange
While hedging of commodity prices and exchange rates is possible, there is no guarantee that appropriate hedging will be available at an acceptable cost should the Company choose or need to enter into these types of transactions.
FINANCIAL INSTRUMENTS
At 30 September 2011, the Company has exposure to interest rate risk which is limited to the floating market rate for cash.
The Company does not have foreign currency risk for non-monetary assets and liabilities of the Egyptian operations as these are deemed to have a functional currency of United States dollars. The Company has no significant monetary foreign currency assets and liabilities apart from United States dollar and Australian dollar cash term deposits which are held for the purposes of funding a portion of the mine construction for the Sukari Gold Mine. The Company currently does not proactively engage in any hedging or derivative transactions to manage interest rate or foreign currency risks.
RELATED PARTY TRANSACTIONS
Details of related party transactions are shown in Note 8 of the appended financial statements.
SUBSEQUENT EVENTS
Other than as set out above and in Note 3 of the appended financial statements, there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely in the opinion of the Directors of the Company to affect significantly the operations of the company, the results of those operations, or the state of affairs of the Company in subsequent financial periods.
The accompanying Interim Consolidated Financial Statements for the quarter ended 30 September 2011 have been prepared in accordance with generally accepted accounting principles and have not been reviewed or audited by the Company's Auditors.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
30 September |
30 September |
||
|
|
2011 |
2010 |
2011 |
2010 |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
Revenue |
89,100 |
38,838 |
256,417 |
75,977 |
|
|
|
|
|
|
|
Other income |
224 |
64 |
2,344 |
187 |
|
|
|
|
|
|
|
Mine production costs |
(23,620) |
(13,715) |
(62,621) |
(24,644) |
|
|
|
|
|
|
|
Production royalty |
(2,328) |
(1,161) |
(7,328) |
(3,366) |
|
|
|
|
|
|
|
Corporate administration expenses |
(1,481) |
(1,335) |
(3,619) |
(3,842) |
|
|
|
|
|
|
|
Depreciation & amortisation |
(18,046) |
(13,802) |
(36,702) |
(25,565) |
|
|
|
|
|
|
|
Movement in production inventory |
2,665 |
4,540 |
1,061 |
11,980 |
|
|
|
|
|
|
|
Foreign exchange gain / (loss) |
(2,424) |
1,440 |
(436) |
2,224 |
|
|
|
|
|
|
|
Share based payments |
(577) |
(14) |
(1,138) |
(259) |
|
|
|
|
|
|
|
Other expenses |
(98) |
(153) |
(248) |
(555) |
|
|
|
|
|
|
|
Profit / (loss) before income tax |
43,414 |
14,702 |
147,730 |
32,137 |
|
|
|
|
|
|
|
Tax (expense)/income |
- |
- |
- |
- |
|
|
|
|
|
|
|
Net Profit / (Loss) for the period |
43,414 |
14,702 |
147,730 |
32,137 |
|
|
|
|
|
|
|
Profit / (Loss) per share |
|
|
|
|
|
- Basic (cents per share) |
3.97 |
1.43 |
|
|
|
- Diluted (cents per share) |
3.96 |
1.43 |
|
|
The above Unaudited Condensed Consolidated Statement of Comprehensive Income
should be read in conjunction with the accompanying notes.
unaudited condensed consolidated STATEMENT OF FINANCIAL POSITION
|
|
30 September 2011 |
31 December 2010 |
|
|
US$'000 |
US$'000 |
|
|
|
|
|
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
160,282 |
154,338 |
|
Trade and other receivables |
40,975 |
128 |
|
Inventories |
65,509 |
38,017 |
|
Prepayments and deposits |
445 |
460 |
|
Other Financial Assets |
- |
- |
|
Total current assets |
267,211 |
192,943 |
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
Plant and equipment |
305,945 |
279,995 |
|
Investments |
3,559 |
|
|
Exploration, evaluation and development expenditure - Note 5 |
220,254 |
167,894 |
|
Total non-current assets |
529,758 |
447,889 |
|
|
|
|
|
Total assets |
796,968 |
640,832 |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
Trade and other accounts payable |
17,763 |
18,002 |
|
Tax liabilities |
599 |
444 |
|
Provisions |
733 |
666 |
|
Total current liabilities |
19,095 |
19,112 |
|
|
|
|
|
NON-CURRENT LIABILITIES |
|
|
|
Trade and other accounts payable |
- |
- |
|
Provisions |
2,608 |
2,624 |
|
Total non-current liabilities |
2,608 |
2,624 |
|
|
|
|
|
Total liabilities |
21,703 |
21,736 |
|
NET ASSETS |
775,266 |
619,096 |
|
|
|
|
|
EQUITY |
|
|
|
Issued Capital - Note 7 |
607,905 |
600,500 |
|
Reserves |
4,380 |
3,345 |
|
Accumulated Profits / (Losses) |
162,981 |
15,251 |
|
TOTAL EQUITY |
775,266 |
619,096 |
The above Unaudited Condensed Consolidated Statement of Financial Position
should be read in conjunction with the accompanying notes.
