ANNUAL REPORT & ACCOUNTS 2022
CREATING OPPORTUNITIES
FOR PEOPLE THROUGH
RESPONSIBLE MINING
CONTENTS
OVERVIEW
Centamin in Numbers
02
Who We Are
04
Strategy in Action:
A Year of Delivery
06
Decarbonisation Roadmap
08
Chair’s Foreword
12
Investment Case
14
STRATEGIC REPORT
CEO’s Statement
16
Our Business Model
20
Understanding Our Stakeholders
22
Business in Action
24
Our Strategy
28
Key Performance Indicators
30
Operational Review
36
Exploration Review
40
Market Review
44
Financial Review
46
Risk Review
54
Disclosures related to
Climate Change
70
Viability Statement
82
CORPORATE GOVERNANCE
Governance Overview
84
Governance Statement
86
Board of Directors
90
Our Governance Structure
94
Our Management Structure
96
Board Diversity
97
Board and Committee Evaluation
98
Key Activities during the Year
99
Our Culture
100
Corporate Governance and
Compliance Statement
102
Nomination Committee Report
104
Technical Committee Report
108
Sustainability Committee Report
110
Audit and Risk Committee Report
113
Remuneration Committee Report
119
FINANCIAL STATEMENTS
Directors’ Responsibilities
150
Independent Auditor’s Report
151
Consolidated Financial Statements
157
Notes to the Consolidated
Financial Statements
161
ADDITIONAL INFORMATION
Mineral Resource and
Reserve Statements
204
Company Details
208
Dividend Policy
211
Glossary
212
Offices
214
Forward-looking Statements
215
CENTAMIN PLC
Located within the Egyptian
Nubian Shield, some 700km
southeast of Cairo and 25km
from the Red Sea, sits the
Sukari Hill, a desert ridge
encircled by wide wadis and
starkly beautiful mountains.
DIVERSITY AND
INCLUSION,
A KEY MILESTONE
Centamin was built on the exploration success of
our Egyptian founders with the Sukari discovery
in the 1990s. The subsequent development of
the Sukari Gold Mine is a story of tenacity in
the modernisation of an ancient gold mining
jurisdiction, which remains one of the few
underexplored gold belts – the Arabian Nubian
Shield.
Today, Sukari is Egypt’s first large-scale modern
mine; served by smooth tarmac roads, off-grid
power, state of the art 36MWDC solar plant, and
a 25km water pipeline fed by the Red Sea. The
landscape and climate can be unforgiving in
Egypt’s mineral rich Eastern Desert. Sukari is a hive
of activity, a hub of employment and opportunity for
upper and lower Egypt, with a workforce of some
4,000 people, of which 96% are Egyptian. Egypt is
an excellent operating jurisdiction, boasting a stable
political environment, good security and a great
infrastructure network from port to road access.
In 2022, Sukari produced its five millionth ounce of
gold since it began production 13 years ago. This
is a milestone and journey that we are exceptionally
proud of, but our focus is on the future –
developing a thriving Egyptian gold industry for the
benefit of people and country.
Sukari has at least 14 years of production ahead
and 11.11 million ounces in gold resources
and, more broadly, across Egypt Centamin has
3,000km2 of new exploration licences.
The opportunities we aspire to create for people
through responsible mining are endless. Thank you
to all that have contributed to make this possible.
In 2022, we implemented the People
and Diversity and Inclusion Policies to
promote an inclusive culture throughout
the Company that reflects the diversity
of the countries in which we operate;
and a culture of belonging and inclusion
where everyone is respected, valued
and empowered to excel within the
workplace.
Following a change in the Egyptian
regulatory framework in 2021 removing
restrictions to the employment of women
at a mine site, we are now proud to
have increased our Egyptian female
representation to 34 employees and
counting. This includes our first Egyptian
female employee at a mine site who
last year was recognised as a trailblazer
and named one of the 100 Global
Inspirational Women in Mining for 2022.
OUR REPORTING SUITE
For more information
within this Report
For more information visit
www.centamin.com
2021
SUSTAINABILITY REPORT
Creating
sustainable value
01
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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Centamin is an established gold producer, with
premium listing on the London Stock Exchange and
a listing on the Toronto Stock Exchange. We are a
FTSE 250 and FTSE4Good constituent. We operate the
Sukari Gold Mine, Egypt’s largest and first modern
gold mine, which has produced an impressive five
million ounces of gold and boasts a further six million
ounces in unmined gold Mineral Reserves.
(1)
Cash and liquid assets are defined as cash, bullion on hand and gold sales
receivables. Cash cost of production, AISC, EBITDA and Adjusted EBITDA,
Cash, bullion on hand and gold sales receivables (also known as Cash and liquid
assets) and Free cash flow and Adjusted free cash flow are non-GAAP measures
and are defined in the Financial Review non-GAAP measures section.
(2)
Attributable to the financial year and final dividend is subject to
shareholder approval.
FINANCIAL
OPERATIONAL
SUSTAINABILITY
TOTAL REVENUE
(US$m)
2021: US$733m
US$
788
M
GOLD PRODUCTION
(ounces)
2021: 415,370oz
440,974
oz
TOTAL RECORDABLE INJURY RATE
(per one million hours worked)
2021: 3.01
2.61
TOTAL MATERIAL MINED
(million tonnes)
2021: 111Mt
137
Mt
LOCAL PROCUREMENT
(% of total procurement spent domestically)
2021: 62%
68
%
CASH COSTS OF PRODUCTION
(1)
(per ounces produced)
2021: US$866/oz
US$
913
/oz
DIRECT NATIONAL EMPLOYEES
(%)
2021: 95%
96
%
ALL-IN SUSTAINING COSTS
(1)
(“AISC”)
(per ounces sold)
2021: US$1,234/oz
US$
1,399
/oz
CONSOLIDATED MINERAL RESOURCES
(Moz)
2021: 12.1Moz
13.6
Moz
CO
2
EQUIVALENT EMISSIONS
(CO
2
-e Scope 1 & 2)
2021: 0.48Mt
0.50
Mt
WORKPLACE DEVELOPMENT
(total training hours)
2021: 27.3
44.3
TOTAL ADJUSTED
CAPITAL EXPENDITURE
(US$m)
2021: US$233m
US$
224
M
ADJUSTED EBITDA
MARGIN
(1)
(%)
2021: 45%
40
%
PROFIT AFTER TAX
(US$m)
2021: US$154m
US$
171
M
CASH AND LIQUID ASSETS
(1)
(US$m)
2021: US$257m
US$
157
M
TOTAL DIVIDEND
(2)
(US$m)
2021: US$105m
US$
58
M
DELIVERING AGAINST
OUR PROMISES
CENTAMIN IN NUMBERS
02
03
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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OUR BUSINESS
AT A GLANCE
WHO WE ARE
1 SUKARI
GOLD MINE
Egypt
(160km
2
)
Production: 441koz
Resources: 11.11Moz M+I
Safety:
0.09 LTIFR, 2.08 TRIFR
Workforce:
4,237
2 DOROPO
PROJECT
Côte d’Ivoire
(1,856km
2
)
Stage:
Pre-development
Resources: 2.52Moz M+I
Safety:
0.00 LTIFR
Workforce:
640
3 ABC
PROJECT
Côte d’Ivoire
(1,149km
2
)
Stage:
Early stage exploration
Resources:
2.15Moz Inferred
Safety:
0.00 LTIFR
Workforce: 63
4 EASTERN
DESERT
EXPLORATION
(“EDX”)
Egypt
(2,989km
2
)
Stage:
Greenfield exploration
Safety:
0.00 LTIFR
Workforce:
68
OUR PURPOSE
OUR VISION
OUR VALUES
Creating opportunities for people through
responsible mining.
We acknowledge our contribution in shaping the future with our
stakeholders, particularly in areas where our host communities
have limited access to resources. Our Purpose directs the
approach to stakeholder engagement and partnership on all
material business decisions.
Our Vision is to be a multi-asset gold
producer, delivering value through
responsibly mining high quality, long
life assets.
Our Values guide our behaviours and define
the way we work with each other and within
the wider society.
DELIVERING GROWTH FROM AN
INTEGRATED EXPLORATION PIPELINE
OUR PEOPLE
Providing a safe and healthy
workplace, offering professional
and personal development
opportunities that empower our
employees and contractors to fulfil
their potential.
COMMUNITIES
& GOVERNMENT
Further to honouring our
contractual commitments to
governments, we are committed
to leaving a strong legacy for
the benefit of our local, regional
and national hosts.
SHAREHOLDERS
Rewarding our shareholders
through our commitment to
dividend distributions and
maintaining open and transparent
communication with our investor
community.
SUPPLIERS
& REFINER
Building long-term relationships
that deliver mutual benefits to all
parties, with a focus on supporting
and developing local business.
Collaborating with our suppliers to
promote responsible supply chain
practices.
ENVIRONMENT
We are committed to environmental
stewardship and safeguarding
natural resources for future
generations, considering our
impact on the localised
environment and global climate
change.
EDUCATE
Education shapes our
workforce and broader
society.
PROTECT
We protect and respect each
other and our environment.
PASSION
We are passionate about
what we do and the legacy
we create.
INNOVATE
We are always learning and
looking for ways to improve
through innovation.
OWNERSHIP
We empower our people
to take responsibility
and accountability
in the workplace.
OUR PORTFOLIO
We manage an integrated pipeline of assets
through the value chain from greenfield
exploration licences to an operating mine,
carefully managing capital allocation to
maximise return on capital and unlock
shareholder value.
EGYPT
2
1
4
3
CÔTE
D’IVOIRE
04
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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A YEAR OF DELIVERY
STRATEGY IN ACTION
LINKS TO STRATEGY
COMMITMENT TO
STAKEHOLDER RETURNS
VALUE MAXIMISATION
AT SUKARI
GROWTH &
DIVERSIFICATION
COMMISSIONED
THE SUKARI
SOLAR PLANT
The largest hybrid solar plant
for a gold mine – generating
20% of the mine’s power
needs, significantly reducing
Scope 1 GHG emissions, costs
and exposure to fuel price.
JANUARY
SEPTEMBER
MARCH
OCTOBER
JULY
APRIL
NOVEMBER
AUGUST
DECEMBER
END OF YEAR
FY21 Guidance delivered
415koz gold produced
at US$1,234/oz AISC
New Sukari
safety record
Eight million hours
worked without a
Lost Time Injury.
2022 guidance
delivered
441koz gold produced at
US$1,399/oz AISC.
FY21 Final
Dividend
US$0.05 per
share equalling
US$105m paid to
shareholders for
FY21.
Hosted the
first Women in
Mining event
in Egypt,
Marsa Alam
Bringing together
professional women
from Egypt’s growing
mining industry.
FY22 Interim
Dividend
Declared of
US$0.025 per share
(US$29m).
More Sukari
bonanza
grades
Drill highlight:
4.5m at 267g/t Au
(inc 4M at 301g/t
Au).
Published 5th
Sustainability Report
USING MODERN
MINING
TECHNIQUES
IN EGYPT
Flew the first airborne
geophysical survey at Sukari to
calibrate the technology and
potentially identify exploration
targets.
DIVERSITY AND
INCLUSION
We believe that a successful
business has a diverse and
inclusive workforce, where
diversity of opinion and
experience is a strength.
Our updated Diversity and
Inclusion Policy recognises the
responsibility of all workers at
all levels, including business
partners, to promote an inclusive
culture that reflects the diversity
of the countries in which we
operate; and a culture of
belonging and inclusion where
everyone is respected, valued
and empowered to excel within
the workplace.
SUKARI TRANSITION
TO OWNER-MINING
Successfully growing the underground
Mineral Reserves by 200% in
2021 and extending the life of
mine supported the transition to
owner-mining, which has delivered
cost savings and increased mining
flexibility.
Sukari
Employee
Development
Programme
Initial assessment
against the
framework.
Sukari
investor
site visit
We were delighted
to host the first
investor and
analyst site visit
since the COVID
pandemic.
Unlocking
value from
Doropo
PFS work
programmes
identified potential
for significant capital
and operating
cost savings by
simplifying the
processing circuit
and further resource
growth. Completed
PFS due H1 2023.
PRODUCED
AND NOT EVEN
HALFWAY
Sukari produced its five
millionth ounce of gold
and in the 13 years of
production, the mine has
generated substantial socio-
economic value for Egypt
and looks forward to the
continued value-creation and
opportunities created for the
Egyptian people over the next
14 years of gold reserve life.
EXPANDING
THE SUKARI
UNDERGROUND
The Sukari underground
continues to be the centre
for further resource growth.
Having strengthened the
team, completed the transition
to owner-mining, we have
identified a low capital
intensive and low technical
risk opportunity to increase the
mining rates by +30% from
2024.
SECURED US$150M
SUSTAINABILITY
LINKED REVOLVING
CREDIT FACILITY
Improving financial flexibility
to fund identified growth
pipeline.
FURTHER SUKARI
RESOURCE AND
RESERVE GROWTH
Geological focus delivered
1.3Moz increase in M&I
resources to 11.11Moz and
the second year of reserve
growth, driven by a 33%
increase in underground
reserves.
06
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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OUR VISION FOR A
LOW CARBON FUTURE
DECARBONISATION ROADMAP
CLIMATE TRANSITION
Our vision for a low carbon future is a
mine with sources of onsite and imported
renewable energy, reductions in absolute
energy consumption through efficient
operational strategy and new technologies,
staged electrification of our mobile fleet and
partnerships with our suppliers to select low
carbon options and increase recycling in
our supply chain.
In the short-term, we are focused on the
identification and delivery of projects that
will effectively reduce our operational
Scope 1 and 2 GHG emissions. However,
through our climate transition strategy we
also recognise the need to collaborate with
our supply chain to reduce Scope 3 GHG
emissions; and more broadly, consider the
social and environmental inter-relationships
associated with our decarbonisation
journey.
Our programme for operational emissions
reductions is built around:
Renewable electricity
Sourcing clean power for our operation
through the procurement or development of
renewable energy supply
Low carbon power sources
Switching to lower carbon fuels, together
with electrification as an alternative to diesel
use applications
Energy efficiency
Continuous work to optimise and improve
the energy efficiency of all our processes
In 2022, we executed various carbon
abatement projects and most notably
our 36MW
DC
(30MW
AC
) solar plant and
battery storage system. In 2022, we studied
opportunities to reduce the operational
emissions of Sukari over the life of mine,
including sourcing clean and lower carbon
power through connection to the national
grid and further expansion of our onsite
renewable energy production.
We have set an interim climate
target of 30%, to reduce our
direct operational Scope 1 and 2
GHG emissions by 2030, compared
to a 2021 base-year. This
would put us on a Paris-aligned
trajectory to limit global warming
to ‘well below’ 2ºC by 2050.
CARBON ABATEMENT PROGRESS
IN 2022
In Q4 2022, Sukari successfully
commissioned the 36MW
DC
(30MW
AC
)
solar plant and 7MW battery energy
storage system, providing a secondary
energy source to Sukari and increasing
the renewable make-up of site power
generation to 20%. This solar plant will
save up to 70,000 litres of diesel per day;
equivalent to an annual reduction of
60,000 tCO
2
e.
At Sukari, we also executed various
efficiency initiatives leading to further
carbon abatement, including:
• Roll-out of the remaining 30 high-
production trays to the haul fleet,
resulting in an 8% reduction in fuel
consumption per tonne of material
moved
• Optimisation of the fine grind process
within the comminution circuit
• Replacement of older underground
trucks and loaders with more efficient
units
• LED light bulb conversion
Collectively these initiatives decreased
our Scope 1 GHG emissions in excess of
43,000 tCO
2
e in 2022; at an equivalent
capital carbon abatement expenditure of
US$12.56 million.
SOLAR PLANT SAVINGS
Annual reduction of
60,000
tCO
2
e
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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DECARBONISATION ROADMAP
CONTINUED
DECARBONISING OUR SUPPLY CHAIN
We are committed to mitigate the impact
of our supply chain emissions, while
recognising that the nature of Scope 3
emissions are largely outside our direct
control.
The majority of our Scope 3 emissions,
98%, are upstream to our operation and
relate to purchased goods, services and
capital expenditure.
Our actions are focused on collaboration
with our suppliers to first understand the
sources of our Scope 3 emissions, then
identify how we can most effectively reduce
them. Preliminary studies of our supply
chain indicate that approximately 20 of
our suppliers generate up to 75% of our
Scope 3 emissions. We are collaborating
with these key suppliers to verify the
carbon footprint of their value chain and
opportunities for abatement.
Scope 3 emissions are not yet included in
our interim target for carbon abatement.
We aim to set targets for a reduction in our
Scope 3 emissions by the end of 2024.
UNDERPINNING OUR 2030 TARGET
ADDITIONAL ABATEMENT OPPORTUNITIES
20MW
AC
RENEWABLE EXTENSION
In 2022, Sukari successfully commissioned the
36MW
DC
(30MW
AC
) solar plant. An additional
20MW
AC
extension to the existing solar
infrastructure (totaling 50MW
AC
) would fully meet
the baseload power demand of the mine, with
minimal requirement for thermal power generation
during peak daylight hours. We aim to achieve this
through staged 5MW
AC
installations over four
years commencing in 2024 at a capital cost
of US$25 million to US$35 million.
50MW
AC
GRID CONNECTION
A 50MW
AC
grid connection at Sukari, in combination
with our existing 36MW
AC
solar plant, would fully
meet the electricity needs of the mine without the
requirement for onsite thermal power generation
using diesel fuel. Following recent upgrades to
Egypt’s distribution infrastructure, a high voltage
grid connection is located within 25km of Sukari.
We are targeting grid connection in 2024 at a
capital cost of US$20 million to US$30 million.
Grid electricity is partly generated from renewable
sources (12% in 2021), with the remainder from
non-renewable fuels, predominantly natural
gas. The Egyptian government is planning to
increase renewable energy generation to 40% by
2030 as published in their Nationally Determined
Contributions. Our 2030 interim target accounts for
an increase in renewable energy sourced through
the grid, from 12% in 2021 to 38%.
Importantly, a continuous supply of renewable
energy would enable Sukari to introduce a range
of lower-carbon technologies, including the
electrification of our mobile fleet, at a scale not
currently feasible while reliant on onsite thermal
power generation.
ELECTRIFYING OUR MINING FLEET
Operation of our mobile mining fleet represents
approximately 50% of our GHG emissions at Sukari.
Opportunities to, switch from diesel use to power
sourced from lower carbon fuels include:
• Hybrid diesel-electric shovels to replace existing
open pit face shovels
• New generation hybrid diesel-electric loaders to
replace existing underground fleet
• In-pit crushing and conveyors to replace open pit
haul trucks for delivery of ore to the mill
• Electrification of the underground load and haul
fleet
For each of these opportunities, the technology
is commercially available and there is a positive
return on investment within the operational life of
Sukari.
ENERGY EFFICIENCY
At Sukari, 71% of stationary energy consumption
is associated with comminution: the grinding and
crushing of rock. Through various optimisation
initiatives, we believe there is opportunity to
fragment particles using less energy than has
conventionally been the case. Other opportunities
to improve the energy and fuel efficiency of our
processes include:
• Development of a fixed plant power management
and monitoring system to optimise energy
generation and distribution
• Conversion to variable frequency drives for
pumps and intermittent rather than continuous
operation
• Utilisation of smaller generators in combination
with existing thermal power plant
• Open pit fleet management and haul road
optimisation.
Additional abatement opportunities associated with fleet electrification and energy efficiency are not
currently included within our interim 2030 target pending further investigation.
OUR 2030 TARGET
In the absence of carbon abatement,
Scope 1 and 2 emissions in 2030 at Sukari
are projected to be 550,819 tCO
2
e based
on a development scenario consistent with
our current business model. This business-
as-usual scenario is equivalent to a 14%
increase in absolute emissions compared to
the 2021 base-year
(1)
, primarily associated
with higher demand on stationary power
fuel consumption.
Execution of our carbon abatement
roadmap is projected to reduce our Scope
1 and 2 emissions by 30% compared to our
2021 base-year; a resultant emissions value
of 335,595 tCO
2
e in 2030.
(1)
The year 2021 has been established as CEY’s base-year with reliable and verifiable GHG emissions data. Our base-year was amended in 2022 to account for the
outsourcing of waste mining services at Sukari which met thresholds for significance as defined under our GHG Base Year Policy.
OUR 2030 CARBON ABATEMENT ROADMAP
To achieve our interim target of a 30%
reduction in operational Scope 1 and 2
GHG emissions by 2030, we have
developed a carbon abatement roadmap
for Sukari. The carbon abatement projects
that underpin our interim target are a
20MW
AC
extension to our existing solar
plant, a 50MW
AC
connection to the national
electricity grid, including increased levels
of renewable energy sourced through the
national electricity grid compared to our
2021 base-year.
We have identified a number of other
opportunities with the potential to reduce
our GHG emissions, namely electrification
of our mobile fleet and energy efficiency,
but these are currently excluded from our
interim target pending further technical and
economic studies.
GHG projections are relative to 2021 base-year
i.e. operation of thermal power plant.
Projections reflect growth consistent with current
business model.
Projections include Scope 1 and 2 emissions only;
Scope 3 emissions are excluded.
*
2030 emission estimates for the Business as Usual
and Carbon Abatement scenarios are relative to the
2021 base-year.
2021
2022
TRANSITION PERIOD
2030
BASE YEAR
PROGRESS
TARGET
20MW
AC
RENEWABLE
EXTENSION
+14
%
*
-30
%
*
50MW
AC
GRID CONNECTION
Business as Usual GHG
Emissions Projections*
Carbon Abatement GHG
Emissions Projections*
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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A PLATFORM FOR GROWTH
CHAIR’S FOREWORD
Having made significant
progress on the turnaround
at Sukari, the focus has
increasingly shifted to
unlocking numerous
growth opportunities.
JAMES RUTHERFORD
NON-EXECUTIVE CHAIR
Having successfully navigated our way
through a two-year period, that was
dominated by the global COVID pandemic,
2022 proved to be equally challenging.
No sooner had the threat posed by COVID
started to abate, than the global economy
found itself facing two equally serious
issues, the impact of which continue to
be very evident.
On 24th February 2022, in a major
escalation of a conflict that dated back to
its unilateral annexation of Crimea in 2014,
Russia launched a full-scale, unprovoked
invasion of Ukraine, initiating the largest
and most bloody military conflict that we
have witnessed in mainland Europe since
World War 2.
This was followed, less than four weeks
later, by the US Federal Reserve embarking
on its most aggressive monetary tightening
cycle since the late 1970s. From a starting
point of close to zero, the Federal Reserve
proceeded, in eight separate moves over
just eight months, to raise the Federal
Reserve Funds rate by an unprecedented
450 basis points. This represented a rear-
guard attempt to play catch-up on soaring
US inflation, which peaked in June 2022 at
over 9%, well above the Federal Reserve’s
longstanding 2% target.
GOLD MARKET
Those events presented two very
contrasting backdrops for the gold market.
In what was an understandable reaction
to heightened geopolitical concerns, the
gold price rose sharply in the immediate
aftermath of the Ukraine invasion, peaking
at over US$2,000/oz in early March.
That price buoyancy, however, proved to be
short-lived, as the US Federal Reserve rate
hikes, accompanied not surprisingly by a
strengthening in the US dollar, resulted in
an eight-month long downtrend for gold,
with the price eventually reaching a low of
close to US$1,600/oz in early November.
That downtrend was then reversed in late
2022, as the US dollar started to weaken,
reflecting a perceived less hawkish tone
from the Federal Reserve. By year end, the
gold price recovered to over US$1,800/oz,
coincidentally almost unchanged from its
level at the start of the year.
Despite interest rate headwinds, the LBMA
gold price averaged US$1,800/oz for 2022,
which represented a record, not just in
US dollar terms but in virtually every other
major currency.
One notable feature that helped underpin
the gold market during 2022, was the
elevated level of Central Bank purchases,
which, based on World Gold Council data,
reached a record high of 1,136 tonnes,
more than twice the average annual level of
509 tonnes for the preceding decade. This
very visible statement of intent by Central
Banks provided a timely reminder of the
role of gold as a store of value during times
of political and economic turmoil.
PERFORMANCE: A YEAR OF
ACHIEVEMENT
In the 2020 Annual Report, we outlined
the three-year reset plan to unlock the
true potential of the Sukari Gold Mine, our
flagship asset, a plan that was grounded
in operational discipline and rigorous long-
term planning.
I am pleased to report that the management
team, under the leadership of our CEO
Martin Horgan, has made impressive
progress on delivering on that plan and
during 2022 achieved several important
milestones. We reported a strong
operational performance for the year, with
gold production at Sukari growing by 6%
to 440,974 ounces (FY21:415koz), a
further step in our goal to return production
to 500,000 ounces per annum. More
importantly the intense focus on safety was
reflected in an 83% improvement in the
Lost Time Injury Frequency Rate to just
0.08 per million hours worked.
Despite continuing inflationary pressures,
we remain firmly focused on cost control
and productivity improvements and as
of 31 December 2022 we had delivered
US$116 million of the US$150 million
cost-savings programme targeted by the
end of 2023. We made impressive progress
on key projects designed to support those
initiatives, most notably the 36MW
DC
solar plant, which was commissioned in
the fourth quarter. This will not only save
on energy costs but will also result in a
significant reduction in carbon emissions.
Reflecting the higher gold sales, revenue
for the year rose 8% to US$788 million
(FY21: US$733m), while profit after
tax was 11% higher at US$171 million
(FY21: US$154m). Earnings per share
was 6.29 US cents. Operating cash flow
before capital expenditure for the year
was US$292 million (FY21:US$309m).
However, reflecting the elevated
reinvestment into Sukari as part of the
reset plan, free cash flow for the year was
negative US$18 million (FY21: negative
US$6m). At year end, the cash and liquid
assets position was US$157 million.
For 2023, we are guiding for higher gold
production in the range of 450,000 to
480,000 ounces. We also have several cost-
savings and operational efficiency initiatives
underway, which are designed to offset
the impact of continuing industry wide
inflationary and logistical pressures.
STRATEGY: A PLATFORM FOR GROWTH
Centamin’s stated strategy remains clear
and consistent and is centred on value
maximisation at Sukari, thereby providing
the foundation to deliver growth and
diversification, while at the same time
maintaining the longstanding commitment
to returns for our stakeholders.
Having made significant progress on
the turnaround at Sukari, the focus has
increasingly shifted to unlocking numerous
growth opportunities. An important
development was the announcement of the
second successive year of reserve growth
at Sukari, with overall Proven & Probable
Reserves increasing by 5% to 6.0Moz, as
a result of which we have identified the
potential to expand the underground mine
at Sukari.
At the same time, we have made significant
progress on the pre-feasibility study for the
Doropo Project in Côte d’Ivoire, which is
due to be published in the first half of the
current year.
SUSTAINABILITY: ENTRENCHED AT
THE CORE OF OUR BUSINESS
As a company, we have put enormous
emphasis on positioning sustainability at
the heart of the business and that it should
clearly reflect our purpose statement, which
is ‘to create opportunity for people through
responsible mining’. This is discussed in
greater detail in the CEO statement.
From a governance standpoint, in
2022 we took further steps to introduce
environmental and social issues as
components of our Remuneration Policy,
by adding carbon abatement initiatives to
the long-term incentive plan and social
targets within the short-term incentive plan,
including gender diversity and inclusion.
We have also formalised sustainability
within our Capital Allocation Policy. In
December, we announced a US$150
million sustainability-linked revolving credit
facility (“RCF”) with a syndicate of leading
international banks, designed primarily to
provide greater financial flexibility to fund
our growth opportunities. An important
feature of this facility is that a series of
tangible sustainability metrics are factored
into the pricing mechanism, aligned to three
priority targets: gender diversity; workplace
training and development; and reduction in
carbon emissions.
BOARD AND STAKEHOLDER
ENGAGEMENT
The strict travel restrictions that were
in place during the COVID pandemic,
meant that for two years, all Board and
committee meetings had to be conducted
via videoconferencing. While the virtual
world proved to be very efficient, it did
nonetheless create several organisational
challenges and it was with no small
measure of relief that we were able to
resume in person meetings during 2022.
With that in mind, we took the opportunity
to accelerate the normal three-year cycle
and to bring forward by one year the full
external Board review. The main conclusion
of the review was that the Board was
exercising its duties in an effective and
constructive manner. It also confirmed our
view that, having had to take more of a
short-term approach during the operational
reset at Sukari, it was the appropriate time
to shift the focus of the Board towards
delivery of our long-term vision.
Following the Board refresh that took
place in 2020, as Chair I feel that the
Board possesses the right blend of skills,
experience and diversity to support and
guide the Company and management.
Nonetheless, we will continue to examine
ways in which we might add appropriate
skills to the Board as is felt to be required.
In a departure from its normal practice,
the Board has decided to alternate the
Annual General Meeting between London
and Jersey. We recognise the logistical
hurdles that shareholders face in travelling
to Jersey and wish to improve accessibility.
This year’s AGM will therefore be held at
Duke’s Hotel in London on 23 May 2023:
this will be a hybrid event, offering the
opportunity to attend in-person or virtually,
via a webcast.
DIVIDEND
While the last two years have involved a
programme of significant reinvestment into
the Sukari Mine, the Board also recognises
the importance of delivering returns to
shareholders through a period of negative
free cash flow. The Board is therefore
proposing a final dividend for 2022 of 2.5
US cents per share, subject to shareholder
approval at the forthcoming Annual General
Meeting on 23 May 2023. This would
represent a proposed full-year dividend of
5.0 US cents per share, equating to US$58
million or equivalent to US$132 per gold
ounce sold in 2022. The long-term dividend
policy of paying out a minimum of 30% of
free cash flow remains unchanged.
THANK YOU
As a result of the impressive work
undertaken over what have been three
challenging years, Centamin today is in
a much stronger position and is now well
placed to focus on and develop its growth
potential. On behalf of the Board, I would
like to thank the senior management team
and broader workforce for their diligence
and dedication and our wider stakeholders
for their support and commitment during
what has been a successful year.
It is particularly important to acknowledge
the tremendous support of the Egyptian
government, who are our partners at Sukari.
The history of gold mining in Egypt is a long
and illustrious one, dating back several
thousand years. Through the Sukari Mine,
Centamin is the modern day custodian
of that legacy and one that we have clear
ambitions to develop further.
We share a common vision around
unlocking Egypt’s undoubted exploration
potential and to be at the forefront of the
development of a modern thriving Egyptian
gold industry, which will bring long-term
economic benefits to the country.
JAMES RUTHERFORD
NON-EXECUTIVE CHAIR
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OVERVIEW
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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A WORLD CLASS
ASSET OFFERING
GROWTH AND YIELD
INVESTMENT CASE
CONSISTENT
STRATEGY: VALUE
MAXIMISATION
We aim to maximise free cash flow generation by focusing on
improving margins through cost discipline and innovation.
Read more on pages 16 and 28
ROBUST
BALANCE
SHEET
Our robust balance sheet enables us to have a long-term
perspective on capital allocation and growth opportunities.
Read more on pages 16 and 46
COMMITMENT TO
SHAREHOLDER
RETURNS
Central to our strategy, this is our ninth consecutive year
returning cash dividends to our shareholders, demonstrating
the sustainability of our dividend policy.
Read more on pages 19 and 48
WORLD CLASS
OREBODY; WORLD
CLASS MINE
Our new Board and leadership team are bedded in; our robust
14 year mine plan is in place, further supported by an active
cost savings programme and transformational investment into
environmental and social initiatives.
Read more on pages 16 and 36
FURTHER
GROWTH
POTENTIAL
There is untapped resource potential across the portfolio.
Our excellent geologists and a result-driven exploration
model maintains an active pipeline of priority exploration
targets balanced with a disciplined value-driven approach
to capital allocation.
Read more on pages 16 and 40
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ADDITIONAL INFORMATION
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A LANDMARK YEAR
FOR SUSTAINABILITY
CEO’S STATEMENT
We spent the past year
successfully progressing our
reinvestment plan and remain
on track to consistently return
Sukari to production levels
towards 500,000 ounces
per annum from 2024.
MARTIN HORGAN
CHIEF EXECUTIVE
OFFICER AND DIRECTOR
DEAR STAKEHOLDERS,
It is a pleasure to report on the tremendous
progress Centamin made over 2022 – a
year in which we celebrated a memorable
milestone with the Sukari Gold Mine
producing it’s five millionth ounce. This
achievement is rare for most gold mines
and testament to the scale and quality
of the Sukari orebody. What is more
remarkable is that Sukari has a further
six million ounces in Mineral Reserves,
equating to a 14-year life of mine, with
further upside potential as we have
demonstrated by adding nearly two million
ounces of gross Mineral Reserves over
the last two years. We remain confident in
delivering more geological growth, both at
Sukari and across the wider portfolio.
As custodians of this world class asset,
Centamin recognises the business
and societal importance in building
a responsible culture that values and
supports people, creating opportunity
through jobs, infrastructure and education,
alongside developing our assets and
delivering strong shareholder returns. We
practise responsible mining activities and
take pride in setting the example for our
growing industry within Egypt and as we
continue to develop our exploration projects
in Côte d’Ivoire. In addition to paying in
excess of US$800 million to Egypt in profit
share and royalties since production began,
over 95% of our workforce are employed
locally to the country of operation – 78% of
which are in leadership positions at Sukari
– and 68% of total procurement is spent
domestically to the country of operation.
We are living and breathing our stated
Company purpose ‘to create opportunity
through responsible mining’.
PERFORMANCE
2022 was another busy year with progress
made against our stated plans. We
completed the second year of our three-
year Sukari reset plan to return the asset to
production levels towards 500,000 ounces
per annum from 2024.
Against a challenging macroeconomic
backdrop, the Centamin team successfully
navigated the transition from contractor
to owner-operated within the Sukari
underground and delivered production,
costs and capital projects in line with
2022 guidance. Sukari produced 440,974
ounces of gold and with US$224 million
invested in adjusted sustaining and non-
sustaining growth capital projects as we
continued the reinvestment programme
to optimise the asset for the longer term.
At the same time we implemented further
initiatives that will deliver more gold at better
costs while reducing our carbon emissions
over the remaining substantial mine life,
most notably with the commissioning of the
Sukari 36MW
DC
solar plant.
Financially, based on an annual realised
gold price of US$1,794/oz, we generated
gross revenues of US$788 million. We
were not immune to the global inflationary
cost pressures experienced in 2022 but
our prudent approach to forecasting and
ongoing cost-savings programme enabled
us to maintain our 2022 cost guidance
throughout the year and deliver within the
stated range. All-in sustaining costs were
US$1,399/oz sold and cash costs were
US$913/oz produced and we continue to
seek opportunities to further improve our
cost profile going forward. EBITDA for the
year was US$319 million, up 9%, and with
a continued strong EBITDA margin of 40%.
STRATEGIC PROGRESS
Sukari value maximisation
Geologically, we continue to unlock the
mineral resource potential within the
Sukari orebody and the wider 160km
2
Sukari Concession area. Our improved
geological understanding resulted in the
second consecutive year of meaningful
growth of both resources and reserves at
unchanged cut-off grades. The open pit
Mineral Reserve gain replaced annual
depletion for the first time since 2015,
while the underground Mineral Reserves
of 1.2 million ounces represents a
threefold increase since 2020, net of
mining depletion, further supporting our
underground expansion plans for benefit
from 2024.
The Mineral Resource Management team,
responsible for the orebody stewardship,
has developed a rolling five-year exploration
plan focused on unlocking the potential of
the orebody, targeting resource to reserve
conversion and further extensional growth.
Beyond the orebody, the Exploration team
has been focused on delineating potential
satellite deposits to provide additional
ore feed to the Sukari mill over the life of
mine. A highlight of the 2022 exploration
programme was completing Egypt’s first
airborne geophysical survey across the
full Concession area. Introducing this tried
and tested first principles exploration tool
has given us a geological dataset which we
can utilise across our wider Eastern Desert
Exploration (“EDX”) blocks across the
Egyptian Nubian shield.
Operationally, total material moved
outperformed with the open pit accelerated
waste stripping programme and the
underground transition to owner-mining
both delivering increased operating
flexibility and further safety, cost and
productivity gains.
The open pit mining operation delivered
another record year of material moved of
136 million tonnes, through a combination
of our own mining fleet and contracted
waste-stripping programme. The benefits of
this investment were evident through 2022
as open pit mining flexibility increased from
one operating area in 2020 to four operating
areas as we exited 2022. In parallel to the
increase in tonnes mined in the open pit,
owner fleet optimisations have delivered a
18% productivity gain in total mined tonnes
per hour since 2020. This has included the
full implementation of the high productivity
truck trays, improvement in haul cycle
planning and road condition maintenance.
The underground mine went through a
significant period of change during the year.
Following an international tender process
in 2021 planned to coincide with the
expiry of the underground mining contract
in late 2021, the decision was taken to
switch to an owner-mining model based
on the extended underground mine life
and expected cost savings and productivity
gains. During Q1 2022 the underground
team implemented the handover plan as
the contractor exited the business and the
Sukari team assumed full responsibility for
operations from Q2 2022. Performance
improved over 2022 as operations bedded
down and new equipment was delivered to
site with productivity gains and cost savings
realised over the period compared to the
contracting costs. With this transition now
complete, the operations have begun 2023
in excellent shape as we seek to maximise
underground production.
Introducing paste-fill within the
underground in 2023 will enable us to
maximise ore extraction in a safer manner
while providing further cost and productivity
gains over and above the current method
of cemented waste rock fill. Construction
of the paste-fill plant progressed as
expected in 2022 and we expect to start
commissioning in Q2 2023.
With the underground reserve life growing
from three to approximately ten years since
2021 and an active pipeline of further
growth targets identified, we carried out
an independent underground option study
to assess the potential to increase the
mining rates. The study concluded that
underground ore mining could sustainably
be increased from the current life of mine
average of 1Mt per annum to a 1.5Mt per
annum with low project execution risk and
low capital intensity. Work in 2023 will
focus on fully engineering and planning
this expansion option for implementation in
2024.
Growth and diversification
Eastern Desert Exploration (“EDX”)
Prior to the commencement of fieldwork
our team completed remote desktop
assessment of the three exploration blocks
spanning 3,000km
2
, which enabled a
quick and focused start to the fieldwork
programme. Our strategy remains twofold:
1)
identify potential deposits within
trucking distance of the Sukari mill and
2)
explore for significant discoveries which
could support standalone operations
Utilising a predominantly Egyptian staffed
team, exploration commenced in May 2022
on the Nugrus block, which is adjacent to
the Sukari Concession area, before moving
to the Um Rus and Najd blocks to the
north. Geochemical reconnaissance work
using BLEG sampling was carried across
the licence areas, followed by more detailed
soil sampling, mapping of known artisanal
workings and combined with the remote
sensing work, has generated several targets
for drill testing during the balance of 2023.
In parallel with the exploration work,
Centamin has been part of an industry
group working with the Egyptian
government to finalise the exploitation
terms. Good progress has been made and
we anticipate finalisation of the exploitation
terms in H1 2023.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CEO’S STATEMENT
CONTINUED
Doropo
We believe our Doropo Project in Côte
d’Ivoire has the potential to be a mine
which can significantly increase overall
Group production, while making a material
contribution to the wider Ivorian economy
and its people.
Having completed the 124,000 metre
drilling campaign, we upgraded the
resource and constrained it within
economic open pit shells for the first
time. The resultant 2.5Moz of Indicated
Resources is at an average grade of
1.52g/t, representing an 22% increase
in grade estimated for the 2021 PEA.
Encouragingly we continue to identify
additional mineralisation targets within
the Mineral Resource area and regionally,
across the broader licence holding that
have the potential to further grow the gold
endowment and further increase the life of
the project.
Metallurgical test work carried out in 2022
identified an opportunity to simplify the
processing flowsheet by removing the
flotation and regrind circuit, which could
have a positive impact on the economics of
the project and will be included in the PFS.
The environmental, social impact
assessment work continued through 2022,
assessing the environmental and social
baselines which will enable the project
design and layout to be developed in a way
which is sympathetic to the local conditions
while enabling the project to be assessed in
line with international good practice.
The PFS is near completion and we
are excited to share those results and
commence the Definitive Feasibility Study
to enable the project to meet its permitting
timeline.
Stakeholder returns
For Centamin, 2022 was a landmark year
for progress against our ESG priorities.
Safety
We finished 2022 having achieved a
new safety record of eight million hours
worked without a Lost Time Injury at
Sukari, breaking the previous record of
five million for LTI free hours worked and
at the time of writing this we are currently
at 9.1 million LTI-free. This has driven an
83% improvement in LTIFR from 2021,
and we recorded a 13% improvement in
TRIFR. This excellent achievement reflects
management’s on-going focus on safety
in the workplace and I believe that safety
performance is a good proxy for operational
ability – a safe mine is a well-run mine and
while we are proud of this achievement,
we will not allow complacency to distract
us from striving to further improve on this
result into 2023 and beyond.
Diversity & inclusion
We believe diversity and promoting
inclusion is an ethical imperative for a
sustainable business. At Centamin we
promote a culture of belonging throughout
the business, where everyone is respected,
valued and empowered to excel within the
workplace, and importantly, by creating an
inclusive culture that reflects the diversity
of the countries in which we operate. In
2021, Centamin welcomed changes to the
Egyptian legal and regulatory framework
that removed restrictions to the employment
of women in the mining sector. Through
broad and concerted leadership, we are
proud to have increased our Egyptian
female representation to 34 employees
(from zero) at Sukari and on our Egyptian
Eastern Desert Exploration blocks (“EDX”),
as we seek to improve our gender balance
in Egypt and across the Group. I would
also like to give specific mention to our
trailblazing colleague, Sara Mohamed
Elsayed, who was the first Egyptian female
employee at a mine site. Sara joined Sukari
in 2021 as Environmental Superintendent
and was named one of the 100 Global
Inspirational Women in Mining for 2022.
The introduction of female professionals
at our sites has been supported and
accompanied by workforce training on
the benefits of a diverse and inclusive
workplace, employee engagement
to identify and resolve barriers to the
advancement of women, including
something as basic as female PPE to
maximise the comfort and safety of all
employees. These efforts represent a
significant milestone in the history of Sukari
and the Egyptian mining sector more
broadly.
Workplace development
We have sought to create an environment
in which our people can develop and thrive
and in 2022 there was a 62% increase in
workforce training hours. At Sukari we have
put in place a professional development
framework that aims to establish a shared
understanding of the required skills to
achieve proficiency in each and every
role; the critical behaviours for successful
performance at Centamin; and ultimately
the objective to develop and promote our
local workforce through the organisation.
Increased levels of training were provided to
support the progression of our employees
to a proficient level, including certified
leadership training to our management and
supervisory team. This is an ongoing focus
as we seek to promote national employment
in leadership positions throughout the
Group.
Decarbonisation
In 2022, we commissioned the largest
global hybrid solar plant to power a gold
mine. The 36MW
DC
solar plant reduces
our annual consumption of diesel fuel for
power generation by 20% (up to 70,000
litres of diesel displacement per day),
significantly reducing costs and Scope 1
GHG emissions by approximately 60,000
tCO
2
-e per annum. Solar, combined with
the productivity gains from implementation
of the high productivity truck trays are two
tangible achievements in 2022.
Our vision for a low carbon future is a
mine with sources of onsite and imported
renewable energy, reductions in absolute
energy consumption through efficient
operational strategy and new technologies,
staged electrification of our mobile fleet and
partnerships with our suppliers to select
low carbon options and increase recycling
in our supply chain. In 2022, we studied
opportunities to reduce the operational
emission of Sukari over the life of mine,
including sourcing clean and lower carbon
power through connection to the national
grid and further expansion of our onsite
renewable energy production. We have set
an interim climate target of 30%, to reduce
our Scope 1 and 2 GHG emissions by
2030, compared to a 2021 base-year. This
would put us on a Paris-aligned trajectory
to limit global warming to ‘well below’ 2°C
by 2050.
Shareholder dividends
Our commitment to stakeholder returns
includes our dividend commitment to our
shareholders. Our sustainable dividend
policy of returning a minimum of 30%
of free cash flow in cash dividends to
shareholders has amassed an impressive
nine-year track record, distributing a total of
US$834 million, including today’s proposed
final dividend, since 2014.
Given the potential scale of the organic
opportunities available to Centamin,
Sukari cash flows and our robust balance
sheet, we have been seeking to provide
our investors with exposure to our growth
projects while maintaining our approach to
dividend payments.
2023 OUTLOOK
In 2021, we commenced the reset with
which to lay the foundation for long-term
success. 2022 was about execution and
delivery into not just our stated guidance
but on all our projects and promises. 2023
is about extending our track record of
delivery and building on that platform for
growth.
In 2023, we are forecasting increased
production of 450,000 to 480,000 ounces
and targeting lower all-in sustaining costs
with a guided range of US$1,250-US$1,400
per ounce sold. This year capex will be
US$225 million, including the last full year
of contracted waste-stripping programme
and additional non-sustaining projects such
as the gold gravity circuit, expansion of the
north dump leach, completion of the paste-
fill plant and ongoing development of the
tailings storage facility.
We will continue to deliver into our
geological exploration programme at the
Sukari orebody and across the Concession
area while we complete the updated life of
mine plan incorporating the underground
expansion potential and mining areas of
bonanza grades.
The most significant decarbonisation and
cost savings opportunity identified for 2023
is the ability to connect to the Egyptian
national electricity grid which has recently
been extended to within 30km of the Sukari
mine site. If successful, this would enable
the operations to run on a combination of
the current solar generated power and grid,
and therefore displacing the current site
thermal power generation using diesel.
THANK YOU
Thank you to the Board, shareholders,
and wider stakeholders for their support,
engagement and feedback. I would
like to thank everyone at Centamin, our
colleagues and contractors, for their hard
work, dedication, passion and enthusiasm.
What we have achieved in a few short
years is significant and provides a platform
from which we can begin our journey to
developing a multi-asset, multi-jurisdictional
gold producer.
MARTIN HORGAN
CHIEF EXECUTIVE OFFICER
AND DIRECTOR
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ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
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ADDITIONAL INFORMATION
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Centamin has been creating long-term value within Egypt
for three decades, working in partnership with the Egyptian
government, local communities and a multitude of local
businesses throughout our supply chain to develop Egypt’s
modern gold mining industry. We are serious in the application
of ethical business practices, supported by robust systems
of corporate governance, transparency and accountability.
CREATING
LONG-TERM VALUE
OUR BUSINESS MODEL
VALUE CREATED
TALENTED PEOPLE
2,322 EMPLOYEES
US$
78
M
Paid in wages,
salaries and benefits
UNDERSTANDING
OUR LOCAL
COMMUNITIES
US$
600
K
Invested in our
local communities
A ROBUST AND
RESPONSIBLE
SUPPLY CHAIN
68
%
Sukari goods and services are
procured locally from Egyptian
suppliers
IN PARTNERSHIP
WITH THE
GOVERNMENT
US$
61
M
In payments to government
INCREASED FOCUS
ON PARTNERING
WITH LOCAL
CONTRACTORS
96
%
Of our contracted workforce
is employed nationally
MINIMISING OUR
ENVIRONMENTAL
FOOTPRINT
8
%
Increase in Sukari renewable
energy generation from 36MW
DC
Sukari solar plant commissioned
in Q4
REWARDING OUR
SHAREHOLDERS
US$
58
M
In cash dividends attributable
to 2022 (including the proposed
final dividend which is subject to
shareholder approval at the AGM)
RESOURCES
GEOLOGY & EXPLORATION
GOVERNANCE &
SUSTAINABILITY
RISK & OPPORTUNITIES
PEOPLE
Human &
intellectual capital
We operate in jurisdictions
which provide good access to an
educated workforce combined
with investment into workforce
(employee and contractor)
development and training.
NATURAL
RESOURCES
Natural capital
We use sea water, solar power
and diesel fuel to operate and
continue to identify opportunities
to minimise our environmental
footprint.
PROPERTY AND
EQUIPMENT
Manufactured
capital
The mining activities and
processing plant both involve a
large equipment fleet, plant and
site infrastructure.
PARTNERSHIP
WITH GOVERNMENT
AND LOCAL
COMMUNITIES
Social & relationship
capital
We strive to maintain a strong
social licence to operate through
active partnerships with countries
and communities in which we
operate.
STRINGENT COST
MANAGEMENT
Financial capital
Disciplined cost controls and
efficient capital allocation
enable us to continuously invest
in longevity and growth of the
business, balanced with strong
shareholder returns.
Maximising our geologic understanding is the foundation of
our business model, to ensure predictability and consistency
in our operations across the mining lifecycle. Our geologists,
with the support of technology, systematically and
methodically explore our prospective landholdings.
Read more on page 40
We want to contribute positively to the people, society, and
world around us. This means ensuring that our sustainable
business practices are embedded in our business strategy.
We see this drive as fundamental to Centamin’s growing
resilience, to delivering the value our stakeholders deserve
and to building a company of which we can all be proud.
Read more on pages 24 and 110
We believe a successful and sustainable business model
requires a robust and proactive risk management framework
as its foundation. This is supported by a strong culture of risk
awareness, encouraging openness and integrity, alongside
a clearly defined appetite for risk. This enables the Company
to consider risks and opportunities for more effective
decision making, delivery on our objectives and improve our
performance as a responsible mining company.
