Centamin (LON:CEY) has announced robust production for Q3 2016 with a 6% QoQ increase and 41% YoY increase to 149koz. Although plant throughput declined 4% QoQ to 2.8mnt, which remains ahead of plant capacity of 11mntpa, grades at the open pit operation were up from 0.99g/t to 1.14g/t. Head grades from the underground mine were marginally lower QoQ, however, the contribution is far smaller to total milled material.
The increase in grades and production is likely to benefit unit costs and margins in Q3 2016. Despite the robust results the stock is likely to be under near term pressure from gold prices, although this should be offset somewhat by GDP depreciation.