unaudited condensed consolidated STATEMENT OF CHANGES IN EQUITY
|
|
Issued Capital US$'000 |
Reserves US$'000 |
Options Reserve US$'000 |
Accumulated Profits/(Losses) US$'000 |
Total US$'000 |
|
At 30 June 2010 |
465,096 |
2,295 |
1,942 |
(16,791) |
452,542 |
|
Profit for the period |
- |
- |
- |
32,042 |
32,042 |
|
Share options exercised |
2,382 |
- |
- |
- |
2,382 |
|
Cost of share based payments |
- |
- |
14 |
- |
14 |
|
Contributions of equity |
132,116 |
- |
- |
- |
132,116 |
|
Transfer to issued capital |
906 |
- |
(906) |
- |
- |
|
At 31 December 2010 |
600,500 |
2,295 |
1,050 |
15,251 |
619,096 |
|
Profit for the period |
- |
- |
- |
147,730 |
147,730 |
|
Share options exercised |
432 |
- |
- |
- |
432 |
|
Cost of share based payments |
(569) |
- |
1,035 |
- |
466 |
|
Contributions of equity |
7,390 |
- |
- |
- |
7,390 |
|
Transfer to issued capital |
152 |
- |
- |
- |
152 |
|
At 30 September 2011 |
607,905 |
2,295 |
2,085 |
162,981 |
775,266 |
The above Unaudited Condensed Consolidated Statement of Changes in Equity
should be read in conjunction with the accompanying notes.
unaudited condensed consolidated INTERIM STATEMENT OF CASH FLOWS
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
30 September |
30 September |
||
|
|
2011 |
2010 |
2011 |
2010 |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
Receipts from bullion sales |
102,445 |
38,692 |
214,436 |
75,698 |
|
Payments to suppliers and employees |
(40,155) |
(19,383) |
(100,125) |
(35,116) |
|
Payments for exploration |
- |
(3,227) |
- |
- |
|
Other income |
224 |
64 |
2,569 |
187 |
|
Net cash generated by/(used in) operating activities |
|
16,146 |
|
|
|
62,514 |
116,881 |
40,769 |
||
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
Payments for exploration |
(3,067) |
- |
(8,422) |
(6,037) |
|
Payments for development |
(28,622) |
(5,927) |
(56,719) |
(44,895) |
|
Payments for plant & equipment |
(5,988) |
- |
(37,811) |
(32,606) |
|
Proceeds on sale of plant and equipment |
- |
(12,518) |
- |
- |
|
Acquisition of Financial Assets |
(3,559) |
- |
(3,559) |
- |
|
Proceeds from sale of gold bullion (capitalised) |
- |
- |
- |
36,469 |
|
Mineral assets |
(12,105) |
- |
(12,105) |
- |
|
Interest received |
356 |
146 |
910 |
279 |
|
Net cash used in investing activities
|
|
(18,299) |
|
|
|
(52,985) |
(117,706) |
(46,790) |
||
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
Proceeds from the issue of equity & conversion of options |
|
1,702 |
|
|
|
6,869 |
7,312 |
9,247 |
||
|
Financial activity (bank charges and realised foreign exchange gain / (loss)) |
|
(121) |
|
|
|
1,131 |
835 |
640 |
||
|
Net cash generated by/(used in) financing activities |
|
1,581 |
|
|
|
8,000 |
8,147 |
9,887 |
||
|
|
|
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
|
(572) |
|
|
|
17,529 |
7,322 |
3,866 |
||
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the financial period |
|
31,326 |
|
|
|
146,347 |
154,338 |
26,941 |
||
|
|
|
|
|
|
|
Effects of exchange rate changes on the balance of cash held in foreign currencies |
|
1,522 |
|
|
|
(3,593) |
(1,378) |
1,469 |
||
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the financial period |
|
32,276 |
|
|
|
160,282 |
160,282 |
32,276 |
||
|
|
|
|
|
|
The above Condensed Consolidated Interim Statement of Cash Flows should be read in conjunction with the accompanying notes.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PREPARATION
This financial report is denominated in United States Dollars, which is the functional currency of Centamin Egypt Limited. The Company is a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, all financial information presented in United States Dollars has been rounded to the nearest thousand dollars, unless otherwise stated.