Read more on page 54
EXPLORE
CLOSURE
MINE &
PROCESS
DEVELOP &
CONSTRUCT
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UNDERSTANDING OUR STAKEHOLDERS
EMPLOYEES
GOVERNMENTS
COMMUNITIES
SHAREHOLDERS
SUPPLIERS,
CONRACTORS
& REFINER
ENVIRONMENT
UNDERSTANDING OUR STAKEHOLDERS
Their interests
Ensuring employee safety
and wellbeing remains at
the forefront of all business
activities.
Increasing employees’
knowledge and skills through
training and education to
benefit the individual and
the business.
Adopting renewable sources of
energy and reducing reliance
on non-renewable energy
sources minimises pollution,
and provides longer term
employment through energy
security and future proofing
mining operations.
Embracing diversity, inclusion
and equal opportunity ensures
a range of perspectives,
skills and experiences in the
workplace and instils a sense of
belonging which in turn reduces
employee turnover.
Their interests
The Company’s presence should
benefit and provide opportunities
for the people of our host
countries. This includes local
employment, workforce skill
development and community
investment.
Prioritise and support regional
procurement to strengthen
economic infrastructure and uplift
the population.
The Company should be actively
pursuing renewable energies
and reducing its reliance on
non-renewable energy sources.
The Company should be
compliant with industry
best practice standards for
management of tailings.
Their interests
The Company’s presence should
have a positive benefit on local
economics.
Continuous, positive and
meaningful engagement
opportunities with key
stakeholders.
Manage waste appropriately
so as not to impact on the local
community and environment.
Support the training and
development of the local
community with resources
and opportunities.
Their interests
Visibility of the Company’s climate
change strategy through reporting
on science-based targets, funding
opportunities and initiatives,
performance against targets.
There is a clear commitment
from the Company, supported
by programmes, ensuring that
mining activities positively impact
the local communities.
Evidence of effective management
of health and safety prioritising
employees’ wellbeing over profit
maximisation.
Diversity across the Company,
and particularly gender diversity,
is a broader societal expectation.
The Company effectively
manages hazardous materials
and waste minimising risk to
people, environment, permitting
non-compliances, exposure to
liabilities and regulatory penalties,
increased capital expenditures
and reputational impacts.
The Company has a transparent
supply chain with effective due
diligence processes in place.
The Board has oversight on
tailings facilities and is committed
to international tailings
management standards.
Their interests
The Company’s policy against
corruption shows commitment to
ethical behaviour and to educating
employees on the importance of
anti-bribery and corruption.
Economic growth supports
local development and provides
revenue to the local governments
to provide basic services.
Building local capacity is the most
effective way for the Company to
leave a lasting legacy.
The welfare of the workforce
is critical for the business to
operate effectively.
Their interests
Compliance with environmental
regulatory requirements.
Minimise the Company’s
greenhouse gas emissions.
Responsibly manage mineral
and non-mineral wastes and
hazardous material.
Understanding and managing
the environmental impacts of
the Company’s activities.
Local procurement reduces
impact of transport on
environment.
How Centamin engages
• Engagement forums
• Management meetings
• Interactive IT platform
• Training, events, social
• Performance reviews
How Centamin engages
• Payments to government as
per the Sukari Concession
Agreement
• Formal meetings
• Site visits
• Audit and assurance
• Budgets and reports
How Centamin engages
• Community leaders
• Engagement forums
• Circulars & leaflets
• Engagement officers
How Centamin engages
• AGM
• Sustainability Report
• Investor presentations
• Public announcements
• Consultation, meetings
• Site visits
• Dividend distribution
How Centamin engages
• Training & inductions
• Policy & contracts
• Formal meetings
• Workshops, daily briefings
• Supplier due diligence
How Centamin engages
• Annual Sustainability Report
• Community leaders / chiefs
• Materiality assessment
• Disclosure statements (CDP,
Tailings, Modern Slavery)
• Workplace training and
development
Read more on page 100
Read more on page 88
Read more on page 88
Read more on page 46
Read more on page 24
Read more on page 24
OUR STAKEHOLDERS
We believe an open and honest stakeholder
engagement process is critical for the
continuous improvement of our business.
We strive to engage with and understand
our stakeholder needs.
In its role, the Board strives to bring leadership, clear
values and robust decision making that duly considers
the views and perspectives of our stakeholders.
Centamin continues to monitor changes in patterns of
communication and engagement with stakeholders.
These include new and evolving methods of information
sharing such as an increasing acceptance by investors to
follow social media feeds as well as investors relying on
third party data and benchmarking platforms as a means
of accessing Company information.
SECTION 172
Although Centamin is a Jersey registered company
and the full requirements of Section 172 are additional
to the Directors’ current obligations under Jersey Law,
the Directors believe they have complied with the
UK requirements in the UK Corporate Governance
Code 2018 (“2018 Code”) – Provision 5. Through the
Board’s governance structure, key decisions give due
consideration to all stakeholders in compliance with
Section 172. For more information on Board stakeholder
considerations as it pertains to decision making please
refer to page 88 of the Governance Report.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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BUSINESS IN ACTION
RESPONDING TO OUR
STAKEHOLDER PRIORITIES
SHAREHOLDERS
LINKS TO OUR STAKEHOLDERS
OUR PEOPLE
COMMUNITIES
& GOVERNMENT
ENVIRONMENT
SUPPLIERS,
CONTRACTORS
& REFINER
We are committed to meeting
international standards of
good practice in the areas of
governance, health and safety,
social development, human rights
and environmental protection.
Our Sustainability Performance
Framework provides a systematic
approach to how the Company
operates with respect to these
key areas and recognises the
need to adopt and apply standards
and processes that effectively
address both material issues and
stakeholder priorities.
ASSESSING MATERIAL ISSUES FOR
OUR STAKEHOLDERS
We analyse the most important
sustainability issues to our stakeholders
and our business to inform our strategy and
priorities for the year-ahead. We define an
issue as being material if it is considered
important by key stakeholders and could
have a significant financial impact on the
business. As such, we consider both risk
and opportunities as part of the materiality
assessment
Each year we invite internal and external
stakeholders to complete a materiality
survey to select the most important
sustainability issues based on potential
impact to Centamin. This is supplemented
by a review of communication received
from stakeholders throughout the year and
analysis of publicly available documents.
The ‘high priority’ issues identified in 2022
are presented in the materiality matrix.
OUR COMMITTMENTS AND PARTNERSHIPS
Our practices are guided by a variety of international frameworks
for good industry practice that reflect our values, purpose and
stakeholder priorities.
The notable voluntary commitments and standards to which
we aspire, and the partnerships that support our effort to create
opportunity for people through responsible mining, include:
TAILINGS MANAGEMENT
Why identified
Gold mining creates a significant amount
of tailings waste as mined ore is crushed,
milled and processed to separate the
gold from the ore. This process involves
hazardous chemicals and reagents such as
cyanide and flotation chemicals, of which
residual quantities remain in the tailings
after processing. These tailings form the
bulk of Centamin’s hazardous waste and
are pumped into a specially designed and
engineered earth-filled lined impoundment
known as a tailings storage facility (“TSF”).
TSFs need to be carefully managed and
monitored to ensure the stability of the
embankment walls and to prevent seepage
of possible contaminants into the local
environment.
Approach
Centamin is committed to the Global
Industry Standard Tailings Management
(“GISTM”) with the objective to cause no
harm to people or the environment through
tailings facility design, operation and
closure. We are targeting conformance with
this standard by August 2023, and as a first
step completed a gap analysis of our tailings
governance and management framework
using the ICMM Conformance Protocols for
the GISTM.
We employ a robust tailings governance
approach based on good industry practice,
risk management, and review and
assurance. Operating manuals are in place
for our tailings storage facilities which detail
the operation, monitoring, maintenance,
construction, closure and rehabilitation
guidelines for the facility; a clear definition
of responsibility for key personnel; and a
Trigger Action Response Plan to effectively
assess deviations from standard operating
practice and required actions, including
what to do in the event of an incident or
emergency. TSFs are monitored through
a layered assurance system by a team
of internal specialists, Sukari’s formally
appointed external Engineer of Record
(“EoR”) and an Independent Technical
Reviewer. In 2022 Centamin improved
clarity of roles, for tailings governance and
management assurance in line with the
GISTM, improved reporting and disclosure.
Both the EoR and Independent Technical
Reviewer are empowered to conduct
routine performance and safety reviews
of Sukari’s Tailings Management System.
The Board has ultimate accountability
for the safe management of our tailings
facilities including emergency preparedness
and response and recovery in the event
of failure. The Board is supported in this
role by the Technical and Sustainability
Committees, who oversee the development
and implementation of the Tailings
Management System. At Sukari, tailings
management is defined as a critical risk
and, as such, standards are in place that
define the minimum requirements for the
management of tailings to protect human
health and the environment through facility
design, operation and closure.
Under our Hazardous Substances Risk
Standard, we adhere to industry good
practice for the safe transportation, storage,
use and disposal of cyanide – including
strict adherence to the national regulatory
requirements. We require that our cyanide
suppliers are signatories to the International
Cyanide Management Code (“ICMC”) and
our site-level cyanide storage and use is
managed under strict control with aspiration
to align with the Code.
Operation of the TSFs is managed by a
dedicated team of people who conduct
daily performance monitoring including
visual inspections to confirm the
operational and structural integrity of the
facility. This is supplemented by routine
monitoring and inspections by the Health,
Safety, Environmental and Sustainability
department (“HSES”).
Actions
In 2022, we formally appointed a new
EoR to advise and assist Sukari on matters
of tailings management and governance
in conformance with the GISTM. Roles
and responsibilities pertaining to tailings
governance and management have been
clarified at both operational and executive
levels; and our EoR is now conducting
quarterly performance reviews of the TSFs.
In 2022, an independent audit confirmed
that Sukari rated either fully or substantially
compliant against all criteria under the
ICMC.
SAFETY, HEALTH
AND WELLBEING
Why identified
Mining is a high-risk industry. The nature of
our core business activities of exploration,
mining, construction and processing
creates a complex work environment
requiring a rigorous health and safety
culture. In line with our core value ‘Protect’,
it is our responsibility to create a safe and
healthy workplace for our employees and
contractors. We understand that failing to
manage these high-risk environments has
the potential to result in injury or loss of life.
Approach
Maintaining an active health and safety
culture is critical to achieving an injury-free,
stress-free and healthy work environment.
Our safety culture entails strong, visible
safety leadership and robust processes,
controls and training, empowering our
workforce to be their own safety leaders.
Our goal is for everyone to go home safe
and healthy every day.
Centamin’s Safety, Health and Wellbeing
Policy is guided by the principle of
shared responsibility, and a belief that all
employees, individually, are responsible for
the creation of a safe working environment
for themselves and their colleagues. The
policy is implemented at asset-level through
robust health and safety systems that are
framed around the adopted Critical Risk
Standards, behavioural standards and
compliance with all relevant host-country
laws.
Risk management is the foundation to
how we manage health and safety, from
hazard awareness and identification, and
routine review and assessment of mitigating
measures to reduce the risk to as low as
reasonably practicable.
Actions
In 2022 we reinforced our wellbeing
programmes including specific mental
health and wellbeing workshops focused
on breaking the stigma attached to
mental health, providing support for those
experiencing health concerns and building
resilience against possible mental health
triggers.
A significant development to the operations
in 2022 was the change from contractor
operated to owner-mining underground.
Accordingly, we developed our Cardinal
Safety Rules to include rules relevant
to working safely in the underground
environment.
Results
Centamin recorded a Total Recordable
Injury Frequency Rate (“TRIFR”) of 2.61
which was a 39% improvement on our
target of 3.99 set for 2022 and which
included a new safety record at Sukari of
eight million LTI free workplace hours.
Improvements in risk mitigation
implemented in 2022 included the
introduction of Interferometric Synthetic
Aperture Radar (“InSAR”) satellite imagery
monitoring to identify any significant ground
displacement across the mining areas
and tailings storage facilities; installation of
vibration monitors underground and in the
open pit, and introduction of Time Domain
Reflectometry units to support the in situ
open pit wall satellite monitors monitoring
for any wall movement.
IMPROVEMENT TO TRIFR
39
%
OUR MATERIAL ISSUES
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OVERVIEW
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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BUSINESS IN ACTION
CONTINUED
TRAINING AND PROFESSIONAL DEVELOPMENT
Why identified
A skilled and empowered workforce is
required to sustain a world class operation
and development pipeline for the Company.
We aim to provide professional and personal
development opportunities that empower
our employees to fulful their potential. We
recognise that our accomplishments as a
company are made possible through the
commitment of our people.
Equally, job satisfaction is important to
our employees who expect opportunities
to develop skills, progress through the
business and be fairly remunerated for their
hard work.
Approach
Centamin’s approach to human resource
management is to attract, develop, and
retain a highly-skilled workforce equipped to
run a world-class operation and support the
Company’s strategic objectives. Initiatives
to support our employees to grow include
providing clear pathways for development,
technical and leadership training
opportunities and succession planning.
Actions
At Sukari we have put in place a
professional development framework that
aims to develop a shared understanding
of the required skills to achieve proficiency
in each and every role, and the critical
behaviours required for successful
performance in Centamin. The key
elements of the framework include: an
employee development pathway (“EDP”)
to ensure all positions are undertaken to a
proficient level; supervisory and leadership
training to equip employees for increased
levels of technical and management
responsibility; and succession planning.
Results
In 2022, the EDP was formally launched
and in-scope employees were assessed
against the competency framework relevant
to their role.
Employees at Sukari received on average
44.3 hours’ total professional development
training, a 62% increase on delivery in
2021.
In addition, the twelve trainees of the
apprenticeship in heavy vehicle mobile
plant technology, celebrated the successful
completion of their first year of this four-year
programme. Under the apprenticeship
programme trainees are taught theory in a
purpose-built training facility, then provided
hands on experience in the workshop under
the tuition of experienced personnel.
DIVERSITY AND INCLUSION
Why identified
Diversity enriches discussion, better reflects
our relationships with our stakeholders
and allows for improved decision making.
Valuing diversity and promoting inclusion
is an ethical imperative for a sustainable
business.
In 2021, the FTSE Women Leader Review
published its first report on improving
gender balance in leadership, with new
voluntary targets for FTSE 350 companies
that 40% of board and leadership positions
should be held by women by the end of
2025.
Mining has historically been a male-
dominated industry. However in Egypt,
Centamin has faced additional and
significant legal and cultural challenges
to the employment of women. Sukari is in
a remote location and Egyptian custom
discourages women from working away
from their families for extended periods
of time, as is required with a rostered
workforce. In 2021, Centamin welcomed
changes to the Egyptian regulatory
framework that removed restrictions to the
employment of women in the mining sector.
Approach
Whilst we hire based on merit, we aspire
to develop a workforce that represents
the diversity of our host countries and
communities; and a culture of belonging
and inclusion where everyone is respected,
valued and empowered to excel within the
workplace.
We recognise that broad and concerted
leadership will be required to advance
diversity and inclusion within the workplace
at large, and Egypt in particular.
Actions
In 2022 we updated our Diversity and
Inclusion Policy and called on our
leadership group to take specific action on
diversity and inclusion, including efforts
to: strengthen diversity in all aspects of
workplace culture, policies, procedures and
practices; systematically identify and resolve
barriers to the advancement of and fair
treatment of women in the workplace; and
set short and long-term targets to increase
the representation of women.
Results
In Egypt we are setting a new benchmark
for diversity and inclusion within the mining
sector. In 2022 we met our internal interim
target for gender diversity of 2.7% and now
employ 34 women in Egypt, two of whom
are in positions of management and the
majority in qualified roles. From a Group
perspective, we are aiming to increase the
representation of women in the workplace
to a minimum of 3.8% in 2023.
We are also proud to partner with Women
in Mining UK through which we actively
promote the role of women in the mining
industry.
34
females employed in Egypt
SOCIO-ECONOMIC PARTNERSHIP
AND RESPONSIBLE SUPPLY CHAINS
Why identified
We contribute to the wealth and
prosperity of our host countries, regions
and communities where we operate by
generating socio-economic value. We
recognise that our operations can be a
significant driver for positive socio-economic
development on several levels: secure
employment and skill development; the
economic value arising through local
supply chains, job creation and developing
manufacturing capacity; community
investment, through partnership with local
organisations to address local needs and
build sustainable local economies; and the
economic value added to a country through
profit share, royalties and taxes.
Approach
As the only large-scale modern mine
in Egypt, Sukari has pioneered the
development of a national mine supply
chain, which continues to grow, diversify
and mature with each successive year of
operation. Our supply and technical teams
actively work with local suppliers to help
them meet our minimum safety, quality,
ethical and cost requirements.
We expect our suppliers to apply standards
to the same level as our own, or higher, in a
manner that is appropriate and proportional
to the nature and scale of their activities,
the goods they supply and the services they
perform. We are committed to using only
those suppliers that adhere to the same
fundamental principles relating to legal
compliance, fairness, honesty and anti-
corruption. All our suppliers must comply
with applicable laws and the principles set
out in our Supplier Code of Conduct.
Actions
In 2022 we commissioned our 36MW
AC
solar plant installed by a local contractor,
GIZA Systems. We are proud that 96% of
our contracted workforce are employed
nationally. We continually look to procure
locally and develop manufacturing in-
country. In 2022 we completed installation
of all 48 of the high-performance truck trays
manufactured in Egypt and established
a new national supplier to supply plastic
core trays – a safer, more cost effective
alternative to the metal trays sourced
from Australia.
Results
In 2022, we formalised our supply chain
due diligence procedures and engaged
Dow Jones to access a broader scope
of business-critical risk data, including:
incidents of reported regulatory non-
compliance; adverse media; sanctions
data and politically exposed persons. The
services were limited to an automated
search of publicly available databases
relevant to the countries in which our
suppliers operate.
ENERGY AND CLIMATE CHANGE
Why identified
The transition to a net zero carbon
economy is expected to profoundly affect
our business model over the medium and/
or long term due to factors including: the
pricing of carbon emissions; regulatory
requirements to set a carbon reduction
target for 2030; availability and costing
of commodities and consumables;
changing market and investor sentiment.
Decarbonisation is a regulatory and
reputational risk and therefore imperative
to embed within the life of mine operational
strategy.
Please refer to further disclosures within the
Climate Change Disclosures section of this
report on page 70.
Approach
We support global efforts to achieve
the climate change goals to reduce
GHG emissions outlined in international
guidance, including the United Nations
Framework Convention on Climate Change
(“UNFCCC”) and the Paris Agreement. We
are committed to reducing our contribution
to climate change, while also building
operational resilience in the face of global
warming.
We aim to integrate climate considerations,
such as energy and decarbonisation, into
our strategic decisions and day-to-day
operational management. We recognise that
this will require a step-change in terms of
climate-risk accountability and transparency
and have therefore set targets for emissions
reduction by 2030.
Results
Our Energy and Climate Change Policy
sets out our commitment to reducing our
contribution to climate change and we have
set a target of 30% reduction in Scope 1
and 2 GHG emissions by 2030, compared
to our 2021 base-year. Our Decarbonisation
Roadmap is presented on page 8 of this
report.
In 2022, we commissioned the 36MW
DC
Solar Project and battery storage facility
which will reduce our Scope 1 emissions
by more than 60,000 tCO
2
-e per annum.
We also completed roll-out of the high-
production trays to all 48 units in our haul
truck fleet. These innovative trays increase
tonnes hauled by 10% for the same fuel
consumption.
SHAREHOLDERS
LINKS TO OUR STAKEHOLDERS
OUR PEOPLE
COMMUNITIES
& GOVERNMENT
ENVIRONMENT
SUPPLIERS,
CONTRACTORS
& REFINER
Link to
SUSTAINABILITY
REPORT
available from
25 April 2023
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CENTAMIN
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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
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ADDITIONAL INFORMATION
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DELIVERING GROWTH
AND STAKEHOLDER
RETURNS
OUR STRATEGY
In 2022, the Company successfully
delivered against its strategic objectives.
Our vision is to be a multi-asset gold
producer of quality, long life assets,
creating opportunities for the people
and communities within our operating
jurisdictions and we believe our fit-for-
purpose strategy will enable us to deliver
on that vision.
OUR CULTURE OF CONTINUOUS IMPROVEMENT
DRIVES OUR SUCCESS
In alignment with our Purpose and Values, Centamin
has built a responsible culture that supports people
as well as developing our assets and delivering strong
returns. By putting in place the right people and the
right processes, we have established a culture of
continuous improvement. We are united in our desire
to work hard, do better, be passionate, and make a
difference.
SUKARI VALUE
MAXIMISATION
2022 PROGRESS
• Achieved 8 million hours LTI-free
• 13% improvement on TRIFR
• 2022 guidance delivered
• US$45 million in gross cost savings
• Added 0.9Moz in P&P Mineral Reserves
• Increased the underground life of mine to 10 years
• Commissioned 36MW
DC
solar plant
2022 PROGRESS
• Final stages of the Doropo PFS
• Completed Egypt’s first airborne geophysical study
at Sukari
• Commenced EDX field exploration
• Advanced negotiations on the exploitation terms for EDX
• ABC systematic field exploration programme across the
three licences
• Secured US$150m sustainability-linked revolving credit
facility for growth projects
2022 PROGRESS
• US$35m paid in EMRA profit share
• US$24m in royalties to Egypt
• US$58m paid and proposed as a FY22 dividend
to shareholders
• Expanded our local supply chain by value and volume
• Updated Code of Conduct and Diversity and
Inclusion Policy
Read more about
SUKARI VALUE
MAXIMISATION
on page 16
Read more about
GROWTH AND
DIVERSIFICATION
on pages 12 and 40
Read more about
COMMITMENT TO
STAKEHOLDER RETURNS
on page 46
GROWTH AND
DIVERSIFICATION
COMMITMENT
TO STAKEHOLDER
RETURNS
2023 PRIORITIES
• Foreign direct investment to our host countries
• Commence Doropo environmental and social
impact assessment
• Develop Egyptian public engagement campaign
• Complete the Sukari grid power feasibility study
• Publish our Climate Change Strategy to 2030 (refer to
Decarbonisation Roadmap on page 8)
• Deliver targets as per the SLL for diversity, workforce
development and climate
• Return a minimum of 30% of free cash flow to
shareholders in cash dividends
2023 PRIORITIES
• Complete the Doropo PFS
• Delineate near mine surface targets on the Sukari Mining
Concession
• Systematic EDX field exploration, targeting first drilling
• Agree the EDX exploitation terms with the Egyptian
government
• Continue to evaluate inorganic opportunities
2023 PRIORITIES
• 25% improvement on 3 year rolling average TRIFR
• Produce 450,000-480,000 ounces
• AISC US$1,250-1,400 per ounce sold
• Further gross cost savings in excess of US$36 million
to reach US$150 million 4-year target
• Complete the 280,000 metre drill programme
• Advance the open pit accelerated waste stripping
programme
• Publish an update Life of Mine Plan (NI 43-101)
for Sukari
• Complete the gravity circuit scoping study
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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ASSESSING OUR
PERFORMANCE
KEY PERFORMANCE INDICATORS
Centamin sets Key Performance
Indicators (“KPIs”) each year and
assesses performance against
these benchmarks on a regular
basis. Our financial and non-
financial KPIs provide a measure
of our performance against the
key drivers of our strategy.
Why we measure
Why we measure
Adjusted EBITDA gives an indication of the
Company’s ability to generate profit from
gold sales.
Free cash flow allows Centamin to pursue
opportunities that return shareholder value.
Performance
Performance
Adjusted EBITDA decreased by 3% to
US$319 million, as a result of an 11%
increase in mine production costs.
Adjusted free cash flow for 2022 was
negative US$18.1million, down 202% on
the prior year (2021: Negative US$6.0
million) reflecting the period of capital
reinvestment in the Sukari Mine as well as
increased exploration spend at Doropo on
the prefeasibility study.
Links to strategy
Links to strategy
Why we measure
Why we measure
It is vital for the longevity of our assets that
we invest sufficient capital in the business
to maintain, optimise and grow our
operations.
Alongside growth, value is returned to
shareholders through our dividend.
Centamin has a nine year track record of
delivering income to its investors.
Performance
Performance
US$275.8 million spent in 2022 (excl.
US$7.7 million ROU Assets) (2021:
US$240.9 million) of which US$157.2
million was sustaining capital and
US$118.6m was non-sustaining capital.
Total 2022 dividend per share of 5 cents,
equating to a circa.4.5% yield and including
the final proposed dividend of 2.5 cents
which is subject to shareholder approval at
the 2023 AGM.
Links to strategy
Links to strategy
FINANCIAL
(1)
ADJUSTED
EBITDA
(1)
(US$ million)
-3
%
-202
%
+18
%
-44
%
ADJUSTED FREE
CASH FLOW
(1)
(US$ million)
TOTAL CAPITAL
INVESTMENT
(US$ million)
DIVIDEND PER SHARE
(“DPS”)
(US cents)
Links to the shareholder approved
Remuneration Policy and through
the short-term and long-term
incentives.
Links to the US$150 million
sustainability linked revolving
credit facility.
(1)
Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair
value through profit and loss (also known as Cash and liquid assets) and Adjusted free cash flow are non-
GAAP measures and are defined in the Financial Review non-GAAP measures section.
LINKS TO STRATEGY
COMMITMENT TO
STAKEHOLDER RETURNS
SUKARI VALUE
MAXIMISATION
GROWTH &
DIVERSIFICATION
For more information
on our
KPIs
visit
www.centamin.com
R
S
2022
319.0
2021
328.8
2020
437.6
2019
280.0
2022
(18.1)
2021
(6.0)
2020
141.8
2019
74.3
2022
283.5
2021
240.9
2020
138.4
2019
97.6
2022
5.0
2021
9.0
2020
12.0
2019
4.0
R
R
R
30
31
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
KEY PERFORMANCE INDICATORS
CONTINUED
Why we measure
Why we measure
Why we measure
Measured & Indicated Mineral Resources
underpin the Group’s operating
sustainability. Extending mine life through
brownfield exploration and new discoveries
from greenfield exploration contribute to the
Company’s long-term growth prospects.
Centamin aims to produce the optimal
amount of gold based on operational
capacity and gold distribution within the
orebody. Gold production needs to generate
sufficient revenue to cover operating costs
and allow Centamin to deliver its strategy.
The AISC aims to capture typical
operational and capitalised costs. We aim to
maintain a strong position on the cost curve
whilst ensuring we are investing sufficiently
to sustain operations.
Performance
Performance
Performance
Consolidated Group Mineral Resources are
13.6Moz, inclusive of 6.0Moz of Mineral
Reserves. In 2022, Sukari Mineral Reserves
grew by 0.8Moz net of twelve months
depletion.
Gold production for 2022 was 440,974
ounces and within the stated guidance
range of 430,000 – 460,000 ounces.
AISC
(1)
were US$1,399/oz sold and within
the guidance range of US$1,275 –1,425/
oz sold.
Links to strategy
Links to strategy
Links to strategy
Why we measure
Total material movement serves as an
indication of operational effectiveness. If the
fleet remains constant and material moved
increases, it demonstrates better utilisation.
Performance
Record material movement in 2022, of
137.5Mt of open pit and underground
(ore and waste) reflecting the focus on
open pit waste stripping and underground
development.
Links to strategy
Why we measure
Why we measure
An indicator of safety in the workplace
and the effectiveness of our management
controls to protect our workforce.
An indicator of safety in the workplace
and the effectiveness of our management
controls to protect our workforce.
Performance
Performance
Group TRIFR improved by 13% on 2021, to
2.61 per 1,000,000 hours worked.
Group LTIFR improved by 83% on 2021,
to 0.08 per 1,000,000 hours worked. With
the Sukari site achieving a record of eight
million hours LTI-free.
Links to strategy
Links to strategy
OPERATIONAL
ENVIRONMENTAL AND SOCIAL
+13
%
+24
%
-13
%
-83
%
ALL-IN SUSTAINING
COST (“AISC”)
(1)
(US$ per ounce sold)
TOTAL MATERIAL MOVED
(Million tonnes)
SAFETY: GLOBAL TRIFR
(per 1,000,000 hours worked)
SAFETY: GLOBAL LTIFR
(per 1,000,000 hours worked)
Links to the shareholder approved
Remuneration Policy and through
the short-term and long-term
incentives.
LINKS TO STRATEGY
COMMITMENT TO
STAKEHOLDER RETURNS
SUKARI VALUE
MAXIMISATION
GROWTH &
DIVERSIFICATION
R
Links to the US$150 million
sustainability linked revolving
credit facility.
S
(1)
Cash cost of production, AISC, EBITDA, Cash, bullion on hand, gold sales receivables, financial assets at fair value through profit and loss (also known
as Cash and liquid assets) and Adjusted free cash flow are non-GAAP measures and are defined in the Financial Review non-GAAP measures section.
2022
1,399
2021
1,234
2020
1,036
2019
943
2022
137,497
2021
111,297
2020
80,789
2019
79,675
2022
2.61
2021
3.01
2020
5.16
2019
7.13
2022
0.08
2021
0.46
2020
0.84
2019
1.43
+12
%
GROUP MINERAL
RESOURCES
(Million ounces)
GOLD PRODUCTION
(Ounces)
+6
%
2022
440,974
2021
415,370
2020
452,320
2019
480,528
2022
13.6
2021
12.1
2020
14.3
2019
15.3
R
R
R
R
32
33
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
KEY PERFORMANCE INDICATORS
CONTINUED
Links to the shareholder approved
Remuneration Policy and through
the short-term and long-term
incentives.
LINKS TO STRATEGY
COMMITMENT TO
STAKEHOLDER RETURNS
SUKARI VALUE
MAXIMISATION
GROWTH &
DIVERSIFICATION
R
Why we measure
Why we measure
Why we measure
An indicator of the socio-economic
benefit to our host communities and the
effectiveness of our measures to enhance
local economic participation.
An indicator of the socio-economic
benefit to our host communities and the
effectiveness of our activities to enhance
local economic participation.
Indicators for Scope 1, 2 and 3 CO
2
emissions on an absolute and intensity
basis per oz of gold production and the
effectiveness of our programmes to reduce
our exposure to climate-related risk.
Performance
Performance
Performance
Consistent with recent years, 96% of
Centamin’s workforce are employed
locally to the country of operation.
Increase in goods and services procured
from suppliers local to the country of
operation from 62 to 68%. In Egypt, there
was a 28% increase in total spend on host
country suppliers.
Scope 1 GHG emissions increased by 4%
compared to 2021, primarily resulting from
the accelerated waste-stripping programme
at Sukari and a corresponding increase to
the size of our mobile fleet. This increase
in consumption was partly counteracted by
the commissioning of our 36MW
DC
solar
plant in the second half of 2022.
Links to strategy
Links to strategy
Links to strategy
Why we measure
Why we measure
Total women employed as a percentage of
direct employees.
We recognise the benefits to our business
of supporting diversity, equity, and inclusion
for long-term sustainable success.
We have implemented a capability
framework at Sukari with the aim of
identifying, developing and promoting
national employees. The focus is on
developing leadership and technical skills
through a structured approach to workforce
training.
Performance
Performance
In 2022, we met our interim target of
2.7% to improve gender diversity and
inclusion. This follows changes in the
Egyptian regulatory framework that removed
restrictions to employ women in the
mining sector. We now employ 34 women
in Egypt, two of whom are in positions of
management.
In 2022 we increased the number of
training hours, both OHS and Technical by
62% versus 2021. This includes technical
and leadership training programmes.
Links to strategy
Links to strategy
ENVIRONMENTAL AND SOCIAL
CONTINUED
+10
%
+10
%
-7
%
+62
%
LOCAL PROCUREMENT
% of total procurement
GENDER DIVERSITY
GHG EMISSIONS
INTENSITY
Scope 1, 2 & 3 GHG emissions per Au ounce
(tCO
2
-e per Au oz)
WORKPLACE
DEVELOPMENT
Hours of training per employee (OHS + technical)
Links to the US$150 million
sustainability linked revolving
credit facility.
S
2022
68.0
2021
62.0
2020
62.0
2019
61.0
2022
3.8
2021
4.1
2020
3.0
2019
2022
2.7%
2021
2.4%
2020
1.5%
2019
1.8%
2022
44.3
2021
27.3
2020
11.9
2019
14.3
LOCAL EMPLOYMENT
% of Group total workforce
+2
%
2022
96.0
2021
94.2
2020
95.0
2019
95.0
S
S
S
34
35
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
STRONG OPERATIONAL
DELIVERY
OPERATIONAL REVIEW
SUKARI GOLD MINE, EGYPT
2022 VS 2021
In 2022, there was strong operational
delivery across the Sukari Gold Mine, in line
with our three-year reset which commenced
in 2021 and beyond that progressing
additional optimisation initiatives, including
successfully commissioning the 36MW
DC
Sukari solar plant and completing the
transition from a contractor-mining
model to an owner-operator model for
the underground operations. Several new
records were set during the year, including
safety and total volume of material moved
by Sukari operated equipment.
We achieved approximately eight million
hours worked at Sukari without a Lost Time
Injury (“LTI”). This represents approximately
a 60% increase to our previous LTI-free
record of five million hours worked. Our
improved safety performance comes as
a result of continued focus on hazard
identification and risk assessment, coupled
with greater focus from site leadership
on safety standards and sustaining a
culture where everyone is empowered as
a safety leader. Important improvements
in management communication and
visibility were realised and we believe this is
contributing to improved levels of employee
engagement and decision making.
In 2022, Sukari achieved gold production
of 440,974 ounces which was in line with
the Company’s guidance of 430,000 to
460,000 ounces and was 6% more than
the prior twelve months in 2021 (“year-on-
year”).
Our operational focus over 2022 was not
only on production, as we continued to look
for potential cost savings and operational
efficiencies across the Sukari Mine to help
mitigate inflationary cost pressures. The
solar plant construction was completed and
commissioning commenced in H2 2022,
delivering better-than-expected cost-savings
driven by upward cost pressure on diesel
prices.
In line with the three-year reset plans and
our roadmap to producing approximately
500,000 ounces per annum from Sukari,
the 2023 Sukari production guidance is
450,000 to 480,000 ounces per annum.
COSTS
Prudent forecasting combined with our
ongoing stretch cost-savings programme
enabled us to significantly offset the
impacts of global inflation and deliver costs
in line with the 2022 guidance. Absolute
cash costs of production were US$403
million, a 12% increase year-on-year due
to increased volumes of material mined
combined with rising input costs, and
partially offset by cost-savings associated
with transitioning the underground to
owner-operated, integrating solar power
and ongoing operating productivity and
efficiency improvements. Unit cash costs
of production were US$913/oz produced, a
5% increase year-on-year, reflecting higher
input costs and partially offset by increased
gold production.
Absolute AISC for gold sold was US$614
million, a 22% increase year-on-year,
reflecting the increase in production
costs and increase in sustaining capital
expenditure, including the reclassification of
open pit waste mining costs. The resultant
unit AISC were US$1,399 per ounce sold,
a 13% increase year-on-year, reflecting the
higher production volumes.
For 2023, we believe we have continued
to take a prudent approach to forecasting
and are guiding cash costs of production to
be between US$840–US$990 per ounce
produced and AISC between US$1,250–
US$1,400 per ounce sold.
OPEN PIT MINING
The open pit focus remained on progressing
the accelerated waste-stripping programme
to improve operational flexibility in the near
and long term. Both Centamin’s owner
operated fleet and the dedicated waste-
stripping contractor outperformed during
the year, resulting in substantially increased
operating flexibility with ore mining from
four operating areas of the pit.
Total open pit material mined of 136Mt, a
24% increase year-on-year, including:
• Open pit ore mined was 11.7Mt at an
average grade of 0.99g/t, which was
in line with plan and reflected a 6%
decrease in tonnes and a 14% increase
in grade year-on-year
• Open pit waste material mined was
125Mt, a 27% increase year-on-year,
as a result of improved owner fleet
productivity, a full year of the trucks
operating with lightweight truck trays and
outperformance against the accelerated
waste stripping programme
Stockpiles increased from 16.9Mt at an
average grade of 0.47g/t to 17.2Mt in 2022.
UNDERGROUND MINING
In the Sukari underground, the decision
was made to transition the underground to
the owner-operator model during Q1 2022.
The decision was based on a combination
of cost savings, improved productivity,
and increased underground mine life
based on the resource and reserve growth
achieved in 2021. The expansion of the
Sukari underground mining capacity is a
significant step towards returning Sukari
production level towards 500,000 ounces
per annum. The ability to expand the
underground is a result of our transformed
approach to mineral resource management
which delivered a near threefold increase
of the underground reserves since 2020,
coupled with the productivity and cost
benefits that continue to be realised
following the transition to owner-mining.
Owner-mining has also provided greater
operational flexibility and autonomy which
are especially important as we seek to
expand the underground operations from
2024.The expansion option that we are
taking forward to the next phase of mine
planning offers both low capital intensity
and a lower level of execution risk.
During 2022, total ore mined was 829kt
at an average total grade of 4.75g/t. This
represented a 12% increase in tonnes year-
on-year due to improvements in operating
flexibility since transitioning to owner-mining
in the underground during H1, and a 4%
decrease in grade year-on-year as per the
mine plan.
The underground ore split was:
• 501kt of ore mined from stopes, at an
average grade of 5.9g/t, a 6% increase in
tonnes year-on-year and a 4% increase in
grade year-on-year
• 328kt of ore mined from development,
at an average grade of 3.0g/t, a 23%
increase in tonnes and a 17% decrease
in grade year-on-year
Focus was placed on advanced grade
control drilling to improve shorter-term
planning and support robust longer-term
plans and forecasts and remains a focus
during 2022.
Backfilling continued, using waste rock
and cemented rock fill (“CRF”), which
allows a bottom-up mining method
and this will continue as the primary
fill method into 2023 until the paste-fill
plant is commissioned. We are aiming to
commence commissioning in H1 of 2023.
GOLD PRODUCTION
440,974
oz
+6%
ALL-IN SUSTAINING COSTS
US$1,399/
oz
36
37
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
OPERATIONAL REVIEW
CONTINUED
INCREASED OPERATING
FLEXIBILITY
Open pit total material mined
(tonnes)
+24
%
Underground total ore mined
(tonnes)
+12
%
Dump leach operations contributed 6,656
ounces, a 31% decrease year-on-year and
in line with the mine plan. With the south
dump leach pad at capacity, in 2023, the
north dump leach will be expanded and
is scheduled to commence leaching at
the end of 2023. This will not contribute
meaningful additional ounces but provides
a low cost option to monetise otherwise
marginal, low-grade ounces.
The focus continues to be on maximising
operational margins on plant throughput. In
line with cost optimisation and performance
studies, 2023 throughput is expected to be
between 12 and 12.25Mtpa, with improved
recoveries and optimal use of reagents
and consumables as mill upgrades are
commissioned.
units
FY 2022
FY 2021
%
H2 2022
H1 2022
Open pit
Total material mined
kt
136,420
110,222
24%
72,048
64,372
Ore mined
kt
11,696
12,391
-6%
5,960
5,736
Ore grade mined
g/t Au
0.99
0.86
15%
0.98
0.99
Ore grade milled
g/t Au
1.00
0.93
8%
0.99
1.01
Underground
Ore mined
kt
829
739
12%
444
385
Ore grade mined
g/t Au
4.75
4.95
-4%
5.17
4.26
Processing
Ore processed
kt
12,114
11,916
2%
6,275
5,839
Feed grade
g/t Au
1.26
1.18
6%
1.30
1.22
Gold recovery
%
88.2
88.6
0%
88.2
88.2
Gold production
oz
440,974
415,370
6%
237,076
203,898
Gold sold
oz
438,638
407,252
8%
235,051
203,587
Avg realised gold price
US$/oz
1,794
1,797
0%
1,730
1,872
Cash costs
US$’000
402,546
359,868
12%
212,690
189,856
Unit cash costs
US$/oz produced
913
866
5%
897
931
AISC
US$’000
613,868
502,366
22%
319,756
294,112
Unit AISC
US$/oz sold
1,399
1,234
13%
1,360
1,445
CAPITAL PROJECTS
Total capital expenditure in 2022 was
US$283.5 million, including US$164.9
million of sustaining and US$118.6 million
of non-sustaining capital expenditure.
Adjusted capital expenditure was US$224
million, removing the US$51.5 million
impact of sustaining waste-stripping and
US$7.7m of capitalised right of use assets
on leases.
36MW
DC
Solar Project
The solar plant was completed and
commissioned during 2022, with consistent
delivery of 36MW
DC
(nameplate capacity),
converting to 30MW
AC
of power since early
September. This project has reduced our
exposure to volatile fuel pricing by saving
up to 70,000 litres of diesel per day and
averaging a reduction in diesel consumption
of 22 million litres per annum. As well as
the cost-saving benefit, it is expected to
reduce Scope 1 GHG emissions by 60,000
tonnes of CO
2
equivalent per annum
alongside a subsequent reduction in the
volume of diesel trucked to site.
Waste-stripping programme
The accelerated waste-stripping programme
continued to progress ahead of schedule.
The 120Mt over four years dedicated
contractor waste-stripping programme is
52% complete with 62.4Mt of waste mined
as at 31 December 2022. In 2023, 38Mt
of waste are scheduled to be moved by the
contractor, with a balance of approximately
20Mt in 2024.
Paste-fill plant
Construction advanced well during the year,
alongside the underground reticulation
network. The plant is expected to begin
commissioning in the first half of 2023.
Process plant upgrades
Multiple upgrades to the plant around
automation, sampling and reagent handling
were well advanced and commissioned
such as increased samplers, reagent mixing
and dosing systems and a new kiln. The
upgrades are part of an ongoing culture of
continuous improvement.
PROCESSING
The plant processed 12.1Mt of ore,
at an average feed grade of 1.26g/t, a
2% increase in throughput and a 6%
improvement in grade year-on-year,
reflecting the improvement in average open
pit mined grade. The metallurgical gold
recovery rate was 88.2%, unchanged year-
on-year.
• 11.3Mt from open pit material, at an
average milled grade of 1.0g/t, a 1%
increase in tonnes and 8% increase in
grade year-on-year
• 0.83Mt from underground material, at
an average milled grade of 4.77g/t, a 9%
increase in tonnes and 3% decrease in
grade year-on-year
38
39
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
GEOLOGICAL FOCUS
DELIVERS GROWTH
EXPLORATION REVIEW
The Mineral Resource Management
(“MRM”) and Exploration teams
continue to deliver excellent results
which demonstrate the quality of
the portfolio. Through a greater
geological focus and resultant
improved geological understanding,
Centamin has increased its
consolidated Group Mineral
Resource base by +30% in 2022 and
grown the Sukari Mineral Reserves
for the second consecutive year,
further underpinning the quality
of the orebody and the Company’s
geological expertise.
At Sukari, positive drill results have
demonstrated the upside potential in the
orebody that have supported life of mine
extensions to 14 years for the open pit
(from twelve years) and to ten years for the
underground (from eight years).
Furthermore, the increased underground
life of mine combined with the pipeline of
growth targets were the basis for conducting
the underground expansion option study
to assess the cost-benefit of increasing
underground mining rates to accelerate
production and optimise the processing
plant throughput over the life of mine.
The team also made excellent progress
across our organic pipeline of projects that
offer growth and diversification, including
upgrading 2.52 million ounces of gold to
Indicated Resources at the Doropo Project
in Côte d’Ivoire and identifying additional
targets for further growth.
SUKARI GOLD MINE
Since developing a robust resource
model Centamin has grown the resource
and reserve base at Sukari for a second
consecutive year and has an active pipeline
of growth targets identified for 2023. The
improved geological understanding has
resulted in meaningful growth of both
resources and reserves at unchanged cut-
off grades. The open pit Mineral Reserve
gain replaced annual depletion for the first
time since 2015, while the underground
Mineral Reserves of 1.2 million ounces
represents a threefold increase since
2020, net of mining depletion, which
further supports the planned underground
expansion project.
The simplified and methodical approach
to geology and orebody stewardship as
implemented in 2021, has informed a
targeted drilling campaign across the
orebody as we employ an extensional model
of exploration seeking further resource
and reserve growth. The MRM team
has an annual rolling target for resource
extensional drilling in addition to resource
conversion from inferred to measure and
indicated which is envisaged to support
further reserve growth.
Within the open pit area, drilling was
focused in the North (Stage 5N) and
around Cleo (Stage 7) as well as on the
Eastern and Western (Stage 5E and W)
contacts of the porphyry with the aim of
improving geological understanding of the
orebody and potentially converting material
classified as waste to ore. This programme
continues into 2023 to inform the next
Mineral Resource update.
Given the move to an extensional model
in the underground, the drilling strategy
targeted gains in the Amun, Ptah, BAST,
Top of Horus and Horus Deeps, resulting in
a 30% increase in underground reserves.
Longer-term the orebody remains open
at depth and along strike in the Horus
and Horus Deeps area, and these are
the focus of the 2023 and beyond drilling
programmes. A particular highlight of the
exploration work was the identification of
an extension to the high-grade or ‘Bonanza’
structures in the BAST area of the orebody.
While relatively small tonnage, narrow
targets, they represent significant near-term
upside and are a priority drill target for early
2023 with the aim of bringing them into
the mine plan in the shortest time frame
possible.
Sukari mining concession (160km
2
)
Surface exploration work in 2022, which
comprised systematic soil sampling,
sampling of artisanal mine exposures and
detailed geological mapping, identified
seven drill targets, five of which had not
been drilled previously, and are all located
within 10km of the Sukari processing plant.
These new drill targets are:
• Wadi Alam
• V Shear East
• Sukari North
• Sukari North Extension
• Um Tundabah
• Kurdeman East
• East Melange Contact
The MRM team has advanced their review
of the results of the previously drilled gold
prospects such as Kurdeman, Quartz
Ridge and V-Shear South. This work has
initially focused on Kurdeman with Quartz
Ridge to follow. At Kurdeman the initial
drill programme identified several zones of
quartz veining, one to four metres in width,
located at lithological contacts, with some
visible gold in the drill core.
Re-evaluation of old prospects (Kurdeman
and Quartz Ridge) and the new targets
that have been developed over the last
two years through systematic soil sampling
and geological mapping programmes. A
25,000m drilling programme commenced
in H2 2022, focused on the development
of additional Mineral Resources within
the Sukari mining concession that could
be converted to Mineral Reserves and
incorporated into the mine plan in the
shortest timeframe.
This programme included further drilling
at V Shear East, Wadi Alam, Kurdeman
and later in the year, Quartz Ridge (results
expected in 2023).
Prospect Name
Hole Number
From (m)
To (m)
Interval (m)
Grade g/t Au
Wadi Alam
WA004
41
63
22
2.9
Wadi Alam
WA023
135
140
5
8.3
Wadi Alam
WA008
115
126
11
2.8
Wadi Alam
WA003
1
12
11
1.9
V Shear East
VSE006
50
53
3
17.7
V Shear East
VSE011
50
55
5
10.6
V Shear East
VSE027
136
144
8
6.0
V Shear East
VSE047
78
86
8
5.0
V Shear East
VSE047
94
107
13
3.1
V Shear East
VSE049
1
11
10
2.9
V Shear East
VSE004
41
51
10
2.9
V Shear East
VSE050
33
47
14
2.1
V Shear East
VSE011
17
25
8
3.4
V Shear East
VSE042
49
59
10
2.8
V Shear East
VSE051
101
111
10
2.2
V Shear East
VSE010
6
11
5
4.5
V Shear East
VSE009
98
101
3
7.3
Kurdeman
KRC033
6
10
4
5.9
Kurdeman
KRE010
101
106
5
4.0
Kurdeman
KRC048
140
146
6
3.0
The Company notes that the potential quantity and grade of these prospects are
conceptual in nature, that there has been insufficient exploration to define a mineral
resource and that it is uncertain if further exploration will result in the prospects being
delineated as a mineral resource.
EGYPT
Aligned with our growth strategy, we have a
substantial 280,000 drilling campaign across
known targets within the underground and
elsewhere in the Concession area.
RESERVE GROWTH
TARGET
3
Moz
add 3Moz in reserves by 2024
TODAY
1.9
Moz
added 1.9Moz in reserves
UNDERGROUND LIFE OF MINE
TARGET
10 years
by the end of 2024
TODAY
10 years
increased from 3yrs in 2020
SUKARI AIRBORNE
GEOPHYSICAL SURVEY
An airborne geophysical survey,
covering the entire 160km2 Sukari
mining concession area, was
completed during Q2 2022. The
heliborne survey, which marks a first
for Sukari and more broadly the mining
sector in Egypt, combined VTEM,
Magnetic and Radiometric techniques,
flown at 100m line spacing across the
Concession area. The programme was
designed to further the understanding
of the geological and structural setting
of the Sukari mineralised system
itself as well as the numerous gold
prospects across the Concession area.
The VTEM data has clearly identified
the arcuate Sukari melange zone
(conductive black shales) with the
brittle Sukari granitoid intrusive (ore
body) sited on its eastern margin at
the contact with more competent
intermediate volcanics. The magnetic
data has provided useful structural
data which explains some of the gold
prospects within the Sukari mining
concession, and the radiometric data
highlighted the Sukari granitoid in the
K channel and K-Th-U ratio image.
40
41
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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Qena
Luxor
NAJD BLOCK
UM RUS
BLOCK
NUGRUS
BLOCK
SUKARI MINING
CONCESSION
Marsa Alam
Quseir
RED SEA
EGYPTIAN EASTERN
DESERT
EXPLORATION REVIEW
CONTINUED
CÔTE D’IVOIRE
DOROPO PROJECT
The Doropo Project, located in the
northwest of Côte d’Ivoire is the Company’s
most advanced exploration project. The
PEA was completed in 2021, which
confirmed the project met the necessary
investment hurdles to progress the work
programme to pre-feasibility study (“PFS”).
