Sukari, Centamin's (LSE: CEY) Egyptian gold mine, saw a record level of production in Q1 2013 according to the miner's preliminary production results, and lifted the share price 3.5% in early trade this morning to 47.40 pence.
87,016 ounces is a huge 77% increase on the same period last year, while it's up 2% on the fourth quarter of 2012. Quarterly throughput at the Sukari process plant also broke records, with 1,402 karats representing a 37% increase on the corresponding quarter in 2012, and 12% up on Q4 2012.
Elsewhere, open pit total material movement of 10,550 karats jumped by 56% and ore production of 2,133 karats increased 11% on Q4 2012. The underground mine saw an increase of 6% on the previous quarter, delivering 119 karats, while the run of mine ore stockpile balance increased by 38 karats to 759 karats.
Chairman Josef El-Raghy commented:
Following on from record 2012 financial results, the team at Sukari have delivered a second successive quarter of record gold production, with further improvements across all areas of the operation. This marks a solid start to the year and output remains on target to achieve the 2013 guidance of 320,000 ounces. With the plant running at consistently high levels of productivity, the processing function is well placed to deliver the next step change in throughput from the Stage 4 expansion, which remains on course to complete commissioning by the end of the year.
Today's statement noted the benefit from continued high levels of productivity coupled with a reduced impact from stoppages compared with the previous quarter.
The news is another boost for Centamin, following problems at the end of last year where a suspension was lifted that had caused its fuel supplier Chevron to be unable to supply fuel to Sukari. The shutdown of the Egyptian mine caused the shares to plummet over 60% in one day, from 52 pence down to 30 pence. Once the suspension was lifted, however, the shares rebounded 25% as fuel supply was resumed, and rose a further 25% as shipment resumed.
So, more good news for investors who bought into Centamin at the bottom of the recent price crash. At today's price, Centamin's shares have yet to regain all of their value prior to the plunge, and the question whether the potential for recovery makes Centamin a buy remains your decision.
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