The financial report comprises the consolidated financial report of Centamin Egypt Limited ("Company") and the entities it controlled at the end of, or during, the period (together, "the Consolidated Entity" or "Group").
The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.
In the application of A-IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Judgments made by management in the application of A-IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.
The following significant policies have been adopted in the preparation and presentation of the financial report:
(B) CASH AND CASH EQUIVALENTS
Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(C) FINANCIAL INSTRUMENTS ISSUED BY THE COMPANY
Debt and Equity Instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.
(D) EMPLOYEE BENEFITS
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.
Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash flows to be made by the consolidated entity in respect of services provided by employees up to reporting date.
Superannuation
The Company contributes to, but does not participate in, compulsory superannuation funds on behalf of the Employees and Directors in respect of salaries and directors' fees paid. Contributions are charged against income as they are made.
(E) EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE
Exploration and evaluation expenditures in relation to each separate area of interest, are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:
i) the rights to tenure of the area of interest are current; and
ii) at least one of the following conditions is also met:
a) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or
b) exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploration drilling, trenching and sampling and associated activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances (as defined in AASB 6 "Exploration for and Evaluation of Mineral Resources") suggest that the carrying amount of exploration and evaluation assets may exceed its recoverable amount. The recoverable amount of the exploration and evaluation assets (or the cash-generating unit(s) to which it has been allocated, being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment, reclassified to development properties, and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced.
Development expenditure is recognised at cost less accumulated amortisation and any impairment losses. When commercial production in an area of interest has commenced, the associated costs are amortised over the estimated economic life of the mine on a units of production basis.
Changes in factors such as estimates of proved and probable reserves that affect unit-of-production calculations are dealt with on a prospective basis.
(F) FINANCIAL ASSETS
Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value through the profit or loss which are initially measured at fair value.
Subsequent to initial recognition, investments in subsidiaries are measured at cost in the company financial statements. Other financial assets are as 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimate future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.
Loans and receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest rate method less impairment.
Interest is recognised by applying the effective interest rate.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each Statement of Financial Position date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss is recognised directly in equity.
(G) FOREIGN CURRENCY
The individual financial statements of each group entity are presented in its functional currency being the currency of the primary economic environment in which the entity operates.For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in United States dollars, which is the functional currency of Centamin Egypt Limited and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognised in profit or loss in the period in which they arise.
(H) GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
i. Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
ii. For receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operation cash flows.
(I) IMPAIRMENT OF ASSETS (OTHER THAN EXPLORATION AND EVALUATION AND FINANCIAL ASSETS)
At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset for which the estimates of future flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. Each cash generated unit is determined on an area of interest basis.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash generating unit) in prior years.
(J) INVENTORIES
Inventories are valued at the lower of cost and net realisable value. Costs including an appropriate portion of fixed and variable overhead expenses, are assigned to inventory on hand by the method appropriate to each particular class of inventory, with the majority being valued on a weighted average cost basis. Net realisable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale.
Ore stockpiles, gold in circuit and bullion are valued applying absorption costing.
(K) JOINT VENTURE ARRANGEMENTS
Jointly controlled operations
Where the Group is a venturer (and so has joint control) in a jointly controlled operation, the Group recognises the assets that it controls and the liabilities that it incurs, along with the expenses that it incurs and the Group's share of the income that it earns from the sale of goods or services by the joint venture.
Due to the nature and rights conferred to PGM under the Concession Agreement, SGM is wholly consolidated within the Centamin group of companies (refer to Accounting Policy (P)).
(L) LEASED ASSETS
Leased assets are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where other systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
(M) PLANT AND EQUIPMENT
Plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item as well as the estimated cost of abandonment. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.
Depreciation is provided on plant and equipment. Fixed assets are calculated on a straight line basis so as to write off the net cost or other re-valued amount of each asset over its expected useful life to its estimated residual value.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes recognised on a prospective basis.
The following estimated useful lives are used in the calculation of depreciation:
Plant* - Life of Mine
Plant & Equipment & Office Equipment - 4-10 years
Motor Vehicles - 2 -8 years
Land & Buildings - 4 - 20 years
* Plant includes the Crushing, Grinding, Milling and Extraction circuits including relevant support infrastructure.
(N) MINE DEVELOPMENT PROPERTIES
Where mining of a mineral resource has commenced, the accumulated costs are transferred to mine properties. Amortisation is first charged to new mine development ventures from the date of first commercial production. Amortisation of mine properties is on a unit of production basis resulting in an amortisation charge proportional to the depletion of the proved and probable ore reserves. The unit of production can be on a tonnes or an ounce depleted basis.