The 2021 PEA indicated a processing
flowsheet which included a full flotation
and regrind circuit. The results of the
more detailed mineral processing and
metallurgical recovery studies as part
of the PFS, including a more extensive
metallurgical drilling programme, have
indicated the potential to simplify the
processing circuit.
The PFS mineral processing and
metallurgical recovery studies included
a dedicated 6,230 metre metallurgical
drilling programme. The initial whole ore
metallurgical test work was performed as a
baseline for the detailed metallurgical test
work programme. Gold extraction for the
fresh samples averaged around 85% at an
EASTERN DESERT EXPLORATION
(“EDX”)
With over 20 years of operating history in
Egypt, Centamin is uniquely positioned
to deliver the significant potential of the
licences in the most cost-effective way.
The EDX Blocks, awarded in 2021,
comprise 3,000km
2
of highly prospective
greenfield exploration tenements within
the Egyptian section of the Arabian Nubian
Shield. This area has not been explored in
the modern era using current exploration
methods and represents a significant
land package of highly prospective but
underexplored geological terrane. The land
package is divided into three Blocks – the
Nugrus Block surrounding the Sukari Mine,
the Um Rus Block located 50km north of
Sukari and the Najd Block which is located
southeast of the former El Sid mine.
Based on remote sensing studies, which
included digitising of extensive artisanal
mining sites, litho-structural interpretation
of hi-resolution satellite imagery as well as
spectral ‘mineral mapping’ techniques – all
three Blocks of ground are thought to be
highly prospective. Work to date in the
Nugrus Block has identified six priority
targets which contain in excess of 20km
2
of
alluvial artisanal workings and over 300 hard
rock artisanal sites.
The initial exploration strategy is based on
two principal objectives:
• Systematic reconnaissance scale
exploration covering all three Blocks of
ground, during the hot summer months,
using BLEG sampling of the extensive
dry wadi (drainage) systems. This will
enable the safe relinquishment of ground
following the first two-year exploration
cycle as well as to identify areas of
potential gold mineralisation that have
not been already discovered by artisanal
miners; and
• Systematic surface exploration using
exploration geochemistry and geological
mapping of high priority targets, that have
already been identified based on remote
sensing studies, to generate early drill
targets. This work will commence in Q4
at the start of the cool winter months
Systematic fieldwork continued through
2022. BLEG drainage sampling
programmes were completed across both
the Nugrus and Um Rus Blocks, while
close spaced soil sampling and prospects
geological mapping within the Nugrus block
has resulted in the identification of four drill
targets, which the Company is aiming to
drill test in early H2 2023.
average head assay grade of only 0.6 g/t
Au. With the oxide and transitional samples
both averaging above 90% for assay head
grades of 0.8 and 1.0 g/t Au respectively.
These encouraging initial results indicate
the opportunity to remove the pyrite
flotation, ultrafine grind circuit and
subsequent flotation concentrate leaching
circuits. This would have significant positive
implications for both the capital and
operating costs as the process flowsheet
would become a more conventional whole
of ore leach circuit configuration.
Centamin has performed comparative
testing of flotation and fine grinding
configurations versus whole of ore leaching
to confirm the potential to remove the PEA
flotation circuit flowsheet design.
Given the material impact this could have
on the overall economics of the project the
decision was taken to postpone completion
of the PFS to H1 2023, to allow for the
processing flowsheet comparison work to
be completed.
PFS progress (final stages)
Environmental & social
• PFS-level environmental and social
baseline studies are substantially
complete, and the environmental and
social scoping report is well advanced
including draft terms of reference for
an environmental and social impact
assessment (“ESIA”)
• Work to date has confirmed broad
stakeholder support for the Doropo
Project, potential development of the
project would need to be done with due
sensitivity to existing socio-economic and
bio-physical values, to date no major
obstacles to permitting and approval
have been identified
Water
• Hydrology and hydrogeology is well
advanced
• Kinetic Humidity Cell Testing (“HCT”)
identifying no significant issues
• Site water balance modelling ongoing
Infrastructure
• Infrastructure geotechnical analysis and
reporting complete, with preferred site
layout
• TSF option analysis complete
Mining
• The mine design and schedule
optimisation are underway using the new
resource model
• Mining contractor tender evaluation is
well advanced
RESOURCE GROWTH WITH
FURTHER UPSIDE
•
2.4Moz increase in Indicated Resources
for a total of 2.52Moz at a grade of 1.52
grams per tonne of gold (“g/t Au”),
constrained within US$2,000/oz pit shells
•
22% increase in Indicated Resource
grade,
versus 2021 preliminary economic
assessment (“PEA”) average grade of
1.25g/t Au
As part of the PFS resource and
engineering drilling programmes some
123,000 metres of reverse circulation
(“RC“) and core drilling was completed,
resulting in 2.4 million ounces converting
from Inferred to Indicated Resources
constrained using optimised pit shells.
Resource growth potential has also been
identified indicating the potential to
laterally extend several of the Main Cluster
deposits, and at the Kilosegui deposit,
which is located 30km southwest of the
Main Cluster, the current 7km long Mineral
Resource area is open along strike in both
directions and down dip.
A detailed soil geochemistry sampling
programme is being conducted across the
Doropo Main Cluster project footprint and
westwards to cover the Vako Shear and
Samboyoro prospects. The work completed
to date has identified potential areas for
Mineral Resource expansion. These targets
all require drilling and will therefore not
make the cut-off for inclusion in the PFS.
As a result, three main areas with multiple targets have been identified. At the end of
2022, a 20,000 metre RC drilling programme was commenced to drill test these targets:
•
Main Cluster:
ten potential extensional resource targets and five new targets
•
Vako Shear Zone
(approx. 14km west of the Main Cluster): seven exploration targets
•
Kilosegui deposit:
four potential extensional resource targets
Doropo Project Mineral Resource table
October 2022
Tonnage (Mt)
Grade (g/t)
Gold Content (Moz)
Indicated
51.51
1.52
2.52
M+I
51.51
1.52
2.52
Inferred
13.67
1.14
0.5
Please refer to page 204 for the Consolidated Mineral Resource statements and notes.
Accordingly, the targets offer potential
upside to the Doropo Project Mineral
Resource base on which the PFS will be
based.
Extensional and regional exploration
targets identified
In addition to the PFS workstreams, a
targeted exploration programme has been
ongoing over the last 18 months, which has
focused on surface mapping, geochemistry,
pXRF multi-element analysis and reviews
of the artisanal mining sites. Furthermore,
historic data has been reinterpreted and
reanalysed. This has included the auger,
RC, air-core and core drilling data, airborne
geophysical data and inductively coupled
plasma (“ICP”) multi-element data.
ABC PROJECT
The ABC Project is located in western Côte
d’Ivoire. The Company have total 1,149km
2
landholding. In accordance with our
disciplined approach to investment, there
has been no drilling at the ABC Project
since 2020. The focus has been on wide-
scale and more cost-effective exploration
techniques.
In 2022, all three permits for Farako
Nafana, Kona and Windou were:
• Soil sampled across the entire surface
areas of the licenses, using various
sample grid spacings
• The Lolosso structure, which hosts
the Kona Central and Kona South
Mineral Resources has been traced soil
anomalies over a strike length of >50km
• Trenching in 2022 along the Lolosso
structure has indicated further potential
to the north and south of the Kona
mineral resource areas over a strike
length of >5km
BURKINA FASO
BATIE WEST PROJECT DISPOSAL
In Q4 2022, Centamin fully completed the
required procedure under Article 110 of the
2015 Mining Code for the relinquishment
of the Konkera Batie West licence. All
Centamin employees and representatives
were withdrawn from the Batie West site
and the Company has handed the licence
area back to the government.
42
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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POSITIONING FOR
STRENGTH THROUGHOUT
THE CYCLE
MARKET REVIEW
MARKET DRIVERS
GOLD
FOREIGN EXCHANGE
OIL
Impact
Impact
Impact
The London Bullion Market Association
(“LBMA”) gold price closed 2022 at
US$1816/oz, up less than 1% having
started the year at US$1800/oz. Average
gold price was US$1802/oz, which was
broadly flat with US$1799/oz in 2021.
Despite this relative stability on an annual
basis there was significant volatility in the
gold price trading throughout the year, with
a spread of US$428/oz between the low of
US$1,628/oz and the high of US$2,056/oz.
Gold performance can largely be attributed
to two key factors: 1) Russia’s invasion
of Ukraine in Q1 2022, creating a shift
to safe-haven assets; and 2) global
macroeconomic backdrop, inflation
and the behaviour of the US Federal
Reserve and major global central banks.
Geopolitical uncertainty in early 2022 due
to the Russian invasion of Ukraine gave
strong support to gold, with prices peaking
during March. Moreover, the invasion
added to the supply side constraints with
sudden pressure put on input costs such
as energy and consumables, as well as
sanctions affecting bullion and doré trade.
Ongoing inflation carrying over from 2021
was exacerbated by the invasion, with
gold’s traditional role as a strategic inflation
hedge offering support to prices.
Prices slowly pulled back from the initial
peak as global markets materialised the
impact of the invasion alongside concerns
over inflation driving rising interest rates
and a strengthening US dollar. This
continued to put downward pressure on
gold prices, with reduced investor demand
and Exchange Traded Funds (“ETF”)
outflows. Towards the end of the year,
gold prices reversed the downward trend
having reached a yearly low in November.
This was supported by a more optimistic
view on interest rates by the US federal
reserve, alongside the reopening of China’s
economy from its zero COVID policy driving
stronger demand.
The US dollar (“USD”) had another strong
year against most major currencies, after
steadily rising over 2021 it continued to
rally in 2022. The US Dollar Index (“DXY”)
was up by around 20% at its peak in
September 2022, this was driven by the
US Federal Reserve deciding to quickly
and consistently increase interest rates,
volatility in global markets and geopolitical
uncertainty increasing demand for USD as
a safe haven asset. The Euro to the USD
rate reached parity in September largely
due to the Eurozone’s exposure to the
war in Ukraine through the demand for
energy from Russia. Towards the end of
the year, the DXY trended downwards with
expectations for softening inflation driving
a slower rate of interest rate rises and
ultimately lower forecasts for peak interest
rates from the US Federal Reserve. This,
coupled with fears of a recession, meant the
USD was subsequently repositioned, more
than halving its gains made, closing the year
up by 8%.
The Egyptian pound (“EGP”) to the USD
rate started 2022 at 15.7 rising to and
close at 24.7, the Central Bank of Egypt
(“CBE”) depreciated the value of EGP twice
and raised interest rates by 8% during
2022. Much of this was in response to the
immediate impact of the war in Ukraine and
rising inflation.
Similarly to gold, major macroeconomic and
geopolitical events influenced the oil price
throughout 2022. The WTI price gained
5% finishing 2022 at US$80/bbl. However,
on an annual average basis the WTI price
rose by 39% averaging US$94/bbl in 2022
versus an average price of US$68/bbl in
2021. Despite the 5% gain over the year,
there was a wide spread of US$53/bbl
between the low of US$71/bbl and high of
US$124/bbl.
In March 2022, the war in Ukraine
combined with reduced global inventories
led to the highest nominal oil price since
2008, with the significant disruption caused
to crude oil trade flows. Lower inventories
were the result of drawdowns from storage
to sustain demand as economic activity
increased, following the pandemic. Prices
then stabilised in the H2 2022 and began
a gradual decline into year end. Rising
interest rates and the rising risks of
recessions weighed on oil prices demand
outlooks and the strengthening US dollar
made oil, denominated in US dollars, more
expensive in other currencies. Whilst COVID
policies eased in China, there was still a
reduction in demand because of measures
imposed earlier in the year.
How we are responding
How we are responding
How we are responding
Our culture on continuous improvement
means that we are always looking for ways
to reduce our cost base and maximise our
operating margins throughout the gold
cycle. In 2020, we set a US$150 million
stretch target of cost-savings by the end of
2023 and as at 31 December 2022 we had
delivered US$116 million of savings with
an active pipeline of initiatives underway
and further opportunities to assess.
Centamin does not have any gold hedging
in place.
REALISED GOLD PRICE
US$1,794
per ounce sold
Centamin reports in USD and therefore has
benefited from the USD strength. In 2022,
58% of the Group cost base was in USD,
34% in EGP and a remaining 8% across
Australian dollars, euros, British pounds,
Swiss francs, etc.
Reducing our reliance on fossil fuels,
namely diesel oil, is the core of our
decarbonisation strategy and ongoing
cost-savings programme. In 2022, we
commissioned the Sukari 36MW
DC
solar
plant, estimated to displace in excess of 22
million litres of diesel oil per annum and
thereby reducing our exposure to fluctuating
oil prices by 12%.
Please refer to our Decarbonisation
Roadmap on page 8 for more information
on the current initiatives underway to fully
displace the use of diesel oil for power
generation at Sukari.
REALISED OIL PRICE
US$0.89
per litre
44
45
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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INVESTING IN THE FUTURE
OF OUR STAKEHOLDERS
FINANCIAL REVIEW
–
a 24% increase in the combined open
pit and underground material mined,
some of which has been capitalised to
mining properties as a waste stripping
asset
–
higher fuel, oil and lubricants costs
to the value of US$72 million due
to increases in the fuel cost per litre
coupled with increased production
–
US$53 million additional spend
on consumables due to increases
in reagent prices and increased
production in the year
Profit before tax increased by 11% to
US$171 million, due to the factors below,
with basic earnings per share decreasing by
29% to 6.29 US cents.
• an 8% increase in revenue, in line with
increased gold sales as planned
• a 16% increase in other income; offset by
–
a 1% increase in other operating
costs, mainly due to a 10% increase in
royalties
–
a 114% increase in greenfield
exploration and evaluation expenditure,
and
–
a 12% increase in cost of sales
As expected, and in line with our three
year reinvestment plans, Centamin’s
cash flows and earnings were positively
impacted in 2022 by higher gold
production and sales, offset by higher
costs and increased capital expenditure.
Operational cash flow decreased by 6% to
US$292 million. Cash flows from investing
activities were impacted mainly by gross
capital expenditure of US$276 million,
predominantly invested in sustaining the
long-term production from Sukari. Adjusted
Group free cash flow declined to negative
US$18 million, after profit share distribution
of US$35 million to our Egyptian partner,
EMRA, and US$27 million advancing our
organic growth pipeline at our exploration
projects Doropo, EDX and ABC.
Centamin is a robust business,
committed to responsible
mining. In 2020 we set out
bold capital reinvestment
plans required to sustain our
business and drive higher
production and improve
margins for the long term, and
for the last two years we have
delivered on those plans.
Despite persisting global supply-side issues
and global inflation, our focus is on what
we can control. We do this with rigorous
planning and subsequent disciplined
compliance to plan, a thriving culture of
continuous improvement, and active risk
and opportunity assessment to ensure we
don’t stop at the minimum but are always
looking to improve.
FINANCIAL PERFORMANCE
In 2022, Centamin delivered a resilient
financial performance that was in line with
our expectations and guidance for the year.
Notwithstanding, and as discussed in our
Chair’s Foreword on page 12 and Market
Review on page 44, the Group’s results
are significantly affected by movements
in the gold price, input costs, particularly
in consumables and fuel, and to a lesser
degree foreign exchange rates.
Revenues increased year-on-year by 8%
to US$788 million, from annual gold sales
of 438,638 ounces, up 8%, at an average
realised price of US$1,794 per ounce,
with no significant movement year-on-year.
A total of 13,485 ounces of unsold gold
bullion was held onsite at year end, due to
timing of gold shipments across the year
end.
As a Group, Adjusted EBITDA was
US$319 million, at a 40% EBITDA margin,
principally driven by;
• a 6% increase in gold production, as
scheduled, at similar average realised
gold prices as compared to last year;
offset by
STRINGENT COST MANAGEMENT
Our judicious approach to forecasting
and stringent cost management meant
we were able to counter some of the
global inflationary cost pressures last year
and delivered guidance as stated at the
beginning of 2022. Good progress was
made and we are confident we will make
our US$150 million target of cost savings
by the end of 2023. As at 31 December
2022 we had extracted US$116 million
of sustainable cost savings and remain
motivated to find further opportunities.
Cash costs of production were US$913 per
ounce produced, up 5%, reflecting a 24%
increase in total open pit mined tonnes,
and a 2% increase in tonnes processed,
total underground mined tonnes remained
flat year on year and a 6% increase in gold
ounces produced. AISC was US$1,399
per ounce sold, up 13%, mainly due to a
11% increase in mine production costs,
9% increase in sustaining corporate costs
and a 55% increase in sustaining capital
costs. This was partially offset by an 8%
increase in gold ounces sold (which was as
scheduled and in line with guidance).
CAPITALISATION OF OPEN PIT
WASTE-STRIPPING
The largest investment in 2022 was on
the accelerated waste-stripping (deferred
waste-stripping) which added US$141
million to our balance sheet, US$89 million
was included in non-sustaining capital
expenditure and related specifically to the
work done by the waste-mining contractor,
with the balance of US$52 million allocated
to sustaining capital expenditure, which
was waste material mined by the Centamin
fleet above the life of mine strip ratio.
Some deferred waste-stripping has already
been amortised in the year based on ore
extracted from the areas mined.
As more fully described in note 2.9 to the
financial statements and required by the
Group’s financial reporting Standards, from
2021, capitalised deferred stripping costs are
included in ‘Mine Development Properties’
and amortised using the unit of production
method based on total ounces produced
for the ‘component’ of the orebody, which is
defined as the respective ‘stage’ of the open
pit mine plan. Capitalisation occurs when the
strip ratio exceeds the life of mine strip ratio
for that stage. Only the costs related to the
excess stripping are capitalised. In line with
the accelerated stripping programme (2022-
2024) we expect to be above the life of mine
strip ratio, resulting in a larger quantum to be
capitalised to the balance sheet.
STRONG BALANCE SHEET
Centamin closed 2022 financial year with
cash and liquid assets of US$157 million.
As announced on 22 December 2022, we
secured the first piece of corporate debt
and on 13 March 2023, all conditions
precedent were met regarding the US$150
million sustainably linked revolving credit
facility (“RCF”), significantly increasing
the Company’s financial flexibility to fund
growth projects across the portfolio. Initially,
the focus will be Sukari. Under the terms of
our Concession Agreement growth capital
invested is recovered over three years,
making these investments ideally suited for
the structure of the RCF.
APPROACH TO CAPITAL ALLOCATION
Capital allocation continues to be
disciplined and closely qualified against
value creation. The Company continues
to exercise a balanced approach to
responsibly maximising operating cash
flow generation, reinvesting for future
growth and prioritising sustainable
shareholder returns. The Company’s
liquidity and strength of the balance sheet
is fundamental to the longevity of the
business and is seriously considered
when assessing capital allocation.
Centamin has an active growth pipeline
through results-driven exploration and
continually assesses inorganic growth
opportunities. Our organic projects are
self-funded but before capital is allocated
they are routinely ranked based on results
against our development criteria and
prospective returns.
In 2022, a key focus was on improving
operational efficiencies to achieve
consistent operational performance with
US$165 million spent on sustaining capital
expenditure and US$119 million on non-
sustaining, or ‘growth’ capital expenditure.
Growth projects include the construction
of the hybrid solar plant, reducing the
reliance on fossil fuels and improving
operating costs, and ongoing construction
of the underground paste-fill plant.
Our strong balance sheet,
underpinned by a resilient
business with increased
capacity for growth, gives us
the flexibility and strength to
deliver stakeholder returns.
ROSS JERRARD
CHIEF FINANCIAL OFFICER
AND DIRECTOR
TARGET
US$
150
M
by the end of 2023
COST-SAVINGS PROGRAMME
TODAY
US$
116
M
is savings realised
46
47
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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|
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|
FINANCIAL REVIEW
CONTINUED
PRIMARY STATEMENTS HIGHLIGHTS
Year ended
31 December 2022
US$’000
Year ended
31 December 2021
US$’000
Revenue
788,424
733,306
Revenue from gold and silver sales for the year increased by 8% year-on-year to US$788 million (2021: US$733 million) with the year-
on-year average realised gold price remaining flat at US$1,794 per ounce sold (2021: US$1,797 per ounce sold) complimented by an
8% increase in gold ounces sold to 438,638 ounces (2021: 407,252 ounces).
Year ended
31 December 2022
US$’000
Year ended
31 December 2021
US$’000
Cost of sales
(544,075)
(487,376)
Cost of sales represents the cost of mining, processing, refining, transport, site administration, depreciation, amortisation and movement
in production inventories. Cost of sales is up 12% year-on-year to US$544 million, mainly as a result of:
• 11% increase (US$40 million) in total mine production costs from US$368 million to US$409 million (+ve), primarily due to the
following drivers:
–
a 30% increase in processing costs (US$47 million) (+ve). The increase was driven by price increases on fuel. Diesel fuel is mainly
consumed at Sukari for the process plants power generation; offset by
–
a 3% decrease in open pit mining costs (US$4 million) (-ve); and
–
a 6% decrease in administration costs (US$3 million) (-ve)
–
There was no significant change in the underground mining costs.
• 5% increase in depreciation and amortisation charges year-on-year from US$139 million to US$146 million (+ve). This increase was
mainly due to:
–
a US$284 million in net additions to property, plant and equipment (excl. capital work in progress) which increased the associated
depreciation and amortisation charges; in addition to higher gold production in the year
Year ended
31 December 2022
US$’000
Year ended
31 December 2021
US$’000
Dividend paid – non-controlling interest in SGM
(35,492)
(75,200)
The profit share payments during the year are reconciled against SGM’s audited financial statements. Any variation between payments
made during the year (which are based on the Company’s estimates) and the audited financial statements, may result in a balance due
and payable to EMRA or advances to be offset against future distributions. SGM’s 30 June 2022 financial statements have been audited
and signed off.
Refer to note 1.3.1.2 in the notes for details of the treatment and disclosure of the EMRA profit share.
CAPITAL EXPENDITURE
The following table provides a breakdown of the total capital expenditure of the Group:
Year ended
31 December 2022
US$’000
Year ended
31 December 2021
US$’000
Underground exploration
8,636
13,741
Underground mine development
32,107
34,900
Other sustaining capital expenditure
124,162
57,513
Total sustaining capital expenditure
164,905
106,154
Non-sustaining exploration expenditure
3,539
2,202
Other non-sustaining capital expenditure
(1)
115,099
132,516
Total gross capital expenditure
283,543
240,872
Less:
Sustaining element of waste stripping capitalised
(2)
(51,527)
(7,838)
Capitalised Right of Use Assets
(7,746)
–
Adjusted capital expenditure (after reclassification)
224,270
233,034
(1)
Non-sustaining capital expenditure included further spend on the solar plant, underground paste-fill plant and the Capital Waste Stripping. Non-sustaining costs are
primarily those costs incurred at ‘new operations’ and costs related to ‘major projects at existing operations’ that will materially benefit the operation.
(2) Reclassified from operating expenditure.
EXPLORATION EXPENDITURE
The following table provides a breakdown of the total exploration expenditure of the Group:
Year ended
31 December 2022
US$’000
Year ended
31 December 2021
US$’000
Greenfield exploration
Burkina Faso
2,928
2,380
Côte d’Ivoire
25,120
11,499
Egypt – Eastern Desert exploration
1,675
–
Total greenfield exploration expenditure
29,723
13,879
Brownfield exploration
Sukari Tenement
12,175
15,943
Total brownfield exploration expenditure
12,175
15,943
Total exploration expenditure
41,898
29,822
Exploration and evaluation expenditure comprises expenditure incurred for exploration activities primarily in Côte d’Ivoire and in the new
Egypt greenfield permit areas. Greenfield exploration and evaluation costs (excluding Burkina Faso) increased by US$15 million or 133%
as more exploration and evaluation work specifically drilling and assaying at the two Côte d’Ivoire sites was done in 2022 as compared to
2021 as well as the commencement of exploration work in the new Egypt permit areas. The brownfield capitalised exploration costs on
the Sukari concession area decreased by US$4 million or 24% year on year.
Impressive progress was made on project
delivery as we achieved several further
important milestones, including initiating
business improvements such as completion
of the preparatory work on centralising our
accounting and internal control systems
across the Group in 2022, which will enable
faster and more efficient access to our
numbers, ahead of planned implementation
in 2023.
2022 DIVIDEND
Stakeholder, and specifically shareholder
returns, are central to our Company
strategy. Centamin was one of the first
gold producers to pay dividends under a
structured policy. We have built a nine-
year track record of returning cash to
shareholders, based on our policy linked
to free cash flow generation before growth
investment. Our dividend policy makes
firm commitments on capital allocation,
meaning shareholder interests are always at
the centre of what we do.
Consistent with the Company’s commitment
to returning cash to shareholders, and
recognising 2022 as the peak reset year,
the Board proposes a 2022 final dividend,
for the year ended 31 December 2022
of 2.5 US cents per share (circa.US$29
million), bringing the proposed total
dividend for 2022 to 5 US cents per share
(circa.US$58 million):
• Interim 2022 dividend paid: 2.5 US cents
per share
• Final 2022 dividend proposed: 2.5 US
cents per share
The final 2022 dividend is subject to
shareholder approval at the 2023 AGM on
23 May 2023 and following approval would
be paid on 23 June 2023.
OUTLOOK
We are fully focused on managing the
bottom line of the business so that we can
maximise the value at Sukari and deliver
growth and diversification combined with
sustainable stakeholder returns. We have
budgeted for similar costs in 2023 as
2022, accounting for rising input costs,
driven by higher consumer price inflation
within our operating countries, supply
chain pressures on fuel, consumables and
shipping costs and tighter labour markets.
We have prudently decided not to budget
any offsetting impacts of our ongoing cost-
savings and improving operating efficiencies
and productivity gains until we have a
better sense of the longer-term inflationary
environment.
The previous two years have been largely
focused on business transformation and
building our geological understanding.
Today, we are excited by the additional
value that is organically within our grasp
and we are pursuing to capture of this
upside to achieve our goals across growth
and returns.
ROSS JERRARD
CHIEF FINANCIAL OFFICER
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ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CONTINUED
The spend in Burkina Faso is mainly on key services and other regulatory obligations required as the process to formally exit the project is
currently underway.
SUBSEQUENT EVENTS
As referred to in note 5.2, subsequent to the year end, the Board proposed a final dividend for 2022 of 2.5 US cents per share. Subject to
shareholder approval at the Annual General Meeting on 23 May 2023, the final dividend will be paid on 23 June 2023 to shareholders on
record date of 2 June 2023.
Also refer to note 5.1 in the financial statements for more information on the Law 32 judgement that was handed down in January 2023.
The Company’s compliance requirements and obligations in respect of the US$150 million revolving credit facility had not yet commenced as
at 31 December 2022 as there were certain conditions precedent that were still to be satisfied to make the agreement effective. The conditions
precedent were met on 13 March 2023 subsequent to year end and before the annual financial statements were signed and the facility is
available for draw down from this date the conditions precedent were met.
Other than as noted above, there were no other significant events occurring after the reporting date requiring disclosure in the financial
statements.
NON-GAAP FINANCIAL MEASURES
1)
EBITDA and adjusted EBITDA
EBITDA is a non-GAAP financial measure, which excludes the following from profit before tax:
• Finance costs
• Finance income
• Depreciation and amortisation
Management considers EBITDA a valuable indicator of the Group’s ability to generate liquidity by producing operating cash flow to fund
working capital needs and capital expenditures. EBITDA is also frequently used by investors and analysts for valuation purposes whereby
EBITDA is multiplied by a factor or ‘EBITDA multiple’ that is based on an observed or inferred relationship between EBITDA and market
values to determine a company’s approximate total enterprise value. EBITDA is intended to provide additional information to investors
and analysts and does not have any standardised definition under IFRS and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
EBITDA excludes the impact of cash cost of production and income of financing activities and taxes, and therefore is not necessarily
indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may also calculate EBITDA
differently. The following table provides a reconciliation of EBITDA to profit for the year before tax.
Adjusted EBITDA removes the effect of transactions that are not core to the Group’s main operations, like adjustments made to normalise
earnings, for example profit on financial assets at fair value through profit or loss, impairments of property, plant and equipment, non-
current mining stockpiles and exploration and evaluation assets.
RECONCILIATION OF PROFIT BEFORE TAX TO EBITDA AND ADJUSTED EBITDA:
31 December 2022
US$’000
31 December 2021
US$’000
Profit for the year before tax
171,001
153,647
Finance income
(1,214)
(196)
Finance costs
(1)
2,459
673
Depreciation and amortisation
146,769
139,455
EBITDA
319,015
293,579
Add back/less:
(2)
Impairments of non-current assets
–
35,208
Adjusted EBITDA
319,015
328,787
(1)
In the 2021 Consolidated Statement of Comprehensive Income, Finance costs were included and disclosed in ‘Other operating costs’, in the current year they are now
separately disclosed in their own line hence the change on the Finance Costs number in 2021.
(2)
Adjustments made to normalise earnings for example profit on financial assets at fair value through profit or loss, impairments of property, plant and equipment, non-
current mining stockpiles and exploration and evaluation assets.
2)
Cash cost of production per ounce
produced and sold and all-in sustaining
costs (“AISC”) per ounce sold calculation
Cash cost of production and AISC are
non-GAAP financial measures. Cash cost of
production per ounce is a measure of the
average cost of producing an ounce of gold,
calculated by dividing the operating costs
in a period by the total gold production over
the same period. Operating costs represent
total operating costs less sustaining
administrative expenses, royalties,
depreciation and amortisation. Management
uses this measure internally to better assess
performance trends for the Company as
a whole. Management considers that, in
addition to conventional measures prepared
in accordance with GAAP, certain investors
use such non-GAAP information to evaluate
the Company’s performance and ability to
generate cash flow. Management considers
that these measures provide an alternative
reflection of the Group’s performance for
the current year and are an alternative
maintaining gold mines. This metric
also includes the cost associated with
corporate office structures that support
these operations, the community and
rehabilitation costs attendant with
responsible mining and any exploration and
evaluation costs associated with sustaining
current operations. AISC US$/oz is arrived
at by dividing the dollar value of the sum
of these cost metrics, by the ounces of
gold sold (as compared to using ounces
produced which is used in the cash cost of
production calculation).
On 14 November 2018 the World Gold
Council published an updated Guidance
Note on ‘all-in sustaining costs’ and ‘all-in
costs’ metrics. Per their press release it was
expected that companies have chosen to
use the updated guidance from 1 January
2019 or on commencement of their
financial year if later. The Group has applied
the updated guidance from 1 January
2019 with no impact on our results or
comparatives.
indication of its expected performance in
future periods. Cash cost of production is
intended to provide additional information,
does not have any standardised meaning
prescribed by GAAP and should not be
considered in isolation or as a substitute
for measures of performance prepared in
accordance with GAAP. This measure is not
necessarily indicative of operating profit or
cash flow from operations as determined
under GAAP. Other companies may
calculate these measures differently.
During June 2013 the World Gold Council
(“WGC”), an industry body, published a
Guidance Note on the ‘all in sustaining
costs’ metric, which gold mining companies
can use to supplement their overall non-
GAAP disclosure. AISC is an extension
of the existing ‘cash cost’ metric and
incorporates all costs related to sustaining
production and in particular recognising the
sustaining capital expenditure associated
with developing and maintaining gold
mines. In addition, this metric includes
the cost associated with developing and
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OVERVIEW
STRATEGIC REPORT
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ADDITIONAL INFORMATION
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CONTINUED
RECONCILIATION OF CASH COST OF PRODUCTION PER OUNCE PRODUCED:
31 December 2022
31 December 2021
Mine production costs (note 2.3)
US$’000
408,543
368,327
Less: Refinery and transport
US$’000
(2,324)
(2,264)
Movement of inventory
(1)
US$’000
(3,673)
(6,195)
Cash cost of production – gold produced
US$’000
402,546
359,868
Gold produced – total (oz.)
oz
440,974
415,370
Cash cost of production per ounce produced
US$/oz
913
866
(1)
The movement in inventory on ounces produced is only the net movement in mining stockpiles and ore in circuit while the movement in ounces sold is the net
movement in mining stockpiles, ore in circuit and gold in safe inventory.
A reconciliation has been included below to show the cash cost of production metric should gold sold ounces be used as a denominator.
RECONCILIATION OF CASH COST OF PRODUCTION PER OUNCE SOLD:
31 December 2022
31 December 2021
Mine production costs (note 2.3)
US$’000
408,543
368,327
Royalties
US$’000
23,842
21,672
Movement of inventory
(1)
US$’000
(6,789)
(15,081)
Cash cost of production – gold sold
US$’000
425,596
374,918
Gold sold – total (oz.)
oz
438,638
407,252
Cash cost of production per ounce sold
US$/oz
970
921
31 December 2022
(1)
31 December 2021
(1)
Movement in inventory
Movement in inventory – cash (above)
US$’000
(6,789)
(15,081)
Effect of depreciation and amortisation – non-cash
US$’000
17,448
35,049
Movement in inventory – cash & non-cash (note 2.3)
US$’000
10,659
19,968
(1)
The movement in inventory on ounces produced is only net the movement in mining stockpiles and ore in circuit while the movement in ounces sold is the net
movement in mining stockpiles, ore in circuit and gold in safe inventory.
RECONCILIATION OF AISC PER OUNCE SOLD:
31 December 2022
31 December 2021
Mine production costs (note 2.3)
US$’000
408,543
368,327
Movement in inventory
US$’000
(6,789)
(15,081)
Royalties
US$’000
23,842
21,672
Sustaining corporate administration costs
US$’000
24,282
22,379
Rehabilitation costs
US$’000
588
276
Sustaining underground development and exploration
US$’000
40,743
48,641
Other sustaining capital expenditure
US$’000
124,162
57,513
By-product credit
US$’000
(1,503)
(1,361)
All-in sustaining costs
(1)
US$’000
613,868
502,366
Gold sold – total (oz.)
oz
438,638
407,252
AISC per ounce sold
US$/oz
1,399
1,234
(1) Includes refinery and transport.
3)
Cash and cash equivalents, bullion on hand and gold and silver sales debtor
Cash and cash equivalents, bullion on hand, gold and silver sales debtor is a non-GAAP financial measure of the available cash and
liquid assets at a point in time. Management uses this measure internally to better assess performance trends for the Company as a
whole. Management considers that, in addition to conventional measures prepared in accordance with GAAP, certain investors use such
non-GAAP information to evaluate the Company’s performance and ability to generate cash flow and the measure is intended to provide
additional information.
This non-GAAP measure does not have any standardised meaning prescribed by GAAP and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with GAAP. This measure is not necessarily indicative of cash and cash
equivalents as determined under GAAP and other companies may calculate it differently.
RECONCILIATION TO CASH AND CASH EQUIVALENTS, BULLION ON HAND, GOLD AND SILVER SALES DEBTOR:
31 December 2022
US$’000
31 December 2021
US$’000
Cash and cash equivalents (note 2.16(a))
102,373
207,821
Bullion on hand (valued at the year-end spot price)
24,440
20,304
Gold and silver sales debtor (note 2.7)
29,832
29,147
Cash and cash equivalents, bullion on hand, gold and silver sales debtor
156,645
257,272
The majority of funds have been invested in international rolling short-term interest money market deposits.
4)
Free cash flow and adjusted free cash flow
Free cash flow is a non-GAAP financial measure. Free cash flow is a measure of the available cash after distributions to the Non-
Controlling Interest (“NCI”) in SGM, being EMRA, that the Group has at its disposal to use for capital reinvestment and to distribute
to shareholders of the parent. Free cash flow is intended to provide additional information, does not have any standardised meaning
prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance
with GAAP. This measure is not necessarily indicative of operating profit or cash flow from operations as determined under GAAP and
other companies may calculate this measure differently.
31 December 2022
US$’000
31 December 2021
US$’000
Net cash generated from operating activities
291,936
309,878
Less:
Net cash used in investing activities
(274,583)
(240,676)
Dividend paid – non-controlling interest in SGM
(35,492)
(75,200)
Free cash flow
(18,139)
(5,998)
Add back:
Transactions completed through specific available cash resources
(1)
–
–
Adjusted free cash flow
(18,139)
(5,998)
(1)
Adjustments made to free cash flow, for example acquisitions and disposals of financial assets at fair value through profit or loss, which are completed through specific
allocated available cash reserves.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CLARITY ON RISK
AND OPPORTUNITIES
RISK REVIEW
In a world of increased
geopolitical and
macroeconomic uncertainty
we focused this year on
ensuring that we managed
the potential impacts of our
risks and maximised our
opportunities.
CRAIG MURRAY
HEAD OF RISK
MANAGING RISKS AND
OPPORTUNITIES THROUGH EXTREME
GLOBAL UNCERTAINTY
Centamin regularly monitors and evaluates
measures to mitigate risk and maximise
opportunity, including those associated with
its underlying operational and exploration
activity. Due to the nature of these inherent
risks, it is not possible to give absolute
assurance that mitigating actions will be
wholly effective.
2022 was a year of extreme
macroeconomic change exacerbated by
geopolitical pressures including the situation
in Ukraine and the ongoing impacts
caused by the COVID pandemic. Whilst as
a business we were able to successfully
manage the operational considerations of
the pandemic, we have felt the financial
pressures as every government, business
and individual has globally. Further
information on this is in the Market Review
and the Director statements.
Recognising this, we have lowered
‘Infectious Disease Management’ from
a principal risk to an emerging risk of
‘Infectious Disease’, whilst ensuring that
we capture the ongoing financial risks to
the business in the ‘Global Macroeconomic
Developments’, ‘Capital and Liquidity’ and
recognise the improved controls we have in
place following the pandemic as reflected in
‘Safety, Health & Wellbeing’.
The previous emerging ‘Financial’ risk
has been escalated to a principal risk
highlighted in ‘Global Macroeconomic
Developments’ and ‘Capital Allocation &
Liquidity’, which also includes the previous
emerging risk on ‘Capital Allocation’
alongside the ongoing impact of the external
pressures driving financial uncertainty, high
inflation and increasing supply costs initially
driven by COVID.
RISK AND OPPORTUNITIES AS WE
POSITION FOR GROWTH
Centamin recognises that nothing is
without risk. We believe a successful and
sustainable business model requires a
robust and proactive risk management
framework as its foundation. This is
supported by a strong culture of risk
awareness, encouraging openness and
integrity, alongside a clearly defined
appetite for risk. This enables the Company
to consider risks and opportunities for more
effective decision making, delivery on our
objectives and improve our performance as
a responsible mining company.
The Board has overall responsibility,
supported by the Audit and Risk
Committee, for establishing a framework
that allows for the review of existing and
emerging risks in the context of both
opportunities and potential threats that
inform the principal risks and uncertainties.
These inform the assessment of the future
prospects and long-term viability of the
Group, further details of the approach
are shown in the Viability Statement on
page 82. Risks and opportunities are also
considered when challenging the strategic
objectives of the Company that underpin
Our Strategy as shown on page 28.
Further information on our Risk Oversight
and Accountability are shown on our
website under Risk & Opportunity
Management in our About section which
also contains further information on our
Risk Appetite.
The previous emerging ‘Security’ risk has
also been captured in the ‘Geopolitical’
risk which highlights not just the political
uncertainty but also the social and security
elements of the countries in which we
operate. During 2020 and 2021 there was
significant review and refresh due to the
evolution of the Company. Through 2022
these themes have continued to be of focus
from operations through to management,
including the Board.
These themes have followed the overall
messaging from 2020 where we baselined
and established the potential, 2021 being
a year of transformation and understanding
to 2022 where we have focused on delivery.
Moving forward we will establish the steady
state supported by long-term planning
which includes how we think about our
risks and opportunities. This messaging
has been reflected in the refreshes to the
wording of some of the principal risks and
the changes in our emerging risks.
Through 2022 we have reinforced our
culture of continuous improvement which
has delivered several opportunities as
highlighted in Our Strategy on pages 06
and 28, such as the 36MW
DC
solar plant,
increased the underground life of mine
to ten years and commencing EDX field
exploration. Through 2023 and beyond
we will prioritise multiple opportunities
such as the Doropo PFS, Systematic EDX
field exploration, Grid Connection and
Renewable Extension at Sukari.
The current status of the principal risks
affecting Centamin and its operational
activities, together with the measures to
mitigate risk, are detailed in the Principal
Risks section. When considering risk, the
Group splits these under external, strategic
and operational risks on a sliding scale
depending on the level of influence over
which the Group may have on the factors
which can impact the risk.
The risk management framework and the
system of internal controls are designed
to operate effectively together and report
through to the Audit and Risk Committee on
a regular basis. Further detail of the work
of the Audit and Risk Committee is set out
in the Audit and Risk Committee Report on
page 113 of the Governance Report.
The principal risks identified by the
Board evidence the extent of potential
consequences inherent in operating a
large-scale mining operation and we have
included our view on the appetite to these
risks at a point in time at the end of 2022,
however it should be noted that these risks
are discussed regularly, and our appetite
could change based on a number of
factors. The Board regularly assesses the
measures to mitigate these risks.
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CENTAMIN
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OVERVIEW
STRATEGIC REPORT
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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RISK REVIEW
CONTINUED
MEASURING OUR RISK
The Board considers risks in terms of
potential severity based on the ‘likelihood’
of the risk occurring given the mitigating
factors in place, and relative ‘impact’
should an event materially impact on
the business to form a residual position.
The risks are then considered against
Centamin’s risk appetite to provide
‘themes’, which are those areas of
concern that are discussed and debated.
The Company considers the residual
position of all the principal risks to be
potentially material if they were to occur.
The other factor, against which the risks
were considered during 2022, is their
velocity. Risk velocity measures how fast
an exposure can impact the Company.
It is the time that passes between the
occurrence of an event and the point
at which the Company first feels its
effects and allows us to focus on the
existing and future mitigation efforts.
Velocity is considered from Very Slow,
which can occur over multiple years,
to Instantaneous, which could happen
immediately. Further information on
velocity is shown on our website.
Cyber security
The Company recognises the importance of risks associated with cyber security and
data governance but has assessed they do not represent a principal risk given the
current position of the Company’s operations. Increasing investment in this area
is, however, a priority for the Company to ensure we can maintain our resilience
alongside planned enhancements to our technology as part of an ongoing digital
transformation programme.
Infectious disease
Potential of a regional/global outbreak of a new disease bringing medical,
economic and social challenges. We recognise the potential impacts of a global
pandemic similar to COVID as a threat bringing potential risks to our people
and business. Learning from COVID and other infectious disease management
we developed a dynamic action plan to safeguard the health of our people and
minimise any business impact. This will continue to adapt and evolve to ensure we
are in the best place to manage and respond as required.
Climate change
Encompassing both physical and transitional elements, as this applies to our
growth and diversification prospects in Côte d’Ivoire and Egypt. Above and beyond
the scope of our existing operation, as presented in our Climate Change disclosures
on page 70, climate change has the potential to profoundly affect how we screen,
evaluate and allocate capital towards growth prospects.
Further details on transitional risk and mitigations are given under the principal
risk of ‘Decarbonisation’.
The diagram shows the key information on
the principal risks including the appetite of
the Company to the particular risk, whether
this is an external, strategic, or operational
risk, whether this is an elevated or refreshed
principal risk for 2022 and also the potential
velocity of the risk.
For the current reporting period we have
identified 16 principal risks and three
emerging risks. Further detail on the
principal risks which could affect Centamin
are shown below with a description of the
nature of the risk, risk trend and velocity,
link to the strategic pillars, mitigation
measures, ongoing strategy to manage the
risk and the Group risk appetite. We have
also given a summary of the emerging risks.
EMERGING RISKS
Emerging risks are defined as
circumstances or trends that could
significantly impact the Company’s financial
strength, competitive position or reputation
within the next three years or over a longer
term. Emerging risks may prove difficult
to quantify as they are often influenced
by external factors and difficult to predict.
Emerging risks are considered as part of the
Company’s strategic discussions through
all levels of the Group and a number of
these risks from the 2022 Annual Report
have been elevated to a principal risk,
highlighting the importance of this process.
We have included ‘Infectious Disease’ as
we recognise that there continues to be the
potential of a pandemic event or an even
more localised outbreak which could have
significant impacts on our business, so we
will continue to ensure that we apply the
lessons learned from COVID.
We also recognise ‘Climate Change’ as
an emerging risk, whilst not currently a
principal risk, as this will potentially have
external and longer-term impacts which
need to be considered.
The Audit and Risk Committee and Board
regularly review the principal risks as well as
the wider operational, corporate and general
business risks including a discussion on
emerging risks. We have outlined a non-
exhaustive list of emerging risks assessed
during the year, these are risks which are
inherent to the nature of our business and
where we operate. We monitor these as part
of the risk management framework.
External
Risk Trend
1
Geopolitical
2
Legal and Regulatory Compliance
3
Litigation
4
Global Macroeconomic Developments
5
Gold Price
Strategic
6
Capital Allocation and Liquidity
7
Diversification
8
Concession Governance and Management
9
Licence to Operate
10
People (Attract, Develop and Retain skilled people)
11
Stakeholder Environmental and Social Expectations
12
Decarbonisation
Operational
13
Safety, Health and Wellbeing
14
Exploration and Project Development
15
Maximising our Geological Potential
16
Operational Performance and Planning
Risk Velocity
Very Slow
Slow
Moderate
Rapid
Instantaneous
14
13
12
11
3
2
4
8
9
15
1
5
6
10
16
7
Risk Trend
Consistent
Slightly Improved
Slightly Worse
New
Risk Appetite
Controlled
Balanced
Informed
Opportunistic
RISK RADAR
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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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RISK REVIEW
CONTINUED
EXTERNAL RISKS
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SLIGHTLY WORSE
CONSISTENT
SLIGHTLY IMPROVED
NEW
SUKARI VALUE
MAXIMISATION
GROWTH &
DIVERSIFICATION
W
C
I
N
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite
Risk trend and velocity
Links to strategy
GEOPOLITICAL
Future political, security and social changes in
the countries in which we operate may impact
on the Group.
The future investment framework, stability
and business conditions in our operating
locations could change with governments
adopting different laws, regulations and
policies that may impact on the ownership,
development and operation of our mineral
resources projects. For example, over the
last year the Company has adapted to the
changing regional security in our development
projects in Côte d’Ivoire. We are monitoring
these closely. Outside of our host countries we
are monitoring the ongoing conflict in Ukraine
including the potential wider impact of this
on the Company. This is discussed further in
the Chair’s Statement on page 12 and in the
Market Review on page 44.
Government policies have developed over the past years in
host countries to incentivise foreign direct investment and the
development of local mining industries. Centamin deploys a
proactive approach to government and stakeholder liaison and
actively monitors – on an ongoing basis – legal, fiscal, regulatory and
political developments in its host countries.
The terms of the Sukari Concession Agreement, (including the
applicable tax regime and rights of tenure), were issued and ratified
under special Law No. 222 of 1994 and can, therefore, only be
amended by the passing of a further law. We continue to closely
monitor the situation through our own security, local and national
government contacts, national security and external advisors.
To maintain a detailed and up to date
understanding of the investment
framework and operating conditions as
well as a constructive relationship with all
concerned stakeholders including host
governments and local partners, such as
EMRA.
The Company seeks to abide by the
Concession Agreement as well as local
laws/regulations in Egypt including around
the areas of exploration and furthermore
where our exploration activities are taking
place in Côte d’Ivoire.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
C
Velocity: Moderate
LEGAL AND
REGULATORY
COMPLIANCE
The Group’s structure includes mining
exploitation and exploration licences in Egypt
and Côte d’Ivoire held through companies in
Australia, Jersey and the United Kingdom.
As a result, the Group is subject to various
legal and regulatory requirements across all
jurisdictions, including cross jurisdictional
taxation, related party transactions, antibribery
and corruption.
Ongoing legal, fiscal and regulatory changes
may impact project permitting, tenure,
taxation, exchange rates, environmental
protection, labour relations, and the ability to
repatriate income and capital. These measures
may also impact the ability to import key
supplies, export gold production and repatriate
revenues.
Centamin deploys a proactive approach to government and
stakeholder liaison and actively monitors – on an ongoing basis –
legal, fiscal, regulatory and political developments in its host countries.
In Egypt we have the Sukari Concession Agreement which can
only be changed by means of another law, so we have the right to
export gold, repatriation of funds, existing tax exemption and further
considerations.
In addition, the Group engages with the relevant regulatory
authorities. In addition, on an ongoing basis, the Group seeks
appropriate advice to ensure compliance with all relevant regulation
and legislation. An example would be the global tax strategy in place
which ensures all taxes are paid at an operational level and further
tax requirements are met through the holding structure. Appropriate
monitoring procedures are in place and we ensure that we manage
legal and regulatory compliance.
The Company seeks to ensure that it
complies with all relevant regulation and
legislation including its environmental and
operational commitments set out in the
relevant permits/authorisations and local
laws/regulations.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
C
Velocity: Moderate
LITIGATION
Centamin’s ability to operate and conduct
its business may be adversely affected by
current and any future dispute resolution and/
or litigation proceedings. Centamin is party
to a single legal action in Egypt. The details
of this litigation, which relates to the Sukari
Concession Agreement, are given in note
5.1 of the financial statements in the 2022
ARA. This challenge to the Sukari Concession
Agreement could affect the Company’s ability
to operate the mine.
In order to mitigate this risk Centamin has (a) retained reputable
legal advisers and continues to actively pursue its legal rights with
respect to its existing case; and (b) maintains regular contact with
its Egyptian legal advisers who actively monitor developments in
both court and local media for signs of any legislative or similar
developments that relate to its ongoing litigation or which may
otherwise threaten its operations, finances or prospects.
