Centamin reduces production target after movement affects high-grade zone at Sukari

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Centamin PLC (LON:CEY) said it will reduce production guidance for the current year after ground movement forced an area of the Sukari gold mine to be shut down.

The movement was in a localised area of waste material in the Sukari open-pit Stage 4 West wall, the gold miner said in a statement.

Open-pit mining operations in this zone have been halted as a preventative safety measure, Centamin added.

Gold production for the three months ended 30 September at Sukari was around 120,000oz, making 375,000oz for the year so far, the company added.

Preliminary estimates suggest production this quarter will drop to around 70,000oz as a result of the disruption, it said.

Measures to stabilise movement in the affected area have already been implemented, it added, with a technical assessment underway to assess how best to mine the area.

The high-grade Stage 4 West wall was due to be mined during the final quarter of 2020 and in 2021 and mining of the high-grade areas will be rescheduled said the statement.

Around 90,000 ounces of gold are estimated to lie in the zone at grades of up to 2.0g/t.

Open-pit mining at Stage 4 North and Stage 5 North will continue, but grades here are below 1.0 g/t said Centamin.

Underground mining has not been affected and will continue as planned.

A third-quarter update will be published on 21 October 2020.

Martin Horgan, chief executive, said: “The use of the slope radar system has facilitated pro-active management of geotechnical risks and we have decided to defer production from this higher-grade area in order to protect our workforce and preserve the value of Sukari.

“As previously disclosed, we are undertaking a LOA [life of asset] review of Sukari. This is well advanced and any rehabilitation requirements and implications for long term geotechnical stability will be incorporated into this initiative.”

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