(O) REVENUE
Revenue is measured at the fair value of the consideration received or receivable.
Sale of goods
Revenue from the sale of mineral production is recognised when the Consolidated Entity has passed the risks and rewards of ownership to the buyer.
Pre-production revenues
Income derived by the entity prior to the date of commercial production (being 1 April 2010) was offset against the expenditure capitalised and carried in the Comparative Statement of Financial Position. All revenues recognised post 1 April 2010 are recognised in accordance with the revenue policy stated above. 1 April 2010 was selected as the commencement date of open pit commercial production due to the fact that sufficient, stable and sustained production capacity had been achieved as at that date. Underground commercial production commenced 1 May 2011 with the start of stoping operations.
Production royalty
The Arab Republic of Egypt ("ARE") is entitled to a royalty of 3% of net sales revenue from the sale of gold and associated minerals from the Sukari Gold Mine. This royalty is calculated and recognised on receipt of the final certificate of analysis document received from the refinery. Due to its nature, the royalty is independent of, and not classified as, a cost of sales.
Interest revenue
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.
Marketing Revenue
Pharaoh Gold Mines NL ("PGM") is entitled to a service fee for managing the process of marketing gold and associated minerals of the Sukari mine. This marketing fee is calculated and recognised monthly on receiving the certificate of analysis document from the refinery. Income derived from this service varies and is agreed periodically between Pharaoh Gold Mines NL and the Sukari Gold Minesboard.
(P) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the consolidated entity, being the company (the parent entity) and its subsidiaries and other controlled entities as defined in Accounting Standard AASB 127 "Consolidated and Separate Financial Statements" and other entities which it controls. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.
The consolidated financial statements include the information and results of each subsidiary and other controlled entities from the date on which the company obtains control and until such time as the company ceases to control such entity. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full.
Sukari Gold Mines ("SGM"), is jointly owned by PGM and EMRA on a 50% equal basis. For accounting purposes, SGM is wholly consolidated within the Centamin group of companies, due to the nature and rights conferred to PGM under the Concession Agreement (refer Page 4). PGM has the primary right to recoup the cost of capital invested to date from net revenues of SGM prior to any distribution of dividends (or profit sharing) between PGM and EMRA. Once PGM has fully recouped its cost of capital, net revenues will be distributed between PGM and EMRA on the basis set out above. The distribution of profits to EMRA will be shown as a charge to the profit and loss account of the consolidated Centamin group of companies.
(Q) SHARE-BASED PAYMENTS
Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of the equity instrument at grant date. Fair value is measured by the use of the Black and Scholes model. The fair value determined at the grant date of the equity-settled share-based payments is expensed over the vesting period, based on the consolidated entity's estimate of shares that will eventually vest.
Equity-settled share based transactions with other parties are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counter party renders the service.
The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. Further details on how the fair value of equity-settled share-based transactions has been determined can be found in Note 10. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with corresponding adjustment to the equity-settled employee benefits reserve.
(R) TAXATION
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because of items of income or expense that are taxable or deductible in other periods and items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is included in the accounting for the business combination.
Tax Consolidation
The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. Centamin Egypt Limited is the head entity in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the "separate taxpayer within group" approach. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the company (as the head entity in the tax-consolidated group).
Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts are recognised as payable to or receivable by the company and each member of the group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax-consolidated group in accordance with the arrangement. Where the tax contribution amount recognised by each member of the tax-consolidated group for a particular period is different to the aggregate of the current tax liability or asset and any deferred tax asset arising from unused tax losses and tax credits in respect of that period, the difference is recognised as a contribution to (or distribution to) equity participants.
(S) RESTORATION AND REHABILITATION
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of exploration, development and production activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of dismantling and removal of facilities, restoration and monitoring of the affected areas. The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each reporting date.
The initial estimate of the restoration and rehabilitation provision relating to exploration, development and mining production activities is capitalised into the cost of the related asset and amortised on the same basis as the related asset, unless the present obligation arises from the production of the inventory in the period, in which case the amount is included in the cost of production for the period. Changes in the estimate of the provision of restoration and rehabilitation are treated in the same manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the related asset.
(T) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Critical Judgments in Applying the Entity's Accounting Policies
The following are the critical judgments that management has made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements:
(a) Provision for restoration and rehabilitation costs
The Group is required to decommission, rehabilitate and restore mines and processing sites at the end of their producing lives to a condition acceptable to the relevant authorities. The provision has been calculated taking into account the estimated future obligations including the costs of dismantling and removal of facilities, restoration and monitoring of the affected areas. The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date.