The potential for serious impact can be further mitigated by:
• Centamin’s adherence to local laws and agreements; the Egyptian
government’s continued support on the constitutionality of Law No.
32 of 2014, which restricts the ability of third parties to challenge
contractual agreements between the Egyptian government and
investors such as Centamin; the investment protections and
dispute resolution provisions set out in the Sukari Concession
Agreement and the bilateral investment treaty between Australia
(PGM’s place of incorporation) and the Arab Republic of Egypt.
• On 14 of January 2023 there was a ruling by the Egyptian
Supreme Constitutional Court which held that Law No. 32 of
2014 was constitutional. The judgment gives Centamin the
right to request the Supreme Administrative Court to rule that
the 2011 challenge to the Concession Agreement is now legally
inadmissible. Further detail is given in note 5.1 and on our website
in the regulatory news section within the update issued on the
16 January 2023.
To minimise exposure to litigation and
reduce the impact of actions by complying
with all relevant laws and regulations
and to defend and/or bring any actions
necessary to protect the Company’s assets,
rights and reputation.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
I
Velocity: Slow
58
59
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
RISK REVIEW
CONTINUED
EXTERNAL RISKS
CONTINUED
STRATEGIC RISKS
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SLIGHTLY WORSE
CONSISTENT
SLIGHTLY IMPROVED
NEW
SUKARI VALUE
MAXIMISATION
GROWTH &
DIVERSIFICATION
W
C
I
N
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite
Risk trend and velocity
Links to strategy
GLOBAL MACRO-
ECONOMIC
DEVELOPMENTS
The COVID pandemic meant economies
across the world were negatively impacted by
lockdowns and disruptions to supply chains,
which have been further impacted by the
crisis in Ukraine and wider macroeconomic
developments globally. Through 2021 and in
to 2022, we saw increases in operating costs
and greater inflationary pressures, together
with a shortage of critical consumables and
equipment. We expect this to continue during
2023 as the new world normal is established.
This situation could create an adverse impact
on our operations, costs, sales and profits.
Further information is shown in the
Operational Review on page 36 and Market
Review on page 44.
We monitor price movements and market dynamics using primarily
third-party analysis and forecasts to support our financial projections
and cash management strategies. Prices will continue to influence
budget considerations in areas such as exploration and the timing
of certain capital expenditures. We focus on cost efficiencies and
capital discipline to deliver competitive all-in sustaining cost.
Deliver on our cost savings initiatives to counter inflation and
improve margins with the recent examples being the high
productivity truck trays alongside additional benefits from the
delivery of the solar plant which reduces our fuel consumption and
lowers the cost of buying fuel. Further options being considered
include grid connection, a renewable extension and electrifying our
mining fleet outlined in our 2030 Carbon Abatement Roadmap on
page 08.
We will continue to allow for financial
flexibility when budgeting and forecasting
using a measured approach to the
potential fluctuations in gold price,
inflationary pressures and the increasing
costs across our capital expenditure and
operational needs.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
N
Velocity: Moderate
GOLD PRICE
The extent of the Company’s financial
performance is due in part to the price of gold,
over which the Company has no influence.
Revenues from gold sales are in US dollars
and Centamin has exposure to costs in
other currencies including Egyptian pounds,
Australian dollars and sterling.
Centamin manages its exposure to gold price
by keeping operating costs as low as possible
and continues to consider other options where
these would be viewed as beneficial for our
commitment to stakeholder returns.
The Group is 100% exposed to the gold price; however, the cash
costs of the Sukari Gold Mine remain within our budget which is
conservatively based on the long-term gold price as modelled by
external advisors. This often means we can take advantage of any
changes in the gold price which have been positive over the course
of 2022 with a realised average price of US$1,794.
The Company does not currently hedge
against the price of gold.
We will continue to allow for financial
flexibility when budgeting and forecasting
using a measured approach to the
potential fluctuations in gold price. This
includes ensuring that we can manage
within the boundaries and margins that the
price of gold and the impacts to our cost
base allow.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
C
Velocity: Moderate
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite
Risk trend and velocity
Links to strategy
CAPITAL
ALLOCATION AND
LIQUIDITY
Centamin targets a capital structure to provide
sufficient liquidity and financial flexibility
to meet the Company’s current and future
financial commitments, while balancing that
with sustainable stakeholder returns.
The capital requirements to develop Sukari,
delivery of key projects, future gold prices
and operating costs are all factors which
need to be considered alongside the external
pressures, as highlighted in the Global
Macroeconomic Developments risk.
We monitor price movements and market dynamics using primarily
third-party analysis and forecasts in order to support our financial
projections and cash management strategies. Prices will continue
to influence budget considerations in areas such as exploration
and the timing of certain capital expenditures. We focus on cost
efficiencies and capital discipline to deliver competitive all-in
sustaining cost.
Deliver on our cost savings initiatives to counter inflation and
improve margins with the recent examples being the high
productivity truck trays alongside additional benefits from the
delivery of the solar plant which reduces our fuel consumption and
lowers the cost of buying fuel. Further options being considered
include Grid Connection, a Renewable Extension and Electrifying
our Mining Fleet outlined in Our 2030 Carbon Abatement Roadmap.
Further to this we have established increased levels of stores and
inventory which will be maintained in the short to medium term to
reduce uncertainty.
We have a robust investment approval process involving the
management and the Board as required. Additional optionality will
be generated through the RCF which is now in place.
We will continue to allow for financial
flexibility when budgeting and forecasting
using a measured approach to the
potential fluctuations in gold price,
inflationary pressures and the increasing
costs across our capital expenditure and
operational needs. This includes ensuring
that we can manage within the boundaries
and margins that the impacts to our cost
base allow.
Distribution of free cash flow to
stakeholders will continue to be managed
in a balanced and sustainable manner that
allows for both growth and returns.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
N
Velocity: Moderate
60
61
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
RISK REVIEW
CONTINUED
STRATEGIC RISKS
CONTINUED
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite
Risk trend and velocity
Links to strategy
DIVERSIFICATION
Sukari currently constitutes Centamin’s main
mineral resource and sole mineral reserve,
near-term production and revenue. We
recognise until further production growth
beyond the core Sukari asset is identified there
is the challenge of diversification.
The project at Sukari has two distinct ore sources (open pit and
underground), the processing plant has two separate flotation
circuits, two separate power stations and the commissioning of the
solar plant in Q4 2022.
Whilst one project, the nature of the design of the plant provides
adequate mitigation and reduces the relative likelihood of
dependence compared to a single layer plant design. The second
circuit of the process plant has been fully operational for over eight
years, which shows resilience. In addition, the plant is fed by both
the open pit and underground operation, providing higher and
lower-grade ore.
Operational activity and production is expected to continue at
above nameplate capacity. Further to this we have increased our
operational flexibility at Sukari including an updated underground
mining capacity.
Alongside the PFS on Doropo the wider resource base in Côte
d’Ivoire is growing at ABC, we are undertaking brownfield
exploration around the Sukari Concession and exploring highly
prospective ground in Egypt’s Eastern Desert.
Further information is given in the Exploration Review on page 40.
Outside the single project at Sukari, there
is continued focus on longer term growth
and expansion through our exploration and
potential acquisition targets both inside
and outside of Egypt.
The exploration projects across the
business provide a well-balanced project
pipeline, with potential to add incremental
shareholder value by increasing
production. Further information will be
provided through 2023 in updates on the
exploration activities and the release of the
pre-feasibility study for Doropo in H1.
Level: Informed
We aim to have an approach that
could deliver reasonable rewards,
economic or otherwise, by
managing risk in an informed way.
C
Velocity: Slow
CONCESSION
GOVERNANCE AND
MANAGEMENT
SGM is 50:50 jointly owned by PGM (the
Company’s wholly owned subsidiary) and
EMRA, with equal board representation from
both parties. The Board of SGM operates by
way of simple majority. Further to this with the
award of the EDX concession areas we need to
adhere with the agreed terms.
Should a dispute arise, or decision making
become deadlocked which cannot otherwise
be amicably resolved then time-consuming
and costly arbitration or other dispute
resolution proceedings may need to be
initiated.
It is of key importance for Centamin to maintain a healthy and
transparent working relationship with its 50% partner, EMRA,
through a strict adherence to the Sukari Concession Agreement.
With the onset of profit sharing in 2019, the proper application of
the cost recovery, net profit share payment provisions and SGM
protocols under the Concession Agreement, has become a priority.
These are key considerations as we work towards the renewal of the
terms of the existing Concession Agreement.
It is a key focus to maintain good working relations with EMRA,
other relevant ministries and wider government to ensure successful
operation of the Sukari Gold Mine. The Group has regular meetings
with officials from EMRA and invests time in liaising with the relevant
ministry and other governmental representatives. This investment
is shown by the wider commitment to Egypt through the Sukari
Concession Exploration and EDX concession investment.
A key objective of the Company is to
maintain its licence to operate in its host
countries. In Egypt, this is achieved
through active and ongoing co-operation,
regular meetings and correspondence with
EMRA, as well as making sure that the
terms and conditions of the Concession
Agreement and applicable laws are
fully complied with, including under the
terms of the EDX concessions. Ongoing
monitoring and review of this is key and is
an activity which we will continue to give
the required focus to.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
C
Velocity: Moderate
LICENCE TO
OPERATE
Centamin is committed to building and
operating our mines in a safe and responsible
manner. To do this, we seek to build trust-
based partnerships with host governments
and local communities to protect our licence
to operate and ability to grow. We should
only advance our business interests where
this protects people, fosters socio-economic
development and safeguards the environment,
and leaves a positive legacy for our host
communities.
Ensure that we are clear on the standards that are expected locally
and regionally within our areas of operation.
Develop and implement investment plans that sustain broad
stakeholder support and compliance with local and regional
standards.
Maintain an up-to-date compliance register for each asset and
routinely review our performance against these commitments and
obligations.
Acting in an ethical, responsible and
transparent manner is fundamental
to realising the significant business
benefits gained from building trusted and
constructive relationships with all our
stakeholders, and to maintaining our socio-
political licence to operate.
Strengthen our sustainability governance
and management framework at all levels of
the organisation, including reinforcement
of our performance standards to support
growth, supported by resources allocated
to ensure the long-term physical, chemical
and biological stability of the site – or social
benefits to our host communities.
Further information is shown in
Understanding Our Stakeholders on page
22.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
C
Velocity: Moderate
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SLIGHTLY WORSE
CONSISTENT
SLIGHTLY IMPROVED
NEW
VALUE MAXIMISATION
AT SUKARI
GROWTH &
DIVERSIFICATION
W
C
I
N
62
63
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
RISK REVIEW
CONTINUED
STRATEGIC RISKS
CONTINUED
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite
Risk trend and velocity
Links to strategy
PEOPLE (ATTRACT,
DEVELOP AND
RETAIN SKILLED
PEOPLE)
Our accomplishments as a Company rely
on our ability to attract, develop and retain
talented people as they are the foundation of
our business.
It is imperative that we support our people
to develop a shared understanding of the
critical behaviours and skills required for
successful performance and provide them
with the opportunity to progress to more senior
positions within the Company. Otherwise we
face the risk of elevated rates of turnover and
knowledge loss.
Valuing diversity and promoting inclusion is an
ethical imperative for a sustainable business.
Initiatives which have been introduced include: the employee
development pathway, to ensure all positions are undertaken to
a proficient level; supervisory and leadership training to equip
employees for increased levels of technical and management
responsibility; and succession planning.
Continue to reinforce awareness of our organisational values and the
critical behaviours required for successful performance supported
by established policies and processes.
Through visible leadership, strengthen diversity and inclusion in
workplace culture and practice, and set targets to increase the
representation.
Further information is shown in Understanding Our Stakeholders on
page 22.
To deliver on the principles and
commitments as stated in our Code
of Conduct. Visible leadership in the
development of our people, diversity
and inclusion. Sustained resourcing of
the professional development, training
initiatives and investment in our people.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
C
Velocity: Moderate
STAKEHOLDER
ENVIRONMENTAL
AND SOCIAL
EXPECTATIONS
Elevated expectations on environmental,
social and governance (“ESG”) corporate
responsibility, includes increased levels of
stakeholder scrutiny, disclosure, regulatory
requirements and industry standards.
Recent high-profile incidents have put a
spotlight on the need for increased levels
of corporate accountability on matters of
environmental and social governance,
including tailings management, heritage
protection, biodiversity, water management,
responsible supply chains, diversity and
inclusion.
Whilst the COVID pandemic initially focused
attention, we have continued to develop
and invest in the wellbeing of our people,
addressing social inequalities and the role
which we must play in the wider communities.
Through our Sustainability Performance Framework we continue
to strengthen our governance and management controls and
assurance processes to meet stakeholder expectations, existing and
new regulatory and industry standards, for example the RGMPs,
GISTM and TCFD.
We define environmental and social criteria and triggers to support
key investment decisions.
At asset-level, we have focused on building the capacity of our
Health, Safety, Environmental and Sustainability (“HSES”) specialist
teams and the continual improvement of our environmental,
sustainability and social management system. We are updating our
LOM management plans and preparing for ISO 14001 accreditation.
Further information is shown in Understanding Our Stakeholders on
page 22.
Our Environmental and Social Policies
are supported at an operational level by
HSES Management Systems and tailored
Environmental Management Plan that
considers the regulatory context of the
country and unique environmental risks
specific to each site.
We employ a robust tailings governance
approach based on good industry practice,
risk management and assurance. We are
targeting conformance with the GISTM by
August 2023.
We recognise that our operations can be
a significant driver for positive socio-
economic development. Fundamental
to this success is the establishment of
trusting partnerships with our stakeholders,
good governance, ethical conduct and
transparency.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
C
Velocity: Slow
DECARBONISATION
We recognise transition to a net zero carbon
economy is expected to profoundly affect
our business model over the medium and/
or long term due to factors including: capital
investment and access to new technology, the
pricing of carbon emissions; availability and
costing of commodities and consumables;
changing market and investor sentiment.
The most significant opportunity for
decarbonisation is the ability to reduce and
potentially remove fossil fuel-generated
electricity from gold mining’s sources of power.
The Transition Risk and Opportunity analysis
on page 75 gives further detail.
In the short term, we are focused on the identification and delivery
of projects that will effectively reduce our operational Scope 1 and 2
GHG emissions.
In 2022, we executed various carbon abatement projects, most
notably our 36MW
DC
(30MW
AC
) solar plant and battery storage
system. Other energy efficiency initiatives executed included roll-out
of the high production trays leading to an 8% reduction in fuel
consumption per tonne of material moved, optimisation of the fine
grind process within the comminution circuit and replacement of
older underground trucks and loaders to more efficient units.
We also studied opportunities to reduce the operational emission
of Sukari over the life of mine, including sourcing clean and lower
carbon power through connection to the national grid and further
expansion of our onsite renewable energy production. Further
information is given in our 2030 Decarbonisation Roadmap on
page 08.
We have set an interim climate target of
30%, to reduce our Scope 1 and 2 GHG
emissions by 2030, compared to a 2021
base-year. This would put us on a Paris-
aligned trajectory to limit global warming to
‘well below’ 2°C by 2050.
We have identified other carbon abatement
opportunities that are the subject of
ongoing investigation, including the
electrification of our mobile fleet and
energy efficiency. Under our climate
transition strategy, we also recognise the
need to collaborate with our supply chain
to reduce Scope 3 GHG emissions.
We will continue to assess our climate-
related risks and opportunities against the
updated Life of Mine Plan for Sukari.
Further information on our Climate Change
Governance, Strategy, Risks, Metrics
and Targets are given in our disclosures
against the Task Force on Climate-related
Financial Disclosures on page 70 and our
2030 Decarbonisation Roadmap.
Level: Balanced
We aim to not take any
unnecessary risk within our
control. However, we understand
that inherently we have limited
control over a number of external
risk factors.
C
Velocity: Slow
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SLIGHTLY WORSE
CONSISTENT
SLIGHTLY IMPROVED
NEW
VALUE MAXIMISATION
AT SUKARI
GROWTH &
DIVERSIFICATION
W
C
I
N
64
65
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
RISK REVIEW
CONTINUED
OPERATIONAL RISKS
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite
Risk trend and velocity
Links to strategy
SAFETY, HEALTH
AND WELLBEING
It is an inherent risk in our industry that
incidents due to unsafe acts or conditions, or
the failure of our equipment or infrastructure
could lead to injuries or fatalities. Remote and
rostered work also has potential to impact the
mental health and wellbeing of our workers.
Our workforce faces potential risks from
hazards such as fire, explosion and
electrocution, as well as risks specific to the
mine site and development project. These
include potential slope failures or collapse
in the underground, mobile plant collisions
and incidents involving hazardous materials.
Continuing focus on the risks associated
with mining companies’ tailings facilities
also means we continue to monitor this risk,
completing regular internal and external
technical reviews.
Protecting the safety, health and wellbeing of employees,
contractors, local communities and other stakeholders is a
fundamental responsibility for Centamin. We seek continuous
improvement of our safety and health management system and
practices including assurance processes, with particular focus on
the early identification of risks and the prevention of incidents. TSF2
is now in operation and continues to be operated to the highest
standards as outlined on our commitments and standards to the
Tailings Storage Facility.
We continue to review and test our crisis management plan
alongside reinforcing our critical risk and control standards,
which includes building the awareness and capacity of senior
management teams to operationalise our critical risks standards and
seek conformance to ISO 45001.
In 2022 we enhanced our health and wellbeing programmes with
increased awareness and training on mental health, as part of
the delivery of our Health & Wellbeing Plan, with new insights on
the relationship between employer and employee arising from the
COVID pandemic.
Ensuring the safety, health and wellbeing
of our workforce is directly aligned with
our first Value, to Protect, and is a moral
imperative. This requires a focus on
zero-harm whilst constituting a direct
investment in the productivity of the
business and the physical integrity of our
operations.
A safe and healthy workforce translates
into an engaged, motivated and productive
workforce that mitigates operational
stoppages, and reduces potential incidents
or harm.
Further information in relation to our
commitments and standards to Safety,
Health and Wellbeing is given earlier in the
Strategic Report under Business in Action
– Responding to our Stakeholder Priorities.
Level: Controlled
We aim to consider potential
breaches in our policies and
controls to safety, health and
wellbeing. The Board invests
heavily in a programme of
continuous improvement in
relevant practices and has an
expectation to meet the highest
standards.
C
Velocity: Rapid
EXPLORATION
AND PROJECT
DEVELOPMENT
Exploration activities by their very nature
are highly speculative with an inherent
degree of risk. Centamin strives to make
new discoveries, growth and value-creation
opportunities through our exploration
programme.
Whilst Egypt continues to represent a
significant opportunity through brownfield
exploration around the Sukari Concession and
highly prospective ground in Egypt’s Eastern
Desert, we also recognise our potential growth
projects in Côte d’Ivoire. Further information is
given in the Exploration Review on page 40.
Before undertaking any exploration activities, a risk-based approach
is undertaken to filter projects, considering a number of factors.
There is now a restructured approach established with the refreshed
exploration team who undertake systematic work programmes
which reduce the risk and gradually increase the certainty of
exploration discoveries that allows a focused spending strategy.
This will be supported by independent advice and an investment in
technology.
2022 delivered a positive update on the pre-feasibility study
for Doropo with completion planned for H1 2023, we secured
2,989km
2
of highly prospective and underexplored ground in Egypt
which we started fieldwork on.
Further information is given in the Exploration Review.
Ensuring we have an effective and efficient
exploration programme to meet our
strategic targets, long-term production and
reserves goals. Further information will be
provided through 2023 in updates on the
exploration activities and the release of the
pre-feasibility study for Doropo.
Level: Opportunistic
We aim to consider opportunities
with higher levels of risk in
exchange for potentially greater
reward, as long as they do not
conflict with our core values.
C
Velocity: Slow
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SLIGHTLY WORSE
CONSISTENT
SLIGHTLY IMPROVED
NEW
VALUE MAXIMISATION
AT SUKARI
GROWTH &
DIVERSIFICATION
W
C
I
N
66
67
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
RISK REVIEW
CONTINUED
OPERATIONAL RISKS
CONTINUED
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite
Risk trend and velocity
Links to strategy
MAXIMISING OUR
GEOLOGICAL
POTENTIAL
Geological uncertainty is an inherent risk
which all mining companies face.
Understanding of the geology and associated
grade distribution can be influenced by a
number of factors which can impact the
size, orientation and shape of the ore and
the potential grade expected by the mining
operations.
As these estimations are used to inform our
operations and the wider business strategy we
need to ensure that we can make this process
as accurate as possible.
The Mineral Resource Management team is focused on developing
the geological and structural framework in which mineralisation
is hosted. This has brought about a clear understanding of the
structural and lithological controls on mineralisation and the
development of a predictive model which is being used to expand
the Mineral Resource and Reserve base of the Company.
Orebody stewardship was also introduced in which geology and
the geologist is at the forefront of all mining and extraction process
decision making. This has allowed improved long and short-term
planning, timing of grade control, material movement, blending and
processing requirements to maximise return on investment.
Further information on the improvements which have been made
are shown in the Exploration Review with one of the key areas being
the growth of our Mineral Reserves at Sukari, as highlighted in the
Sukari Reserve and Resource update released in Q4 2022.
To achieve an accurate estimation based
on geology, that informs improved mine
planning and operations to deliver results.
This will be supported by the near term
roadmap to 475 – 500koz pa and the
robust life of mine schedule which was
further updated in 2022.
Level: Informed
We aim to have an approach that
could deliver reasonable rewards,
economic or otherwise, by
managing risk in an informed way.
C
Velocity: Moderate
OPERATIONAL
PERFORMANCE
AND PLANNING
By their nature, mineral resources and
reserves are estimates based on a range
of assumptions, including geological,
metallurgical, technical and economic factors.
Other variables include expected costs,
inflation rates, gold price, grade downgrades
and production outputs.
Unplanned operational stoppages can
impact our production. An inability to shift
the volumes of waste required, drops in our
operational capacity in mining, contractor
management, supply chain disruption or
ground stability are examples of potential risks.
Accurate and complete planning is pivotal
to informing production estimates, grade
quality and provide greater clarity to corporate/
operational decision making. We then need to
deliver against our targets by analysis of our
data to inform the right decisions.
2021 was a transformational year for Centamin with a focus on
improving mining flexibility and delivering growth which was
continued through 2022 as we delivered greater open pit mining
flexibility and consistency alongside other improvements.
We updated the market on the twelve-year LOM Plan, issued
ten-year guidance, continued with accelerated waste-stripping and
took ownership of the underground mining operation. Through
2022 we commissioned the solar plant, installed all the high
production truck trays, lifted and boosted TSF2 and refreshed the
Sukari Orebody Stewardship Model. The LOM Plan should provide
clarity as to the strategic direction of the mine and the desired
production levels for the short, medium and long term to give focus
to the operational elements of the mine. Alongside the overhauled
geological leadership team and restructured approach to geology
and orebody stewardship we have developed a comprehensive
mining engineering model, enhanced our geotechnical engineering
programme, increased our mining flexibility and have identified
multiple initiatives to improve operating efficiency and productivity.
An example being taking ownership of the underground mining
operation in house with targeted investment in the resources
required to reflect the growth potential.
To achieve reliable and consistent
production, whilst optimising the
potential of the operation as highlighted
in the Operational Review. The Company
provides timely and accurate information
to the market on production levels and
forecasts. The mining sector continues
to face operating cost inflation, including
labour costs, energy costs and the natural
impact of ore-grade deterioration over time.
In order to deliver our disciplined growth
strategy and to maintain and improve
our competitive position, the Group must
deliver its financial improvement targets,
cost savings initiatives and minimise
the number of unplanned operational
stoppages.
Level: Informed
We aim to have an approach that
could deliver reasonable rewards,
economic or otherwise, by
managing risk in an informed way.
C
Velocity: Moderate
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SLIGHTLY WORSE
CONSISTENT
SLIGHTLY IMPROVED
NEW
VALUE MAXIMISATION
AT SUKARI
GROWTH &
DIVERSIFICATION
W
C
I
N
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OVERVIEW
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ADDITIONAL INFORMATION
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CLIMATE CHANGE
DISCLOSURES
DISCLOSURES RELATED TO CLIMATE CHANGE
We support global efforts to
achieve the climate change
goals to reduce GHG emissions
outlined in international
guidance, including the United
Nations Framework Convention
on Climate Change (“UNFCCC”)
and the Paris Agreement. We
are committed to reducing our
contribution to climate change,
while also building operational
resilience in the face of global
warming.
In April 2021, the UK government updated
its climate change target to cut emissions
by 78% by 2035 compared to 1990 levels
encouraging similar levels of ambition from
businesses. This follows the government’s
commitment in June 2019 to legislate
for net zero emissions by 2050 and that
large asset owners make disclosures
in accordance with the Financial
Stability Board’s Task Force on Climate-
related Financial Disclosures (“TCFD”)
recommendations.
We recognise that this will require
transformational changes in how we
extract mineral resources and integrate
climate-related impacts and risk into our
business strategy and financial planning.
Our approach is based upon the Paris
Agreement principles to limit global
warming to well below 2ºC above pre-
industrial levels and pursue efforts to limit
the increase to 1.5ºC, with consideration
to the Intergovernmental Panel on Climate
Change (“IPCC”) recommendations.
We are committed to disclosing actual
and potential climate-related risks and
opportunities for our business strategy
and financial planning, where such
information is material. In accordance
with the Listing Rules of the UK Financial
Conduct Authority, we have evaluated the
consistency and maturity of our climate
change disclosures to the recommendations
of the TCFD as stated below. The impact of
climate on our business model, strategy and
financial statement is noted in the relevant
sections of the 2022 Annual Report.
TCFD recommendation
Response / progress
Consistency of our
disclosures to the TCFD
Steps to improve
our disclosures
GOVERNANCE
a) Describe the Board’s
oversight of climate-
related risks and
opportunities
•
Our management and governance structure is described on page 94
•
The charter of the Board of Directors, and more specifically the
Sustainability committee, describe roles and responsibilities with respect
to the consideration of climate-related risks and opportunities on the
Company’s business, strategy, and financial planning
•
The Board and its committees regularly review and evaluate risks,
opportunities and impacts related to climate change. See Risk Review on
page 54. We have a principal business risk on Decarbonisation and an
Emerging risk on Climate Change
•
The Sustainability Committee meets with senior management at least
quarterly to oversee development of the Company’s sustainability
governance, strategy, metrics, targets and performance. Climate change is
a standing agenda item for each meeting
•
The key decisions taken by the Board in relation to climate-related risks
and opportunities in 2022 are presented in the Risk Review on page 54.
The Board oversaw development of science-based targets for carbon
reduction by 2030 and an accompanying roadmap of carbon abatement
projects. The Board reviewed our Energy and Climate Change Policy
which was approved in March 2023. The Board oversaw construction
and commissioning of the Sukari Solar Project. The Board oversaw the
establishment of a US$150 million revolving credit facility incorporating
sustainability linked performance metrics for carbon reduction
Consistency level: Full
The Board has broad
and regular oversight
of climate-related risks
and opportunities
None
b) Describe
management’s role
in assessing and
managing climate-
related risks and
opportunities
•
Our management and governance structure is described on page 94
•
The insights of the CEO and Executive that underpin the formulation of the
Group’s long-term strategy are described in the CEO on page 16. Climate-
related risks and opportunities are considered in our Market Review on
page 44, our Business Model and Strategy on page 20, Financial Review
on page 46 and Risk Review on page 54
• Management is incentivised to take accountability for sustainability
performance through the Company’s remuneration structure, which
include climate-related targets see the Remuneration Comittee Report
on page 119
•
In 2021 we constituted a Climate Change Working Group comprising
members of our senior technical management team and reporting to the
Executive. The Working Group engages with our operational management
team to integrate climate change commitments into operational decision-
making
•
The key achievements taken by management in relation to climate-related
risks and opportunities in 2022 are presented in the Key Performance
Indicators on page 30, including: successful commissioning of the Sukari
Solar Project; introduction of a Group-level Energy and Climate Change
Policy; development of science-based targets for carbon reduction by
2030 and an accompanying roadmap of carbon abatement projects;
establishment of a US$150m revolving credit facility which includes
sustainable-linked performance metrics for reduction in carbon emissions
Consistency level: Full
Opportunity to
strengthen the role of
the Climate Change
Working Group on
medium and long-term
strategy and financial
planning
In 2023, strengthen
the application of
climate-related criteria
when reviewing and
guiding business plans
and major capital
expenditures
Clarify the role and
responsibilities of
the Climate Change
Working Group to
provide technical
guidance on climate-
related risks and
opportunities
TCFD COMPLIANCE STATEMENT
Our Board has judged that our climate
change disclosures as presented in our
2022 Annual Report are fully consistent
with the TCFD recommendations on
governance, risk management and metrics
and targets; and partially consistent with
recommendations on strategy. To be fully
consistent with the TCFD recommendations
on strategy, we shall complete in 2023 a
more detailed scenario analysis of climate-
related transition risks over the medium and
long term and assess the impact of these
risks on business strategy. We are aiming to
publish disclosures that are fully consistent
with the TCFD recommendation in our
2023 Annual Report.
In support of this statement, the following
section details the risks and opportunities
arising from climate change, the potential
impact on our business and the actions
we’re taking to respond. The TCFD
Content Index as presented on the
right, summarises our response to each
recommendation and provides specific
signposting to where the disclosures can
be found. The Content Index identifies
where our disclosures are judged to
be: (i) fully consistent with the TCFD
recommendations; (ii) consistent with the
recommendations but where we recognise
opportunity for improvement; and (iii) not
yet fully consistent and the measures being
taken to make these disclosures in the
future. In preparing these disclosures, we
have considered the TCFD Guidance for All
Sectors.
During 2023 we will continue to focus on
maturing our reporting process to enable
future disclosure.
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DISCLOSURES RELATED TO CLIMATE CHANGE
CONTINUED
TCFD recommendation
Response / progress
Consistency of our
disclosures to the TCFD
Steps to improve
our disclosures
RISKS AND OPPORTUNITIES
a) Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks
•
We have a robust and proactive risk management framework that
underpins the business strategy as published on our website
www.centamin.com/about/risk-opportunity-management. We routinely
monitor and refine our risk management and internal controls to meet the
changing requirements of the business. These processes align with the
UK 2018 Code and ISO 31000 Risk Management Guidelines
•
The Climate Change Working Group leads the specific assessment of
climate-related transition and physical risks
•
We have completed a preliminary assessment of climate change-related
transition risks and opportunities on page 70. The approach was
consistent with our Group risk management and strategy development
framework
•
We have assessed climate-related physical risks to our operations
under future emissions scenarios based on General Circulation Models
and scenarios aligned with the latest phase of the Climate Model
Intercomparison Project (“CMIP6”) (comprising projections made with
respect to SSP2-4.5 and SSP5-8.5 scenarios) on page 70
Consistency level: Full
None
b) Describe the
organisation’s
processes for
managing climate-
related risks
•
We have a robust and proactive risk management framework that
underpins the business strategy. We routinely monitor and refine our risk
management and internal controls to meet the changing requirements of
the business. These processes align with the UK 2018 Code and ISO 31000
Risk Management Guidelines
•
We are actively allocating capital for carbon abatement and in 2022
commissioned the Solar Project
•
In 2022, the Climate Change Working Group undertook an assessment of
carbon abatement opportunities, developed preliminary targets for carbon
reduction by 2030 and an accompanying roadmap of carbon abatement
projects page 08
Consistency level: Full
None
c) Describe how
processes for
identifying, assessing
and managing climate-
related risks are
integrated into the
organisation’s overall
risk management
•
We have a robust and proactive risk management framework that
underpins the business strategy. We routinely monitor and refine our risk
management and internal controls to meet the changing requirements of
the business. These processes align with the UK 2018 Code and ISO 31000
Risk Management Guidelines
Consistency level: Full
The assessment
and management
of climate-related
risk is an integral
element of our Group
risk management and
strategy development
framework as described
in the Risk Review.
Decarbonisation is a
principal risk
None
TCFD recommendation
Response / progress
Consistency of our
disclosures to the TCFD
Steps to improve
our disclosures
STRATEGY
a) Describe the climate-
related risks and
opportunities the
organisation has
identified over the
short, medium, and
long term
(1)
•
Decarbonisation has been identified as a principal business risk. The
transition to a net zero carbon economy has potential to profoundly
affect our business model over the medium and long term due to
factors including: technological shifts, the pricing of carbon emissions,
availability and costing of commodities and consumables, and changing
market and investor sentiment
•
The most significant opportunity for decarbonisation is the ability to
reduce fossil fuel generated electricity from our operations, including:
further investment in renewables and connection to the national electricity
grid
•
A physical risk assessment of our operations under future emissions
scenarios assessed our business to be resilient to physical risks for the
near-term predictions, indicating that adaptation specifically to mitigate
the effects of climate are not required for the current operational life of
Sukari
•
Climate Change has been recognised as an emerging risk, further detail
on page 54, due to the external and potential longer-term impacts
Consistency level: Full
None
b) Describe the impact of
climate-related risks
and opportunities on
the organisation’s
businesses, strategy,
and financial planning.
•
We have assessed the impact of climate-related risk on business strategy,
financial materiality and mitigating measures
•
We have set an interim 2030 target for carbon reduction and an
accompanying roadmap aligned with a 2ºC pathway on page 08. Under
this roadmap, capital allocation is judged to be financially material,
however, the carbon abatement initiatives are assessed to provide a
positive return on investment within the life of asset
•
Climate-related physical risk is not predicted to have a material financial
impact on the business during the current operational life of asset, but
has been recognised as an emerging risk with potential material impacts
on our growth and diversification across Africa
Consistency level: Full
Strengthen the
consideration of
climate-related
transition risk following
more detailed scenario
analysis
In 2023, review the
impact of climate-
related transition risk
on business strategy
and financial planning
following a more
detailed scenario
analysis over the
medium and long term
c) Describe the resilience
of the organisation’s
strategy, taking into
consideration different
climate-related
scenarios, including a
2ºC or lower scenario
•
We use different financial scenarios to assess our short and medium-term
climate-related transition risks and potential disruption to operational
activities
•
We believe our business is financially and strategically resilient to climate-
related risks in the short term, including a 2ºC scenario, with mitigation as
described on page 70
•
A key pillar of our climate transition strategy is to reduce our Scope 1 and
2 carbon footprint. We have set an interim target for carbon reduction by
2030 and accompanying roadmap aligned with a 2ºC pathway
•
A physical risk assessment of our operations under future emissions
scenarios assessed our business to be resilient to physical risks for the
near-term predictions, indicating that adaptation specifically to mitigate
the effects of climate are not required for the current operational life of
Sukari
Consistency level:
Partial
Complete scenario
analysis to test the
resilience of our
business to a 1.5ºC
pathway scenario and
the impact over the
medium and long term
In 2023, complete
scenario analysis to
test the resilience of
our business to a 1.5ºC
pathway scenario and
the impact over the
medium and long term
Continue to investigate
the feasibility of
additional opportunities
for carbon abatement
to align with a
1.5ºC pathway, and
associated capital
requirements
(1) Our short-term time horizon is defined as less than two years and our long term as greater than five years.
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DISCLOSURES RELATED TO CLIMATE CHANGE
CONTINUED
We aim to embed climate considerations,
such as energy efficiency and
decarbonisation, into our strategic decisions
and day-to-day operational management
to ensure that they are aligned with
our commitments and ambitions. We
recognise that this requires a step-change
in terms of climate-risk accountability and
transparency.
In 2022, we elaborated an Energy and
Climate Change Policy which clearly
states our position on climate change
and support of the goals of the Paris
Agreement. Under this policy we commit
to implement governance, engagement
and disclosure processes to ensure climate
change risks and opportunities under future
emissions scenarios are considered in
business decision making, including capital
allocation. To meet this commitment, we
shall strengthen capital allocation decisions
to align with the transition to a low carbon
economy.
GOVERNANCE
The Board, with technical guidance from
the Sustainability Committee, has overall
responsibility for providing the strategic
direction on climate change related topics
and to review the performance of the
Company. The committee oversees, on
behalf of the Board, material policies and
processes designed to manage climate-
related risks and opportunities. Climate
change is a standing agenda item for
committee meetings and the chair of
the Sustainability Committee provides a
summary of the committee’s discussions at
the Board. In addition, the Audit and Risk
Committee reviews the Group’s material
risks, including those related to climate
change. The activities of the Board in
respect to climate change are presented on
page 99.
Implementation of our climate change
commitments and ambition with respect
to carbon emissions reduction and
energy efficiency opportunities, are the
joint responsibility of the Executive and
respective asset-level managers with the
technical support of Centamin’s Climate
Change Working Group. Our Climate
Change Working Group comprises
members of our senior technical
management team that covers ESG, risk,
finance and operations. The working group
is responsible for advancing climate change
workstreams and reporting to the Executive.
We are committed to obtaining assurance
over GHG accounting data and related
assertions in accordance with ISO 14064-
3. SRK Consulting was commissioned
by Centamin to conduct an independent
Limited assurance of our GHG emissions
for the financial year ending 31 December
2022. SRK Consulting concluded that the
Scope 1 and 2 emissions as reported are, in
the scope of Limited assurance, supported
by the evidence obtained.
Further, Executive and senior management
remuneration includes a climate
performance indicator to incentivise
accountability for climate change and action
on decarbonisation in particular.
TCFD recommendation
Response / progress
Consistency of our
disclosures to the TCFD
Steps to improve
our disclosures
METRICS AND TARGETS
a) Disclose the
metrics used by the
organisation to assess
climate-related risks
and opportunities in
line with its strategy
and risk management
process.
• Scope 1, 2, 3 GHG emissions
• Scope 1, 2, 3 GHG emissions intensity
• Energy consumption and intensity
• Capital allocation for carbon abatement
Consistency level: Full
Under the scope of
our scenario analysis,
further research is
required to set an
internal carbon price for
measuring impact and
setting targets over the
medium and long term
In 2023, complete
scenario analysis to
test the resilience of
our business to a 1.5ºC
pathway scenario
and the impact over
the medium and long
term, including carbon
pricing
b) Disclose Scope 1,
Scope 2, and, if
appropriate, Scope 3
GHG emissions, and the
related risks.
•
Scope 1 & 2 GHG emissions have been disclosed since 2016, and Scope 3
since 2021 on page 80
•
In 2022, our Scope 1, 2 & 3 GHG accounting methods have been
independently verified for accuracy and completeness in accordance with
the requirements of the GHG Protocol
•
We are actively engaging with our supply chain to verify and improve the
accuracy of our Scope 3 GHG emission estimate
Consistency level: Full
Further research is
required to improve
our understanding of
our Scope 3 carbon
footprint
In 2023, continue to
engage with our main
suppliers to verify and
improve the accuracy
of our Scope 3 GHG
emissions estimate
c) Describe the
targets used by
the organisation to
manage climate-
related risks and
opportunities and
performance against
targets.
•
Scope 1 and 2 carbon reduction targets and an accompanying roadmap
including capital requirements have been set for 30% by 2030 are
described on page 08
•
Our carbon abatement achievements in 2022 are described on page 08
•
We aim to set targets for a reduction in our Scope 3 GHG emissions by the
end of 2024
Consistency level: Full
Further research is
required to improve
our understanding of
our Scope 3 carbon
footprint
In 2023, we will
continue to engage with
our main suppliers to
identify and assess
opportunities to reduce
our Scope 3 GHG
emissions and set
targets by end of 2024
Download here:
ENERGY AND CLIMATE
CHANGE POLICY
CLIMATE CHANGE TRANSITION STRATEGY
Our vision for a low carbon
future is a mine with
sources of onsite and
imported renewable energy,
reductions in absolute energy
consumption through efficient
operational strategy and
new technologies, staged
electrification of our mobile
fleet and partnerships with our
suppliers to select low carbon
options and increase recycling
in our supply chain.
Gold is rare and as with other precious
metals, a lot of ore is mined and processed
to produce small amounts of pure metal.
Consequently, gold production has a
relatively high GHG intensity on a mass
basis. However, emissions associated
with the downstream value chain – for
example, in jewellery, investment and
technology – are likely to be small and
orders of magnitude lower than primary
gold production. Gold may play an
increasingly important role in technologies
that help facilitate a transition to a low
carbon economy. In addition to providing
financial diversification, an investment in
gold may help reduce the carbon footprint
of an investment portfolio while reducing
investors’ exposure to climate change risks.
Through our climate change transition
strategy we aim to accelerate our transition
to a low-carbon emissions business,
purposefully and profitably.
1 REDUCING OUR CARBON
FOOTPRINT (SCOPE 1 AND 2)
In the short term, we are focused on the
identification and delivery of projects that
will effectively reduce our operational Scope
1 and 2 GHG emissions. Our programme
for operational emissions reductions is built
around:
•
Renewable electricity:
Sourcing clean power for our operation
through the procurement or development
of renewable energy supply
•
Low carbon power sources:
Switching to lower carbon fuels, together
with electrification as an alternative to
diesel use applications
•
Energy efficiency:
Continuous work to optimise and improve
the energy efficiency of all our processes
The growing decarbonisation of grid-
sourced electricity, continued improvement
in the economics and practicality of
renewables, alongside enhanced energy
and operational efficiency, will support our
transition to a low-carbon future.
In 2022, we executed various carbon
abatement projects, most notably our
36MW
DC
solar plant and battery storage
system. In 2022, we studied opportunities
to reduce the operational emission of Sukari
over the life of mine, including, sourcing
clean and lower carbon power through
connection to the national grid and further
expansion of our onsite renewable energy
production.
2 COLLABORATION WITH OUR
SUPPLY CHAIN (SCOPE 3)
We are committed to mitigate the impact
of our supply chain emissions, while
recognising that the nature of Scope 3
emissions are largely outside our direct
control. The majority of our Scope 3
emissions, 98%, are upstream to our
operation and relate to purchase goods,
services and capital expenditure (Categories
1, 2 and 3).
Our actions are focused on collaboration
with our suppliers to first understand the
sources of our Scope 3 emissions, then
identify how we can most effectively reduce
them. Preliminary studies of our supply
chain indicate that approximately 20 of
our suppliers generate up to 75% of our
Scope 3 emissions. We are collaborating
with these key suppliers to understand the
carbon footprint of their value chain and
opportunities for abatement.
3 OPERATIONAL RESILIENCE TO
CLIMATE CHANGE
We explore how the world might develop
under a range of climate change pathways
and try to understand and test the resilience
of our operations to physical climate risk
from both acute extreme weather events
and chronic shift in climate patterns.
In 2021, we commissioned an independent
desktop assessment of our climate-related
physical risks at Sukari. Our business was
assessed to be resilient to physical risk for
the near-term productions, indicating that
adaptation specifically to mitigate the effects
of climate are not required for the current
operational life of Sukari. The longer-term
predictions are however potentially relevant
to closure planning and the resilience of
closure structures.
4 TRANSPARENCY
We are committed to reporting transparently
on our progress in meeting our climate
change objectives and aim to produce our
climate-related disclosures in line with the
recommendations of the TCFD. Our Annual
Report and Sustainability Report cover
the material aspects of our climate-related
disclosures and a TCFD Content Index is
provided on page 70. We also publish data
via the Sustainability Dashboard on our
website. Our climate change response to
the CDP was rated B in 2022.
We have set an interim climate target of 30%, to reduce our direct
operational Scope 1 and 2 GHG emissions by 2030, compared to a 2021
base-year. This would put us on a Paris-aligned trajectory to limit global
warming to ‘well below’ 2°C by 2050.
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OUR APPROACH TO CLIMATE-RELATED RISK
DISCLOSURES RELATED TO CLIMATE CHANGE
CONTINUED
Understanding climate change-
related risks and opportunities
across all aspects of our
business is vital to inform our
strategy and our continued
ability to operate. Climate
change is integrated into our
risk management processes
in the understanding,
identification and mitigation
of risk. Our website provides
an overview of the approach
to risk and opportunity
management including the
oversight and accountability
for this.
We categorise risk in two ways:
• Principal risk: a risk, or combination of
risks that would threaten the business
model, future performance, solvency or
liquidity of the Company
• Emerging risk: circumstances or trends
that could significantly impact the
Company’s financial strength, competitive
position and reputation within the next
three years or over a longer term
We consider climate change and
Decarbonisation specifically, as a principal
risk at a Group level. We recognise that
transition to a low carbon economy will
profoundly affect our business model over
the medium and long term due to factors
including: capital investment; access to
technology; pricing of carbon emissions;
availability and costing of commodities
and consumables; changing market and
investor sentiment.
To mitigate this principal risk we have
articulated our climate change plans,
policies and progress. Our climate transition
strategy includes a target for reduction in
carbon emissions by 2030.
More broadly, we have identified climate
change as an emerging risk, encompassing
both physical and transitional elements, as
this applies to our growth and diversification
prospects in Côte d’Ivoire and Egypt.
Further information is shown in our
emerging risks on page 54.
Acknowledging the importance of
climate-related risk and the volatility of
climate factors, we have been guided
in our scenario analysis by the future-
orientated climate models developed by the
Intergovernmental Panel on Climate Change
(“IPCC”) and the International Energy
Agency (“IEA”).
TRANSITION RISK AND
OPPORTUNITY ANALYSIS
The transition to a low carbon economy
brings about political, legal, economic,
technological and other changes.
Transitional risks and opportunities primarily
affect the economic performance of the
Company. In the short term, we believe
our business is financially and strategically
resilient to the likely impact of climate-
related transition risk, including a 2ºC
scenario, with mitigation as noted below.
Importantly, by reducing our carbon
footprint as per our 2030 decarbonisation
roadmap, we mitigate our contribution to
climate change and enhance our resilience
to transitional risks.
For the medium and long term, we will
complete a more detailed quantitative
scenario analysis in 2023 to test the
resilience of our business to a 1.5ºC
pathway, noting the level of uncertainty
around these assumptions increases. We
recognise the increased efforts that would
be needed to limit global warming to 1.5ºC
to reduce potential future climate-related
impacts to natural and human systems.
Transition risk event
Potential financial impact
Relevant time
horizon
Mitigation measure
TRANSITIONAL CLIMATE RISKS
Carbon Pricing
Application of new
economic instruments
to reduce carbon
emissions, i.e. carbon
tax or emissions
trading scheme.
There are rapid advances associated with regulation and policy frameworks
aiming to support climate resiliency in markets and some governments have
introduced carbon pricing mechanisms. Where these mechanisms become
applicable to our assets, they will increase the cost of compliance.
Egypt does not currently have economy-wide quantitative emission reduction
targets nor is a national monitoring, reporting and verification system in place.
The lack of net-zero aligned global and national policies and frameworks
increases the uncertainty around how carbon pricing and other regulatory
mechanisms will be implemented in the medium and long term.
The potential financial impact is judged to be Moderate in the medium term
and High in the long term.
Medium:
Moderate
Long: High
Implement 2030 decarbonisation plan
aligned with the Paris Agreement.
Routinely stress test the resilience of
our business to future carbon price
scenarios over different time horizons.
Monitor the development of
international and national policy on
carbon pricing.
Market
uncertainty
Change in consumer
sentiment towards
gold due to
climate-related
considerations
leading to sustained
reduction in gold
price over long term.
The production of gold has a high carbon intensity relative to other metals and
does not materially contribute to low carbon or energy transition technologies.
However, industry research indicates good opportunity for gold mining to
reduce emissions at a scale and rate aligned with Paris climate targets,
and that gold may offer investors demonstrable benefits as a climate-risk
mitigation asset.
The impact of climate-related risk on gold price is not assessed to be
financially material in the short term. Gold is unique in its diverse roles and
functions, consequently, there is uncertainty around how climate-related risk
will affect gold price over the long term.
The potential financial impact is judged to be Low in the medium term and
Moderate in the long term.
Medium: Low
Long: Moderate
Implement 2030 decarbonisation plan
aligned with the Paris Agreement.
Routinely test the resilience of our
business to reduced gold price
scenarios over different time horizons.
Monitor the impact of climate-related
risk on gold price.
Commodities and
consumables
Abrupt and
unexpected shifts in
availability and cost
of commodities and
consumables.
The progressive application of new economic instruments is expected to
increase the cost of commodities and consumables sourced from those
jurisdictions. This may already be impacting the commodities we source from
Europe where they are subject to the EU Emissions Trading Scheme.
Less than 20% by value of our supply chain is sourced from jurisdictions that
apply a carbon pricing mechanism. The impact of climate-related risk on our
supply chain is not assessed to be financially material in the short term. The
lack of net-zero aligned global and national policies and frameworks increases
the uncertainty around how carbon pricing and other regulatory mechanisms
will be implemented in the medium and long term.
The potential financial impact is judged to be Moderate in the medium term
and High in the long term.
Medium:
Moderate
Long: High
Collaborate with our suppliers that
have the largest carbon footprint to
set decarbonisation targets aligned
with the Paris Agreement.
Routinely stress test the resilience of
our business to varying inflationary
scenarios over different time horizons.
Monitor the development of
international and national policy on
carbon pricing.
Investor
uncertainty
Negative change in
investor sentiment
towards gold and/
or producers
unable to achieve
established climate
targets resulting in a
sustained reduction
to share value over
the long term.
Investor capital is shifting towards companies and assets that are able to
transition to a low-carbon economy, driven by both regulatory and broader
stakeholder pressures. A failure to decarbonise the business in line with
regulatory and stakeholder expectations could have a material adverse effect
on our ability to attract and retain investor capital in the medium and long
term.
