(Reuters) - Gold miner Centamin Plc’s (CEY.L) quarterly core earnings topped market expectations as lower-than-estimated mine site costs and inventory-driven sales volumes offset a drop in production.
Shares of the Egypt-focused company climbed 4 percent in morning trading on the London Stock Exchange.
Centamin stuck to its annual output target of 505,000-515,000 ounces, first forecast in May, when the miner was forced to cut its production estimate and raise its cost forecast due to lower grade ore at its Sukari mine in Egypt.
The company sold 97,628 ounces of gold in the second quarter, it said on Thursday, higher than the quarter’s production volume of 92,803 ounces, reported last month.
The beat was driven by sales volumes exceeding production and better-than-expected cash costs, Jefferies said.
Cash costs came in at $714 per ounce, compared with Jefferies estimate of $896 per ounce.
The miner expects significantly stronger production in the second half, driven by continued improvements in grade from the open pit in the Sukari mine, it said on Thursday.
Its earnings before interest, tax, depreciation and amortisation (EBITDA) fell 27.9 percent to $45.8 million, in the quarter ended June 30, about 36 percent ahead of Goldman Sachs estimate.
The company’s quarterly revenue fell 18.1 percent to $123.9 million, while production dropped 25.5 percent.
Centamin also declared an interim dividend of 2.5 cents per share on Thursday, higher than the consensus of 2.1 cents per share, according to Jefferies analysts.
Reporting by Muvija M in Bengaluru; Editing by Amrutha Gayathri