(b) Ore reserve estimates
Estimates of recoverable quantities of reserves include assumptions on commodity prices, exchange rates, discount rates and production costs for future cashflows. It also involves assessment and judgement of difficult geological models. The economic, geological and technical factors used to estimate ore reserves may change from period to period. Changes in ore reserves affect the carrying values of mine establishment properties, property, plant and equipment, provision for rehabilitation assets and deferred taxes. Ore reserves are integral to the amount of depreciation and amortisation charged to the Statement of Comprehensive Income and the calculation of inventory.
(U) KEY SOURCES OF ESTIMATION UNCERTAINTY
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:
(a) Recovery of Capitalised Exploration Evaluation and Establishment Expenditure
The Group capitalises exploration, evaluation and establishment expenditure incurred on ongoing projects. The recoverability of this capitalised exploration expenditure is entirely dependent upon returns from the successful establishment of mining operations or from surpluses from the sale of the projects or the subsidiary companies that control the projects. At the point that it is determined that any capitalised exploration expenditure is not recoverable, it is written off.
(V) NEW STANDARDS AND INTERPRETATIONS ADOPTED
The consolidated entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to their operations and are effective for the current financial reporting period beginning 1 July 2010.
Significant new and revised standards and interpretations effective for the current financial reporting period that are relevant to the consolidated entity are:
· AASB 2009-5: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process;
· AASB 2009-8: Amendments to Australian Accounting Standards - Group Cash-settled Share-based Payment Transactions AASB 2.
· AASB 2009-10: Amendments to Australian Accounting Standards - Classification of Rights Issues;
· AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project;
· Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments.
(W) ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE
The following Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been adopted by the consolidated entity for the year ended 30 June 2011.
|
Standard / Interpretation |
Effective for annual reporting periods beginning/ending on or after |
Expected to be applied be consolidated entity |
|
AASB 124 Related Party Disclosures (2009) and AASB 2009-12 Amendments to Australian Accounting Standards |
1 January 2011 |
30 June 2012 |
|
AASB 9: Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-9 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) |
1 January 2013 |
30 June 2014 |
|
AASB 2010-4 Further Amendments to Australian Accounting Standards arising from Annual Improvements Project |
1 January 2011 |
30 June 2012 |
|
AASB 2010-5 Amendments to Australian Accounting Standards |
1 January 2011 |
30 June 2012 |
|
AASB 2010-6 Amendments to Australian Accounting Standards - Disclosures on Transfers of Financial Assets |
1 July 2011 |
30 June 2012 |
|
AASB 2010-8 Amendments to Australian Accounting Standards - Deferred Tax: Recovery of Underlying Assets' |
1 January 2012 |
30 June 2013 |
|
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements |
1 July 2013 |
1 January 2014 |
|
AASB 2011-5 Amendments to Australian Accounting Standards - Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation |
1 July 2011 |
1 January 2012 |
|
AASB 2011-6 Amendments to Australian Accounting Standards - Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation - Reduced Disclosure Requirements |
1 July 2013 |
1 January 2014 |
|
IFRS 10 Consolidated Financial Statements |
1 January 2013 |
1 January 2013 |
|
IFRS 11 Joint Arrangements |
1 January 2013 |
1 January 2013 |
|
IFRS 12 Disclosure of Interests in Other Entities |
1 January 2013 |
1 January 2013 |
|
IFRS 13 Fair Value Measurement |
1 January 2013 |
1 January 2013 |
The impact of these recently issued or amended Standards and Interpretation have not been determined as yet by the consolidated entity.
NOTE 2: SEGMENT REPORTING
The Consolidated Entity is engaged in the business of exploration and mining of precious and base metals only, which is characterised as one operating segment only. As the consolidated Entity has only one operating segment, all the necessary reporting disclosures are disclosed elsewhere in the notes to the financial statements.
NOTE 3: EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely in the opinion of the Directors of the Company to affect significantly the operations of the company, the results of those operations, or the state of affairs of the Company in subsequent financial periods.