Gold is unique in its diverse roles and functions, consequently, there is
uncertainty around how climate-related risk will affect investor sentiment
towards gold over the long term.
The potential financial impact of climate-related risk on gold investment is
judged to be non-material in the short term, low in the medium term and
moderate in the long term.
Medium: Low
Long: Moderate
Implement 2030 decarbonisation plan
aligned with the Paris Agreement.
Routinely stress test the resilience
of our business to reduced capital
scenarios over different time horizons.
Monitor the impact of climate-related
risk on the capitalisation of the gold
sector; regular engagement with
investors.
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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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DISCLOSURES RELATED TO CLIMATE CHANGE
CONTINUED
Transition risk event
Potential financial impact
Relevant time
horizon
Mitigation measure
TRANSITIONAL CLIMATE RISKS
Technological
shifts
Failure to adopt/
deploy new
technology that
reduces carbon
emissions.
Transition to a low carbon economy will require the adoption / deployment of
innovative technologies. In the mining sector this includes: reliable renewable
energy generation and battery storage; automation, electrification, and fuel
switching technology for mobile fleet; and energy efficient systems and
equipment. To meet decarbonisation targets it may be necessary to write-off
existing assets.
Capital expenditure to support the adoption/deployment of new technology
is assessed to be financially material in the short, medium and long term.
Under our interim 2030 decarbonisation target, the technology is commercially
available and there is no short-term requirement to write-off existing assets.
We have identified other opportunities to further reduce our GHG emissions,
namely electrification of our mobile fleet and energy efficiency. These
opportunities are the subject of ongoing technical studies.
Short: High
Medium: High
Long: High
Allocate capital for carbon abatement
as per our 2030 decarbonisation plan.
Routinely stress test the resilience of
our business to increased levels of
capital expenditure.
Investigate the availability and
efficacy of technology for the
electrification of mobile fleet and
energy efficiency.
TRANSITIONAL CLIMATE OPPORTUNITIES
Technological
shifts
Ability to adopt/
deploy new
technology
that reduces carbon
emissions.
In addition to the carbon abatement projects that underpin our 2030 target,
we have identified a number of other opportunities at Sukari to reduce our GHG
emissions including electrification of our mining fleet and energy efficiency see
Decarbonisation Roadmap on page 08. There is also the opportunity to access
increased levels of renewable energy through a power purchase agreement for
supply from the national grid.
There is ongoing research and development in technological improvements
and innovations that support the transition to a low carbon economy.
The potential financial impact is judged to be Low in the short term, Moderate
in the medium term and High in the long term.
Short: Low
Medium:
Moderate
Long: High
Monitor the availability and efficacy of
new technology; regular engagement
with technology developers.
Market
uncertainty
Change in consumer
sentiment towards
gold due to
climate-related
considerations
leading to sustained
reduction in gold
price over long term.
As an industrial material, gold could play an increasing role in technologies
that facilitate the transition to a low-carbon economy.
The potential financial impact is judged to be Low in the long term.
Long: Low
Monitor the impact of climate-related
risk on gold price.
Investor
uncertainty
Positive change in
investor sentiment
towards producers
who achieve
established climate
targets resulting
in a sustained
strengthening to
share value over the
long term.
Demonstrable progress in the implementation of our 2030 decarbonisation
plan and other opportunities to reduce GHG emissions could attract investor
capital.
In 2022, we put in place a four-year revolving credit facility linked to a number
of sustainability metrics including a climate-related KPI.
The potential financial impact is judged to be Low in the long term.
Medium:
Moderate
Long: Low
Implement 2030 decarbonisation plan
aligned with the Paris Agreement.
Monitor the impact of climate-related
risk on the capitalisation of the gold
sector; regular engagement with
investors.
CLIMATE CHANGE FORECASTS AND PHYSICAL RISKS FOR SUKARI
Climate factor
Assessment
period (CMIP6)
Baseline and forecast based on shared socioeconomic pathway
Predictions and
adaptation
Mean Annual
Precipitation
2015-2039 and
2081-2100
BASELINE
1981-2015
No significant increase
due to extremely low
precipitation values
across the year
No adaptation required
SSP2-4.52 030s
+0.0%
2015-2039
SSP5-8.5 2030s
+0.0%
SSP2-4.5 2090s
+0.0%
SSP5-8.5 2090s
+0.0%
2080-2100
Mean Annual Air
Temperature
(MAAT)
(°C increase)
2015-2039 and
2081-2100
BASELINE
1981-2015
Short-term forecast
suggests increase in
MAAT of up to 1.2°C
over baseline conditions
(GCM medians)
Long-term increase in
MAAT up to 5.4°C over
baseline conditions
(GCM medians)
No adaptation required
during operational life
of asset
SSP2-4.5 2030s
+1.1%
2015-2039
SSP5-8.5 2030s
+1.2%
SSP2-4.5 2090s
+2.8%
2080-2100
SSP5-8.5 2090s
+5.4%
Climate-related physical risks concern
the potential impact on our operation and
surrounding communities from both acute
extreme weather events and chronic shifts
in climate patterns.
We have assessed the physical risks at
Sukari under future emissions scenarios
based on General Circulation Models and
have selected two scenarios aligned with
the latest phase of the Climate Model
Intercomparison Project (“CMIP6”) under
which high changes are expected to the
future climate:
• Scenario SSP2-4.5: Represents the
medium pathway of future GHG
emissions for which climate protection
measures are being taken
• Scenario SSP5-8.5: Assumes an energy-
intensive, fossil fuel-based economy,
representing the upper boundary of the
range of scenarios
The potential candidate trends were
analysed for mean annual precipitation and
temperature for two assessment periods
beyond baseline; near-term (2015-2039)
and long-term (2080-2100).
Sukari was assessed to be resilient to
physical risks for the near-term predictions,
in relation to precipitation and temperature.
Specifically, the pipeline supplying the mine
with water from the Red Sea insulates the
operation from any climate-related water
supply risk and sea level rise does not
present a direct threat to the operation.
Adaptations to mitigate the effects of
climate are either not required, nor deemed
financially material, for the remaining
operational life of Sukari.
The longer-term predictions are relevant to
mine closure planning and the resilience
of structures in the context of increased
intensity storm events. These results will
be considered in the definition of closure
criteria for the mine and the detailed design
post-closure landform. The cost liability for
mine closure is updated on an annual basis
to reflect updates to the closure plans.
PHYSICAL RISK ANALYSIS
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OVERVIEW
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ADDITIONAL INFORMATION
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DISCLOSURES RELATED TO CLIMATE CHANGE
CONTINUED
We strive to continually enhance our carbon
footprint accounting, monitoring, planning
and target setting. Having adopted climate-
related metrics since 2016 and disclosure
to the CDP since 2019, we are continuing
to widen the scope and accuracy of our
reporting. Our Scope 1 and 2 emissions
data for 2022 has been subject to
independent limited assurance for accuracy
and completeness in accordance with
ISO:14064:3.
In 2022, our Group Scope 1 and 2
emissions were 505,486 tCO
2
-e
representing an increase of 4% compared
to our 2021 base-year
(1)
. We anticipated
an increase in our Scope 1 emissions,
primarily resulting from an accelerated
waste-stripping programme at Sukari and
a corresponding increase in diesel fuel
consumption; while seeing a 2% decrease
in our Scope 1 and 2 GHG emissions
intensity per Au ounce produced.
With the commissioning of the 36MW
DC
solar plant in 2022 and establishment of
our 2030 decarbonisation roadmap, we
have set an interim target to reduce our
Scope 1 and 2 GHG emissions by 30%,
compared to a 2021 base-year. This would
put us on a Paris-aligned trajectory to limit
global warming to ‘well below’ 2°C by 2050.
The majority of our Scope 3 emissions,
98%, are upstream to our operation
and relate to purchased goods, services
and capital expenditure. Using the GHG
Protocol and Quantis evaluator, our
Scope 3 emissions were 1,196,331 tCO
2
-e,
of which 46% was associated with
Category 1 purchased goods and services
and 41% was associated with Category 2
capital goods. Preliminary analysis of our
supply chain indicates that approximately
20 of our suppliers generate up to
75% of our Scope 3 emissions. We are
collaborating with these suppliers to verify
the carbon footprint of their value chain and
opportunities for abatement.
Scope 3 emissions are not yet included in
our interim target for carbon abatement.
We aim to set targets for a reduction in our
Scope 3 emissions by the end of 2024.
In 2022, our capital budget for carbon
abatement initiatives was US$15 million,
of which we spent US$8 million on
completion of the 36MW
DC
solar plant
and US$4.5 million on replacement of
underground loaders and ejector trucks
with more efficient vehicles. Over the short
to medium term, capital allocation for
carbon abatement is forecast to be US$50
to 70 million for extension of our solar plant
and grid connection.
(1)
|n accordance with the GHG protocol, the direct emissions from the combustion of
biomass should be reported separately from Scope 1. Our total emissions from the
combustion of biomass in 2022 = 806 tCO
2
-e
METRICS AND TARGETS
GROUP GHG EMISSIONS AND ENERGY CONSUMPTION
2022
2021
(1)
2020
Emissions (tCO
2
-e)
Scope 1 – total
505,486
484,081
498,844
Scope 1 – Sukari
502,053
475,315
417,900
Scope 2
Zero
Zero
Zero
Scope 3
1,196,331
1,217,612
925,892
Scope 1, 2 and 3
1,701,817
1,701,693
1,353,644
Emissions intensity (tCO
2
-e per oz Au produced)
Scope 1 and 2
1.15
1.17
0.95
Scope 1, 2 and 3
3.86
4.10
2.99
Energy consumed (GJ)
Renewable energy consumed
100,834
–
–
Non-renewable energy consumed
7,177,007
6,868,398
6,061,438
Total energy consumed
7,277,841
6,868,398
6,061,438
Energy intensity
(GJ per oz of Au produced)
16.50
16.54
13.40
(1)
The year 2021 has been established as CEY’s base-year with reliable and verifiable GHG
emissions data. Our base-year was amended in 2022 to account for the outsourcing of
waste mining services at Sukari which met thresholds for significance as defined under
our GHG Base Year Policy.
GROUP SCOPE 3 GHG EMISSIONS
SCOPE 3 GHG EMISSIONS (tCO
2
-e)
2022
Category 1 – Purchased goods and services
546,951
Category 2 – Capital goods
493,179
Category 3 – Fuel and energy related activities
126,297
Category 4 – Transportation and distribution
14,106
Category 5 – Waste generated in operations
129
Category 6 – Business travel
7,217
Category 7 – Employee commuting
N/A
Category 8 – Leased assets
6,776
Category 9 – Transportation and distribution
1,095
Category 10 – Processing of sold products
162
Category 11 – Use of sold products
N/A
Category 12 – End of life treatment of sold products
420
Category 13 – Leased assets
N/A
Category 14 – Franchise
N/A
Category 15 – Investments
N/A
Under the GHG Protocol the following Scope 3
categories were deemed not applicable to our business:
Category 11 Use of sold products, Category 13 Leased
assets, Category 14 Franchise, Category 15 Investments.
BREAKDOWN OF SCOPE 1 GHG EMISSIONS
DIESEL STATIONARY
253,913 tCO
2
-e
MISCELLANEOUS
5,909 tCO
2
e
DIESEL MOBILE
245,664 tCO
2
-e
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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VIABILITY STATEMENT
To address the requirements of Provision
31, and contributing to Provision 1 of the
2018 Code, the Directors have assessed
the prospects of the Group over a longer
period than the twelve months required
for the going concern assessment, which
is shown in note 1.3.5 of the financial
statements. We recognise the future
requirement for a resilience statement and
when the requirements are finalised for this
disclosure, we will ensure that these are
met in future annual reports.
PERIOD OF ASSESSMENT
In preparing the assessment of viability the
Board has considered the principal risks
and opportunities faced by the Group in
relation to the Business Model as set out on
page 20, relevant financial forecasts and
sensitivities and the financial position of the
business.
Mining is a long-term business and
timescales can run into decades. The
Group maintains a Life of Mine Plan
covering the full remaining mine life of
its sole operation, the Sukari Gold Mine.
However, the Company’s planning process
includes a detailed one-year financial
budget and longer-term twelve-year outlook
in line with the strategy. A period of five
years, from 31 December 2022, has been
selected as the appropriate period over
which to assess the short to medium-term
viable prospects of the Group. It should also
be noted that the third-party due diligence
which was completed as part of the
placement of the RCF was over a five-year
period.
VIABILITY ASSESSMENT
The Board assessed the current position
and prospects of the Group, taking account
of the potential impact of the principal and
emerging risks to the Group’s business
model and ability to deliver its strategy,
during the five-year assessment period.
The Board considered the key strategic
drivers, which are based around the
Company’s strategic objectives: Sukari value
maximisation, growth and diversification
and commitment to stakeholder returns, as
set out in Our Strategy.
PROCESS OF ASSESSMENT
When assessing the prospects of the
Group, the Directors have considered
a series of scenarios using internal and
external factors, including macroeconomic
and geopolitical impacts. This analysis
has focused on the existing asset base
of the Group over a five-year period, with
assumptions on a potential development
project at Doropo, which is considered
appropriate for an assessment of the
Group’s ability to model the capital
expenditure and development programmes
planned during the timeframes against the
cash flows which would be generated.
Base Case: The assessment was first
evaluated using forecasted long-term gold
prices. As no further mitigations were
necessary, it was decided that there was no
threat to the viability of the Company over
the five-year assessment period selected.
To create a more stringent test and further
challenge the resilience of the Group, the
assessment was re-run using a number
of different scenarios which have been
outlined below:
• Scenario 1: A reduction in the forecasted
long-term gold price to US$1,450/oz over
the duration of the assessment.
• Scenario 2: A 10% increase in the
forecasted operational costs of mining
over the duration of the assessment.
• Scenario 3: A 10% increase in the
forecasted price of fuel over the duration
of the assessment.
• Scenario 4: A 15% reduction in the
forecasted production over the duration
of the assessment.
The scenarios outlined above would
consistently impact the Group over the
duration of the period chosen and should
be considered as extremely severe to allow
for stress testing of the viability. There
was no potential singular event impacting
production for a matter of months etc which
would threaten the viability and any singular
event would need to be catastrophic.
The updated Sukari Mineral Resource
and Reserves statement in Additional
Information underpins the long-term
sustainability of the operation with a life
of mine of twelve years based on an
approximate twelve million tonne per
annum nameplate throughput. Further to
this, exploration at Sukari has demonstrated
the potential for significant resource growth
with a five-year exploration programme in
place.
The Directors have assessed the principal
risks which could impact the prospects of
the Group over this period and consider the
most relevant risks to be risks to the gold
price, macroeconomic, geopolitical, capital
allocation and liquidity, and operational
performance and planning. The ongoing
macroeconomic and geopolitical uncertainty
has raised the inherent likelihood of
these risks to the Group which we have
considered during the assessment below.
The Group is constantly monitoring the
risks identified above and believes it
can sufficiently mitigate these impacts
through the introduction of broad-based
cost savings initiatives, savings in capital
and operating expenditure programmes,
working capital reduction measures and
funds available to be drawn down on the
recently placed RCF.
KEY RISKS AND ASSUMPTIONS
The key risks and assumptions
underpinning the Board’s assessment of
the business viability include gold prices,
fuel price, operational performance and
planning, licence to operate and financial
position.
• Gold price: Management time and
focus are applied to ensure a low-cost
operation, which helps Sukari remain
profitable, even in a relatively low gold
price environment. Sukari has a low
cost per ounce of production compared
with other operating mines, which
contributes to the Company’s longer-term
viability. The strategic decision to remain
unhedged means the Company benefits
fully in a strong gold price environment.
In a weaker gold price environment, the
commitment to cost control helps ensure
business continuity.
When the scenarios were re-modelled there
were two distinct outcomes. For scenario 1
it was identified there would be a negative
cash balance by the end of 2024 and for
scenarios 2 to 4 there would be a negative
cash balance by the end of Q1 2026. It
should be noted that the scenarios were
considered without any of the additional
mitigation measures such as those noted
earlier.
For all the scenarios the main contributory
factor is the higher capex spend forecast
over 2023-26 arising from the investment
in Sukari alongside the Waste Stripping
contract, plus the potential development of
the Doropo asset through 2025 and 2026.
Risk management and internal control
systems are in place which allow monitoring
and review of the key variables which could
impact the liquidity and solvency of the
Group. As such, the Group are confident
that we have the ability to mitigate any
situation as they might reasonably occur.
CONCLUSION
Taking into account the Group’s current
position and robust assessment of principal
and emerging risks, the Directors confirm
they have a reasonable expectation that the
Group will be able to continue in operation
and meet its liabilities as they fall due for
the next five years (until 31 December
2027). This longer-term assessment
process supports the Directors’ statements
on both viability and going concern,
as shown in note 1.3.5 of the financial
statements.
• Fuel price: At the Company’s flagship
asset, fuel is purchased domestically
from the Egyptian government. The price
is set monthly. Based on forecast prices,
fuel represents approximately 34% of
our operational costs and is therefore a
significant input assumption in both the
budget process and development of the
R&R. This can therefore materially affect
the cost base of the business.
• Operational performance and planning:
Sukari operates 24-hours-a-day, 365
days of the year, with an estimated plant
throughput capacity of twelve Mtpa, a
level which Sukari often exceeds. The
process plant recovery rates are targeting
88.2% in 2023. Maintaining and
improving productivity is fundamental
to our business and long-term strategy.
Sukari has built up 17.2Mt of stockpiles
at an average grade of 0.47g/t, available
for processing. Sukari has a low cost per
ounce of production compared with other
operating mines, which contributes to the
Company’s longer-term viability.
• Licence to operate: Centamin’s local
partner in Egypt is the government
department EMRA. This relationship
remains strong and equitable with the
profit-sharing arrangement as per the
Concession Agreement over the 160km
2
Sukari Gold Mine tenement (for more
information please refer to section 4.1
of the financial statements (p195) and
in the highly prospective ground in
Egypt’s Eastern Desert which we have
started activities in. We also recognise
our potential growth projects in Côte
d’Ivoire where we continue to develop
government relations as we undertake
more detailed feasibility studies.
• Financial position: The Company
maintains a net cash balance of US$50
million, with no debt, hedging, gold loans
or streaming commitments or other
financial arrangements outside of the
recently agreed revolving credit facility.
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ADDITIONAL INFORMATION
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GOVERNANCE
IN ACTION
GOVERNANCE OVERVIEW
Our governance structure supports our
business model to ensure we create
long-term value for our stakeholders,
contribute positively to our people, the
wider society, and the world around us.
OVERVIEW
BOARD MEETINGS HELD
2021: 6
5
INDEPENDENCE ON
MANDATED COMMITTEES
2021: 100%
100
%
FEMALE DIRECT REPORTS
TO SENIOR MANAGEMENT
2021: 29%
29
%
COMMITTEE MEETINGS HELD
2021: 32
26
FEMALE BOARD MEMBERS
2021: 33%
33
%
BOARD MEMBERS WITH GOVERNMENT
RELATIONS, PUBLIC SERVICES AND
DEVELOPMENT EXPERIENCE
67
%
INDEPENDENT NON-EXECUTIVE
DIRECTORS ON BOARD
2021: 75%
75
%
SENIOR MANAGEMENT
FEMALE REPRESENTATION
2021: 16%
16
%
BOARD MEMBERS WITH MINING
AND RESOURCE EXPERIENCE
100
%
For more information on
our
GOVERNANCE
visit
www.centamin.com
CORPORATE GOVERNANCE
Governance Statement
86
Board of Directors
90
Our Governance Structure
94
Our Management Structure
96
Board Diversity
97
Board and Committee Evaluation
98
Key Activities in the Year
99
Our Culture
100
Corporate Governance and
Compliance Statement
102
Nomination Committee Report
104
Technical Committee Report
108
Sustainability Committee Report
110
Audit and Risk Committee Report
113
Remuneration Committee Report
119
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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OUR BOARD AND MANAGEMENT TEAM HAVE
THE RIGHT CULTURE AND STRUCTURE TO
DEVELOP AND DELIVER OUR STRATEGY
GOVERNANCE STATEMENT
The Board operated
effectively through 2022,
making informed decisions,
supported by reliable,
accurate and timely
information.
JAMES RUTHERFORD
NON-EXECUTIVE
CHAIRMAN
DEAR SHAREHOLDERS
I’m pleased to report that the Board
was able to function in a structured and
consistent way through 2022, with the right
culture and governance framework in place.
As can be seen by the number of meetings
held in 2022, while less frequent, the
nature of the meetings and improvement in
materials has allowed the Board to provide
the necessary oversight and strategic
function.
Through the work of the Technical and
Sustainability Committees, there were a
series of technical reports and external
validation over our Reserves and Resources
and operating environment at Sukari,
providing greater certainty over our
forecasting and operational delivery against
our targets.
The Board and management team, with
assistance of the Audit and Risk Committee
and Sustainability Committee, have secured
a sustainability-linked revolving credit facility
of US$150 million. The facility is with a
syndicate of leading international lending
banks, offering the Company increased
financial capacity and flexibility. From a
governance perspective, the level and rigour
of due diligence required by the lenders,
provides further support that the Company
has been thoroughly vetted across our legal
and corporate framework.
The Audit and Risk Committee has
overseen a significant cost saving
programme across all aspects of our
business. In an inflationary environment,
this initiative has proven essential to remain
competitive and continue to deliver returns
to our shareholders. This has also allowed
us to meet our commitment to shareholders
with the recommended total dividend
payments of US$58 million for 2022.
The Board remains well informed and
apprised of progress on all the Group’s
projects beyond Sukari. The management
team have been developing relationships
in Egypt and throughout 2022 have
been in negotiations with the Egyptian
government to agree fiscal terms over
our new land holdings in Egypt’s Eastern
Desert. The management team have also
been developing the pre-feasibility study
and associated environmental studies at the
Doropo site in Côte d’Ivoire.
The Sustainability Committee has worked
with the management team to review
emission intensity at an operational level
and assess the impact of our carbon
abatement projects. The Board’s decisions
consider the financial and environmental
impact of cost reduction and efficiency
drivers with the added benefits of capital
investment in solar and alternative fuel
solutions. The Board approved the TCFD
disclosures which are set out in the
Strategic Report.
The global challenges continue to be
significant, but our Board and management
team have the structure needed to prepare
and stay ahead. I believe we are heading
in the right strategic direction, continuing
to invest in our people and as a Board are
supportive of efficient operational practices
with intelligent use of our natural resources.
Within this framework we will continue to
meet the demands of our shareholders and
wider stakeholders and ensure a safe and
productive working environment for our
employees.
During the year, I along with Dr Sally Eyre
(chair of the Remuneration Committee and
Senior Independent Director) engaged and
consulted with our major shareholders on
a specific remuneration matter, details of
which can be found in our Remuneration
Report. Increasingly during engagement
with shareholders, there is a keen interest
to understand our environmental and
emissions reduction initiatives as well as our
social and community programmes. Where
there was shareholder interest, we offered
our Head of ESG to discuss these topics
which ranged from environmental and
carbon reduction initiatives to social and
community programmes.
I’m pleased to advise that full details
of these initiatives can be found in our
Strategic Report and separately in the
Sustainability Report that will be published
next month. I, along with my fellow Board
members, continue to actively engage
with shareholders and remain available
to discuss matters of interest relating to
our strategy and key initiatives. The next
opportunity to meet with the Board in
person will be at the AGM on 23 May 2023
and we welcome shareholders’ attendance.
Further details of the Board’s consideration
to all stakeholders, in compliance with
Section 172, can be found in the Strategic
Report ‘Understanding our Stakeholders’
and the Governance Report ‘Principal
decision making’.
BELOW IS A SUMMARY OF THE GOVERNANCE
ACTIONS UNDERTAKEN BY THE BOARD IN 2022:
GOVERNANCE
FINANCIAL
• Decisive Board action with support
of the committees and management
team
• Predictable patterns of Board
and committee meetings allowing
constructive debate and consideration
of longer term views and strategies
See page 99 Key Activities
• Site visit to Sukari, Egypt and
engagement with key personnel and
workforce committees
See page 102 Compliance Statement
• Approval of a senior secured
sustainability-linked revolving credit
facility (“RCF”) of US$150 million
See page 99 Key Activities
• Initiatives to reduce costs across the
business
See page 46 Strategic Report
• Development of systems and internal
controls and assurance mapping
See page 113 of the Audit and Risk
Report
TECHNICAL
SUSTAINABILITY,
PEOPLE AND CULTURE
• The underground operations at
Sukari Gold Mine (“Sukari”) have
transitioned from contractor-mining
to owner-operator mining
See page 88 Principal Decision Making
• Expansion of the Sukari underground
mining capacity to 1.5Mtpa of total
ore mined, with support of the
independent studies
See page 40 Strategic Report
• Second consecutive year of resource
and reserve growth at Sukari
underpinning its status as a Tier 1 gold
mine
See page 36 of the Strategic Report
and reserve and resource data in the
Additional Information section
• Workforce talent programmes rolled
out across the business to improve
proficiency and opportunities for
succession pipelines
See the Sustainability Committee Report
• Clear sustainability targets
underpinned by a robust performance
framework
See the Sustainability Committee Report
• Commissioning of the solar plant at
Sukari
See page 08 Strategic Report
• Active engagement with government
and independent power providers for
the supply of 50MW
AC
of grid power
to Sukari
See page 08 Strategic Report
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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|
PRINCIPAL DECISION
MAKING
GOVERNANCE STATEMENT
CONTINUED
Following an independently managed
contractor tender process, the underground
operations at Sukari transitioned from
contractor-mining to owner-operator mining
in February 2022.
Supported by the Technical Committee
and Sustainability Committee the Board
oversaw the tender process and approved
the proposal presented by management
to transition from contractor-miner to
owner-operator. The Board considered the
proposal and its ability to deliver significant
cost savings, operational control and mining
flexibility. A key consideration was the ability
to upskill the local workforce. Key factors
included:
• Expiry of the current five-year
underground contract
• 200% increase in Sukari underground
Proven and Probable Reserves,
underpinned by an eight-year
underground life of mine with identified
near-term growth targets to extend
beyond a ten-year life of mine
• The operational leadership at Sukari has
been significantly strengthened, with
experienced underground expertise and
increased investment in the development
of the national workforce
• An owner-operator model including
risk-based analysis against the submitted
contractor-mining tender proposals
identified significant operating synergies
for the broader Sukari operations
• The transition to owner-operator mining
is expected to generate long-term cost
savings
• Circa 90,000 metres of underground
drilling was budgeted for 2022, including
identified near-term growth targets to
extend the underground beyond a ten-
year life of mine and helping to support
the underground expansion study
• The stakeholders identified below were
consulted throughout the original tender
process, where external and owner-
operator proposals were assessed, and
through to the final selection by the
Board where the decision was made to
transition from contractor-miner to owner-
mining operator of the underground
operations at Sukari.
OWNER OPERATOR – UNDERGROUND MINE
The following table sets out the Board’s consideration to i) our
stakeholders and how they were impacted by the proposal ii) the
potential impact on the resources the business model relies upon
iii) how this linked through to our strategy, risks and opportunities and
iv) the Section 172 considerations which assessed the value creation
and the impact on the stakeholder groups.
STAKEHOLDER COMMUNICATION CHANNELS
CORPORATE REPORTS AND
INVESTOR AND ANALYST
RESULTS CALLS
ANNUAL GENERAL
MEETING
INVESTOR
PRESENTATIONS
INTERIM & FINAL
RESULTS PRESENTATIONS
CAPITAL MARKETS
PRESENTATION
RETAIL PRESENTATION
WORKFORCE
ENGAGEMENT
Centamin’s transparency to all
stakeholders with production
of annual reports, half-year,
sustainability and payments
to governments reports
accompanied by investor and
analyst calls with open questions
The AGM provides an
opportunity to meet with
key members of the
management team and
Board and attend the
formal meeting either in-
person or on-line
Centamin’s commitment to
clarify our position from a
strategic, governance and
financial perspective
Directors have taken the time to
explain the message behind all
the numbers and how they fit into
the overall strategy of the business
Centamin’s passion in what it
does including its forward-looking
plans were communicated and
demonstrated to all stakeholders
Messages of assurance on growth
and diversification including how
Centamin promotes a culture of
continuous improvement
The Board site visit to Sukari,
Egypt allowed direct engagement
by the members of the Board
(and in particular the chairs of
each of the committees) with
key personnel and established
workforce committees
LINKS TO STRATEGY
COMMITMENT TO
STAKEHOLDER RETURNS
VALUE MAXIMISATION
AT SUKARI
GROWTH &
DIVERSIFICATION
EMPLOYEE & COMMUNITY
Link to resources
See Business Model
People
Link to strategy and principal risks
and opportunities
See Risk Report on ‘People (attract,
develop and retain skilled people)’
Section 172 considerations
• Recruitment opportunities for nationals
employed by the contractor
• Local workforce development
opportunities
GOVERNMENTS (EMRA)
Link to resources
See Business Model
Partnership with government and local
communities
Link to strategy and principal risks
and opportunities
See Risk Report on ‘Concession
Governance and Management’ and
‘Licence to Operate’
Section 172 considerations
• Relationship with government and
licence to operate
• Improvements in costs, operational
flexibility and profit share
SHAREHOLDERS
Link to resources
See Business Model
Stringent cost management
Link to strategy and principal risks
and opportunities
See Risk Report on ‘Stakeholder
environmental and Social Expectations’
Section 172 considerations
• Costs and benefits analysis for
shareholder groups
• Cost savings and synergies to improve
operational efficiency
SUPPLIERS
Link to resources
See Business Model
Property and equipment and supply
chain
Link to strategy and principal risks
and opportunities
See Risk Report on ‘Operational
Performance and Planning’
Section 172 considerations
• Incumbent contract expired, thorough
tender process undertaken
• Existing contractor, contractual terms,
commercial arrangements, costs and
timing
ENVIRONMENT
Link to resources
See Business Model
Natural Resources
Link to strategy and principal risks
and opportunities
See Risk Report on ‘Stakeholder
environmental and Social Expectations’
and ‘Decarbonisation’
Section 172 considerations
• Operational flexibility and fleet
assessment to improve working
environment and reduce emissions
For more information on Company
communications see our website,
our Twitter feed and LinkedIn profile
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
BOARD OF DIRECTORS
JAMES (JIM) RUTHERFORD
NON-EXECUTIVE CHAIRMAN
DR. SALLY EYRE
SENIOR INDEPENDENT
NON-EXECUTIVE DIRECTOR
MARTIN HORGAN
CHIEF EXECUTIVE OFFICER
MARNA CLOETE
INDEPENDENT NON-EXECUTIVE
DIRECTOR
ROSS JERRARD
CHIEF FINANCIAL OFFICER
CATHARINE FARROW
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Appointed
January 2020
Appointed
April 2020
Appointed
Chief Financial Officer since April 2016; Director
since February 2018 (served as Interim CEO from
December 2019 to April 2020)
Appointed
April 2019
Appointed
September 2019
Appointed
September 2019
Nationality
British
Nationality
British
Nationality
Australian
Nationality
British
Nationality
South African
Nationality
Canadian
Qualifications
BSc (Econ), MA (Econ)
Qualifications
BEng (Hons)
Qualifications
BCompt (Hons)
Qualifications
BSc (Geo), PhD, DIC
Qualifications
MA (Comm) Taxation and chartered accountant
Qualifications
PhD, PGeo, ICD.D.
Skills and experience
Jim has over 25 years’ experience in investment
management and investment banking, specialising
in the global mining and metals sector. Jim brings to
the Board considerable financial and capital markets
insight and a deep understanding of the mining
industry.
He has held senior appointments with various
companies including Senior Vice President with
Capital International Investors (a division of Capital
Group) and Vice President of Equity Research at the
investment bank HSBC James Capel in New York.
He has also held investment analyst roles with Credit
Lyonnais, covering diversified industrials, and with
CRU International, covering the copper industry.
Jim has previously served as a non-executive director
of Anglo American plc from 2013 to 2020 and
was the senior non-executive director of GT Gold
Corp from 2019 to 2021 when it was taken over
by Newmont Corporation. Jim stepped down as
non-executive director of Evraz plc on 3 March 2022
having served on the board since 15 June 2021.
Skills and experience
Martin is a qualified mining engineer with 25 years in
multiple areas of the mining industry. In his career he
has shown a strong strategic and operating acumen
as well as demonstrating a longstanding commitment
to environmental and social responsibility within
mining, which is central to Centamin’s decision-
making and corporate strategy.
From 2009 to 2019 Martin was the co-founder
and CEO of Toro Gold Ltd, where he oversaw the
discovery, development and operation of the Mako
Gold Mine in Senegal. Toro was acquired by LSE and
ASX listed Resolute Mining in August 2019. Prior to
that, Martin was Executive Director of BDI Mining,
an AIM listed diamond producer, and from 2000
to 2006 he worked in mining finance at Barclays
Capital in London, where his responsibilities included
technical appraisal and advisory services across
Africa and the Middle East. He also held consulting
engineer roles with SRK Ltd and started his career as
a mining engineer with Gold Fields of South Africa.
Skills and experience
Ross has over 20 years’ experience in senior finance
roles in Australia, Africa and the Middle East. Before
joining Centamin, Ross was lead audit partner
with Deloitte Perth, Australia. His experience in
leading teams providing audit and related financial
advisory services to public companies, national and
international groups continues to be of benefit to
Centamin.
Also, of particular relevance is his experience of
Egypt, having been based in Cairo for a number of
years. He has established strong relations within
Egypt specifically with officials at all levels. Ross
continues to demonstrate excellent leadership skills,
assembling and managing multi-jurisdictional teams.
As a qualified accountant, Ross is a member of
the Institute of Chartered Accountants in Australia
(“ICAA”), the Institute of Chartered Accountants in
Zimbabwe (“ICAZ”) and the Australian Institute of
Company Directors (“AICD”).
Skills and experience
Sally was formerly the President and CEO of TSX
Venture Exchange listed Copper North Mining, and
an executive of Endeavour Financial which became
Endeavour Mining. Whilst working for Endeavour,
she served as Senior Vice President operations,
overseeing the exploration, development and
production of a portfolio of gold mining projects in
West Africa. She was the former CEO of Etruscan
Resources (acquired by Endeavour Financial).
Sally brings extensive experience in global resource
capital markets and mining operations. As a
geologist, she brings strong technical balance to the
Board.
Skills and experience
Marna has over 15 years of mining industry
experience in emerging markets with particular
emphasis on Africa. Her substantial management
experience within finance, community and
government relations align well with Centamin’s
existing Board and business model.
Marna started her career in 2002 with
PricewaterhouseCoopers in the Metals and Mining
Division with a client base that included Harmony
Gold Mining Company Limited, Palabora Mining
Company (a member of the Rio Tinto Group) and
Ingwe Collieries (a subsidiary of the Energy Coal
Division of BHP Billiton). She joined Group Five
Limited, a large South African listed construction
company, in 2005 where she was responsible for
Group Reporting. Ms. Cloete joined Ivanhoe Mines
in July 2006 and was promoted to CFO in December
2009.
Skills and experience
Catharine is a professional geoscientist with more
than 25 years of mining industry experience. She is
active in the mining industry with public, private and
academia. Her expertise ranges from operations,
technical services, corporate development and
exploration. From 2012 to 2017 she was co-founder
and CEO of TMAC Resources Inc.
She is a member of the Association of Professional
Geoscientists of Ontario, the Canadian Institute of
Mining, Metallurgy & Petroleum, and a Fellow of the
Society of Economic Geologists.
Catharine brings valuable operational and technical
mining experience to the Board.
Committee memberships
C
Committee memberships
Committee memberships
Committee memberships
C
Committee memberships
C
Committee memberships
C
Current external appointments
Senior independent director of
Ecora plc
(formerly known as Anglo Pacific Group).
Current external appointments
None
Current external appointments
None
Current external appointments
Non-executive director of Ero Copper Corp
and Equinox Gold.
Current external appointments
President and CFO of Ivanhoe Mines Ltd.
Current external appointments
Non-executive director of Franco-Nevada
Corporation, Eldorado Gold Corporation and
Aclara Resources.
Committee Memberships
Audit and Risk Committee
Sustainability Committee
Remuneration Committee
Technical Committee
Nomination Committee
Group Risk Committee
Committee Chair
New Committees post 2020 AGM
C
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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BOARD ROLES AND DIVISION OF RESPONSIBILITIES
BOARD OF DIRECTORS
CONTINUED
HENDRIK (HENNIE) FAUL
INDEPENDENT NON-EXECUTIVE
DIRECTOR
PROFESSOR IBRAHIM FAWZY
INDEPENDENT NON-EXECUTIVE
DIRECTOR
MARK BANKES
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Appointed
July 2020
Appointed
August 2018
Appointed
February 2011
Nationality
South African
Nationality
Egyptian
Nationality
British
Qualifications
BEng
Qualifications
BSc, PhD
Qualifications
BA (Law) and MA
Skills and experience
Hennie has over 30 years of mining industry
experience across a range of commodities and
jurisdictions. As a qualified mining engineer,
he brings highly relevant engineering expertise
that complement the existing technical skills on
the Board, further strengthening the Company’s
operational governance.
Hennie joined Anglo American in 2004, initially
holding a number of senior engineering positions
within its Technical and Base Metals divisions. From
2013 to 2019 Hennie was CEO of Anglo American’s
Copper business, including the Los Bronces
and Collahuasi mines in Chile together with the
Quellaveco greenfield project in Perú. Prior to that,
he was Anglo American’s Group Head of Mining
from 2011 to 2013, where he was responsible for
improving governance and best practices across its
diverse global mining portfolio. Between 2009 and
2010, Hennie was CEO of Anglo American’s Zinc
business.
Skills and experience
Dr Fawzy has over 50 years of experience working
with industrial and investment companies in Egypt
and abroad. He has held the position of minister of
industry of Egypt as well as the president and CEO of
the General Authority for Investment and Free Zones
in Egypt. He is also an emeritus professor at the
Faculty of Engineering at Cairo University.
He brings valuable experience and insight in
governmental relations, banking, investment and
development, specifically within Egypt.
Skills and experience
Mark is an international corporate finance lawyer
specialising in mining policy and agreements,
mergers and acquisitions and international
restructurings for the resource sector.
Mark joined Norton Rose Fulbright in 1984. He
worked in both London and Hong Kong and was a
partner at Norton Rose Fulbright from 1994 to 2007
before starting his own business, Bankes Consulting
EURL, in October 2007 through which he continues
to consult to the mining sector and to Norton Rose
Fulbright.
Mark brings legal expertise drawn from years of
experience and is knowledgeable in the area of
mergers and acquisitions.
Committee memberships
C
Committee memberships
Committee memberships
Current external appointments
Non-executive director of Master Drilling Ltd and
ACG Acquisition Company Limited.
Current external appointments
Chairman of Egyptians Abroad company for
investment and development and director of its
subsidiary companies.
Current external appointments
Founding director of Bankes Consulting EURL
(private).
Committee Memberships
Audit and Risk Committee
Sustainability Committee
Remuneration Committee
Technical Committee
Nomination Committee
Group Risk Committee
Committee Chair
New Committees post 2020 AGM
C
CHAIRMAN
JIM RUTHERFORD
Leads the Board with overall governance,
major shareholder and other stakeholder
engagement responsibilities. For a detailed
list of the Chair’s responsibilities, please
see the Board Charter on the Company’s
website.
CHIEF EXECUTIVE OFFICER
MARTIN HORGAN
Responsible for leading the Company
through the implementation of strategy,
management of the overall business
performance and leading the management
team. For a detailed list of the Chief
Executive Officer’s responsibilities, please
see the Board Charter on the Company’s
website.
At the date of this report, the Board is made up of the Chair, a Senior Independent Director plus five Non-Executive Directors and
two Executive Directors with the following responsibilities:
BOARD ATTENDANCE SCHEDULE IN 2022
CHIEF FINANCIAL OFFICER
ROSS JERRARD
Assisting the Chief Executive Officer with
the implementation of the corporate strategy
and responsibility for the Company’s
financial performance. This includes
delivering external financial reporting in
compliance with the required regulations;
overseeing the preparation of strategic
and financial budgets; developing and
maintaining a sound system of financial
controls; identifying and implementing risk
management practices; representing the
Group before key stakeholders including
government officials (including EMRA); and
monitoring external contracts and supplier
relationships to ensure they are operating
effectively.
SENIOR INDEPENDENT DIRECTOR
DR SALLY EYRE
Responsible for assisting the Board in
carrying out its responsibilities including
being a sounding board for the Chair and
an intermediary for the other Directors. For
a comprehensive role profile, please see the
Board Charter on the Company’s website.
INDEPENDENT NON-EXECUTIVE
DIRECTORS
MARK BANKES, DR IBRAHIM FAWZY,
DR CATHARINE FARROW, MARNA
CLOETE AND HENNIE FAUL
The Non-Executive Directors are
responsible for bringing in an external
perspective, sound judgement and
objectivity to Board debates. Constructively
challenging the Executive Directors whilst
monitoring the delivery of agreed strategy.
For a detailed list of the Non-Executive
Directors’ responsibilities, please see the
Board Charter on the Company’s website.
Mr Bankes continues to provide a wealth of
legal, regulatory and compliance experience
to the Board. The Board agreed that it was
important for continuity and the retention
of corporate history and knowledge
that Mr Bankes be retained as a Non-
Executive Director, notwithstanding his
tenure whereby Mark Bankes reached his
twelfth anniversary on the Board in 2023.
Mr Bankes has continued to ensure all
matters at committee and Board level are
robustly debated and management and the
executive are sufficiently challenged.
GROUP COMPANY SECRETARY
DARREN LE MASURIER
Provides advice and assistance to the
Board, the Chair and other Directors by
ensuring Board procedures are adhered
to and corporate governance complied
with. Both the appointment and removal of
the company secretary is a matter for the
Board.
The table excludes meetings held by written
resolutions or sub-committees and reflects
the membership during 2022.
For committee attendance records please
see each committee report for further
details.
Date of appointment/resignation
Number of Board
meetings attended
Maximum possible
meetings
Executive
Martin Horgan
Appointed 6 April 2020
5
5
Ross Jerrard
Appointed 5 Feb 2018
5
5
Non-Executive
Jim Rutherford
Appointed 1 Jan 2020
5
5
Dr Sally Eyre
Appointed 10 Apr 2019
5
5
Marna Cloete
Appointed 2 Sept 2019
5
5
Dr Catharine Farrow
Appointed 2 Sept 2019
5
5
Hennie Faul
Appointed 1 July 2020
5
5
Dr Ibrahim Fawzy
Appointed 14 Aug 2018
5
5
Mark Bankes
Appointed 24 February 2011
5
5
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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THE BOARD IS RESPONSIBLE FOR
SETTING THE STRATEGY AND ENSURING
ACCOUNTABILITY FOR ITS DELIVERY
OUR GOVERNANCE STRUCTURE
BOARD INDEPENDENCE
BOARD RE-ELECTION
BOARD COMPOSITION
AND ROLES
The Board remains compliant with
the provisions of the 2018 Code,
whereby at least half the Board
comprises Non-Executive Directors
who are determined by the Board to
be independent. Each of the Non-
Executive Directors is considered by
the Board to be independent and free
from any issues that may impair their
ability to present their opinions and/or
mar their judgement. For more details
on independence see the Corporate
Governance Compliance Statement.
All Directors are subject to annual re-
election. All Directors will be put forward
for re-elections at the next Annual
General Meeting (“2023 AGM”). The
experience and skills each Director
contributes to the Board are set out in
their biographies on pages 90 to 92.
The Nomination Committee regularly
reviews the balance and composition of
the Board and its committees. Non-
Executive Director independence, skills,
experience and tenure also remain key
elements for continuous review. Further
details are set out on page 104 of the
Nomination Committee Report.
BOARD TRAINING
BOARD SITE VISITS
Regular training continued to be
provided to the Board in 2022 to
enhance their understanding and
awareness of ESG standards and
terminology, Egypt economic and
political environment, security situation
in Côte d’Ivoire and broader market
updates from the Company’s brokers
and legal advisors.
The full Board welcomed the opportunity
to return to Sukari, Egypt for a site visit
in 2022, and for those who had been
restricted from travelling due to COVID,
observed first-hand the significant
progress that had been made over the
last two years onsite at Sukari.
NON-EXECUTIVE DIRECTORS
AUDIT AND RISK
COMMITTEE
REMUNERATION
COMMITTEE
NOMINATION
COMMITTEE
SUSTAINABILITY
COMMITTEE
TECHNICAL
COMMITTEE
Oversight of the
Company’s financial
and narrative reporting
processes and the integrity
of the financial statements
as well as supporting the
Board by providing the
risk management and
internal control functions/
processes.
Reviewing and
recommending to the
Board the remuneration
packages for the Executive
and Non-Executive
Directors. Setting the
remuneration structure
for senior management,
pay scales and the
remuneration package
for the wider workforce.
Responsible for reviewing
the structure, size and
composition of the Board
and its committees.
Overseeing the succession
planning of Directors
and management team.
Implementation of the
People Policy and Diversity
and Inclusion Policy.
Responsible for reviewing
and monitoring policies,
management systems
and performance of
the Company to ensure
compliance with
applicable ESG, climate
initiatives, legal and
regulatory requirements
and alignment with good
industry practice.
Responsible for reviewing
technical reports,
internal quality control
and assurance over the
Group’s mining assets
and exploration. Oversight
of the life of asset,
production and exploration
remain central on the
agenda of the committee.
For a detailed summary
of committee activities,
see the Technical
Committee Report.
Read more on page 113
Read more on page 119
Read more on page 104
Read more on page 110
Read more on page 108
EXECUTIVE DIRECTORS
CORPORATION
MANAGEMENT
OPERATIONAL
MANAGEMENT
TECHNICAL
MANAGEMENT
CENTAMIN PLC
OVERSEEING AND INFORMING
REPORTING
BOARD OF DIRECTORS
The Board sets and implements the strategic aims and values of the Company,
providing direction to the Executive and management teams. With one production asset,
the Board and its committees play a significant role in all major decisions in the Group.
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ADDITIONAL INFORMATION
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COLLABORATIVE
WORKING ENVIRONMENT
OUR MANAGEMENT STRUCTURE
There is collaborative working between the
Executive Directors and the management
team, the goal being to execute the Company’s
strategy. Centamin’s management teams
comprise of highly motivated, dynamic and
experienced individuals.
BOARD EXPERIENCE BY SECTOR
EXECUTIVE VS NON-EXECUTIVE
NON-EXECUTIVE TENURE
Mining and Resource Industry
Capital Markets
Legal
Finance, Accounting and Audit services
Mergers and Acquisitions
Government Relations, Public
Service & Development
Investment Banking &
Investment Management
Chair
Non-Executive
Chief Executive Officer
Executive
Chief Financial Officer
Executive
Senior Independent Director
Non-Executive
The People Policy aspires to develop an inclusive
workforce that represents the diversity of our
host countries and communities, not limited to
gender, geographical representation, education,
experience, ethnicity, religion or belief, experience,
age and disability. A programme is in place with a
working group to identify and resolve barriers to the
advancement of women in our workplace.
Years in tenure
0 – 2
2 – 4
4 – 6
6 – 9
9+
Jim Rutherford
Dr Sally Eyre
Marna Cloete
Dr Catharine Farrow
Hennie Faul
Dr Ibrahim Fawzy
Mark Bankes
(1)
(1) See Mark Bankes’ biography on page 92 for an explanation on tenure.
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Non-Executive
CORPORATE
MANAGEMENT
OPERATIONAL
MANAGEMENT
TECHNICAL
MANAGEMENT
Corporate Manager
Corporate Analyst
Head of Risk
Data Manager
Corporate Communications
Financial Controller
Company Secretary
Group Accountant
SUKARI
Country Manager – Egypt
General Manager – Sukari
WEST AFRICA
Regional Manager
ESG Manager
Group Head of Exploration
Group Mineral Resource Manager
Group Head of Projects
Group Health and Safety Manager
Group ESG Manager
Group Mine Engineer
Following the strengthening of the management team in 2020 and 2021, the management structure remained consistent through 2022.
EXECUTIVE DIRECTORS
BOARD DIVERSITY
The awareness of diversity and the
various forms it takes in the boardroom
are illustrated in the Company’s Diversity
and Inclusion Policy. The Nomination
Committee Report further explores how the
Board addressed diversity issues beyond its
members during 2022, where greater focus
was given to the Group’s gender diversity
and the objective of the enacted People
Policy and Diversity and Inclusion Policy in
aligning Centamin with its people. Below are
some of the Company’s key Board statistics.
BOARD MEMBERS
9
2 Executive
7 Non-Executive
(1)
3 Female
6 Male
NATIONALITIES
5
British
Egyptian
Australian
Canadian
South African
4
1
1
1
2
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ADDITIONAL INFORMATION
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KEY ACTIVITIES IN THE YEAR
BOARD AND COMMITTEE EVALUATION
Annually, the Board undertakes an internal evaluation of its own performance, its committees and that of its individual Directors.
An externally facilitated Board evaluation is conducted every three years with the last review completed by Korn Ferry in February 2022
and the findings reported in the FY2021 Annual Report.
