Centamin (LON:CEY) following the previously announced strong operational results has delivered strong financial results for Q2 2016. Gold production of 140koz was up 12% QoQ and 30% YoY and the group has now raised full year production guidance to 520-540koz from 470koz at an AISC of US$720-750 which is down from US$900/oz. CEY has declared an interim dividend of US$0.02/sh.
Whilst record throughput was a key factor in raising production the reduction in the stripping ratio from above 5 to 3.4 at the open pit mine and increase in grade of almost 50% to 9.26g/t Au in the underground mine have benefitted CEY's cost performance. Consequently, AISC decreased 22% YoY and 12% QoQ to US$669/oz.
We expect strong operational performance to continue as CEY has guided that grades in the open pit are expected to increase through H2 2016 with mining rates remaining ahead of initial projections. As a result, the strong cost performance also appears sustainable and the outlook for CEY is positive.