Centamin Raises Dividend 675%

Written by MrStockFox. Posted in Dividends

Today I read the news and my first thought was that this was too good to be true.  Someone messed up somewhere.  But I double checked and triple checked the report and everything seems to line up.  Last fiscal year, Centamin paid out a total dividend of 2.94 cents per share.  This year they have dramatically increased the dividend due to the large cash buildup.  For 2016, they have decided to payout a total of 15.5 cents per share( Proposed final dividend of 13.5 US cents per share + the 2 US cent per share interim dividend last October ).  I own 20,060 shares, so with this raise my annual income has increased by $2306.90 for a total dividend payment in May 2017 of $2708.10.  I still cannot believe my eyes for the numbers that I am typing on this page.  I totally expect that the dividend will go back down next year, but its sure nice to receive the high payout and reward share holders.  This one dividend payout will make up 20% of my total income for the entire year.


You can view some of my past updates on the company here.

Operational Highlights

  • Production of 551,036 ounces, a 26% increase on 2015 and above the revised guidance range.
  • Cash cost of production of US$513 per ounce, down from US$713 per ounce in 2015 and below the revised guidance range, driven by higher production and reductions in mine production costs, mainly due to lower fuel prices.
  • All-in sustaining costs (AISC) of US$694 per ounce, down from US$885 per ounce in 2015 and below the revised guidance range, due to the factors affecting the cash cost of production.
  • Record processing throughput of 11.6Mt, an increase of 9% on 2015 and above our base case forecast rate of 11Mtpa.
  • Record open pit total material movement (waste plus ore) of 62.2Mt, an increase of 8% on 2015. 
  • Underground ore mined 1.02Mt (down 12% 2015) at a grade of 9.04g/t (up 40% on 2015), achieving a sustained annualised rate above our base case forecast of 1Mt per annum at a grade of at least 6g/t.
  • 2017 guidance of 540,000 ounces of gold at US$580 per ounce cash cost of production and US$790 AISC.
  • A new discovery from exploration in Côte d'Ivoire, with a maiden resource of 0.3Moz at 1.6g/t Indicated and 1.0Moz at 1.3g/t Inferred covering five prospects within a 5km radius area and remaining open at depth and along strike.
  • Evaluation of results from Burkina Faso is ongoing, which will guide further drilling planned for 2017.

Financial Highlights

  • EBITDA US$373 million, up 145% on 2015, due to higher gold prices, increased production and lower costs.
  • Basic earnings per share of 18.61 US cents, up 313% on the prior year. Profit sharing with the Egyptian Mineral Resources Authority ("EMRA") commenced during Q3 2016, with earnings per share (before profit share) of 23.05 US cents, up 411% on the prior year.
  • Centamin remains debt-free and unhedged with cash, bullion on hand, gold sales receivable and available-for-sale financial assets of US$428 million at 31 December 2016, up 85% (2015 US$231 million).
  • Proposed final dividend of 13.5 US cents per share; total 2016 dividend payout of 15.5 US cents per share (c.US$178 million).

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