The internal evaluation at the committee and Board level was conducted and proposals identified as follows:
Sustainability Committee
•
Development of a structured training programme for the Board
• Return to periodic meetings (quarterly)
• Ongoing communication with
–
the Technical Committee on matters relating to assurance reports, projects and initiatives to reduce emissions
–
the Remuneration Committee on matters relating to ESG targets
–
the Audit and Risk Committee on matters relating to the Asset Retirement Obligation (“ARO”) and TCFD
disclosures
• Improved functionality to Board pack information
Technical Committee
• Return to periodic meetings (quarterly)
•
Ongoing communication with the Sustainability Committee on development of assurance reports and other
projects
Audit and Risk Committee
•
Return to periodic meetings (quarterly) and deeper dive meetings ahead of periodic financial reporting
•
Align with the Sustainability Committee and Remuneration Committee on developments around ARO, TCFD and
climate change related disclosures
Remuneration Committee
•
Align with the Audit and Risk Committee and Sustainability Committee on developments around the ESG targets
Nomination Committee
•
Offer attendants from the wider Board where additional expertise or input is required
Board
• Physical attendance at all periodic meetings where possible
•
Encourage use of experts / advisors at meetings to support the Board’s understanding
Detailed further in the Nomination Committee Report are the actions resulting, in part, from the externally facilitated Board and
committee evaluation. In summary these are as follows:
•
Succession planning and Board effectiveness
– periodic reviews of the Group’s succession planning is undertaken by the Nomination
Committee. This has identified the need for two new non-executive Board positions over the next two years.
•
Skills gap analysis
– periodic reviews are undertaken to identify skills gaps at the Board and wider management team.
KEY ACTIVITIES OF THE BOARD IN 2022
Topic
Key activities during 2022
Progress and outcome in supporting the strategy
Board
• Transition from contractor-mining to owner-operator mining of
the underground operations at Sukari
• Expansion of the Sukari underground mining capacity to
1.5Mtpa of total ore mined, as supported by the independent
option study
• Approval of a senior secured sustainability-linked revolving
credit facility of US$150 million
•
Underground operations at the Sukari Gold Mine transitioned from contractor-
mining to owner-operator. The Board supported this initiative having clear
line of sight of the underground Reserve and Resource
•
The approach to mineral resource management and productivity and cost
benefits realised following the transition to owner-mining supported the
decision to expand the underground. A base case mining and development
schedule was produced for the expanded 1.5Mtpa mining rate utilising the
2021 underground resource model
•
The facility is with a syndicate of leading international lending banks,
offering the Company increased financial capacity and flexibility. From a
governance perspective, the process provides greater rigour and certainty
over our legal and corporate framework
Committee
recommendations
• Assessment of key operational projects
• Capital allocation review
•
Climate Change Strategy and target for reduction of GHG
emissions by 2030 supported by science-based carbon
abatement roadmap and development of the Energy and
Climate Change Policy and TCFD disclosures
•
Remuneration targets set for 2023 and future longer term
incentives
•
The Technical Committee oversaw the process that led to the recommended
transition to underground owner-operator
See the case study on principal decision making above and the Technical
Committee Report on page 108
•
The Audit and Risk Committee supported the dividend policy taking into
consideration the cash flow forecasting and future financing requirements
which culminated in the Board approved revolving credit facility
See further details in the Audit and Risk Report on page 113
•
The Sustainability Committee recommended for approval of the Board the
Climate Change Strategy, carbon abatement reduction opportunities and
statement, TCFD statement and updated ESG policies including the Energy
and Climate Policy
See further details in the Sustainability Committee Report on page 110
• The Remuneration Committee worked with the Sustainability Committee,
Audit & Risk Committee and Nomination Committee to ensure the targets
aligned with the Group’s strategic goals and incentivised the right
behaviours. These targets were approved by the Board
See further details in the Remuneration Committee Report on page 119
Routine activities
• Director approved interim dividend and shareholder
recommended final dividend
• Periodic financial reporting and monitoring of the internal
control environment
• Annual budget preparations
• Corporate and Board training
• M&A opportunity assessment
• Risk and assurance mapping
•
Board approved interim and Board recommended final dividend for the
FY2022
• Publication of financial results and ongoing regulatory compliance
• Delivery of comprehensive budget (including site level)
• Corporate policies training rolled out across the business
•
Assessment of opportunities and development of a data room
•
Workshops were undertaken to ensure the views of the Board were understood
when developing the principal and emerging risks and articulation of the
Company’s risk appetite
2023 FOCUS AREAS
The Strategic Report sets out the areas of focus for the Board for 2023 and through the work of the Board and its committees, the
governance framework will focus on guiding, monitoring, challenging and advising on these key activities:
• Fully optimised Life of Mine Plan (including underground expansion study)
• Delivering on cost reduction initiatives and related capital projects
• Assessment of growth opportunities:
–
Exploration across the Sukari Concession area with potential satellite resources
–
Doropo Project pre-feasibility study and EIA
–
Exploration projects in Côte d’Ivoire and completion of PFS/EIA and strategic/finance structuring for the project
–
Eastern Desert work programmes in Egypt
–
M&A opportunities
• Sustainability performance
–
Carbon abatement initiatives include negotiations and contracts to secure grid power connection
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UNDERSTANDING WHO WE
ARE THROUGH OUR CULTURE
OUR CULTURE
OUR VALUES AND THE WAY WE DO BUSINESS EXPRESS OUR CULTURAL IDENTITY
MONITORING
ACTIONS
VALUES
• Safety statistics
• Operational reports
• Internal reports
• External communication
• Shareholder feedback
• Investment in people and communities
• Deliver our strategy
• Employee wellbeing and safety
• Maintain our social licence to operate
• Safeguard our industry
• Care for our environment and communities
• Support our environment and social governance
• Responsibility, accountability and ethical standards
• Continued improvement and innovation
• Information and training
• Ensuring responsible mining and opportunities for
the future
WE ARE COMMITTED
TO OUR VISION
WE HAVE A CLEAR AND
CONSISTENT STRATEGY
TO DELIVER OUR VISION
OUR PURPOSE IS
PEOPLE-DRIVEN
Our vision is to be a multi-asset gold producer,
delivering value through responsibly mining high-
quality, long-life assets.
To create value and returns for stakeholders by
maximising the value of our asset base and promoting
further growth and diversification.
Our purpose is to create opportunities for people
through responsible mining.
We recognise we have an important part to play in
shaping the future of our stakeholders and supporting
wider society.
Our purpose directs our decisions and actions, shapes
our culture and drives our strategy.
The following activities are examples of how our culture has been assessed and shaped within the organisation to develop, enhance and
align with our Purpose, Values and ultimately our strategic aims:
1.
CONTINUOUSLY ENCOURAGING
DIVERSITY AND CELEBRATING
PEOPLE
•
Partnership with Women in Mining UK to support the advancement of women in our workplace
•
Policy development with people and inclusion at the forefront and training to support the Company’s
policies
2.
CONTINUOUSLY CREATING A
SAFE WORKPLACE
•
Safety performance and incentivising continuous improvement and striving to achieve a zero-harm
workforce
•
From safety sharing at the Board and committee level, to safety awareness workshops, safety is everyone’s
responsibility, and all are empowered to protect one another
3.
HEALTH AND WELLBEING
•
Upgrade to employee accommodation and recreational facilities, including a new football pitch and gym
at Sukari
• Engagement initiation of a mental wellbeing programme
•
Continued improvements to our catering services including a healthier menu
4.
CONTINUOUS EDUCATION
AND TRAINING
• Professional development and leadership training
•
Partnership with registered training organisations to deliver certified training modules in leadership and
management
•
Apprenticeship programme in heavy vehicle mobile plant technology to recognised industry standards
CULTURE
The Board defines the
Company’s values and
behaviours, and through its own
actions and communication
channels embeds these in the
corporate culture across the
business.
Communication
• Engagement forums
• Management meetings
• Investor relations
• Published reports
Aims
• Protect our environment
• Invest in our employees
• Maintain our social licence
to operate
• Safeguard our industry
• Care for our communities
Policy
• Performance framework
• Setting operating standards
• Management planning
• Budget and resource
allocation
MONITORING
ACTIONS
VALUES
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CORPORATE GOVERNANCE AND COMPLIANCE STATEMENT
2018 UK CORPORATE GOVERNANCE CODE
Compliance Statement
The Company is incorporated in Jersey, Channel Islands. The Company, by virtue of the Listing Rules, is subject to the 2018 Corporate
Governance Code (“the 2018 Code”) issued by the UK financial Reporting Council (“FRC”) and therefore the Company needs to
confirm how it has applied the main principles and complied with all relevant provisions of the 2018 Code and to explain areas of non-
compliance. The 2018 Code can be found on the FRC’s website www.frc.org.uk.
The Company has complied with all relevant provisions of the 2018 Code except for full compliance with the following:
Code Provision
Requirement
Application
Code Provision
5 and 6
Stakeholder
interests
and workforce
engagement
Workforce engagement: non-compliant until June 2022 when the site visit was performed.
The Board agreed that Code Provision 5 and 6 were satisfied following the Board site visit in June 2022. Although there
continues to be adequate frameworks in place to manage stakeholder interests and engagement, the Board felt that direct
engagement with the workforce, following the lifting of COVID travel restrictions, was required in order to satisfy the full
requirements of the Code. The site visit allowed the Board’s workforce representative to meet with key personnel and observe
first hand the work carried out by the team and ensure active in-person dialogue.
At Sukari, we encourage employees to raise questions and concerns with their supervisor to maintain a workplace free from
corruption, discrimination, harassment and retaliation. Our site-based grievance mechanism and independent whistleblower
hotline allow workers to anonymously file a complaint, and both are available in all languages of the countries in which we
operate.
The Board selected the Chair of the Sustainability Committee to act as the Board’s representative for workforce engagement,
given the scope of the committee focuses on human rights, diversity and inclusion, workforce engagement, sustainability of
communities and engagement with the wider stakeholders. Catharine Farrow as chair of the Sustainability Committee and
acting Board representative for workforce engagement, met with several working groups while visiting Sukari which cemented
the direct engagement with the workforce.
As well as speaking with senior leaders and team members during the site visit, specific engagement included the following:
•
Diversity Committee: Attending the committee and discussing with the members the key achievements in the year to date
and areas of focus for the committee
•
HSE team meeting: Attending the meeting with an opportunity to observe and contribute to the weekly HSE team leader
discussion
•
Tailings management progress meeting: Attending the meeting with an opportunity to observe and contribute to the weekly
tailings management meeting involving the process department, environmental team and major project team leaders
•
Tool-Box talk: Attendance with an opportunity to observe the routine weekly tool-box talk
•
Meet and greet with Sukari women: An opportunity for open discussion with the female staff from both Sukari and the
Eastern Desert Exploration
Site visits will be undertaken by the chair of the Sustainability Committee at least annually.
As chair of the Sustainability
Committee, Catharine Farrow is also privy to all whistleblower reports and site-based reports on matters including grievance,
human resources and safety standards. All whistleblowing reports are tabled with the Sustainability Committee periodically and
matters are elevated for consideration by the committee based on their potential severity.
The existing communication channels and structured working groups along with the direct observations, communication and
feedback by the chair of the Sustainability Committee has ensured meaningful engagement in line with Code Provision 5.
Code Provision 10
Director
independence
The average tenure of Centamin’s Non-Executive Directors is approximately three years except for Mark Bankes who has been on
the Board for twelve years.
Mark Bankes continues to provide a wealth of legal, regulatory and compliance experience to the Board. The Board agreed
that it was important for continuity and the retention of corporate history and knowledge that Mr Bankes be retained as a
Non-Executive Director, notwithstanding his tenure whereby Mark Bankes reached his twelfth anniversary on the Board in 2023.
Mr Bankes has continued to ensure all matters at committee and Board level are robustly debated and management and the
executive are sufficiently challenged.
For further details please see the biography details on page 92.
The Board considers Mark Bankes to be independent as he continues to demonstrate objective judgement and independence. To
ensure the level of independence remains, Mark Bankes does not serve on the Audit and Risk Committee or the Remuneration
Committee.
At least half of the Board members are Independent Non-Executive Directors. See statement below on Board Independence.
Code Provision 36
Post-employment
shareholding
Effective from the 2022 AGM, the Company’s shareholder approved Remuneration Policy included a policy on post-cessation
holding requirements (as required by Provision 36 of the 2018 Code). Prior to this date the Company did not have in place a
post-employment share ownership guideline. The Company’s Performance Share Plan also includes a two-year holding period
requirement for vested shares which continues following the departure of an executive.
The Company is required to report on how it has applied the principles of the 2018 Code during 2022 and details of such application are
to be found throughout the 2022 Annual Report as follows:
Board leadership & Purpose
Promoting the long-term sustainable success of the Company
See page 20 in the Strategic Report
Alignment of Purpose, Values and strategy with our Culture
See page 100 Our Culture
Effective controls framework
See page 118 on Risk Management and Internal Controls
Stakeholder engagement and Section 172 of the UK Companies Act 2006
See page 22 on Relationship with Stakeholders and page 88 Case Study ‘Owner Operator’
Workforce policies and practices
See page 104 on Nomination Committee Report and Sustainability Committee
Division of responsibilities
The role of the Chair
See page 93 under the Our Governance Structure
Non-Executive Directors
See page 93 under the Our Governance Structure
Information and support
See page 208 under Company Information
Composition, succession and evaluation
Succession planning
See page 104 of the Nomination Committee Report
Skills and experience
See pages 90 to 92 within Board of Directors
Board diversity
See page 106 within Board Diversity
Board evaluation
See page 98 within Board and Committee Evaluation
Audit, risk and internal control
Internal and external audit functions
See page 117 within the Audit and Risk Committee Report
Fair, balanced and understandable
See page 116 within the Audit and Risk Committee Report
Risk management
See page 118 within the Audit and Risk Committee Report
Remuneration
Remuneration policies and practices supporting strategy and promoting
long-term sustainable success
See page 130 within the Remuneration Committee Report
Procedure for developing policy on executive remuneration
See page 129 within the Remuneration Committee Report
Shareholder engagement
See page 120 within the Shareholder Information
Workforce engagement and policy alignment
See page 129 within the Remuneration Committee Report
NATIONAL POLICY 58-201 – TORONTO STOCK EXCHANGE
In addition, the Company is required to follow the principles of corporate governance set out in the best practice recommendations of the
Toronto Stock Exchange, in particular those recommendations in National Policy 58-201 Corporate Governance Guidelines (NP 58-201).
The compliance statements presented in the report reflect the requirements of the primary listing on the premium segment of the London
Stock Exchange and the 2018 Code which are consistent with the recommendations of the Toronto Stock Exchange.
BOARD INDEPENDENCE
When determining whether a Director is independent, the Board adheres to the Directors’ Test of Independence Policy, which is based
on the 2018 Code and the definitions of independence in the Canadian Securities Administrators’ National Instrument 52-110 – Audit
Committees. The review carried out in 2022 confirms that the Company remains compliant with the provisions of the 2018 Code,
whereby at least half the Board comprises Non-Executive Directors who are determined by the Board to be independent. Each of the
Non-Executive Directors is considered by the Board to be independent and free from any issues that may impair their ability to present
their opinions and or mar their judgement. For more details on independence see the Corporate Governance Compliance Statement.
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FOCUS ON PEOPLE,
DIVERSITY & INCLUSION
NOMINATION COMMITTEE REPORT
Following the transitional
year, the committee could
focus more readily on
succession and future
strategic planning.
JAMES RUTHERFORD
CHAIR OF THE
NOMINATION COMMITTEE
INTRODUCTION
The Board and management team
remained largely unchanged through
2022, providing much needed continuity
and stability following the transitional
year in 2021. Within this context, the
committee was able to focus more readily
on succession planning for the future,
ensuring talent is recognised and promoted
throughout the business.
The committee and Board commissioned
a thorough and independent review of the
Board’s effectiveness and composition
through 2021 which was completed
in February 2022. An output of this
evaluation was a range of short to medium-
term recommendations. One area of
consideration for the committee was the
composition and aggregate competencies
and skills across the Board. Whilst the
Board’s composition was deemed to be
entirely appropriate, a risk was observed
around particular skills and experience
being ‘siloed’ with a single Director. As a
result, the committee believes it is now
appropriate to launch a search to appoint a
further Director to the Board to add direct
experience across one or more of Egypt,
legal and/or finance related experience.
The committee also reviewed the Diversity
and Inclusion Policy this year and updated
Code of Conduct having consideration to
the practical steps for implementation and
training. This formed part of the continued
improvement of Group policies.
The committee also worked closely with
the Remuneration Committee to set social
targets as part of the short-term incentive
plan and with the Sustainability Committee
on training and development opportunities
across the business.
In this report, I am pleased to be providing
you, our stakeholders, with an update on
our progress as a committee and the Board
in 2022.
BOARD SUCCESSION
The Board has been together through a
full reporting cycle since completing the
two-year Board succession and refreshment
reported in full in the 2020 Annual Report
and accounts. This has allowed the Board
to develop, articulate and implement a clear
strategy which is underpinned by technical
assurance. The Nomination Committee
concluded that the Board reflects diverse
knowledge and expertise in all required
disciplines. However, to ensure continued
improvement, the committee commissioned
an independent evaluation to assess the
effectiveness of the Board and understand
the skills gaps and training needs to meet
the Group’s long-term strategic aims.
As noted above (Introduction) the
Nomination Committee believes it is now
appropriate to launch a search to appoint
a further Director to the Board to add
direct experience across one or more of:
Egyptian, legal and/or finance experience
(to support the Audit and Risk Committee).
Consideration of the next appointment(s)
will also take into consideration greater
gender diversity. The committee has
engaged an external search consultancy
to assist with the search for potential
candidates.
Nomination Committee membership
James Rutherford is the chair of the committee with three members who are all
Independent Non-Executive Directors. Depending on the agenda of committee meetings,
senior management are regularly invited to attend to provide an update on issues of
interest to the members. Below is the individual attendance record for all members and for
more information on the skills that each member brings to the Committee see the Board of
Director Profile section:
Member
Membership details
Number of
meetings attended
James Rutherford (C)
Appointed since 29 June 2020
3 of 3
Dr Sally Eyre
Appointed since 29 June 2020
3 of 3
Dr Ibrahim Fawzy
Appointed since 29 June 2020
3 of 3
Mark Bankes
Appointed since 24 April 2019
3 of 3
KEY FOCUS AREAS DURING THE YEAR
1.
Board succession and diversity
2.
Group diversity and inclusion
3. Leadership succession: Egypt
management team structuring and
strengthening of the team
4.
Leadership and employee development
pathway and vocational education
5.
Policy updates: Code of Conduct and
Diversity and Inclusion Policy
KEY FOCUS FOR 2023
1.
Engagement of a recruitment agent to
aid with the identified Non-Executive
Director roles on the Board
2.
Target setting and assessment of
the Group’s diversity and inclusion
programmes
3.
Continual improvements in talent
management and professional
development programmes
Committee purpose
The committee continues to monitor
the make-up of the Board and other
committees ensuring the balance of skills
is maintained. It also continues to ensure
that the correct procedures are in place
for nominating, inducting, and evaluating
Board members. Working with senior
management, the committee continues to
have an oversight on talent management,
diversity and inclusion programmes. The
full Terms of Reference are available on
the Company’s website on https://www.
centamin.com/about/governance/.
Overboarding
The committee assesses the time
commitments required to undertake a
Board position at Centamin. All proposed
external Board appointments are tabled
with the Board for prior approval.
Consideration is given to potential conflicts
and how these could be managed, time
commitments of the new role and the
individual’s existing commitments to ensure
the individual has sufficient capacity to
undertake the new role. The committee and
the Board are comfortable that all Board
members have sufficient capacity to serve
on the Centamin Board.
The committee is seeking potential
candidates that bring listed board
experience, are a recognised business
leader with commercial experience
and credibility within Egypt, possessing
extensive knowledge, network and direct
business experience in Egypt and/or bring
audit committee experience. The successful
candidate will exhibit non-executive
behaviours, namely the ability to add value
through influence, guidance, indirect
challenge and the courage of conviction.
BOARD EFFECTIVENESS REVIEW
The externally facilitated Board evaluation
was undertaken by Korn Ferry and
completed in February 2022. The review
assessed how the Board works as a team
and interacts with the management team;
reviewing how the Board and its committees
interpret their mandates and deliver against
key targets.
GROUP DIVERSITY
AND INCLUSION
The mining industry has been
historically male dominated and
the challenge to bring about greater
gender diversity has been on the
agenda for many companies in the
sector. However, in Egypt, Centamin
has faced additional and significant
legal and cultural challenges to the
employment of women. Sukari is in a
remote location and Egyptian custom
discourages women from working away
from their families for extended periods
of time, as is required with a rostered
workforce.
We recognised that broad and
concerted leadership will be required
to advance the participation of women
within the workplace in Egypt. Leading
from the top, the Board approved
the People Policy and Diversity and
Inclusion Policy and developed
targets along with the Remuneration
Committee to improve diversity and
inclusion across the business.
At Sukari, a gender diversity working
group was established under the
leadership of the General Manager to
advise the site management team on
the achievement of these objectives.
These have led to female appointments
at a site level which represent a
significant milestone in the history
of Sukari and we are proud of this
achievement. A support group has also
been established for female employees
working at Sukari.
Recruitment in 2022 has been
successful with 30 female
employees now working across HR,
Administration, Finance and Health
and Safety and 5 women working
at Sukari with contractors. The next
phase will be identifying barriers for
the recruitment of female employees
within Mineral Resource Management,
Processing and Mining.
Alongside these initiatives are training
programmes, with diversity and
awareness courses and induction for
all the workforce including diversity
standards.
The People Policy and Diversity
and Inclusion Policy are available
on the Company’s website on
www.centamin.com
.
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NOMINATION COMMITTEE REPORT
CONTINUED
PARKER REVIEW
The committee continues to monitor the
diversity targets using one of many key
indicators such as the Parker Review. The
report is based on identifying the various
ethnic groups which the Directors on the
Board identify with and this was submitted
to the Department for Business, Energy and
Industrial Strategy (“BEIS”) on the BEIS
portal. The Board remains compliant with
one Director identifying themselves as being
an ethnic minority as defined within the
Parker Review. In considering diversity as
a whole, the committee notes the following
key diversity indicators and considerations:
Key indicators have been used by the
committee to assess where the Company
stands in relation to diversity in all its forms.
Throughout 2021-2022, several of the
Group wide policies were updated to
complement the issue of diversity and link
to the Company’s strategy. The People
Policy, Diversity and Inclusion Policy and
Code of Conduct have all been reviewed by
the committee and approved by the Board.
There are several initiatives to tackle the
issue of diversity and manage the talent
pipeline at site level with specific targets
introduced as part of the short-term
incentives.
The committee also applies the same
diversity consideration when undertaking
the recruitment process for other key senior
management roles. The Company believes
that having senior management positions
occupied by individuals from diverse
backgrounds promotes a better succession
pipeline of talented executives and senior
managers who are innovative, perform well
and make effective decisions.
DIVERSITY DETERMINANTS
Board diversity
Centamin’s Diversity and Inclusion Policy commits to creating a diverse Board with members who are diverse in gender, geographical
representation, education, ethnicity, opinion and so on. In line with policy, the following remain key factors in identifying and considering
candidates for election and/or re-election:
Highly qualified
based on experience,
expertise and personal
skills and qualities
Gender, age,
ethnicity, disability
and geographical
background
Level of female
representation
Assistance of
independent external
advisors in addition
to own searches for
the right person
DIVERSITY AND INCLUSION POLICY
The revised and updated Diversity and
Inclusion Policy, which was developed
by the Nomination and Sustainability
Committees, introduces the following key
updates:
• Recognises the responsibility of all
employees at all levels, including
business partners, for promoting the
development of a diverse and inclusive
culture
• Clarifies the accountability of our Board
leadership team to promote and improve
our diversity performance
• Alignment of KPIs and targets with good
industry practice, including those of the
FTSE Women Leaders Review.
By definition, diversity refers to all
characteristics that make an individual
unique including gender, ethnicity, religion
and socio-economic background. At
Centamin we recognise our performance
on gender diversity requires specific
improvement to meet investor expectations
and good industry practice. The Policy has
been revised to help drive improvements in
our performance. Since the policy has been
put in place each business entity has been
tasked to develop action plans and put in
place workforce engagement structures
to promote diversity and inclusion.
Measurable objectives and targets will
also drive continual improvement in
diversity and this has been built into our
remuneration metrics.
FTSE Women Leaders Review
As the Hampton Alexander Review concluded in 2021, the FTSE Women Leaders Review will continue to monitor the representation of
women among leaders of FTSE 350 companies at board level and senior leadership. This continues to be included in the Company’s
Diversity Policy on monitoring female representation at Board, senior management, and the overall commitment to developing a diverse
workforce. The newly published People Policy and Diversity and Inclusion Policy falls in line with monitoring gender diversity.
During the year, the committee assessed the succession planning and approach to diversity and inclusion at the Board level,
the management team and their direct reports, giving consideration to the progress towards the targets set by the FTSE Women
Leaders Review:
Group
Diversity stats disclosed
Current target for FTSE 350 companies
2025 targets for FTSE 350 companies
Board
33% female representation
(2021:33%)
At least 33%
(target met)
At least 40%
Senior management
(Executive Committee)
16% female representation
(2021:16%)
At least 33%
(IA target of 25% not met)
At least 40%
(IA target of 28%)
Direct reports
29% female representation
(2021:29%)
At least 33%
(IA target of 25% met and exceeded)
At least 40%
(IA target of 28%)
The Group reported that senior management fell below the Investment Association (“IA”) target recommended as 25% of female
representation but direct reports were above the IA recommended target of 25%. In 2022 female representation within the management
team included roles across investor relations and human resources. Female representation across the direct reports includes office
management, the sustainability manager and assistant company secretary. A number of initiatives are underway to encourage greater
diversity across the Group.
LEADERSHIP SUCCESSION
As part of the business contingency
planning, the Nomination Committee
reviewed a succession plan covering the
management team. The contingency plan
identified key roles across the Group and
the resilience and succession in place
should an unforeseen event occur. The
role succession plan highlighted gaps
and opportunities for future recruitment
as well as functioning as an additional
tool to enhance the current talent pipeline
management of Centamin.
The role succession plan also prompted
discussion around identification of talent for
future succession to executive and senior
leadership roles.
In early 2022, the Nomination Committee
oversaw the retirement of Mr Youssef
El-Raghy and appointment of Mr Amr
Hassouna as Country Manager. As Country
Manager, Amr will be responsible for all
of Centamin’s activity in Egypt including
managing the Group’s interest in SGM as
Managing Director, the activities in the
Eastern Desert Exploration and will also
be our primary contact for governmental
interactions including EMRA and the office
of the Minister of Petroleum.
Throughout 2022, the Nomination
Committee was involved in assessing the
talent and succession planning with regards
to key roles and responsibilities of the
broader management team.
LEADERSHIP TRAINING
The Board continues to work on developing
a diverse pipeline of talented individuals
from within the organisation. The
opportunities for employees to develop
the required skills and experience are
being managed through a leadership
development programme.
National employees
The majority of Centamin’s workforce are
based in Egypt and career developmental
programmes have been set up for
national employees. The purpose of these
programmes is to ensure that national
employees have the opportunity to learn
and grow in their careers and be equipped
to take on senior leadership roles within
Centamin.
This programme, which is supported by
the Nomination Committee, builds on the
progress through 2021 to:
• Increase the number of Egyptian
nationals in leadership roles
• Reduce the number of expatriates year-
on-year
• Identify and deliver role specific
development pathway and training
programmes
The initiative aims to develop the
proficiency across all roles with a clear
ultimate target to increase local participation
at senior levels year-on-year. To progress
this goal, the Sukari Capability Framework
was rolled out at Sukari with the aim of
creating opportunities for all employees.
The Future Institute of Australia, a
registered training organisation, delivered
courses during the year which included
Diploma level qualifications for senior
management and Certificate IV level
qualification for superintendents.
The focus on leadership and supervisory
development programmes will help to
develop the in-house training capability with
assessor expertise to support the growth of
employees and the business.
1
DIVERSITY
AND INCLUSION
POLICY
2
SUCCESSION
PLANNING
3
TRAINING AND
DEVELOPMENT
4
TALENT
PIPELINE
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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ASSESSING KEY
OPERATIONAL PROPOSALS
TECHNICAL COMMITTEE REPORT
Key deliverables were
completed this year providing
the business with operational
efficiencies and further cost
savings.
HENNIE FAUL
CHAIR OF THE
TECHNICAL COMMITTEE
INTRODUCTION
The Technical Committee supports and
advises the Board in reviewing technical
and operational matters. The committee
helps in monitoring executive led proposals,
ensuring fair process from tendering to
quality control and assurance.
COMMITTEE PURPOSE
The committee operates within the
governance structure of the Group and the
committee’s primary functions are set out
in the charter. These include the review of
technical matters relating to exploration,
development, permitting, construction,
operation, decommissioning and
rehabilitation of Centamin’s mining activities
and operations. In addition, the committee
will understand and assess the resources
and reserves on Centamin’s mineral
resource properties. The committee will also
review the planning, preparation and review
of technical reports and related assurance
information, giving due consideration to the
impact of decisions on wider stakeholders.
For more information on the committee’s
charter please visit the Company’s website
at www.centamin.com.
KEY ACTIVITIES IN 2022
The exploration programmes across the
Sukari concession area were assessed by
the committee, with the announcement
in December 2022 disclosing the second
consecutive year of resource and reserve
growth at Sukari. The committee has seen
first-hand the improvement in geological
understanding by the Mineral Resource
Management team. Overall, the Group’s
Measured and Indicated Mineral Resource
base is now 13.6 million ounces in 2022,
after Sukari mining depletion, the upgrade
to Doropo Mineral Resources and the
removal of the non-core asset Batie West
in Burkina Faso.
The committee has also assessed the plans
for delivery of the drilling campaign across
all known targets within the underground
and elsewhere in the concession area,
with just under 2.0 million ounces of gross
Mineral Reserves added over the last two
years.
The committee was also instrumental
in the assessment of the underground
operating model and tender process and
cost-risk benefit analysis of both contractor-
mining and owner-operator mining the
underground operations. This resulted in
SGM becoming the owner-operator, mining
the underground operations at Sukari.
Please see ‘Principal Decision Making’ in
the Governance Report on page 88 for
more information.
The committee has also worked alongside
the Sustainability Committee on carbon
abatement projects and the Audit and
Risk Committee on the cost reduction
opportunities at an operational level.
Ensuring the right behaviours are
incentivised is also key to delivering the
Group strategy and the committee worked
with the Remuneration Committee to
develop the operational targets.
H1 2022
–
Review throughout the year of operational data across the Group’s assets including the safety,
high potential incidents and related workplace safety
–
Assessment of the tendering, cost estimates, operational preparedness and underground
reserve estimates to support the Board approved transition to owner-mining of the
underground operation at Sukari
–
Oversight of the Côte d’Ivoire portfolio and preparations for the pre-feasibility study at Doropo
H2 2022
–
Oversight of the negotiations on the fiscal terms over the new exploration ground in Egypt’s
Eastern Desert
–
Assessment of the commissioning and outputs from the 36MW
DC
solar plant
–
Review of the geological models that underpin a 12+ year mine schedule roadmap
–
Review of the Company’s identified organic growth opportunities across the concession, new
exploration ground in the Eastern Desert and exploration across Côte d’Ivoire
–
Review of the proposals for the expansion of the Sukari underground to a mining capacity of
1.5Mtpa
–
Review of the presentational material to support the upside potential of the Sukari
underground
–
Review of the Sukari Reserve and Resource estimate
–
Assessment of power providers for the supply of grid power to Sukari
MEMBERSHIP
The committee comprises four Non-
Executive Directors, a majority of whom
are independent within the meaning
of the 2018 Code. The Chief Executive
Officer, along with members of the senior
operations team are invited to attend
meetings where appropriate.
The committee met less frequently this
year, returning to a more predictable pattern
COMMITTEE HIGHLIGHTS IN 2022
Operations
• Sukari achieved a site record of
eight million hours LTI free
• Transition from contractor-mining
to owner-operator mining of the
underground operations at Sukari
• Expansion of the Sukari underground
mining capacity to 1.5Mtpa of total ore
mined
• Mineral Resource Management
increasing the Sukari underground
Proven and Probable Reserves,
underpinning an eight-year underground
life of mine
• Geology work programmes progressed in
Côte d’Ivoire (Doropo and ABC)
Cost saving and carbon reduction
initiatives
• Commissioning of the solar plant at
Sukari
• Assessment of power providers for the
supply of grid power to Sukari
• Review of carbon abatement
programmes and ESG initiatives
of periodic meetings. The committee’s
agenda was nonetheless full throughout
the year with the committee serving the
Company by overseeing the safety and
wellbeing standards across the operations,
project proposals through to delivery
and commissioning, plans to improve
productivity resulting in environmental
benefits and cost saving.
Below are the details of the members and
their attendance during the year:
MEETINGS HELD IN 2022
Member
Membership details
Number of
meetings
attended
Maximum
possible
meetings
Hennie Faul (C)
From establishment on 29 June 2020
5
5
Dr Sally Eyre
From establishment on 29 June 2020
5
5
Dr Catharine Farrow
From establishment on 29 June 2020
5
5
Mark Bankes
From establishment on 29 June 2020
5
5
2023 TARGETS
• Delivery of the fully optimised Life of
Mine Plan (including underground
expansion study)
• Delivering on cost reduction
initiatives and related capital projects
• Results from the exploration
programmes across the Sukari
Concession area with potential
satellite resources
• Delivery of the Doropo Project
pre-feasibility study and EIA
• Eastern Desert work programmes
in Egypt
• Carbon abatement initiatives include
negotiations and contracts to secure
grid power connection
For further information on the
Company’s Operational activities see
the Strategic Report and the Reserve
and Resource Statement can be found
on pages 204 to 207 of the 2022
Annual Report.
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ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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COMMITMENTS TOWARDS
A SUSTAINABLE FUTURE
SUSTAINABILITY COMMITTEE REPORT
Under our sustainability
performance framework
we are reinforcing our
impact in areas including
climate change, diversity
and inclusion, workplace
safety and wellbeing. We
are committed to a more
sustainable future that
delivers enduring value
for all our stakeholders.
DR CATHARINE FARROW
CHAIR OF THE
SUSTAINABILITY
COMMITTEE
INTRODUCTION
I am pleased to share the full-year update
on the activities of the Sustainability
Committee. The committee supported
the Board this year on all material
environmental, social and governance
matters. The committee also worked closely
with the Technical Committee by assessing
ESG impacts on all existing operations and
future projects and with the Remuneration
Committee on assessment and setting of
targets.
COMMITTEE ROLE AND MEMBERSHIP
The committee is responsible for promoting
the long-term sustainable success of
the Group with regard to ESG, including
conformance with applicable government
and industry standards, legal and business
trends and public policy issues. For more
information on the committee’s charter
please visit the Company’s website at
www.centamin.com. The full committee
charter can be found on our website. Below
is the individual attendance record for all
members of the committee:
ACTIVITIES IN 2022
Environmental and social governance
Safety, health and wellbeing
People and transformation
–
Internal review and independent assurance of the
asset retirement obligation at Sukari
–
Independent review of the Sukari health and safety
management system conformity against ISO 45001
–
Review and update of the Code of Conduct and
Diversity and Inclusion Policy
–
Development of an environmental and social
baseline to support the Doropo Project pre-
feasibility study
–
Review of safety incidents and identification of
continuous improvement measures
–
Interim targets and action plan to improve diversity
and inclusion at Sukari
–
Review of group-level ESG performance framework
metrics and targets to align with the Responsible
Gold Mining Principles (“RGMP”)
–
Reinforced mental health and wellbeing awareness
and occupational health surveillance programmes
at Sukari
–
Roll-out of the professional development framework
comprising the Employee Development Pathway,
leadership and supervisory development programme
and succession planning
–
Development of sustainability metrics under the
structure of revolving credit facility
–
Independent Security and Human Rights Review at
the Doropo Project
–
Review of ESG reporting and disclosure standards
Local socio-economic partnership
Energy and climate change
Material stewardship
–
Reinforced community engagement including
impressions survey at Sukari
–
Climate Change Strategy and target for reduction of
GHG emissions by 2030 supported by science-based
carbon abatement roadmap
–
Third-party due diligence
of Centamin’s supply chain
–
Active communication of the Group’s Whistleblower
hotline
–
Commissioning of the solar plant in 2022
–
Committee oversight of Independent TSF Dam Safety
Review Audit, appointment and key activities of the
Engineer of Record
–
Review of group-level 2021 Modern Slavery
Statement
–
Independent assurance of Scope 1 & 2 GHG
accounting methods and estimation of Scope 3 GHG
emissions
–
Review of Group-level Tailings Management
Disclosure Statement
–
Development of the Energy and Climate Change
Policy and TCFD disclosures
–
Independent gap analysis against International
Cyanide Management Code at Sukari
Member
Membership details
Number of
meetings
attended
Dr Catharine Farrow (C)
From establishment on 29 June 2020
7 of 7
Marna Cloete
From establishment on 29 June 2020
7 of 7
Hennie Faul
From establishment on 29 June 2020
7 of 7
Dr Ibrahim Fawzy
From establishment on 29 June 2020
7 of 7
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ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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ENHANCING OUR
ASSURANCE
AUDIT & RISK COMMITTEE REPORT
SUSTAINABILITY COMITTEE REPORT
CONTINUED
CLIMATE CHANGE STRATEGY
The Board, with technical guidance from
the committee, has overall responsibility for
providing the strategic direction for effective
environmental management and to review
the performance of the Company.
A Climate Change Working Group met
throughout the year consisting of members
of the senior technical team, reporting to
the Committee and Executive. This working
group assessed the financial impact and
materiality of climate-related risks and
opportunities on the Company’s business
model. As set out on page 08, we have
set an interim climate target of 30%, to
reduce our Scope 1 and 2 GHG emissions
by 2030, compared to a 2021 base-year.
This would put Centamin on a Paris-aligned
trajectory to limit global warming to ‘well
below’ 2ºC by 2050. Throughout 2022 the
committee and management team further
developed the TCFD recommendations as
presented on page 70.
TAILINGS MANAGEMENT
The importance of tailings management
is recognised by the committee who
receive, as a standing agenda item at each
meeting, updates on the management and
monitoring of our tailings facilities at Sukari.
The committee oversees progress towards
conformance with the Global Industry
Standard on Tailings Management. In 2022,
the committee considered the results of
the dam safety review audit as presented
by the independent technical reviewer. The
committee also oversaw the appointment
of a new Engineer of Record (“EoR”) and
the clarification of roles and responsibility
with respect to tailings, governance and
management.
SUSTAINABILITY LINKED CREDIT
FACILITY
The Company has committed to meeting
specific sustainability-linked targets on
carbon emissions, workforce development
and gender diversity as part of the senior
secured sustainability-linked US$150m
revolving credit facility. These key
performance metrics will be monitored
annually and, depending on the Company’s
performance, the interest margin on the
facility may decrease, remain unchanged or
increase. These sustainability targets align
with our ongoing environmental, social and
governance priorities and will track tangible
progress in reducing our environmental
footprint and strengthening our social
licence to operate.
GROUP SUSTAINABILITY DASHBOARD
To improve access for stakeholders
to key data as well as allow users to
assess corporate governance and ESG
performance, a dashboard is available
as a central repository of all key health,
safety, environment, social and governance
data. For more information on the ESG
data pack, please see our website
https://www.centamin.com/responsibility/.
KEY FOCUS IN 2023
• Achieve the sustainability targets under
the terms of the revolving credit facility in
relation to carbon emissions, workforce
development and gender diversity
• Execute the Group’s decarbonisation
roadmap and as a priority, engage with
government and independent power
providers for the supply of 50MW
AC
grid
power to Sukari and extension of our
existing solar plant
• Continue to strengthen our tailings
governance and management processes
and develop a roadmap for conformance
with the GISTM
• Complete the PFS-level environmental
and social study and advance the
environmental and social impact
assessment (“ESIA”) for the Doropo
Project, Côte d’Ivoire
For further information on the committee’s
activities and wider environmental, social
and governance initiatives please see the
Strategic Report. The Sustainability Report
will be published in April 2023.
I am pleased to present
this report covering the
committee’s activities
during the year.
MARNA CLOETE
CHAIR OF THE AUDIT
AND RISK COMMITTEE
INTRODUCTION
The Audit and Risk Committee held
periodic meetings this year, consistent with
the financial reporting cycle. In addition, the
committee has focused on developments
of the systems for internal control as well as
the risk and assurance framework.
The committee has worked with the
Sustainability Committee on matters
relating to TCFD disclosures and Sukari’s
asset retirement obligation and has
also supported the Board on the capital
allocation review covering the cost control
initiatives, shareholder returns and
execution of the revolving credit facility.
COMMITTEE PURPOSE
The committee monitors the integrity of the
financial statements of the Group, including
its annual, half-yearly and quarterly reports
and any other formal announcement
relating to its financial performance,
reviewing, and reporting to the Board on
significant financial reporting issues and
judgements which they contain, having
regard to matters communicated to it by
the auditor. Full details of the committee’s
purpose are set out in the Audit and Risk
Committee Charter which is available on the
website at www.centamin.com.
KEY ACTIVITIES IN 2022
Accounting standards
• Fair value and impairment trigger
assessment across the Company’s assets
• Assessment of the carrying value of the
run of mine stockpiles and accounting for
deferred waste stripping
• Asset retirement obligations external
review and provisioning
• Going concern assessment, including
the severe but plausible scenario stress
testing as well as the Viability Statement
Risk, assurance and controls
• Review of the principal and emerging
risks including relative velocity, informed
by working groups to understand the
Company’s risk profile
• Internal control environment and internal
control focus areas
• Progress on assurance mapping to
understand the activities across the
business, the controls and wider
technical assurance
• Progress on the Digital Transformation
Strategy and ERP solutions following
the selection of SAP which is being
implemented in 2023
• Assessment of the external auditor and
review of the annual audit and half-year
review reports
Finance, legal and governance
• Assessment of the cost savings initiatives
• Review of the dividend policy, cash flow
forecasting and future financing options
(culminating in the Board approved
revolving credit facility)
• Ongoing assessment of the cost recovery
model and financing of capital projects
under the terms of the Sukari Concession
Agreement
• Financial impacts of environmental
initiatives relating to the carbon and
emission abatement programmes
• Assessment of the Company’s legal
cases, regulatory updates and policy
reviews
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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AUDIT & RISK COMMITTEE REPORT
CONTINUED
MEMBERSHIP
The committee comprises three
Independent Non-Executive Directors, two
of whom chair other committees, which
allows different perspectives to be aired.
Members of the Executive are invited to
attend meetings where appropriate. Below
are the relevant skills, experience and
diversity that makes up the committee:
SIGNIFICANT ISSUES CONSIDERED DURING THE YEAR BY
THE AUDIT AND RISK COMMITTEE
The following significant issues were considered during the year
(full details and analysis are set out in note 1 to the financial
statements).
Member
Relevant skills/
background
Experience
Meetings
attended
Meetings
held
Marna Cloete (C)*
Chartered accountant
and taxation professional
Finance expert in emerging
markets with particular emphasis
on Africa as well as substantial
management experience within
community and government
relations
6
6
Dr Catharine Farrow
Geoscientist
Operational, technical services,
corporate development and
exploration expertise
6
6
Hennie Faul
Mining engineer
Qualified mining engineer with
over 30 years’ experience with
knowledge of various commodities
in multiple jurisdictions
6
6
*
Has relevant and current financial experience in accordance with the 2018 Code.
Topic
Significant issue
Summary of the significant issue
Key action points
Accounting basis
of preparation
Going concern and
longer-term viability
The Directors performed an assessment of the Group’s ability
to continue as a going concern at the end of each reporting
period. The Directors also assessed the Group’s prospects
over a longer term, specifically addressing a five-year period
as part of the overall Viability Statement.
A detailed cash flow analysis was performed covering twelve
months from the date of signing, modelling severe but
plausible downside scenarios that could play out at Sukari
and the estimated effect of each on the Group Cash Position
without applying significant mitigating measures.
Key assumptions underpinning this forecast and the longer-
term viability which the committee assessed include:
•
updates to the ongoing litigation as discussed in note 5.1
to the financial statements
• mineral reserve and resource update
• annual budget and forecasting
• estimated future gold price, variable and fixed cost
assumptions
• Climate change risk and impact assessment on Sukari
which resulted in no material impact on the financial
reporting judgements and estimates
The Directors considered it appropriate to prepare the
financial statements on the going concern basis. The
committee also considered the adequacy and accuracy of
the disclosures in the 2022 Annual Report in respect of the
Group’s ability to continue as a going concern and its future
viability.
The committee reviewed the papers presented by
management in respect to the going concern assumption.
The committee was satisfied that management had
performed a detailed analysis and forecasting to assess
the economic impact of the Group on a going concern basis.
The Group continues to benefit from a strong balance sheet
with significant cash balances. In addition, the Company
has access to a $150m revolving credit facility for general
corporate purposes.
Based on the information presented the committee agreed
with management’s conclusion that the Group is expected to
be a going concern for at least twelve months from the date
of signing the financial statements.
In addition to the twelve-month going concern assessment
the Directors assessed the Company’s prospects over the
longer term, specifically addressing a period of five years as
part of the overall viability statement. Further details of this
assessment can be found in the viability section in the Risk
Review.
Following this assessment, the committee considered
the extent of the assessment made by management to be
appropriate and recommended the Viability Statement and
related disclosures (for inclusion in the 2022 Annual Report)
for approval by the Board.
The committee also concluded that it remained appropriate
to adopt the going concern basis of accounting in preparing
the consolidated financial statements without a material
uncertainty, and that the disclosure in the 2022 Annual
Report, in respect of the Group’s ability to continue as a
going concern, was appropriate.
Topic
Significant issue
Summary of the significant issue
Key action points
Asset Retirement
Obligation (“ARO”)
Accounting for
transactions
Management has updated the model for the 2022 ARO to
address the closure risks. The assumptions include the latest
available technical studies, updates to the mine ‘footprint’
and inclusion of newly completed projects which may be
considered for end-of-life decommissioning.
The review incorporates new information and updates
resulting from changes in the year and recommendations
from the external consultants which have been applied to the
ARO provision. Please see more details in section 1.3.6 in the
financial statements.
The external review of the 2022 ARO has been completed and
there were no significant shortfalls or omissions identified,
there were a few recommendations for improvement, mainly:
•
to update the provision in line with the development and
maintenance of the mine closure plan
• improved understanding of the post-closure risks and
• further development of a detailed Mine Closure Plan
aligned with Good International Industry Practice (“GIIP”)
and informed by relevant specialist studies, stakeholder
input along with an improved, robust basis of estimate
(detailing assumptions, quantities and unit rates)
All of which will impact the ARO and its basis of estimate
in future years and will also improve confidence in the ARO
estimate.
The committee discussed the approach to the review, noting
that it was appropriate applying a higher standard to the
estimation, than that required by the Concession Agreement
or local laws, to comply with industry best practice.
Development of the ARO will be a continuous workstream
for management as Sukari moves closer towards the end
of its further eleven year Life of Mine Plan with oversight
and guidance provided by the Committee. There has
been no material change to the provision recognised at
31 December 2022.
Impairment trigger
assessment of
assets (other than
financial assets)
Accounting for
transactions
Accounting standards require management to undertake
an impairment assessment of its assets when facts and
circumstances suggest the carrying amount may exceed its
recoverable amount.
The committee reviewed the trigger assessment which
considered the following:
• Movement in share price and market capitalisation
• Performance against annual production and cost
guidance
• Average realised gold price
• Any events which may impact operations
The committee reviewed the papers presented by
management in respect to IAS 36 and IFRS 6 and were
in agreement with management’s conclusion that no
impairment triggers have been identified by management
that would warrant a full impairment test to be carried out
for the recognised Sukari CGU PPE and E&E Assets.
Mine ROM
Stockpiles
Accounting for
transactions
IAS 2, Inventories requires that inventory is measured at
the lower of cost and net realisable value (“NRV”). Based
on the current usage patterns and net revenue projections
(based on the YTD average realised gold price per oz) for this
inventory, the NRV is expected to be higher than cost and as
such no changes have been made to the value of the asset
and no impairment charges were considered necessary.
Detailed assessments of various stock models were
performed in relation to the accounting treatment of the
Mine ROM.
Consistent with prior years, disclosure of Mine ROM
Stockpiles have been split between current and non-current
assets based on the utilisation profile over the next twelve
months. The committee reviewed management’s assessment
of inventories and agreed they are appropriately carried at
the lower of cost and NRV on the balance sheet. This practice
has continued based on the outlook for the next twelve
months.
No impairment has been required and this position was
assessed at year end against the Life of Mine Plan.
Regulatory
FRC thematic review
The Company’s Annual Report and accounts to 31 December
2021 were subject to the FRC’s thematic review, covering a
sample of companies and their disclosures.
The FRC highlighted areas where key judgement and
estimation was applied, suggesting consideration for
greater disclosure as we evolve the TCFD disclosures and
explanation of judgments relating to the ARO provision.
The committee received the letter and considered the
areas highlighted following the thematic review ensuring
management reflected the comments and recommendations
of the FRC in the 2022 Annual Report.
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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|
AUDIT & RISK COMMITTEE REPORT
CONTINUED
FAIR, BALANCED AND
UNDERSTANDABLE
The committee is satisfied that the controls
over the accuracy and consistency of the
information in the 2022 Annual Report were
sufficiently robust. The committee reviewed
the control environment and is in receipt
of monthly, quarterly, and annual financial
and budgetary information. The committee
is also involved in the review of all key
accounting policies and matters requiring
judgement and estimation.
