Egypt-focused gold miner Centamin (LON:CEY) (TSX:CEE) 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鈥檚 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
鈥淲hile the precise impact has yet to be fully determined, the company鈥檚 preliminary estimate is that production for the fourth quarter will be reduced to circa 70,000 ounces,鈥� the miner .
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鈥檚 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.
Life-of-asset review
Sukari, which began operations in January 2010,聽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.
鈥淎s previously disclosed, we are undertaking a life of asset review of Sukari,鈥� Centamin said. 鈥淭his is well advanced and any rehabilitation requirements and implications for long-term geotechnical stability will be incorporated into this initiative.鈥�
Centamin has proved resilient to recent challenges, beyond those brought by the covid-19 pandemic. After about six months without a top boss,聽it appointed in April Martin Horgan聽as its new chief executive officer.
The company has also gone through some聽major board changes. Those include seeing Josef El-Raghy migrate聽from executive chairman to chairman, 18 years after becoming managing director.