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Egypt-focused gold miner Centamin (LON:CEY) (TSX:CEE) said on Friday its total output targets for 2020 will be affected by safety-related delays at its flagship Sukari mine in Egypt.
The company said radar systems detected a movement in Sukari’s open-pit Stage 4 West wall, which prompted it to immediately defer open-pit mining operations in that zone. Work in the area was scheduled to start during the fourth quarter.
It has lowered gold production guidance for 2020 by around 15% after stability issues at the west wall of its flagship Sukari mine
“While the precise impact has yet to be fully determined, the company’s preliminary estimate is that production for the fourth quarter will be reduced to circa 70,000 ounces,” the miner said in a statement.
Gold production for the three months ended September 30 at Sukari was around 120,000 ounces, taking annual production to 375,000 ounces so far. The company’s guidance for 2020 was between 510,000 and 525,000 ounces of gold.
Shares in Centamin fell 20% on the news and were last trading in London at 161.2p, leaving the company with a market capitalization of 1.87 billion pounds.
The company noted that underground mining had not been affected.
Sukari, which began operations in January 2010, comprises a large open pit and an underground mine.
The asset, the only operating gold mine in Egypt, has an estimated productive life of about 15 years. The company, however, is in the process of reviewing that timeline.
“As previously disclosed, we are undertaking a life of asset review of Sukari,” Centamin said. “This is well advanced and any rehabilitation requirements and implications for long-term geotechnical stability will be incorporated into this initiative.”
Centamin has proved resilient to recent challenges, beyond those brought by the covid-19 pandemic. After about six months without a top boss, it appointed in April Martin Horgan as its new chief executive officer.
The company has also gone through some major board changes. Those include seeing Josef El-Raghy migrate from executive chairman to chairman, 18 years after becoming managing director.