The committee has, at the request of
the Board, also considered whether the
2022 Annual Report is fair, balanced,
and understandable. In arriving at that
decision, the committee has been involved
in reviewing, at an early stage, the content
of (both) the financial statements and the
Strategic Report (including the business
model), the performance review and
governance reporting throughout the report
(including the Governance Report).
When reviewing all aspects of the 2022
Annual Report, the committee was
conscious to reflect the solid performance
of the management team in delivering the
reset plan, while having consideration to the
shareholder experience during this period.
The committee was also mindful of the
balance in reporting of non-financial
performance measures such as exploration
and resource and reserve definition
progress across the Group’s operations. The
updated resource and reserve statements
set out in the Strategic Report were also an
area of focus, ensuring that reserve growth,
replacement and depletion were given
equal weighting.
The committee considered the relative
emphasis on the activity across Côte d’Ivoire
and in Egypt, ensuring that the success
in resource growth was matched with the
relative cost in delivering the exploration
programmes.
The committee, in reviewing the 2022
Annual Report, also noted the need for clear
and concise reporting. The members of the
committee have worked with management
to demonstrate, through structured tables,
graphs and images, the linkages between
risk, the Company’s strategic aims and the
structure for rewarding performance.
The committee recommended and, with
agreement of the Board, concluded,
that the 2022 Annual Report was ‘fair’,
‘balanced’ and ‘understandable’ having
considered the activity of the Company
during the period and that users of the
2022 Annual Report would be able to
AUDIT PARTNER
The committee is pleased with the performance of the audit partner, Jonathan Lambert. The audit partner provided appropriate challenge
to management and the committee and addressed any technical accounting issues in a professional manner.
Audit area
Observations by the Audit and Risk Committee
Audit planning
The planning documents had identified key material issues and areas of focus for the audit.
Leadership and
communication
The committee notes the breadth of experience of the team across Egypt and London and provided both support and challenge to the
management team.
Assessment of independence
There were no areas that conflicted with PwC’s independence.
Audit costs
The committee was encouraged by the growing capability within Egypt and the collaboration between audit teams in the UK and Egypt.
The fees year-on-year have remained in line with expectations.
Audit rotation
The committee noted the audit partner would be required to rotate following the 2022 year-end audit having served on the audit for five years. A
further audit partner would carry out one full year, during which time the committee will undertake a formal tender for the external audit.
understand our position, strategy, business
model and overall performance, which were
presented consistently throughout the 2022
Annual Report.
EXTERNAL AUDITOR
During 2022, the Company’s external
auditor, PricewaterhouseCoopers
LLP (“PwC”) presented their detailed
audit plan and final audit findings and
recommendations to the committee. The
committee agreed with the audit approach
at the planning stage and agreed with the
materiality thresholds, identification of the
key risk areas and significant judgements
and estimates.
ANNUAL REPORT EVALUATION
AND BENCHMARKING
As part of the 2022 audit, the management
team met with PwC to critically assess the
previous 2021 Annual Report and discuss
ways to improve the report for shareholders.
The session provided useful insight into the
following:
Strategic Report
• Approach to TCFD reporting ensuring
the key or material aspects of the
Sustainability Report were covered in the
Annual Report
• Simplification of the message by linking
to key external factors and making use
of existing data on the Company’s website
• Structuring of the report and
consolidating to remove repetition
Governance Report
• Linkages to avoid repetition and direct
the reader to key statements
• Developing further the narrative to reflect
real life examples to illustrate the work of
the Board and committees
Financial statements
• Reflecting any impacts of climate change
initiatives within the narrative to the
financial statements
Through benchmarking and reviewing
trends in reporting and industry leading
disclosure the Company hopes to continue
to evolve and develop a high standard of
reporting for its shareholders.
EXTERNAL AUDITOR EFFECTIVENESS
In accordance with the terms of reference of
the committee, a review of the effectiveness
of the external auditor was undertaken as
part of the half-year and annual statutory
There has been open communication
between the committee and the audit
partner throughout the statutory audit and
management has also worked directly with
the audit team. PwC has also had open
access to the Board.
The audit team visits Sukari regularly
to carry out inventory testing as well as
assessing controls and substantive testing.
PwC also carries out audit work at our
administrative offices in Egypt and Jersey.
Having carried out the evaluation, the
committee is satisfied that the audit
engagement for the financial year ended
2022 was both effective and added value to
the Group.
NON-AUDIT SERVICES
The committee maintains an independence
policy in respect of the provision of services
by the external auditor. The committee
regularly reviews this policy for necessary
changes in response to changes in related
standards and regulatory requirements.
The policy is designed to safeguard auditor
objectivity and independence and includes
rules relating to the provision of audit
services, audit-related services and other
non-audit services, and stipulates that all
non-audit services require specific prior
approval by the committee.
PwC did not perform any non-audit services
in the year, other than the half-year review.
Deloitte LLP tax teams in the UK and
Australia continue to provide tax advisory
services, and none were provided by the
external auditor. Internal control functions
are supported by BDO LLP.
The Group’s policy for non-audit services
requires approval in advance by the
committee of all non-audit services carried
out by the external auditor. For certain
services that are permissible, because
of the knowledge and experience of the
external auditor and/or for reasons of
confidentiality, it can be more efficient
or prudent to engage the external
auditor rather than another party. This is
particularly the case in relation to audit-
related assurance services that are closely
connected to the audit function where
audit. To assess auditor effectiveness the
following factors were considered for the
Audit and Risk Committee and the Chief
Financial Officer.
The areas considered were as follows:
• Understanding of the business and
the application to relevant accounting
standards
• Awareness of the commercial
environment in which the Company
operates and the extent to which the
auditor can approach verification and
performance of audit procedures
• The audit process including the quality
of the audit which was assessed by
the committee by looking at how key
judgements were handled as well as how
the auditor responded to questions raised
• Relevant laws, regulations, the FRC’s
ethical standard and other professional
requirements as well as the Group’s
relationship with the auditor as a whole
• Assessment of potential threats to
the auditor’s independence and the
safeguards in place to mitigate potential
threats including the provision of any
non-audit services
• The relationships between the Company
and the external audit (apart from the
ordinary course of business)
• The qualifications, expertise and
resources of the auditor including a
report of the auditor’s own internal quality
procedures
All the above-mentioned factors were
considered together with the feedback that
came from members of the finance team
and senior management. The committee,
including other actions arising from the
review, considered overall feedback from
this process.
Following the evaluation process, any
relevant findings were relayed to the audit
partner and, where applicable, actions were
incorporated into the audit plan.
In relation to the significant issues, the
committee assessed and challenged
the key judgements, estimates and
conclusions set out in the position papers
that were presented to the committee by
management. The committee also assessed
the auditor’s planning report, half year
review report and audit report on the full
year accounts, challenging management
and the auditor on the conclusions drawn,
particularly where the presented proposals
or conclusions differed.
the external auditor has the benefit of
knowledge gained from work already
performed as part of the audit.
Fees for audit services incurred during the
year amounted to US$756k; there were non-
audit services carried out by PwC during the
year of US$139k in respect of the half-year
review. Full details are set out in note 6.5 to
the financial statements.
The Company’s policy is to tender the
external audit every ten years. The last audit
tender was undertaken in 2014 when PwC
was appointed auditor. The FY22 audit
will be PwC’s ninth year as auditor of the
Company. The committee will undertake a
formal tender for the external audit in 2023,
which will need to be effective for the FY24
audit.
AUDITOR OBJECTIVITY AND
INDEPENDENCE
The committee continues to monitor the
auditor’s objectivity and independence and
is satisfied that PwC and the Group have
appropriate policies and procedures in
place to ensure that these requirements are
not compromised.
The committee noted the current audit
partner, Jonathan Lambert, will be required
to rotate following the FY22 audit having
served on the audit for five years. A new
PwC audit partner, Tim McAllister, will carry
out one full year, during which time the
committee will undertake a formal tender
for the external audit.
EXTERNAL AUDITOR
So far as each current Director of the
Company is aware, the auditor has had full
access to all relevant information and the
committee has answered any questions
raised by the auditor allowing the auditor to
carry out its duties.
The committee recommends to the Board
the reappointment of PwC as auditor at
the forthcoming 2023 AGM. PwC has
expressed its willingness to continue in
office as auditor.
INTERNAL AUDIT
The committee worked with management
to progress the internal audit work
programmes and ensure the required
resources and information are available to
the Head of Risk to complete the scope of
work.
Over the course of 2022 BDO LLP and
other specialist providers worked with
management to undertake activities to
identify areas for improvement across
the governance, risk and internal control
framework.
The committee noted that although the
timeline for the implementation of certain
audit reforms, including the BEIS Audit &
Corporate Governance Reforms, have been
delayed, the committee recognises there
are several preparatory activities that can be
undertaken. The committee is overseeing
the implementation of the SAP system
which will drive a number of changes
across our control environment. Below are
examples of the activities underway, with
support from our internal controls partners
as required:
Assurance mapping
Developing an Assurance Map will allow
the Company to highlight the effectiveness
of risk and internal controls. The purpose
of this will be to understand, against our
key risks, the controls we have in place and
the level of assurance we receive for the
given control. They can then be assessed
to ensure the controls are designed and
operate effectively.
Process and control mapping
initialisation
As part of the SAP system implementation
the Company is mapping the processes and
controls across key areas of the business
utilising the standard templates, structures
and best practice within SAP. The Company
has engaged with Birchman, a specialist
consultant, to provide support through the
SAP Implementation process to leverage
their mining experience and ensure good
practice processes and controls.
116
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AUDIT & RISK COMMITTEE REPORT
CONTINUED
Cyber Security Review
The Cyber Assessment will provide a
reflection of the maturity of our cyber
security and is being performed by a
specialist partner in this area. It will review
us against key elements from multiple
cybersecurity frameworks. This will identify
areas of strong performance and areas
needing improvement, with a clear action
plan to prepare for and address these as
required.
The committee is comfortable with the
scope of work and levels of assurance
provided by the internal audit, based on
the size and complexity of the business.
The committee continues to review the
opportunities for internal audit to support
and challenge the robustness of the
internal control environment and provide
further assurance to the committee and the
external auditor.
RISK MANAGEMENT AND
INTERNAL CONTROLS
The Board has overall responsibility for
establishing a robust risk management
framework and assessing material strategic
and operational risks across the Group,
including consideration of emerging risks
alongside the principal risks. Further
information on our Risk Oversight and
Accountability can be seen in the About
section on our website (www.centamin.
com), where you will see the Risk &
Opportunity Management link.
While the Board has overall responsibility for
ensuring the adequacy of risk management
and internal controls, the Board has
delegated certain responsibilities to the
committee. These include responsibility
over monitoring the effectiveness of risk
management and internal control systems
implemented by management, and making
suggestions on ways in which the business
can improve its effectiveness. It advises
on significant changes to that structure
to obtain reasonable assurance that the
Company’s assets are safeguarded and that
reliable records are maintained.
Due to the limitations inherent in any
system of internal control, the oversight
by the committee provides robust but
not absolute assurance against material
misstatement or loss and is designed to
manage rather than wholly mitigate risk.
During 2022, no significant internal control
failings were identified. The Risk Review on
page 58 of the Strategic Report includes
further information on principal risks for
the Group which the committee considered
along with emerging risks, an overview of
our approach to managing risk, and long-
term viability.
The committee noted that, at an operational
level, increased resourcing of key
personnel within the senior and operational
management team drove focused activity
and internal and external assurance
providing greater comfort on the internal
control environment at an operational level.
The process undertaken to secure the
sustainability-linked revolving credit facility
of US$150 million with a syndicate of
leading international lending banks, has
from a governance perspective, provided
greater rigour and certainty over our legal
and corporate framework.
Whilst we recognise the existing
environment is adequate for our needs,
improvements are being driven by an
understanding of the need for increased
documentation and formalisation of
processes, in response to the potential
move towards a UK-SOX style of regime.
In anticipation of this, we have undertaken
the assurance mapping and process
controls (noted above) alongside the Digital
Transformation programme to enhance our
control environment.
The Board has overall responsibility,
supported by the Audit and Risk
Committee, for establishing a framework
that allows for the review of existing
and emerging risks in the context of
both opportunities and potential threats
that informs the principal risks and
uncertainties. The risk management
framework and the system of internal
controls are designed to operate effectively
together and report through to the Audit
and Risk Committee on a regular basis.
Our approach incorporates international
good practice, reflecting the requirements
of the 2018 Code and ISO 31000 Risk
Management Guidelines. The framework
adopts a top-down and bottom-up
approach, enabling thorough identification,
assessment, mitigation and monitoring
of risks throughout the business. The
three lines of defence provide review and
oversight, while ensuring the information
that flows from the reporting lines is
relevant, timely and can genuinely
support the Board’s strategic decisions.
Further details of the assurance and risk
framework can be found on the Company’s
website in the risk and opportunities
management page.
The committee and the Board are pleased
to confirm that the Company remains in
compliance with recognised good practice
and with the 2018 Code, unless otherwise
highlighted, and relevant Canadian
requirements to ensure we have a sound
system of risk management and internal
control in place during 2022 and up to
and including the date of this report.
The FRC’s guidance on risk management
was also referenced when undertaking our
risk management review.
CONTROLS OVER FINANCIAL
REPORTS AND FINANCIAL
STATEMENTS
The consolidated financial statements
and annual report are prepared at the
Company’s head office in Jersey, where the
Group finance team and Chief Financial
Officer are based. The accounting
information from the Group’s operations
is provided to the head office where the
ledgers are consolidated. Appropriate
reconciliations and reviews are performed at
the level of the operation and at the Group’s
head office by way of the performance
of monthly, quarterly, and annual
reconciliations.
The committee concluded that the finance
team was sufficiently resourced with
adequate controls, such that management
and the Board were able to receive timely
and accurate information to make informed
decisions.
GOING CONCERN AND
LONG-TERM VIABILITY
As set out in the report, with the Audit and
Risk Committee recommendation and the
Board’s agreement, it was appropriate to
continue to adopt the going concern basis
of accounting in preparing the financial
statements. The going concern statement is
detailed in full in note 1.3.5 to the financial
statements. The statements in relation to
the Group’s viability, over the longer term,
are set out in the Risk Review on page 54.
CONCLUSION
As a result of its work during the year, the
committee concluded that it has acted
in accordance with its terms of reference
and has ensured the independence and
objectivity of the external auditor. A member
of the Audit and Risk Committee will be
available at the 2023 AGM along with
the Chief Financial Officer to answer any
questions in relation to this report.
MARNA CLOETE
CHAIR OF THE AUDIT AND
RISK COMMITTEE
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
DEVELOPING FAIR AND
CHALLENGING TARGETS
REMUNERATION COMMITTEE REPORT
DEAR SHAREHOLDERS,
INTRODUCTION
As chair of the Remuneration Committee,
I am pleased to present the 2022
Remuneration Report.
This report includes:
• My annual report on the activities of the
Remuneration Committee during the year
• The Annual Report on Remuneration
which describes how our Directors’
Remuneration Policy was implemented
for the year ended 31 December
2022 and how it is intended that the
shareholder approved policy will be
implemented for the forthcoming year
• A summary of the 2022 Directors’
Remuneration Policy that was put to a
shareholder vote at the 2022 AGM and
received over 95% approval
COMMITTEE ACTIVITIES DURING
THE YEAR
The committee activities during the year
included:
• Assessing the FY2021 executive bonus
and FY 2019 Performance Share Plan
award outturns
• Setting the Directors’ FY 2022
base salaries
• Setting the FY 2022 incentive plan
targets and monitoring performance
against those targets
• Presenting the new remuneration
policy for shareholder approval at the
2022 AGM
• Reviewing the application of that
Remuneration Policy for the FY 2023
• Reviewing the remuneration packages
for the wider members of the senior
management team and targets at Sukari
to ensure incentives are aligned
• Having oversight of wider pay practices
across the Company (e.g. overseeing
the pension provision, cost of living and
benefits packages in London and Jersey)
• Consulting with the Company’s
shareholders in relation to the FY 2020
Performance Share Plan (“PSP”) award
BACKGROUND TO REMUNERATION
DECISIONS
The 2022 financial year has been a
solid year of operational and financial
performance
Our Chief Executive Officer has delivered
strong progress against our Sukari reset
plans alongside our broader growth and
diversification plans. Key highlights under
our Chief Executive Officer’s leadership
have included:
• Completing the asset review and
optimisation studies at Sukari
• Delivering cost saving initiatives at
Sukari totalling circa US$116m savings
as at 31 December 2022
• Eight consecutive quarters of operational
delivery during the 2020 PSP award’s
vesting period, driving renewed investor
confidence in both the Sukari Gold Mine
and the Company’s ability to operate
under the Company’s 2020 reset plan
• Solid progress towards returning the
asset to a sustainable 500,000 ounce
per annum producer
• Reserve growth at Sukari of
approximately 2.0 million ounces before
depletion which could equate to circa
US$300-400m attributable cash flow to
Centamin shareholders
• Significant progress with our
decarbonisation initiatives including
commissioning the Sukari 36MW
DC
Solar
Project (the largest hybrid, off-grid project
of its kind for a gold mine); and initiating
studies on alternative, lower carbon
efficient fuel and use of electricity
2022 has seen another
successful year, with the
teams across all assets
working to plan and delivering
on our stated targets.
DR. SALLY EYRE
CHAIR OF THE
REMUNERATION
COMMITTEE
119
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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0
20
40
60
80
100
120
140
Dec
2021
Jan
2022
Feb
2022
Mar
2022
Apr
2022
May
2022
June
2022
Jul
2022
Aug
2022
Sep
2022
Oct
2022
Nov
2022
Dec
2022
GBp
REMUNERATION COMMITTEE REPORT
CONTINUED
INCENTIVE OUTCOMES FOR 2022
The remuneration outcomes for the year
reflected solid operational and financial
progress as well as the substantial strategic
progress delivered during FY 2022.
Martin Horgan’s maximum annual bonus
opportunity for 2022 was 150% of base
salary and Ross Jerrard’s maximum bonus
opportunity for 2022 was 125% of salary.
Consistent with the approved shareholder
policy, 75% of the bonus opportunity
was based on financial/objectively
measurable targets, namely (i) production
and operational efficiency (assessed by
reference to both volume and stripping
ratios) (ii) finance (assessed by EBITDA and
sustaining costs) and (iii) ESG (assessed by
reference to our safety and environmental
performance through the year). The
remaining 25% was based on personal/
strategic targets which included targets
relating to the transition to owner miner
of the underground operation at Sukari,
delivery of key capital projects, systematic
delivery of exploration programmes,
assessment of growth opportunities and
effective stakeholder management.
As explained further on pages 131 to 136,
based on actual performance against the
various original targets set, Martin Horgan
was awarded a bonus totalling 72% of the
maximum bonus opportunity of 150% of
salary. Ross Jerrard was awarded a bonus
totalling 71.7% of the maximum bonus
opportunity of 125% of salary.
The bonuses earned for the year at
£588,600 for the Chief Executive Officer
and £408,882 for the Chief Financial Officer
were considered to be fair and balanced
based on performance against the targets
set and also reflective of the progress the
business made during the year. Payment
of bonuses based on an assessment
against the targets set was consistent with
the approach taken across the Group for
all employees who are eligible to receive
annual bonus payments.
The committee did not use discretion in
relation to FY 2022 remuneration bonus
outcomes concluding that, overall, the
remuneration payments were consistent
with the overall performance of the
Company during the relevant performance
periods. The committee is comfortable
that our Remuneration Policy operated as
intended in 2022. In reaching this decision,
the committee noted that the bonus awards
earned as a percentage of maximum were
generally consistent across the senior
management team. Whilst different bonus
structures operate outside of the corporate
management team, the committee noted
that bonuses were payable across the
As a result, on vesting, we tested the
TSR target as originally set based on
performance over the full three year
performance period (i.e. the base point for
measuring TSR pre-dated news in relation
to the Sukari Gold Mine reset plan), the
free cash flow targets were also tested on
their original basis but, in line with the
original intent of the target, we added back
non-sustaining capex (these levels were
materially larger than had been the case
in prior year adjustments as a result of
the reset). With regard to the production
targets, these were restated in line with the
life of mine updated guidance provided to
the market in December 2020.
Following this approach resulted in 63.1%
of the award vesting, with partial vesting
under the TSR and production targets and
full vesting under the cash flow target.
The committee was comfortable with its
restatement of the production targets given
(i) Centamin delivered above median TSR
performance versus sector peers over
the full three year performance period
and had TSR performance period been
measured from the conclusions of the life
of mine review in December 2020, TSR
performance would have been even higher
(see the chart below tracking Centamin’s
TSR versus the GDXJ Index comprising
global gold miners of a comparable size
to Centamin) (ii) the free cash flow targets
SHARE PRICE PERFORMANCE
Company based on performance against
objectives set at the start of the year (as
noted below). Given the Remuneration
Policy operated as intended the committee
is comfortable that it is achieving the right
balance between performance and reward.
As a result, the same broad structure will
operate in FY 2023.
The 2020 Performance Share Plan
(“PSP”) awards were granted in June
2020 which followed shortly after the
appointment of our current CEO. The
performance targets were relative TSR
versus sector peers, free cash flow and
production. The CEO’s appointment took
place following a challenging period of
operational performance which resulted
in the Board, which had also benefited
from new membership, identifying the
need to undertake a full operational and
investment review of our Sukari Gold
Mine. His appointment was supplemented
with a broader strengthening of the
leadership team.
The timing of the awards, in June 2020,
enabled the updated management team
to collectively participate in the 2020 PSP
and also ensured that the number of shares
awarded did not benefit from the depressed
market share prices observed as a result of
COVID between February and May 2020,
with the awards granted based on a share
price of £1.64, being well above the 2019
grant price of £1.007 and also above the
share price at the start of 2020.
Following the award of the shares, with
the performance targets set based on
assumptions adopted by the previous
Board and management, the new team
undertook a full life of mine review with
the conclusions published to the market
in December 2020. Key conclusions of
the life of mine review included that for
the mine to be a long-term sustainable
asset there needed to be a sustained
period of investment that included a
substantial waste stripping programme
requiring deployment of material additional
non-sustaining capital expenditure,
accompanied by lower production over the
medium term, to ensure the mine could
reach its full long-term potential. This
change of strategy, focused on ensuring
the long-term sustainability of the asset
as opposed to maximising short-term
production and cash generation, resulted
in a misalignment in the targets set for the
2020 long-term incentive plan and the
Board’s objective of delivering long-term
value from the Company’s primary asset.
were tested as envisaged at grant and (iii)
the production target restatement aligned
with the Board’s agreed strategy that
overrode the original targets in the 2020
LTIP which if targeted would have been to
the long-term detriment of the mine (i.e.
seeking to achieve these targets would have
been misaligned to strategy). The final point
the committee considered was that the
change to the production targets did not
relate to COVID in any way, the Company
has delivered strong performance through
the period notwithstanding the challenges
associated with COVID which included, for
example, the need for employees to move
between Australia and Egypt in a time of
limited transport and heightened safety
protocols.
In aggregate, noting that had the TSR
targets been run from the December reset
announcement that vesting would have
been higher on TSR but that restating the
production targets had increased vesting on
production was considered to derive a fair
vesting outcome overall for the performance
delivered noting the wider points considered
above.
Given the above restatements to the original
targets, the Executive Directors have
committed to retain 100% of the after-tax
number of shares towards meeting the
Company’s share ownership guidelines
and these shares will be retained towards
The committee took the decision to take no
action on the 2020 awards performance
conditions until the end of the performance
period so it was able to take a considered
view on the performance of the new
management team and the shareholder
experience over the full three year period.
There was also within the terms of the
2020 awards performance condition an
expectation that the free cash flow targets
would be restated to ‘add back’ non-
sustaining capital expenditure.
Towards the end of the performance period,
and following the committee considering the
Company’s significant outperformance of
our gold mining peers from the December
2020 announcement of the reset at Sukari
Gold Mine, the committee was aware of
the potential for misalignment between
performance and rewards that could arise
as a result of the original 2020 performance
targets being set on inappropriate
assumptions. As a result, along with the
Board Chair, I engaged with our major
shareholders and the leading shareholder
advisory bodies on how to address this
issue, noting the potential for retention
issues arising from strong performance
across the gold mining sector as a whole
and the expectation of commensurate
rewards as a consequence.
In light of the above, the committee
undertook an extensive investor
engagement exercise to determine the
most appropriate route to address the lack
of alignment between the 2020 awards
performance targets and the 2020 reset
plan. Given our unique set of circumstances
the feedback we received suggested
that restating the production targets in
line with the reset guidance provided to
the market in December 2020 would be
appropriate. This, along with adding back
the non-sustaining capital expenditure was
necessary as a result of the life of mine
review and reset plan. It was suggested
that the shareholder experience through
the three year period should be reflected
in retaining the original total shareholder
return target as set. The restatement to the
production target originally set based on
the information published to the market
in December 2020, was considered to
ensure that the original intent of the targets
was maintained and that the targets would
remain no more or less challenging but for
the reset required to ensure Centamin could
unlock its long-term potential.
the Company’s post-employment share
ownership guidelines. This ensures that
the vesting is fully aligned with long-
term shareholder interests. This holding
requirement was agreed post engagement
with shareholders.
The committee thanks shareholders and
the leading advisory bodies for engaging
with the Company in relation to the above.
Full details of the targets and performance
against them is included on page 137.
WIDER EMPLOYEE REMUNERATION
CONTEXT
Updated corporate salary structures and
gradings were applied in 2022 across the
senior management team. At Sukari, a
further review was undertaken taking into
consideration the economic conditions
in Egypt and inflationary environment.
Following this review a pay increase for
national employees was applied in 2022
ranging from a 20% salary increase (for the
base level grades) to between 3% and 8%
increases for more senior levels. The higher
percentage increases reflected employees
who were impacted most by the inflationary
environment and devaluation of EGP to the
US$. In 2023 a further 15% increase to
basic salaries and salary structures were
applied to national employees at Sukari
effective 1 January 2023.
CEY (TSR)
VanEck Junior Gold Miners ETF (GDXJ)
120
121
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OVERVIEW
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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REMUNERATION COMMITTEE REPORT
CONTINUED
The bonus scheme at Sukari is paid
each quarter and includes KPIs such
as safety, gold production and free cash
flow generation. Executive and site based
KPIs were considered and discussed
with representatives from the workforce
committees as well as formal discussions
on workforce pay and benefits with
senior members of the site-based team
through the budget preparatory process.
Consistency and alignment is a key feature
with the Executive, Senior Management
and site based personnel rewarded on the
performance of the asset. The feedback
from the engagement process continues
to be positive and is considered to be
working effectively.
The chair of the Sustainability Committee
acting as the Board representative for
workforce engagement, met with several
working groups while visiting Sukari in
June 2022. As well as speaking with senior
leaders and team members during the site
visit, there was specific engagement with
several of the Sukari based working groups.
As chair of the Sustainability Committee,
Catharine Farrow is also privy to all
Whistleblower reports and receives updates
on site-based matters such as grievance
and employee safety statistics.
APPROACH TO REMUNERATION
IN 2023
The Remuneration Committee intends to
adopt the following approach to Executive
Directors’ remuneration in 2023, in
compliance with the existing policy:
Base salary
Consistent with the proposals set out in the
FY2021 ARA, the CEO’s salary increase was
phased with an initial increase to £545,000
with effect from 1 January 2022 and then
an increase to £590,000 with effect from
1 January 2023 with Committee discretion
to further increase in line with the typical
workforce related increase. The Committee
considered the strong progress during the
year alongside institutional investors’ calls
for restraint in executive base pay in the
current high inflation environment and
concluded that it would not be appropriate
to further increase salary beyond £590,000.
As a result his salary will be £590,000
from 1 January 2023. The phasing of
the increases to the Chief Executive’s
salary were applied in recognition of the
expectations of shareholder advisory bodies
during the 2021 consultation process.
The CEO’s base salary is now at a market
comparative rate.
The Chief Financial Officer’s base salary
was increased by 3% to £471,050 with
effect from 1 January 2023. This rate
of increase was below the typical rate of
increase awarded to UK and Jersey based
employees who, absent changes to roles
or responsibilities, received a 6% increase.
Future salary increases (beyond January
2023) will be set having had regard to the
typical rate of increase for employees in
the UK and Jersey unless there was to be
a material change in the size and scope of
Centamin.
Outside of corporate employees, inflation
in Egypt is running above 10% and the
impact on payroll has also been built into
the Company’s 2023 budget. As such,
the rate of salary increase for UK and
Jersey employees is expected to be broadly
consistent with pay increases across the
Company.
Pension
In line with pension legislation in the
UK, all UK and Jersey employees are
eligible to participate in the Company’s
Workplace Pension. This pension enables
any employee to contribute 5% of their UK
salary into the pension scheme with the
Company contributing a further 3% of their
UK salary (up to £44,030). A further review
of the Company’s Workplace Pension will be
undertaken during the year.
Annual bonus
The annual bonus opportunity for the Chief
Executive Officer will continue to be 150%
of salary with the Chief Financial Officer’s
bonus at 125% of salary for FY 2023.
The FY 2023 bonus performance metrics
will be a similar structure to 2022 as follows:
• Structured corporate targets (55% for
FY 2023). These targets will relate to our
financial and operational performance
• ESG targets (20% for FY 2023).
These targets relate to health & safety,
environment, social and employee
development targets
• Strategic targets (25% for FY 2022).
These targets relate to growth,
exploration, and other strategic priorities
for the year ahead which are tailored to
each executive’s responsibilities
2023 PERFORMANCE SHARE
PLAN AWARDS
2023 PSP awards will vest based upon
an independent three-year relative TSR,
free cash flow and production targets.
In addition, we are also to introduce
sustainability targets into the PSP for
the first time in 2023. The targets will
relate to key initiatives we are taking to
drive reductions in our GHG emissions.
The targets relate to delivery against key
milestones, so the targets are quantifiable
and well defined. The milestones are
central to our sustainability strategy and
are aligned with our revolving credit facility
commitments and will account for 10% of
the 2023 PSP.
In line with Centamin’s historic approach,
both Executive Directors will receive a
PSP award over shares worth 150% of
salary. Further details of the incentive plan
targets to operate in 2023 are included on
page 146.
SUMMARY
I hope that you find the report clear and
informative and are supportive of the
approach we are adopting in connection
with Board remuneration. You can
contact me via the Company Secretary
if you have any questions on this report
or more generally in relation to the
Company’s remuneration.
DR SALLY EYRE
CHAIR OF THE REMUNERATION
COMMITTEE
EXECUTIVE DIRECTOR REMUNERATION AT A GLANCE
Key component
How implemented in 2022
Intended implementation for 2023
Base salary
CEO – £545,000
CFO – £457,330
CEO – £590,000
CFO – £471,050
Pension
(1)
CEO – participation in the UK workplace pension (3% of UK salary,
Company contribution with a 5% of UK salary employee contribution
in line with the UK workforce) up to £44,030
CFO – participation in a Jersey equivalent workplace pension (3% of
Jersey salary with a 5% of Jersey salary employee contribution in line
with the Jersey workforce up to £44,030)
(1)
The normal retirement age for employees and Directors is 67
CEO – continuation participation in the UK workplace pension up to
earnings of £44,030
CFO – participation in a Jersey equivalent workplace pension (3% of Jersey
salary with a 5% of Jersey salary employee contribution in line with the
Jersey workforce up to £44,030)
Benefits
CEO/CFO – between 5% and 15% of base salary
CEO/CFO – between 5% and 15% of base salary
Annual bonus
CEO – 150% of salary maximum
CFO – 125% of salary maximum
Targets:
• 55% – financial/operational e.g. profit, production, costs,
development and the efficient deployment of capital projects
•
20% – ESG e.g. lost time injury frequency rate, total recordable
injury rates, environment and social incident frequency rate and
people and development targets relating to training and diversity
• 25% – personal/strategic e.g. exploration and growth, capital
projects and stakeholder management
50% of the maximum is payable at the ‘target’ performance level
Targets will be disclosed in full in the 2022 DRR
The net of tax amount of any bonus over 75% of salary is to be used to
purchase shares subject to a two-year holding period. Option to defer up
to the full bonus into Company shares
CEO – 150% of salary maximum
CFO – 125% of salary maximum
Targets:
• 55% – financial/operational e.g. profit, production, costs, development
and the efficient deployment of capital projects
•
20% – ESG e.g. lost time injury frequency rate, total recordable injury
rates, environment and social incident frequency rate and people and
development targets relating to training and diversity
•
25% – personal/strategic e.g. exploration and growth, capital projects
and stakeholder management
50% of the maximum is payable at the ‘target’ performance level
Targets will be disclosed in full in the 2023 DRR
The net of tax amount of any bonus over 75% of salary is to be used to
purchase shares subject to a two-year holding period. Option to defer up to
the full bonus into Company shares
PSP
CEO/CFO – 150% of salary
Targets:
•
50% – relative TSR vs FTSE Gold Mines Index
• 25% – free cash flow generation
• 25% – production
CEO/CFO – 150% of salary
Targets:
• 50% – relative TSR vs GDXJ Index
• 15% – free cash flow generation
• 25% – production
• 10% – Sustainability targets
Shareholding
requirements
200% of salary
Post-employment share ownership guideline requiring retention of shares
based on the lower of the holding at cessation of employment and the
200% of salary in employment guideline (current beneficially owned shares
do not count against the guideline which will relate to the shares vesting
under incentive plans from 2022).
200% of salary
Post-employment share ownership guideline requiring retention of shares
based on the lower of the holding at cessation of employment and the
200% of salary in employment guideline (current beneficially owned shares
do not count against the guideline which will relate to the shares vesting
under incentive plans from 2022).
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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|
REMUNERATION COMMITTEE REPORT
CONTINUED
As set out in the business model, Centamin creates value through the process of gold exploration through to production by maximising
production at the lowest possible cost. The gold and silver doré bars produced at Sukari are sold to our appointed refiner who, in turn,
refines the doré bars and sells the near-pure gold at the price determined by the London bullion markets. Performance metrics used in
the annual bonus and PSP reflect the achievement of the Company in meeting its strategic objectives through the actions and influences
of the Executive Directors:
Key measure
Link to Incentive Plans
SUKARI VALUE MAXIMISATION
Gold production
Production targets employed in both the annual bonus and PSP.
Material movement and strip ratio
Adherence to the longer term mine planning assessed in the annual bonus.
Cost control
EBITDA, cash costs and AISC per ounce sold included in the annual bonus.
Cost control is a driver of long-term returns to shareholders, measured via relative TSR in the PSP.
Discipline on capital allocation
Measurable and personal KPIs to reflect sound policy decisions and intelligent use of capital.
Environmental
Measurable targets over the longer term for greenhouse gas emission reduction.
GROWTH & DIVERSIFICATION
Optimising production, development and drilling metres
Identifying high-grade from the existing mineral resource with production targets used in the annual bonus.
Self-funded growth and exploration
Mineral resource exploration development and growth targets are employed in the strategic element of
individual KPIs within the annual bonus.
Exploration in Côte d’Ivoire and Egypt
Individual KPIs to identify and deliver on projects in Côte d’Ivoire and in Egypt outside of the Sukari Concession area.
COMMITMENT TO STAKEHOLDER RETURNS
Consistent dividend policy
Delivering shareholder returns in line with the dividend policy will drive TSR which is measured in the PSP.
Shareholder return relative to peers
50% of PSP based on relative performance against peers.
Safety and incident reduction
LTIFR, TRIFR and environment and social incident frequency rate targets used in ESG elements of the bonus structure.
People
Training and diversity targets are included in the ESG targets along with ongoing workforce engagement,
implementation of Group policies and embedding the workplace culture being assessed through personal KPIs.
Government relations and community initiatives
Maintaining key relationships and delivery of initiatives linked directly to individual bonus KPIs.
REMUNERATION POLICY
Shareholder approval for the Directors’ Remuneration Policy was obtained at the AGM held on 10 May 2022. The policy will continue to
apply for the next two years. The main features of the policy are set out below (the full policy can be found on pages 133 to 143 of the
2021 Annual Report found on the Company’s website within Investors under the banner Results and Reports.
REMUNERATION POLICY FOR EXECUTIVE DIRECTORS
Element of pay and link
to strategy
Operation
Opportunity
Performance conditions
Base pay
Base pay to be set
competitively so as to allow
the motivation and retention
of key executives of the
calibre and skills necessary
to support Centamin’s short
and long-term objectives.
Pay is reviewed annually and any change ordinarily
takes effect from 1 January. When determining
an appropriate level of salary, the Remuneration
Committee considers:
• Remuneration practices within the Company
• The performance of the individual Executive
Director
• The individual Executive Director’s experience
and responsibilities
• The general performance of the Company
• Salaries within the ranges paid by the
companies in the comparator group(s) used
for remuneration benchmarking
• The economic environment
Base salaries will be set at an appropriate
level. Any increase which exceeds that of
the general workforce may only normally
be awarded in cases of a change in
responsibility, complexity and nature of
the role or size of the organisation, when
the pay level becomes out of line with
the market data or to reflect the fact
that a Director has been appointed on a
below market salary with the intention
being that this salary will be increased if
considered appropriate.
N/A
Element of pay and link
to strategy
Operation
Opportunity
Performance conditions
Benefits
Benefits may be provided
where necessary to ensure
competitive remuneration
packages are consistent
with the market.
The ‘normal’ benefits that may be provided
include items such as car or car allowance,
life assurance, private medical provision,
subscriptions and phones.
Where necessary (e.g. due to the location of
operations of the business) it may be necessary to
provide ‘additional’ benefits such as (but not limited
to) private security, accommodation and reasonable
travel costs or enhanced provision of other benefits.
It is not intended that (i) normal benefits
will exceed 5% of base pay and (ii)
additional benefits will exceed 10% of
base pay (to include tax paid on the
benefits). Therefore, it is not intended that
normal benefits and additional benefits
will exceed 15% of base pay (to include
tax paid on the benefits).
N/A
Pension
Positioned to ensure
competitive packages and
provision of appropriate
income for executives in
retirement.
Pension benefits may be provided to Executive
Directors on the same basis as other employees in
the relevant location of the Executive Director.
The benefit may be provided as a salary supplement
or formal pension allowance, which does not form
part of the salary for the purposes of determining
the extent of participation in the Company’s
incentive arrangements.
Pension provision to any Executive
Director will have a value (expressed
as a percentage of salary) in line with
the pension contributions provided to
the majority of the relevant workforce
(currently 3% of salary).
N/A
Annual bonus
To provide a driver and reward
for the delivery of short-term
performance goals, normally
over the course of the
financial year.
The Remuneration Committee will determine
the bonus payable after the year end based on
performance against targets.
Annual bonuses up to 75% of salary are paid in
cash after the end of the financial year to which
they relate.
The net amount of any bonus earned in excess of
75% of salary must be applied in the acquisition
of shares (or be taken as a deferred share award)
that must in normal circumstances be retained for a
minimum period of two years. Dividend equivalents
can be paid on shares acquired for this purpose.
Executive Directors may voluntarily elect to take
up to their full bonus in shares (e.g. by way of a
deferred share award). Dividend equivalents can be
paid on shares acquired for this purpose.
The bonus plan is subject to malus/claw back
provisions described in the notes to this table.
Chief Executive Officer:
150% of salary.
Chief Financial Officer:
125% of salary.
The performance measures are selected
to provide an appropriate balance
between incentivising Executive
Directors to meet financial/operational
targets for the year and incentivising
them to achieve specific personal/
strategic objectives.
A majority of the bonus (i.e. at least
50% of the bonus opportunity) will be
linked to the achievement of financial/
operational performance targets with a
minority of the bonus comprised of ESG
and/or strategic or personal targets. In
all cases, the overwhelming majority
of the targets will be material to the
Company’s strategy and operate on a
structured basis.
No more than 25% of the maximum
opportunity is payable for delivering a
threshold level of performance (where
such an approach can be applied given
the nature of the metric/target used).
Up to 50% of the maximum opportunity
is payable for delivering a target level
of performance (again, where such an
approach can be applied).
The Remuneration Committee may
adjust the formula-based bonus outturn
if this does not reflect underlying
performance and/or shareholders’
experience and/or as a result of a
material safety event.
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ADDITIONAL INFORMATION
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REMUNERATION COMMITTEE REPORT
CONTINUED
Element of pay and link
to strategy
Operation
Opportunity
Performance conditions
Long-term incentives (Performance Share Plan – PSP)
To align the long-term
interests of the executives
with those of shareholders
Executive Directors and other selected employees
may participate in the PSP on the recommendation
of the Remuneration Committee.
Awards to Executive Directors shall in normal
circumstances be satisfied in shares and will vest
no earlier than three years following grant subject
to continued employment and the satisfaction of
performance conditions.
Awards which vest at the end of the three-year
performance period will be subject to an additional
two year holding period. During this period the
shares cannot be sold (other than as required for
tax purposes).
A dividend equivalent provision may be applied
which allows the Remuneration Committee to pay
an amount (ordinarily in shares unless, for example,
there is a tax or securities law issue prohibiting the
use of shares in which case a cash payment may be
made) equivalent to the dividends paid or payable
on vested shares between the date of grant and the
vesting of an award. The payment may assume the
reinvestment of the dividends.
Awards are subject to malus/claw back provisions
described in the notes to this table.
The aggregate market value (as at the
respective award dates) of shares in
respect of which awards are made to an
eligible employee in any year shall not in
normal circumstances be greater than
150% of the amount of such eligible
employee’s salary at the award date, save
in circumstances which are considered
by the Remuneration Committee to be
exceptional, where an absolute limit of
250% of salary may be applied.
PSP awards vest subject to the
achievement of challenging performance
conditions set by the Remuneration
Committee prior to each grant. These
conditions may include a blend of
financial, operational and/or shareholder
return-related metrics. A minority of the
conditions may also include strategic
and/or sustainability targets.
Threshold performance under each
metric will result in no more than 25%
of that portion of the award vesting.
The Remuneration Committee may
adjust the formula-based vesting
outturn if this does not reflect
underlying performance and/or
shareholders’ experience.
The Remuneration Committee may
adjust the formula-based bonus outturn
if this does not reflect underlying
performance and/or shareholders’
experience and/or as a result of a
material safety event.
Share ownership requirement
To encourage ownership of
shares, thereby creating
alignment of interest
between shareholders and
the Executives.
Executive Directors are required to build a holding
of shares in the Company equivalent to 200% of
base salary.
In employment
200% of salary. The Remuneration
Committee will, during the course of the
year, consider its approach to post-
cessation shareholding requirements for
the Executive Directors.
Post-employment
Executive Directors are expected to retain
the lower of their holding at cessation
of employment and the current in
employment guideline (at 200% of salary)
for two years. This applies on a forward-
looking basis (i.e. current beneficially
owned shares will not count against the
guideline which will relate to the shares
vesting under incentive plans from 2022).
N/A
Full details of the Company’s Remuneration Policy are set out in the FY 2021 Annual Report and Accounts. These include details on
the following:
• Policy on the Committee’s discretions when applying the rules of the Group’s variable incentive plans
• Policy on the selection of performance metrics and targets
• Policy on malus/clawback provisions under the terms of the Group’s incentive plans
• Policy if a new Director is appointed
• Policy on payment for loss of office
• Policy on external board appointments
SERVICE CONTRACTS
Executive Directors have rolling service contracts which are terminable on no more than twelve months’ notice on either side. Executive
Directors are entitled to be paid salary and pension (if any) in respect of the relevant notice period. In the case of notice given in
connection with and shortly following a change of control, Executive Directors are entitled to payment in lieu of an amount equal to twelve
months’ basic salary together with bonus under the short-term incentive plan. For this purpose, the amount of bonus (if any) shall be
determined by the Remuneration Committee of Centamin plc; be pro-rated based on the period up to the date of the change of control
only; take into account all of the relevant key performance indicators; and be subject to the normal rules on clawback. Details of the
Executive Directors’ service contracts are included below.
Martin Horgan
Ross Jerrard
Date of agreement
April 2020 (1 October 2020 revised split contracts).
March 2019.
Notice period
Twelve months’ notice from either party.
Twelve months’ notice from either party.
Expiry date
No fixed expiry date as rolling contract.
No fixed expiry date as rolling contract.
Termination
payment
Entitled to be paid salary and pension in respect of the relevant notice
period. In the case of notice given in connection with and shortly
following a change of control, Martin Horgan will be entitled to payment
in lieu of an amount equal to twelve months’ basic salary together with
any bonus that, in the opinion of the Remuneration Committee, would
have been due to him at the time of the completion of the change of
control taking into account all the relevant performance indicators.
Entitled to be paid salary and pension in respect of the relevant notice
period. In the case of notice given in connection with and shortly following
a change of control, Ross Jerrard will be entitled to payment in lieu of an
amount equal to twelve months’ basic salary together with any bonus that,
in the opinion of the Remuneration Committee, would have been due to him
at the time of the completion of the change of control taking into account
all the relevant performance indicators.
There are no other provisions for payment for loss of office.
ILLUSTRATION OF APPLICATION OF REMUNERATION POLICY
The following charts illustrate the remuneration opportunity provided to the Executives.
CEO (£’000)
CFO (£’000)
£3,000
Fixed
On target
Maximum
£2,500
£2,000
£1,500
£1,000
£500
£0
100%
£606k
£1,270k
£2,819k
£2,376k
48%
35%
17%
27%
37.24%
37.24%
Fixed Pay
LTIP
LTIP value with 50% share
price growth
Annual Bonus
Fixed
On target
Maximum
£2,500
£2,000
£1,500
£1,000
£500
£0
100%
£502k
£973k
£2,151k
£1,798k
52%
30%
18%
28%
33%
39%
Fixed Pay
LTIP
LTIP value with 50% share
price growth
Annual Bonus
Three scenarios have been illustrated based on the following assumptions:
1.
Minimum performance:
comprising the minimum remuneration receivable (i.e. fixed pay only, being base salary effective 1 January
2023 and benefits calculated using the 2022 figure as set out in the table on page 130.
2.
On-target performance:
comprising fixed pay, an annual bonus payment of 50% of the maximum opportunity and PSP awards vesting
at 25% of maximum opportunity.
3.
Maximum performance:
comprising fixed pay, 100% of annual bonus and 100% vesting of PSP awards. The maximum performance
scenario also illustrates potential pay out under the PSP with a 50% share price growth.
The illustrations do not take into account dividends.
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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REMUNERATION COMMITTEE REPORT
CONTINUED
REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS
Element of pay and
link to strategy
Operation
Performance
conditions
Non-Executive Director fees
To attract and retain
high calibre Non-
Executive Directors
by the provision of
competitive fees.
The Chairman is paid a single fee for all his responsibilities.
The Non-Executive Directors are paid a basic fee.
Members of the Board’s committees each receive additional fees to reflect their time commitment for each committee.
The chairs of the Board’s key committees (e.g. Remuneration Committee and Audit Committee) each receive additional
fees (in place of their committee membership fees) to reflect their extra responsibilities. Similarly, any Director
undertaking the role of designated non-executive for workforce engagement may also receive an additional fee in
recognition of their time commitment fulfilling the role.
The senior Independent Director also receives an additional fee in recognition of the time commitment for the role.
The Non-Executive Directors’ fees are determined by the Board. The level of fees takes into account the time
commitment, responsibilities, market levels and the skills and experience required.
When reviewing fee levels, account is taken of market movements in Non-Executive Director fees, Board committee
responsibilities, ongoing time commitments, the general economic environment and the level of increases awarded to
the wider workforce.
Fee increases, if applicable, are normally effective from January of each year.
Non-Executive Directors do not participate in any pension, bonus or long-term incentive plans.
Non-Executive Directors may be compensated for travel, accommodation or hospitality-related expenses in connection
with their roles and any tax thereon.
In exceptional circumstances, additional fees may be paid where there is a substantial increase in the temporary time
commitment required of Non-Executive Directors.
N/A
The Chairman and Non-Executive Directors (appointed in the last two years) have formal letters of appointment which provide for three
months’ notice and those under existing service agreements (two years plus) ‘reasonable notice’. These letters of appointment also
provide for additional payments to be made post-termination in the event that they are required to spend material time assisting the
Company, for example in connection with an investigation for which they are entitled to be indemnified by the Company.
Name
Position
Service Agreement
Jim Rutherford
Chairman
29 June 2020
Sally Eyre
Non-Executive Director
10 April 2019
Marna Cloete
Non-Executive Director
1 September 2019
Catharine Farrow
Non-Executive Director
1 September 2019
Hennie Faul
Non-Executive Director
1 July 2020
Ibrahim Fawzy
Non-Executive Director
14 August 2018
Mark Bankes
Non-Executive Director
14 December 2011
All Directors’ service contracts are kept available for inspection at the Company’s registered office.
DETERMINATION AND APPLICATION OF THE POLICY
When determining our Executive Director remuneration policies and practices, the committee takes account of a number of factors:
Factor
How this is taken into account
Clarity
We aim to ensure that our remuneration policies and practices are clearly articulated, transparently disclosed and well understood by both
our management team and our shareholders.
Simplicity
Overly complex remuneration structures which can be misunderstood and deliver unintended outcomes are avoided. One of the core
objectives of the committee is to ensure that our executive remuneration policies and practices are as simple to communicate and operate
as possible, while also supporting our strategy.