NOTE 4: REVENUE AND OTHER INCOME
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
30 September |
30 September |
||
|
|
2011 |
2010 |
2011 |
2010 |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
(a) Revenue |
|
|
|
|
|
Gold Sales |
88,744 |
38,692 |
255,283 |
75,698 |
|
Interest revenue |
356 |
146 |
910 |
`279 |
|
|
|
|
|
|
|
(b) Other income |
|
|
|
|
|
Sale of plant and equipment |
- |
- |
- |
- |
|
VAT refund |
- |
- |
- |
- |
|
Silver sales proceeds |
224 |
25 |
536 |
148 |
|
Marketing Commission |
- |
- |
2,032 |
- |
|
Scrap material sales |
- |
39 |
- |
39 |
|
|
89,324 |
38,902 |
258,762 |
76,164 |
NOTE 5: EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE
|
|
Three months ended 30 September 2011 |
Nine months ended 30 September 2011 |
|
|
US$'000 |
US$'000 |
|
Exploration and evaluation phase expenditure- At Cost (a) |
|
|
|
Balance at the beginning of the period |
50,887 |
45,112 |
|
Expenditure for the period |
14,738 |
20,513 |
|
Balance at the end of the period |
65,525 |
65,625 |
|
|
|
|
|
Development expenditure- At Cost (b) |
|
|
|
Balance at the beginning of the period |
140,156 |
122,782 |
|
Expenditure for the period |
33,862 |
94,497 |
|
Accumulated Amortisation |
(13,776) |
(24,858) |
|
Transfers to Property, Plant & Equipment (net) |
(5,612) |
(37,792) |
|
Balance at the end of the period |
154,629 |
154,629 |
|
Net book value of exploration, evaluation and development phase expenditure |
220,254 |
220,254 |
|
|
|
|
|
(a) Included within the cost amount of exploration evaluation and development assets is US$5.3M being the excess of consideration over the net tangible assets acquired on the acquisition of Pharaoh Gold Mines NL in January 1999. This amount has been treated as part of the cost of exploration, evaluation and development. Management believe that the recovery of these amounts will satisfactorily be made through the exploitation of the project in due course.
|
|
(b) The Sukari Gold Mine has several planned phases of development. Open pit waste removal, underground capital development and process plant expansion activities are being separately accounted for as development phase expenditure. |
NOTE 6: CONTINGENT LIABILITIES
The Directors are not aware of any contingent liabilities as at the date of these unaudited interim consolidated financial statements.
NOTE 7: ISSUED CAPITAL
|
Fully Paid Ordinary Shares |
Three months ended 30 September 2011 |
Nine months ended 30 September 2011 |
||
|
|
Number |
US$'000 |
Number |
US$'000 |
|
|
|
|
|
|
|
Balance at beginning of the period |
1,091,858,750 |
601,069 |
1,081,946,250 |
600,500 |
|
Issue of shares upon exercise of options and warrants |
- |
- |
345,000 |
569 |
|
Issue of shares under the Executive Director Loan Funded Share Plan 2011 |
- |
- |
3,000,000 |
- |
|
Issue of shares under the Employee Loan Funded Share Plan 2011 |
400,000 |
- |
6,967,500 |
- |
|
Transfer from share options reserve |
- |
- |
- |
- |
|
Placement of shares - Sheba |
2,906,216 |
6,836 |
2,906,216 |
6,836 |
|
Balance at end of the period |
1,095,164,966 |
607,905 |
1,095,164,966 |
607,905 |
Change to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 01 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Share options granted under the employee option plan
In accordance with the provisions of the employee share option plan, as at 30 September 2011, executives and employees have options over 1,000,000 ordinary shares. Share options granted under the employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are contained in Note 10 to the financial statements.
Please see Note 10 for more information on share based payments.
NOTE 8: RELATED PARTY TRANSACTIONS
The related party transactions for the three months ended 30 September 2011 are summarised below:
- Salaries, superannuation contributions, bonuses, consulting and Directors fees paid to Directors during the three months ended 30 September 2011 amounted to A$567,096 (30 September 2010: A$784,999).
- Mr J El-Raghy is a Director and shareholder of El-Raghy Kriewaldt Pty Ltd ("ELK"), which provides office premises to the Company in Australia. All dealings with ELK are in the ordinary course of business and on normal terms and conditions. Rent paid to ELK during the three months ended 30 September 2011 amounted to A$11,365 (30 September 2010: A$16,587).
NOTE 9: EARNINGS PER SHARE
Basic earnings per share are calculated using the weighted average number of shares outstanding. Diluted earnings per share are calculated using the treasury stock method. In order to determine diluted earnings per share, the treasury stock method assumes that any proceeds from the exercise of dilutive stock options and warrants would be used to repurchase common shares at the average market price during the period, with the incremental number of shares being included in the denominator of the diluted earnings per share calculation. The diluted earnings per share calculation exclude any potential conversion of options and warrants that would increase earnings per share.
The weighted average number of ordinary shares used in the calculation of basic earnings per share is 1,093,474,152(30 September 2010: 1,029,201,322). The weighted average number of ordinary shares used in the calculation of diluted earnings per share is 1,095,136,541 (30 September 2010: 1,030,499,388). The earnings used in the calculation of basic and diluted earnings per share is a profit of US$43,414,036(30 September 2010: profit of US$14,701,993).
