Centamin capital review could weigh on flexibility for share buyback
CENTAMINE was undertaking a review of its capital structure in which it would assess its approach to debt financing, and possibly whether it had the flexibility to consider a share buyback program.
The review would focus primarily on payment issues for projects such as Doporo, Centamin CEO Martin Horgan said today during the company’s fourth quarter production presentation.
Centamin announced in May last year that it would advance its Doporo project in Ivory Coast after a preliminary assessment indicated its mining prospects could support $275 million in investment. A preliminary economic assessment of Doporo implied a mine life of 13 years producing an annual average of 207,800 oz of gold for the first five years.
“A whole chunk of capital is in the works and that would have implications for what we do in terms of financial flexibility. All sorts of options will be on the table for us to consider,” he said.
Centamin shares have fallen 24% in the past 12 months.
Centamin said last year it would pay a minimum total dividend of $105 million. It was a four-year dividend plan in which he guaranteed a minimum payout of $100 million for each of the first two years and guaranteed gold production of 450,000 to 500,000 ounces through 2024.
Centamin today reported fourth quarter gold production of 107,549 ounces, bringing full year production for the year ended Dec. 31 to 415,370 ounces – midpoint of guidance of 400,000 to 430. 000 oz.
Revenue for the year totaled $733 million generated from gold sales of 407,252 ounces at an average realized gold price of $1,797 per ounce sold.
The gold production forecast for 2022 remained unchanged at 430,000 to 460,000 ounces at an overall sustaining cost of $1,275 to $1,425/oz sold.
Asked about the future Batie West, a Burkinabè prospect that Centamin decided not to pursue, Horgan said discussions were underway with third parties as well as the country’s mines minister. “There is an active dialogue,” he said.