NOTE 10: SHARE BASED PAYMENTS
The consolidated entity had an Employee Share Option Plan (ESOP) as well as an Executive Director Loan Funded Share Plan (EDLFSP) and an Employee Loan Funded Share Plan (ELFSP) in place for executives and employees.
Employee Option Plan
Options were issued to key management personnel under the Employee Option Plan 2006 (previously the Employee Option Plan 2002) as part of their remuneration. Options were offered to key management personnel at the discretion of the Directors, having regard, among other things, to the length of service with the consolidated entity, the past and potential contribution of the person to the consolidated entity and in some cases, performance.
Each employee share option converts into one ordinary share of the Company on exercise. The options carry neither rights to dividends nor voting rights. Options vest over a period of 12 months, with 50% vesting and exercisable after six months and the other 50% vesting and exercisable after 12 months of issue. All options are issued with a term of three years. At the discretion of the Directors part or all of the options issued to an executive or employee may be subject to performance based hurdles. No performance based hurdles have been applied for issues granted to date.
In addition to the above 1,630,150 options (Series 18) were issued pursuant with the agreement with Macquarie Bank Limited to provide a corporate loan facility of up to US$25 million (as announced on 02 April 2009). Those options were exercisable any time on or before 31 December 2012. No Series 18 options have been exercised at the date of this report.
The following reconciles the outstanding share options granted under the Employee Option Plan, and other share based payment arrangements, at the beginning and end of the financial period:
|
|
Three months ended 30 September 2011 |
Three months ended 30 September 2010 |
|
|
Number of options |
Number of options |
|
|
|
|
|
Balance at beginning of the period (a) |
2,630,150 |
4,950,150 |
|
Granted during the period (b) |
- |
- |
|
Exercised during the period (c) |
- |
(1,115,000) |
|
Forfeited (expired or lapsed) during the period (d) |
- |
- |
|
Balance at the end of the period (e) |
2,630,150 |
3,835,150 |
|
Exercisable at the end of the period |
2,630,150 |
3,835,150 |
a) Balance at the start of the period
|
Options series |
Number |
Grant date |
Expiry / Exercise Date |
Exercise price A$ |
Fair value at grant date A$ |
|
||||||
|
|
Series 17 |
1,000,000 |
19 Dec 2008 |
19 Dec 2011 |
1.0000 |
0.3568 |
||||||
|
|
Series 18 |
1,630,150 |
15 Apr 2009 |
31 Dec 2012 |
1.2000 |
0.4326 |
||||||
|
|
|
2,630,150 |
|
|
|
|
||||||
b) Issued during the period
There were no options issued during the period.
c) Exercised during the period
There were no options exercised during the period.
d) Forfeited (expired or lapsed) during the period
There were no options forfeited, expired or lapsed during the period.
e) Balance at the end of the period
|
Options series |
Number |
Grant date |
Expiry / Exercise Date |
Exercise price A$ |
Fair value at grant date A$ |
|
||||||
|
|
Series 17 |
1,000,000 |
19 Dec 2008 |
19 Dec 2011 |
1.0000 |
0.3568 |
||||||
|
|
Series 18 |
1,630,150 |
15 Apr 2009 |
31 Dec 2012 |
1.2000 |
0.4326 |
||||||
|
|
|
2,630,150 |
|
|
|
|
||||||
Loan Funded Share Plans
Shares were issued to Executive Directors under the EDLFSP 2011 and Employees under the ELFSP as part of their remuneration package.
Under the terms of the EDLFSP and ELFSP, the Company has provided a limited recourse and interest free loan to certain employees of the Company for the purpose of acquiring the New Shares (the "Loan"). The purchase of the shares have been funded by the Loan and the shares will not vest until certain performance conditions are met. In the event the performance conditions are not met, or the shares are forfeited by the participant, the Company can either re-acquire the shares or direct the trustee to sell them on, offsetting the proceeds against the outstanding loan amount and waiving the remainder of the loan. Subject to performance conditions and time based hurdles being met, the loan will be repayable by the relevant employee in full on the earlier of the termination date of the loan (3 years from the date of issue) or the date on which the shares are disposed of.
Further details of the EDLFSP and ELFSP can be found in the Company's Annual Report or Notice of General Meeting for the shareholder meeting held on Tuesday, 15 February 2011, and full copies of the plan are available upon request.
The following reconciles the outstanding share options granted under the EDLFSP and ELFSP at the beginning and end of the financial period:
|
|
Three months ended 30 September 2011 |
Three months ended 30 September 2010 |
|
|
Number of shares |
Number of shares |
|
|
|
|
|
Balance at beginning of the period (a) |
8,940,000 |
- |
|
Granted during the period (b) |
400,000 |
- |
|
Exercised during the period (c) |
- |
- |
|
Forfeited (expired or lapsed) during the period (d) |
(500,000) |
- |
|
Balance at the end of the period (e) |
8,840,000 |
- |
|
Exercisable at the end of the period |
- |
- |
a) Balance at the start of the period
|
Options series |
Number |
Grant date |
Expiry / Exercise Date |
Exercise price GBP |
Fair value at grant date GBP |
|
||||||
|
|
Series 21 |
3,000,000 |
21 Mar 2011 |
21 Mar 2014 |
1.259 |
0.684 |
||||||
|
|
Series 22 |
75,000 |
21 Mar 2011 |
21 Mar 2012 |
1.259 |
0.474 |
||||||
|
|
Series 23 |
75,000 |
21 Mar 2011 |
21 Mar 2013 |
1.259 |
0.563 |
||||||
|
|
Series 24 |
75,000 |
21 Mar 2011 |
21 Mar 2014 |
1.259 |
0.563 |
||||||
|
|
Series 25 |
4,890,000 |
21 Mar 2011 |
21 Mar 2014 |
1.259 |
0.754 |
||||||
|
|
Series 26 |
225,000 |
21 Jun 2011 |
21 Jun 2014 |
1.171 |
0.754 |
||||||
|
|
Series 27 |
600,000 |
21 Jun 2011 |
21 Jun 2014 |
1.171 |
0.563 |
||||||
|
|
|
8,940,000 |
|
|
|
|
||||||
b) Issued during the period
|
Share series |
Number |
Grant date |
Expiry / Exercise Date |
Exercise price GBP |
Fair value at grant date GBP |
|
Series 28 |
400,000 |
30 Sep 2011 |
30 Sep 2014 |
0.981836 |
0.754 |
|
|
400,000 |
|
|
|
|
c) Exercised during the period
There were no shares exercised during the period.
d) Forfeited (expired or lapsed) during the period
|
Options series |
Number Forfeited/ Expired/Lapsed |
Lapsed Date |
Share price at lapse date GBP |
|
Series 25 |
500,000 |
19 Sep 2011 |
1.057 |
|
|
500,000 |
|
|
e) Balance at the end of the period
|
Options series |
Number |
Grant date |
Expiry / Exercise Date |
Exercise price GBP |
Fair value at grant date GBP |
|
Series 21 |
3,000,000 |
21 Mar 2011 |
21 Mar 2014 |
1.259 |
0.684 |
|
Series 22 |
75,000 |
21 Mar 2011 |
21 Mar 2012 |
1.259 |
0.474 |
|
Series 23 |
75,000 |
21 Mar 2011 |
21 Mar 2013 |
1.259 |
0.563 |
|
Series 24 |
75,000 |
21 Mar 2011 |
21 Mar 2014 |
1.259 |
0.563 |
|
Series 25 |
4,390,000 |
21 Mar 2011 |
21 Mar 2014 |
1.259 |
0.754 |
|
Series 26 |
225,000 |
21 Jun 2011 |
21 Jun 2014 |
1.171 |
0.754 |
|
Series 27 |
600,000 |
21 Jun 2011 |
21 Jun 2014 |
1.171 |
0.563 |
|
Series 28 |
400,000 |
30 Sep 2011 |
30 Sep 2014 |
0.981 |
0.754 |
|
|
8,840,000 |
|
|
|
|
Form 52-109F2
Certification of interim filings
I, Pierre Louw, Chief Financial Officer of Centamin Egypt Limited, certify the following:
1. I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Centamin Egypt Limited, (the issuer) for the interim period ended 30 September 2011;
2. Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;
3. Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings;
4. The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
5. Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings
(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.
5.1 The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is based upon the Principles of Good Corporate Governance, as published by the ASX Corporate Governance Council.
5.2 N/A
5.3 N/A
6. The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on 01 July 2011 and ended on 30 September 2011 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
Pierre Louw
Chief Financial Officer
Egypt : 31 October 2011
Form 52-109F2
Certification of interim filings
I, Harry Michael, Chief Executive Officer of Centamin Egypt Limited, certify the following:
1. I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Centamin Egypt Limited, (the issuer) for the interim period ended 30 September 2011;
2. Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;
3. Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings;
4. The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
5. Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings
(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.
5.1 The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is based upon the Principles of Good Corporate Governance, as published by the ASX Corporate Governance Council.
5.2 N/A
5.3 N/A
6. The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on 01 July 2011 and ended on 30 September 2011 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
Harry Michael
Chief Executive Officer
Perth: 31 October 2011
This information is provided by RNS
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