Risk
Inappropriate risk-taking is neither encouraged nor rewarded in our policy and practices. A balanced use of both short and long-term
incentive plans is operated which employ a blend of financial, non-financial and shareholder return targets. Also, equity plays a significant
role in our incentive plans, which work in tandem with shareholding guidelines. Robust malus/clawback provisions also operate to provide
the committee with the ability to take action in certain circumstances.
To avoid conflicts of interest, committee members are required to disclose any conflicts or potential conflicts ahead of committee meetings.
No Executive Director or other member of management is present when their own remuneration is under discussion.
Predictability
Reflecting typical practice, our incentive plans are subject to individual caps, with our share plans also subject to market standard dilution
limits. How the rewards potentially receivable by our Executive Directors under the incentive plans vary based on performance delivered and
share price growth.
Proportionality
A clear link between individual awards, delivery of strategy and our long-term performance can be seen and is demonstrated in the table
on page 30. In addition, incentive/’at-risk’ pay comprises a significant portion of Executive Directors’ packages. In addition, the structure of
the Executive Directors’ service contracts ensures ‘rewards for failure’ are avoided.
Alignment to culture
Through the Remuneration Policy we incentivise development of our culture, our values, attitudes, and behaviours. Our core values are
protect, ownership, innovate, educate and passion which are linked to remuneration, in particular through the sustainability objectives that
ensure we have robust safety standards that protect the workforce every day, improve our socio economic development in the countries of
operation and responsibly manage and minimise the environmental impact of Centamin’s activities.
Details of our core Values can be found on page 4 of the Strategic Report.
Our executive pay policies are designed and operated with these core values in mind. For example, a significant portion of the annual bonus
targets are either directly or indirectly linked to sustainability. Also, the committee has the flexibility to adjust the bonus/PSP outturn based
on a formulaic assessment of performance against the targets if it believes that performance has been delivered in a manner that does not
reflect the Company’s focus on sustainability.
THE WIDER EMPLOYEE CONTEXT
Our Remuneration Policy for Executive Directors takes due account of our approach to pay across the Company and aims to attract and
retain high performing individuals and to reward success. Base pay and benefits are set competitively, taking account of the individual’s
performance and market data. Annual incentives are typically linked to local business performance with a focus on performance
against key strategic business objectives. Members of the senior management team may also receive some of their annual bonus in
shares which are deferred or remuneration in shares (through performance or restricted shares). At this time there are no all-employee
share arrangements but this is kept under review on a regular basis, taking account of the locations the Company operates in and the
appropriateness of share-based rewards in such locations.
All employees of Sukari Gold Mine Company (the majority of whom are based at the Sukari mine site) are subject to a performance-
related bonus which is linked to underlying operational performance, safety and cost control measures at the mine. Further details on
employee relations can be found in the Sustainability Report, which is published separately. At a site level, a benchmarking exercise was
undertaken to align roles and experience and where applicable reset pay by grade and responsibility.
Consideration is also given to the base salary increase, relative performance of the Company and working conditions of the wider
workforce. The Remuneration Committee also take account of how the short and longer-term incentives align with the strategic
aims of the business, having regard to incentivising the right behaviours and developing the right culture. The main differences in
determining executive and senior employee compensation compared to the wider workforce relates to the emphasis on rewarding
long-term performance, as well as performance at an operational, strategic and corporate level. Consideration is also given to the level of
responsibility of executives and senior employees. In addition, in light of the 2018 UK Corporate Governance Code recommending that
engagement with the workforce takes place to explain how executive remuneration aligns with wider Company pay policy, discussions
are undertaken through employee engagement forums, with formal communication to senior members of the management team and
heads of department particularly through the budget process and more informal discussion groups to engage on workforce benefits and
remuneration. Senior members of the management team were also interviewed during the initial consultation phase which helped shape
the options and proposals put forward to the Remuneration Committee for further consideration.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
REMUNERATION COMMITTEE REPORT
CONTINUED
CONSIDERATION OF SHAREHOLDER VIEWS
Feedback from shareholders and proxy advisors and (where considered appropriate) meetings held with the same are considered as part
of the Company’s annual Remuneration Policy review. Major shareholders are contacted should there be any proposed material changes
to our Remuneration Policy or practices.
The Remuneration Committee has undergone significant direct consultation with shareholders during the year. On an ongoing basis (i.e.
a non-policy year), when considering the implementation of the Remuneration Policy, the Remuneration Committee considers the views
of investors and best practice and may consult shareholders if material changes to the application of the Remuneration Policy are made
from year to year.
ANNUAL REMUNERATION REPORT
Single figure table in US$ (audited)
Salary
Benefits
Bonus
LTI
Pension
Total
Total
Total fixed
remuneration
Total variable
remuneration
Executives
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Martin Horgan
675,056
683,705
17,606
52,536
720,113
625,723
538,998
–
1,616
1,790
1,953,389
1,363,754
694,278
738,031
1,259,111
625,723
Ross Jerrard
566,464
601,959
36,022
87,624
501,463
528,784
356,287
–
1,616
1,790
1,461,852
1,220,157
604,101
691,373
857,750
528,784
Total Executive
1,241,520
1,285,665
53,628
140,160
1,221,576
1,154,506
895,285
–
3,232
3,580
3,415,241
2,583,911
1,298,379
1,429,405
2,116,861
1,154,506
Non-Executives
Jim Rutherford
304,706
342,770
–
–
–
–
–
–
–
–
304,706
342,770
304,706
342,770
–
–
Sally Eyre
121,882
130,252
–
–
–
–
–
–
–
–
121,882
130,252
121,882
130,252
–
–
Marna Cloete
109,694
116,542
–
–
–
–
–
–
–
–
109,694
116,542
109,694
116,542
–
–
Catharine Farrow
109,694
116,542
–
–
–
–
–
–
–
–
109,694
116,542
109,694
116,542
–
–
Hennie Faul
109,694
116,542
–
–
–
–
–
–
–
–
109,694
116,542
109,694
116,542
–
–
Ibrahim Fawzy
97,506
114,918
–
–
–
–
–
–
–
–
97,506
114,918
97,506
114,918
–
–
Mark Bankes
126,282
130,677
–
–
–
–
–
–
–
–
126,282
130,677
126,282
130,677
–
–
Total
979,458
1,068,242
979,458
1,068,242
979,458
1,068,242
Total Executive
and NED
1,654,210
1,793,714
1,654,210
1,793,714
1,654,210
1,793,714
Notes to table:
•
All salaries and fees are paid in sterling and to reflect the financial reporting currency of US$, are shown in the table at the US$ rate of exchange in the month of payment.
•
Year end bonuses are paid in sterling and shown in the table based on the year end exchange rate of $1.2234/£1. If the pre‐tax value of the bonus is in excess of 75% of salary,
the amount above 75% of salary (following the payment of tax and employee’s national insurance) will be invested in the Company’s shares.
•
Benefits are within the limits of the policy and relate to the benefits package for the Executive Directors.
•
The Remuneration Committee, following shareholder consultation, reset the performance condition for Production and Free Cash flow following the operational ‘reset’ of Sukari
in 2020. As a result, the performance conditions relating to PSP (reflected in the LTI column) awards granted in 2020 have been partially met as at 31 December 2022. 63.1%
of the PSP Award granted in 2020 will vest in June 2023 as detailed on page 138.
•
None of the total PSP value (reflected in the LTI column) for the Executive is attributable to share price appreciation. The LTI value of £0.9954 per share is based on the average
share price for the last three months of 2022. The LTI includes the value of dividend equivalents on the award balance over the vesting period.
•
Mark Bankes received an additional fee totalling £30,000 in 2022 (£20,000 in total for 2021) as a result of the additional time commitment in providing Non-Executive Director
oversight in respect to the Egypt Bid Round negotiations. This included time spent travelling to and from Cairo and time spent supporting the Company providing oversight to the
active working committee. No additional fees are expected in 2023.
NON-EXECUTIVE DIRECTOR FEES
Non-Executive Directors receive annual fees within an aggregate Directors’ fee pool limited to an amount which is approved by shareholders.
The fees are periodically reviewed with no Director having input into the review of their own fees. Fees were reviewed with effect
from 1 January 2022 with increases being awarded for the chairs of committees who are subject to the annual base fee. These were
the first increases to fees since 2013 and have been set to reflect the current and expected future time commitment of these roles.
Following this year’s review, the current annual fee rate for Non-Executive Directors are unchanged as follows:
Fee structure in 2023
As at 31 December 2022
Annual Board Chair fee
£250,000 (US$305,858)
£250,000 (US$345,000)
Annual base fee
£65,000 (US$79,523)
£65,000 (US$89,700)
Chair of a Board committee
£15,000 (US$18,351)
£15,000 (US$20,700)
Member of a Board committee
£5,000 (US$6,117)
£5,000 (US$6,900)
Senior Independent Director
£10,000 (US$12,234)
£10,000 (US$13,800)
Notes to table:
•
The Non-Executive Directors do not participate in any of the Company’s share plans or incentive plans.
•
The US$ figures in the table reflects year-end exchange rate of $1.22/£1 for 2023 and $1.38/£1 for 2022.
2022 ANNUAL BONUS (AUDITED)
The 2022 bonus plan for the Executive Directors was structured with 75% of the bonus opportunity based on financial/objectively
measurable targets and 25% was based on personal/strategic targets.
As set out in the risk matrix in the Strategic Report, the Company is exposed to the daily fluctuations in the price of gold, receiving the
market rates on the day of sale. Consequently, revenue cannot be directly linked with the performance of the Executive and therefore the
Remuneration Committee uses a balanced scorecard as the basis on which to assess performance. The measures used comprise the
key areas of executive focus within a mining company context, including finance, production, controls over costs, targeted drilling through
exploration as well as encouraging a safety culture and sustainable operations.
FINANCIAL/OBJECTIVELY MEASURABLE TARGETS (75% OF BONUS OPPORTUNITY)
Consistent structured financial/objectively measurable targets (audited) applied to both the CEO and CFO during the year as detailed
below. The performance delivered against the targets resulted in 48.55% out of the maximum 75% available as being achieved as
detailed below.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
|
STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
REMUNERATION COMMITTEE REPORT
CONTINUED
OPERATIONAL (35% OF BONUS OPPORTUNITY)
Under the operational elements the committee determined that 17.1% of the maximum 35% of bonus opportunity was payable, using
the following performance as the basis for this calculation:
Category
Performance
measure
% of bonus
opportunity
Threshold
Target
Maximum
Actual
Outturn as %
of maximum
bonus
opportunity
Outturn as
% of salary
CEO/CFO
Gold production
Ounces
10
430,000
440,680
460,000
440,974
5.08%
7.62/6.35
Open pit material movement
‘000t
3.57
88,632
93,297
97.961
94,160
2.12%
3.18/2.65
Contractor waste
‘000t
1.43
36,485
37,230
37,975
42,260
0.00%
0/0
Strip ratio to ore mined (adjusted for
low-grade ore reclassified from waste)
w/o
4
9.96
11.06
11.62
12.38
4.00%
6/5
UG material mined
‘000t
4
1,279
1,421
1,493
1,077
0.00%
0/0
UG development
4
8,035
8,928
9,374
6,862
1.81%
2.72/2.26
Lateral
metres
50
55
58
166
1.33%
Waste
metres
4,785
5,317
5,583
3,346
0.00%
Ore
metres
3,200
3,556
3,734
3,350
0.47%
UG drilling
4
72,000
80,000
84,000
73,143
2.00%
3/2.5
Grade control
metres
21,600
24,000
25,200
25,354
2.00%
Exploration
metres
50,400
56,000
58,800
47,789
0.00%
Plant recovery
%
4
87.0
88.2
89.0
88.2
2.00%
3/2.5
TOTAL
35%
17.01%
25.52/21.26
Notes to table:
•
Threshold achievement represents 25% of the bonus opportunity for the respective performance measure.
•
Target achievement represents 50% of the bonus opportunity for the respective performance measure.
•
Maximum achievement represents 100% of the bonus opportunity for the respective performance measure.
•
Production is based on ounces of gold produced.
FINANCIAL (20% OF BONUS OPPORTUNITY)
Under financial target element, the committee determined that 16.47% of the maximum 20% of bonus opportunity was payable, using
the following performance as the basis for this calculation:
Category
Performance measure
% of bonus
opportunity
Threshold
(1)
Target
(1)
Maximum
(1)
Actual
Outturn as %
of maximum
bonus
opportunity
Outturn as
% of salary
CEO/CFO
Cash cost of production
US$/ounce
5
1,000
952
900
795
5.00%
7.5/6.25
AISC per ounce sold
(2)
US$/ounce
2
1,425
1,341
1,275
1,398
0.66%
1/0.83
AIC per ounce sold
(2)
US$/ounce
3
1,742
1,659
1,576
1,736
0.81%
1.2/1.01
EBITDA
(3)
US$ million
4
176
185
194
319
4.00%
6/5
Capital projects (solar)
(4)
Budget/phase of completion
2
Assessed by reference to stage of completion and remaining
within budgetary constraints
2.00%
3/2.5
Capital projects (Paste-Fill)
(4)
Budget/phase of completion
2
Assessed by reference to stage of completion and remaining
within budgetary constraints
2.00%
3/2.5
Capital projects
(underground fleet)
(4)
Budget/phase of completion
2
Assessed by reference to stage of completion and remaining
within budgetary constraints
2.00%
3/2.5
TOTAL
20
16.47%
24.7/20.6
Notes to table:
(1) The structure of the threshold, target and maximum pay out schedules are as for the operational targets above.
(2)
As set out in the Executive bonus letter at the beginning of 2022, the committee assessed the impact of the Egyptian fuel price on the cost base of the business applying
the commodity assumption of 60 US cents per litre when determining the outcome of cash cost of production. The committee also assessed the impact of the gold price on
AISC, AIC and EBITDA at US$1,750 although this didn’t result in a material change. The assessment results in a 0.65% outturn as a % of maximum bonus opportunity.
(3)
When testing the sustaining and direct operating costs and non-sustaining and capital projects targets the committee takes account of the extent to which planned
expenditure was actually made and the rationale therefore.
(4)
The committee assessed delivery of the projects by reference to budget and stage of expected completion to agree the outturn. Consideration was also given to the
efficient use of existing resources available onsite to meet the project needs. The committee and Board also considered the commercial approach to decision-making
when assessing the requirements of the projects. As a result of this review, the committee is satisfied that this element pays out in full.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
|
STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
REMUNERATION COMMITTEE REPORT
CONTINUED
ESG (20% OF BONUS OPPORTUNITY)
Under the sustainability part of the bonus, the committee determined that 15.8% of the maximum 20% of the bonus opportunity was
payable using the following performance as the basis for this calculation:
Category
Performance measure
% of bonus
opportunity
Threshold
Target
Maximum
Actual
Outturn as %
of maximum
bonus
opportunity
Outturn as
% of salary
CEO/CFO
Group LTIFR
Per 1 million hours
4
0.91
0.77
0.68
0.08
4.00%
6/5
Group TRIFR
Per 1 million hours
4
5.31
4.51
3.98
2.61
4.00%
6/5
Reportable (major) incidents
Level 4-5
1.5
–
–
–
2
0.00%
0/0
Environmental incidents
Level 1-3
1.5
2.67
2.27
2.00
2.53
0.51%
0.76/0.64
Scope 1 GHG emissions
Co
2
per ounces
3
1.17
1.12
1.08
1.13
1.32%
1.98/1.65
Employee training
Hrs per headcount
1
27.30
31.40
34.13
38.17
1.00%
1.5/1.25
Leadership training
Hrs per headcount
1
8.72
10.03
10.90
11.78
1.00%
1.5/1.25
Competency level
% Proficiency
1
–
–
–
Threshold
0.25%
0.37/0.31
Gender diversity
Gender balance
3
–
15
–
23
3.00%
4.5/3.75
TOTAL
20
15.08%
22.6/18.9
Notes to table:
•
The structure of the threshold, target and maximum pay out schedules are as for the targets above.
•
All environmental incidents related to minor spills due mainly in the handling of materials during offload and transportation.
PERSONAL/STRATEGIC TARGETS (25% OF BONUS OPPORTUNITY)
Martin Horgan
Achieved (audited)
The targets applicable to Martin Horgan’s non-financial bonus for FY 2022 and his performance against them is detailed below. In total,
he achieved 23.45% of the 25% available:
Topic/Target:
Achieved:
Weighting
(% of bonus
opportunity)
Achieved
(% of
maximum)
Outturn as %
of maximum
bonus
opportunity
Outturn as
% of salary
Optimising the LOM plan:
UG expansion and grid
connection studies
Delivery of further Reserve growth of 0.8Moz at Sukari to support the UG
expansion premise.
State Power company undertaking grid connection study to displace
diesel power generation.
5
100%
5
7.5
SGM UG owner operator
Successful process and transitioning to underground mining owner-
operator at Sukari.
Second Tailings Facility and Solar commissioned successfully.
2
100%
2
3
SGM infrastructure
Doropo evaluation of optimised metallurgical route.
3
85%
2.55
3.83
Exploration
SGM exploration across the concession.
Eastern Desert Exploration programmes in place and good progress with
government negotiations.
5
90%
4.5
6.75
Growth opportunities
M&A opportunities and corporate action preparedness reviewed to the
satisfaction of the Board.
4
95%
3.8
5.7
Egyptian management
structure
Egyptian in country management structure completed and additional
support targeted to further develop in-country relations.
2
90%
1.8
2.7
Capital structure review
Completed capital structure review to meet future funding requirements.
US$150m revolving credit facility agreed in December 2022.
4
95%
3.8
5.7
25%
23.45%
35.18%
Total outturn: 23.45% out of a possible 25% of the max bonus opportunity.
Martin Horgan’s total bonus based on a formulaic assessment of all the targets (financial/objectively measurable plus personal/strategic
targets) was 72% of his maximum bonus opportunity. As a result, Martin received a bonus of £588,600 or 108% of salary. Annual
bonuses up to 75% of salary are paid in cash. The amount of bonus earned above 75% of salary (on a net of tax basis) will be required to
be converted to shares and held for a minimum of two years.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
REMUNERATION COMMITTEE REPORT
CONTINUED
Ross Jerrard
Achieved (audited)
The targets applicable to Ross Jerrard’s non-financial bonus for FY 2022 and his performance against them is detailed below. In total, he
achieved 23.15% of the 25% available:
Topic/Target:
Achieved:
Weighting
(% of bonus
opportunity)
Achieved
(% of
maximum)
Outturn as %
of maximum
bonus
opportunity
Outturn as
% of salary
Capital allocation
Implemented new procedures on cost recovery.
Capital structure presented to the Board.
5
95%
4.75
5.94
Cost management initiatives
Continued delivery of cost savings initiatives against inflationary
headwinds. Cost savings programme delivered $100m by 31 December
2022 of the $150m cumulative target.
Managed major contract renewals.
5
100%
5
6.25
Treasury/Finance
US$150m revolving credit facility agreed in December 2022.
2
95%
1.9
2.38
Government relations and
stakeholder management/legal
and regulatory compliance/
Internal & external audit
management
Eastern Desert Exploration: Management of fiscal terms and
government negotiations.
Transitioning of senior personnel within Egypt and across the
Group’s assets.
Approval of Group tax and audit reviewed and approved with
the Company’s partner, EMRA.
5
90%
4.5
5.63
Implementation of the Group
Risk Management Framework/
risk review and process
mapping
Risk Management Framework and reporting fully established across all
assets.
Group wide risk indicators updated across the Board and
management teams.
2
95%
1.9
2.38
M&A assessment and
structuring/corporate
action activities
Managed the team in the review of M&A opportunities.
Established processes in place in the event of corporate action.
3
95%
2.85
3.56
IT Implementation
Group wide workshops completed and project schedule for
new integrated system with SAP rollout on track for H2 2023.
3
75%
2.25
2.81
TOTAL
25%
23.15%
28.94%
Total outturn: 23.15% out of a possible 25% of the max bonus opportunity for the Chief Financial Officer.
Ross Jerrard’s total bonus based on a formulaic assessment of all the targets (financial/objectively measurable plus personal/strategic
targets) was 71.7% of his maximum bonus opportunity. As a result, Ross received a bonus of £409,882 or 89.63% of salary. Annual
bonuses up to 75% of salary are paid in cash. The amount of bonus earned above 75% of salary (on a net of tax basis) will be required to
be converted to shares and held for a minimum of two years.
LONG-TERM INCENTIVES – SHARES AWARD TABLE (AUDITED)
June 2020 PSP award
The chair’s introductory letter provides a full summary of the context for the vesting of the 2020 PSP awards.
The 2020 PSP Awards targets are set out below along with performance against the targets and details of the restatement of the
production targets.
2020 performance conditions
Performance condition testing and details of restatements to financial and
production targets
Relative TSR v bespoke mining peer group
Total shareholder return (“TSR”) performance over the three-year performance period ending
31 December 2022 ranked eleventh out of the 25 companies retained in the peer group at the
end of the performance period (with companies that were acquired replaced by the relevant
acquiring company).
As a result of being ranked at the 58th percentile of the comparator group, 50% of this part of
the award will vest being 25% of the total award vesting.
Weighting
50% of the
total award
Threshold 25%
Median
Stretch 100%
Upper Quartile
Free cash flow (“FCF”)
In testing the condition the committee added back the following non-sustaining capital
expenditure:
Capital Drilling Contract
US$90m
UG expansion/Owner-Mining Fleet
US$20m
Adjusted FCF to ‘add back’:
US$110m.
This resulted in 2022 free cash flow for the purposes of the performance condition of US$92m
resulting in 100% vesting for this portion of the award, being 25% of the total award. The
committee would consider this a fair reflection of the underlying FCF generated based on the
original targets set.
Weighting
25% of the
total award
Threshold
FY 2022 Target 25%
US$45m
Stretch
FY 2022 Target 100%
US$70m
The target was set (as detailed in the 2020 Remuneration Report) such
that the committee would add back non-sustaining capex not envisaged in
setting the targets.
25% gold production
Original target
Production for FY2022 was 440,974 oz. This results in performance within the restated target
range and results in 52.4% of this part of the award vesting, being 13.1% of the award.
The committee considers this a fair reflection of the production performance delivered by the
Company with use of the December 2020 restated target ensuring that the targets fulfilled
their original intent and there was no misalignment between the Board’s approved strategy
and incentive plan targets.
Weighting
25% of the
total award
Threshold
25% vesting
500,000 oz
Stretch
100% vesting
550,000 oz
Restated Target
Weighting
25% of the
total award
Threshold
25% vesting
430,000 oz
Stretch
100% vesting
460,000 oz
The restated targets were set out in the December 2020 reset guidance
for 2022 presented to the market via a regulatory announcement on
2 December 2020.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
|
STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
REMUNERATION COMMITTEE REPORT
CONTINUED
The performance conditions for the grants made in June 2020 covered the period from 31 December 2019 to 31 December 2022.
Performance against the restated targets is set out below:
Category
Weighting
Targets
Outturn
Threshold
(25% of
maximum)
Maximum
(100% of
maximum
Actual
As a % of the
Category
As a % of the
Award
Relative TSR vs a bespoke peer group of miners
50%
Median
Upper quartile
TSR at 58th percentile
50%
25%
‘Adjusted’ free cash flow
25%
$45m
$70m
$92m
100%
25%
‘Restated’ gold production
25%
430,000
460,000
440,974
52.4%
13.1%
The above vesting results applied to all participants in the plan with vesting of 63.1% of the original award to take place in June 2023.
The vesting outcome as a result of the committee’s proposal results as follows:
• CEO:
372,290 shares
will vest on 2 June 2023 with 100% of the net of tax number of shares required to be held until at least 2 June
2025 and all shares (net of tax) to be retained towards the Company’s in and post-employment share ownership guidelines.
• CFO:
246,090 shares
will vest on 2 June 2023, 50% of the net of tax number of shares required to be held until at least 2 June 2025
and all shares (net of tax) to be retained towards the Company’s in and post-employment share ownership guidelines.
In relation to the 2020 PSP vesting, the awards carried the right to dividend equivalents on the shares that vested. As a result, an
additional value accrued as dividend equivalents has been included in the single figure table on page 130.
The Committee is comfortable that the above process delivers the original intent of the awards and achieves a fair balance between
performance and reward. The achievement of vesting under each element of the award, total shareholder return, free cash flow and
production, demonstrates that it was a combination of robust operational performance and delivery that has linked through to the
restoration of shareholder returns through the performance period and on that basis the overall vesting result is appropriate.
The Committee also noted the potential for windfall gains when determining vesting of the 2020 PSP Awards but noted that with
Centamin’s share price not negatively impacted by COVID at grant (with gold being a safe haven asset), there was no potential for
windfall gains and through the performance period the share price has delivered a sustained recovery from lows arising as a result of the
announcement of project reset as opposed to being drive by outside factors.
PSP award table (conditional awards) – Martin Horgan (audited)
Award date and basis
Face value of
award at grant
date US$
Fair value of
award at
grant date in
US$
End of
performance
period
Shares
granted
Total
outcome
of vest
Total
lapsed
based on
performance
to end 2022
Awards held on
31 December
2022
PSP 5 June 2020 (200% of salary)
1,254,977
781,750
31 Dec 2022
590,000
372,290
217,710
372,290
PSP 30 April 2021 (150% of salary)
1,021,324
653,250
31 Dec 2023
650,000
–
–
650,000
PSP 20 May 2022 (150% of salary)
997,307
660,825
31 Dec 2024
979,000
–
–
979,000
Notes to the table
•
There is nil cost for conditional awards which are subject to performance conditions.
•
The face value of the 2022 awards was £0.835 per award applying an FX rate of $1.22:£1. The face value was calculated using the five day average share price based on the
high and low daily share prices prior to grant.
•
The fair values of the awards are based on IFRS 2 valuation methodology set out in note 6.3 of the financial statements.
PSP award table (conditional awards) – Ross Jerrard (audited)
Award date and basis
Face value of
award at grant
date US$
Fair value of
award at
grant date in
US$
End of
performance
period
Shares
granted
Total
outcome
of vest
Total
lapsed
based on
performance
to end 2022
Awards held on
31 December
2022
PSP 5 June 2020 (150% of salary)
831,480
516,750
31 Dec 2022
390,000
246,090
143,910
246,090
PSP 30 April 2021 (150% of salary)
895,623
504,451
31 Dec 2023
570,000
–
–
570,000
PSP 20 May 2022 (150% of salary)
836,353
554,175
31 Dec 2024
821,000
–
–
821,000
Notes to the table
•
There is nil cost for conditional awards which are subject to performance conditions.
•
The face value of the 2022 awards was £0.835 per award applying an FX rate of $1.22:£1. The face value was calculated using the five day average share price based on the
high and low daily share prices prior to grant.
•
The fair values of the awards are based on IFRS 2 valuation methodology set out in note 6.3 of the Financial Statements.
30 April 2021 performance criteria (audited):
The awards granted in April 2021 will vest in April 2024 (with all of the vested shares subject to a two year holding period) and will be
subject to satisfaction of the following performance conditions over the three-year financial period ended 31 December 2023:
Weighting
Threshold
(25% vesting)
Stretch
(100% vesting)
Relative TSR vs FTSE Gold Mines Index
(the Index)
50%
Performance Equal
to the Index
Annual Out-Performance
of the Index by 10%p.a.
2023 Free cash flow
$ million
25%
45
70
2023 Gold production
‘000 ounces
25%
450
480
20 May 2022 performance criteria (audited):
The awards granted in May 2022 will vest in April 2025 (with all of the vested shares subject to a two year holding period) and will be
subject to satisfaction of the following performance conditions over the three-year financial period ended 31 December 2024:
Weighting
Threshold
(25% vesting)
Stretch
(100% vesting)
Relative TSR vs FTSE Gold Mines Index
(the Index)
50%
Performance Equal
to the Index
Annual Out-Performance
of the Index by 10%p.a.
2024 Free cash flow
$ million
25%
35
70
2024 Gold production
‘000 ounces
25%
450
500
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
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SHAREHOLDING GUIDELINES (AUDITED)
To encourage ownership of shares and thereby create a link of interest between shareholders and the executives, the Remuneration
Policy requires Executive Directors to build a holding of shares in the Company equivalent to 200% of base salary. Vested shares awarded
by the Company are included in the calculation. The Executive Directors are both working towards this guideline by building their share
ownership through personal acquisition and vested share awards.
The following table shows the current shareholding of each of the Directors in post as at 31 December 2022.
Name
As at
31 December 2022
Unvested
conditional awards
(5,6)
Balance
(1)
Percentage of
base salary
(4)
Executive Directors
Martin Horgan
2,326,193
2,219,000
107,193
20%
Ross Jerrard
(2)
2,348,000
1,781,000
567,000
123%
Non-Executive Directors
(3)
Jim Rutherford
250,000
–
250,000
100%
Sally Eyre
15,000
–
15,000
15%
Marna Cloete
15,000
–
15,000
17%
Catharine Farrow
30,000
–
30,000
33%
Hendrik Faul
–
–
–
0%
Ibrahim Fawzy
140,000
–
140,000
174%
Mark Bankes
319,000
–
319,000
302%
(1)
Of the Executive Directors the balance reflects the total shares owned (including deferred bonus shares) but excludes the unvested share awards which remain subject
to performance conditions.
(2)
For Ross Jerrard, the balance includes the 2018 PSP Award which partially vested in 2021 resulting in 102,000 shares. Of this vest, 40,290 shares are subject to a two
year holding period under the terms of the PSP.
(3) No Non-Executive Directors hold shares, share options or awards that are subject to performance measures.
(4) The valuations of the shareholdings are based on the three month average share price to 31 December 2022 of £0.995.
(5) All scheme interests are conditional awards and no options have been granted.
(6)
There are no share interests that have a specific continued service requirement other than the conditional awards which are contingent on employment at the point
of vest.
PERFORMANCE GRAPH AND CEO REMUNERATION TABLE (UNAUDITED)
The graph below compares the TSR of the Company to the FTSE 250 and the FTSE Gold Mine indices. The graphs show the return for
the last ten years. The indices were chosen to allow shareholders to compare the Company’s performance against other peers considered
relevant for these purposes.
CEY (TSR)
FTSE Gold Mines
FTSE 250
0
50
100
150
200
250
300
350
400
450
2012
2013
2015
2016
2017
2018
2019
2020
2021
2014
2022
REMUNERATION COMMITTEE REPORT
CONTINUED
The Remuneration Committee considers that these indices are appropriate comparators of the Company for this purpose. We have
reflected details of the CEO pay from 2011, when Centamin plc was incorporated:
Chairman – Josef El-Raghy
(1)
Single figure
remuneration
Annual bonus as %
of maximum
Long-term incentives
vesting in year as %
of maximum
2013 (Chairman/CEO)
US$2,020,562
75%
n/a
2014 (Chairman/CEO)
US$2,073,192
80%
n/a
2015 (Chairman)
US$1,862,338
70%
n/a
CEO – Andrew Pardey
(2)
Single figure
remuneration
Annual bonus as %
of maximum
Long-term incentives
vesting in year as %
of maximum
2015
US$1,063,348
68%
0%
2016
US$1,205,892
77%
0%
2017
US$3,096,791
78%
100%
2018
US$1,144,053
Bonus waived
40%
2019
US$1,020,730
30%
0%
(1) The CEO pay from 2012 to 2014 reflects the total remuneration for Josef El-Raghy while he held the position of CEO and Chairman.
(2)
Andrew Pardey was appointed CEO from 1 February 2015 and retired on 13 December 2019 and received awards under the performance share plan from June 2015.
Prior to 2015 awards were granted under the deferred bonus share plan reflecting his prior role as a COO.
Interim CEO – Ross Jerrard
(3)
Single figure
remuneration
Annual bonus as %
of maximum
Long-term incentives
vesting in year as %
of maximum
2019
US$1,063,846
63%
0%
2020
US$1,270,896
59%
20%
CEO – Martin Horgan
(3)
Single figure
remuneration
Annual bonus as %
of maximum
Long-term incentives
vesting in year as %
of maximum
2020
US$874,504
59%
N/A
2021
US$1,363,754
74.7%
N/A
2022
US$1,953,389
72%
63.1%
(3) Ross Jerrard was appointed Interim CEO on 13 December 2019 until 6 April 2020 when Martin Horgan was appointed.
140
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ADDITIONAL INFORMATION
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REMUNERATION COMMITTEE REPORT
CONTINUED
PERCENTAGE CHANGE IN THE REMUNERATION OF THE DIRECTORS (UNAUDITED)
The table below shows the percentage change in salary, benefits and bonus for all Directors compared with all employees.
Average percentage change
2019–2020
Average percentage change
2020–2021
Average percentage change
2021–2022
Salary/
Fee
Benefits
Annual
bonus
Salary/
Fee
Benefits
Annual
bonus
Salary/
Fee
Benefits
Annual
bonus
Martin Horgan
(2)
N/C
N/C
N/C
46%
43%
71%
-1%
-70%
15%
Ross Jerrard
(2)
8%
-55%
4%
2%
179%
15%
-6%
-63%
-5%
Jim Rutherford
(4)
N/C
N/A
N/A
40%
N/A
N/A
-11%
N/A
N/A
Sally Eyre
(3)
N/C
N/A
N/A
22%
N/A
N/A
-16%
N/A
N/A
Marna Cloete
(3)
N/C
N/A
N/A
16%
N/A
N/A
-6%
N/A
N/A
Catharine Farrow
(3)
N/C
N/A
N/A
20%
N/A
N/A
-6%
N/A
N/A
Hendrik Faul
(3)
N/C
N/A
N/A
105%
N/A
N/A
-6%
N/A
N/A
Ibrahim Fawzy
(3)
7%
N/A
N/A
19%
N/A
N/A
-15%
N/A
N/A
Mark Bankes
(3)
-11%
N/A
N/A
27%
N/A
N/A
-3%
N/A
N/A
All employees
(1)
15%
-1%
-15%
-5%
10%
25%
-4%
-9%
3%
(1)
Centamin plc does not have any direct employees, therefore we have voluntarily shown the change in Directors’ pay vs a wider employee comparator group. Centamin
plc employs the senior management team through subsidiary service entities therefore the senior management team has been used as the comparator group 2022: 28
employees (2021: 26 employees).
(2)
The percentage reflects the year-on-year change recorded in US$ in the single figure table. The change for Martin Horgan between 2020 – 2021 reflects the fact that
his bonus and salary represented part of the year as he started employment in April 2020.
(3)
Any increase or decrease in Non-Executive Director fees reflects a change in the membership or chairmanship of committees and reflects a change in exchange rate
between the reporting currency US$ and payments made in GB£. N/A is referenced whether the individual does not receive benefits of pension or an annual bonus.
(4)
N/C is referenced where there is no comparator data for that individual or where a Director has not worked a full year (unless otherwise stated) and so the change would
not be representative. N/A is referenced where the individual does not receive benefits of pension or an annual bonus.
RELATIVE SPEND ON PAY (UNAUDITED)
The following table provides an illustration of the relative spend on pay to place the Directors’ pay in the context of the wider Group finances:
Average percentage change 2021–2022
% change
2021 Spend on pay
$’million
2022 Spend on pay
$’million
Comparator group
(1)
-9.8
55
58.8
Remuneration of Centamin’s Executive Directors
(2)
27%
2.6
3.3
Remuneration of Centamin’s Non-Executive Directors
(2)
-9.5%
1.07
0.97
Distributions to Centamin shareholders
(3)
-44.8%
105
58
(1)
The comparator group is based on the average number of employees based in Egypt where the majority of the Company’s employees are based: 2022: 2,194 (2021: 1,847
employees and 2020: 1,530). The total remuneration paid to all employees in the Group in 2022 was $77.8m (2021: $68.2m and 2020: $59.2). The percentage to the
comparator group reflects the devaluation of EGP to the reporting currency of US$, please see the ‘wider employee remuneration context’ for further information.
(2)
The percentage reflects the year-on-year change recorded in US$ in the single figure table.
(3) The percentage change relates to distributions to shareholders for each financial year.
Centamin is not required to report under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 as only a few members
of staff are either UK tax residents or have a UK nexus. The majority of the workforce is based in Egypt. Similarly, Centamin is not
required to publish the ratio of the CEO’s pay to that of the workforce.
Other than the paid and declared dividends during the year, there have been no other shareholder related returns of capital or share buy
backs by the Company.
PAYMENT TO PAST DIRECTORS (AUDITED)
There were no payments to past Directors during the year.
PAYMENTS FOR LOSS OF OFFICE (AUDITED)
There were no payments for loss of office.
THE COMMITTEE (UNAUDITED)
The Remuneration Committee is a committee of the Company represented by three Independent Non-Executive Directors and the
Company Chairman, namely Dr Sally Eyre (chair of the committee), Dr Fawzy, Marna Cloete and Jim Rutherford (Company Chair).
The committee comprised three Independent Non-Executive Directors in addition to the Company Chair.
In compliance with the 2018 UK Corporate Governance Code, no member of the committee has any financial interest, other than as
shareholder and Non-Executive Director fees for being on the committee, in the matters decided by the committee. None of the members
of the committee participate in any bonus scheme, long-term incentive, pension or other form of remuneration other than the fees disclosed
in this report. There is no actual or potential conflict of interest arising from the other directorships held by members of the committee. The
Executive Directors may attend meetings of the committee to make recommendations relating to the performance and remuneration of their
direct reports but neither they, nor the Company Secretary, attend meetings when their own remuneration is under consideration.
Current committee members
Joined
Attendance in 2022
Sally Eyre (chair of the committee)
2019
5/5
Jim Rutherford
2020
(1)
5/5
Marna Cloete
2020
(1)
5/5
Dr Ibrahim Fawzy
2021
(2)
5/5
(1) Jim Rutherford and Marna Cloete joined with effect from 29 June 2020.
(2) Dr Fawzy joined with effect from 31 March 2021.
ACTIVITIES OF THE COMMITTEE
The committee met five times during the year and also approved one set of resolutions by way of written resolution. The business
conducted during the year is set out below:
Date of activity
Summary of activity
Q1 2022
Assessing the FY 2021 bonus and FY 2019 Performance Share Plan award outturns
Preparing the 2021 Directors’ Remuneration Report
Finalising the new remuneration policy for shareholder approval at the 2022 AGM.
Setting the 2022 incentive plan targets
Reviewing the Executive Directors’ base salary and 2022 incentive plan performance targets
Q2 2022
Approving awards under the Company’s shareholder approved Incentive Share Plan
Review of shareholder, proxy and stewardship feedback from the Annual General Meeting
Q3 2022
Consultation and early engagement in relation to the FY 2020 Performance Share Plan
Engagement onsite with employee working groups at Sukari (Board site visit)
Q4 2022
Reviewing the application of Remuneration Policy for 2022
Preparing the executive performance conditions for the Executive Directors for 2023
Undertaking the committee evaluation and review of the committee charter
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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|
REMUNERATION COMMITTEE REPORT
CONTINUED
ADVICE PROVIDED TO THE COMMITTEE
Korn Ferry was appointed by the committee in 2018 following a competitive tender process to provide independent advice on
remuneration matters. Representatives from Korn Ferry attend certain committee meetings and provide advice and briefings to the
committee chair outside of meetings as necessary. Fees are charged on a cost incurred basis and the fees charged by Korn Ferry in the
year ended 31 December 2022 totalled £119,300.
Korn Ferry is a member of the Remuneration Consultants Group and operates voluntarily under the group’s code which sets out the
scope and conduct of the role of executive remuneration consultants when advising UK listed companies. The committee is satisfied
that the advice provided on matters of remuneration remains objective and independent with the provision of executive remuneration
services provided by a team within Korn Ferry that operates independently to the wider Korn Ferry organisation, effectively providing
Chinese walls between these services and those of the wider Korn Ferry organisation. Korn Ferry provided other human capital related
services during the year to a separate part of the business, but these services were carried out by a team wholly separate to the
remuneration advisory team. The committee is comfortable that the controls in place at Korn Ferry do not result in the potential for
any conflicts of interest to arise and the consultant confirmed they have no connection, other than the engagement services, with the
group or its Directors.
SHAREHOLDER VOTING AT THE AGM (UNAUDITED)
Set out in the table below are the votes cast for and against the adoption of the Remuneration Report and Remuneration Policy at the
AGM on 10 May 2022.
For
Against
Withheld
Approval of the Remuneration Report
745,341,893 (97.16%)
21,809,088 (2.84%)
231,470
Approval of the Remuneration Policy
735,236,754 (95.84%)
31,894,529 (4.16%)
251,168
POLICY IMPLEMENTATION IN 2023 (UNAUDITED)
Base salary
As detailed in the committee chair’s Introductory Statement, given the CEO was appointed on a below market base salary with the
intention of moving him to a market consistent rate, his salary was increased to £545,000 effective 1 January 2022, with a further
increase to £590,000 with effect from 1 January 2023 with Committee discretion to further increase in line with the typical workforce
related increase. The Committee considered the strong progress during the year alongside institutional investors’ calls for restraint in
executive base pay in the current high inflation environment and concluded that it would not be appropriate to further increase salary
beyond £590,000. As a result his salary will be £590,000 from 1 January 2023. The phasing of the increases to the Chief Executive’s
salary were applied in recognition of the expectations of shareholder advisory bodies during the 2021 consultation process. The CEO’s
base salary is now at a market comparative rate. The committee is comfortable with the increase given that since his appointment in April
2020 he has delivered exceptional performance and demonstrated exemplary leadership. The increase was a key part of the investor
consultation process undertaken in 2021 and the increase has been phased based on the consultation feedback. Future salary increases
(beyond January 2023) will be set having regard to the typical rate of increase for employees in London and Jersey unless there was to be
a material change in the size and scope of Centamin.
The CFO’s base salary will increase by 3% which is below the increase for London and Jersey based employees which is set at 6%.
Outside of corporate employees, Egypt CPI is currently running above 20% and the impact on payroll has been built into the Company’s
2023 budget (see section above on the wider employee context). As such, the rate of salary increase for corporate employees is expected
to be broadly consistent with pay increases across the Company.
Pension
Both Executive Directors will participate in a corporate pension scheme. The pension arrangements in Jersey mirror UK auto-enrolment
requirements, with participation being through a 5% of salary employee contribution up to a salary £44,030 with the Company
contributing 3% of the salary up to £44,030.
Annual bonus
As detailed in the committee chair’s Introductory Statement, the CEO’s maximum bonus opportunity for 2023 is 150%
of salary. The CFO’s bonus opportunity is 125% of salary.
The proportion of the bonus payable at ‘target’ performance level for 2023 is 50% of maximum which is consistent with 2022 and reflects
‘best practice’ expectations and our internal focus on creating a Group-wide high-performance culture.
The bonus metrics to apply in FY 2023 have been restructured into the following categories:
Performance measure
Weighting
The targets are challenging ranges that are set with reference
to budgeted performance levels and will be tested using:
55% operational / financial
/ quantitative
Gold production
7%
Production from the Sukari Concession.
Material moved / strip ratio / recoveries
16%
Operational targets across the Sukari open pit and underground operations.
MRM development drilling metres /
pre-depletion reserve gains
12%
Mineral Resource Management inc. development drill metres and pre-
depletion reserve gain over the Sukari Concession.
Cash costs / AISC
10%
Published Group total Cash Costs per ounce produced and AISC per ounce
sold. Commodity assumption of the fuel price and gold price will be assessed
by the committee.
Profitability / adjusted EBITDA / Capex
10%
Adjusted EBITDA will be per the published Non-GAAP measures and Capex
spend based on the stage of completion and cost controls.
20% Environmental
Social Governance
Group TRIFR and Reportable Incidents
9%
Published Group safety statistics.
ESG social targets including employee training
/ leadership training and progress on the
development pathway
6%
Quantitative metrics linked to the ESG targets in the revolving credit facility.
Diversity targets
5%
Quantitative metrics linked to the ESG targets in the revolving credit facility.
25% Individual KPIs
Balance scorecard
25%
Strategic and personal KPIs to be assessed by the committee.
For the CEO, the key objectives relate to further optimised LOM plan,
completion of the Doropo PFS, delivery of exploration programmes, develop
the Egyptian stakeholder plan and review growth opportunities.
For the CFO, the key objectives relate to SAP implementation, capital
allocation, Concession Agreement tax renewal, assessment of growth
opportunities and governance regulatory compliance.
Notes to table:
•
Threshold achievement represents 25% of the bonus opportunity for the respective performance measure.
•
Target achievement represents 50% of the bonus opportunity for the respective performance measure.
•
Maximum achievement represents 100% of the bonus opportunity for the respective performance measure.
•
The committee retains discretion in the operation of the bonus plan which includes the ability to adjust formula-based bonus outcomes where there is a perceived disconnect
between the level of bonus and the shareholder experience during the performance period and / or material safety events during the year (including adverse TRI frequency rates
below 25% reduction on a weighted three year average) that are not considered to be adequately captured by the safety target detailed above.
Due to commercial sensitivity, the committee does not believe it is in shareholders’ interests to provide more detailed prospective
disclosure of the bonus targets. Full details of the bonus outcome will be summarised in the 2023 Directors’ Remuneration Report.
The other key features of the bonus plan include discretion that enables the committee to adjust the bonus out-turn where formulaic
assessment is inconsistent with the Company’s overall performance, the shareholder experience through the period or if there is a
material safety event during the year. There is also a requirement for any bonus earned above 75% of salary to be held in shares (albeit
the Executive Directors will have the ability to defer the full amount of the bonus into shares). Dividend equivalents may be payable on
deferred shares. Finally, recovery and withholding provisions that operate for three years post payment of the bonus.
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STRATEGIC REPORT
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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REMUNERATION COMMITTEE REPORT
CONTINUED
PERFORMANCE SHARE PLAN (“PSP”)
Executive Directors will receive a PSP award over shares worth 150% of salary.
Awards will vest based upon independent three-year relative TSR, cash flow and production targets. Also, reflecting the Remuneration
Policy, these awards will be subject to a full two-year post vesting holding period.
More particularly, the targets to be applied to this award are expected to be as follows:
Metric
Weighting
Threshold
(25% vesting)
Stretch
(100% vesting)
Relative TSR vs The VanEck Junior Gold Miners ETF (“GDXj”)
See notes
50%
Performance equal
to the Index
Annual out-performance
of the Index by 10% p.a.
2025 Gold production
‘000 ounces
25%
450
500
2025 Free Cash Flow
US$m
15%
35
70
2025 decarbonisation targets
See notes
10%
Assessment of
decarbonisation targets
Assessment of
decarbonisation targets
Notes:
•
The Company’s TSR performance will be assessed against the The VanEck Junior Gold Miners ETF (“GDXj”).
•
The Remuneration Committee will assess performance based on gold produced in 2025 over the Sukari concession.
•
The Remuneration Committee will assess performance based on free cash flow generated over the Sukari Concession Agreement in 2025.Free cash flow is a Non-GAAP
measure and will apply a retrospective adjustment for any non-sustaining capex that has not been considered as part of the estimate. Dividends payable to CEY shareholders
have not been included in this estimate. The Remuneration Committee will consider an adjustment at the time of the vested award if the average annual gold price in 2025 is
outside a 5% range of the budgeted estimate of $1,600/oz in the calculation of the estimated Free Cash Flow in 2025.
•
The Remuneration Committee will assess performance based on the decarbonisation targets set in 2023 and the resulting stage of completion of the projects by 31 December
2025:
–
25% of the Vesting Proportion shall Vest upon the Company successfully connecting to the Egyptian electricity grid in 2025.
–
62.5% of the Vesting Proportion shall Vest upon the Company successfully commissioning a 10MW extension to Sukari’s existing solar plant in 2025 or a combination of
other projects that achieve an equivalent level of carbon abatement (to a 10MW extension of solar plant).
–
100% of the Vesting Proportion shall Vest upon the Company meeting the Decarbonisation initiatives set in 2023; to include: connecting to the Egyptian national grid;
and commissioning of the solar extension or a combination of other projects that achieve an equivalent level of carbon abatement. The committee will assess the stage of
completion of the projects by 31 December 2025 and the level of reduction to future Scope 1 and 2 emissions. Demonstrable carbon reduction over the vesting period will
be assessed by the committee, taking into account targets set by the Board on the decarbonisation roadmap.
With regard to the targets set for the FY 2023 long-term incentive award, they were the subject of review during the final quarter of 2022
and the targets are considered similarly challenging to those set in prior years.
The TSR peer group was reviewed in 2022 and given the consolidation that has occurred in the industry over recent years, the committee
wanted to assess the appropriateness of the index. The committee assessed the FTSE Gold Mines Index which has 23 constituents in
total which encompasses all gold mining companies globally that have a sustainable, attributable gold production of at least 300,000
ounces a year or more. The committee assessed the relative weighting of the mining companies in the index noting that two mining
companies had a 40% weighting in the index, with the top ten constituents accounting for 86% of the total index.
The VanEck Junior Gold Miners ETF (“GDXj”) invests in the stocks of gold miners where there are currently 95 constituents from across
the globe. There is significantly less concentration across the index, with the top ten constituents accounting for circa 39% of total index.
The Remuneration Committee assessed the index and were comfortable that the GDXj reflected the Company’s peer group and
represented a fair comparison of performance against the Company’s TSR over the same period.
With regards to the cash flow and gold production targets, these were set with reference to both internal and external expectations for
Centamin’s future performance to the end of 2025. The Remuneration Committee will consider increasing the production targets to take
account of further information available following the UG optimisation study which is due to be completed in 2023. The results of the
study and any subsequent increase will be published in the FY2023 Annual Report and Accounts.
The Remuneration Committee assessed the sustainability linked targets as part of the revolving credit facility, as a means of providing
consistent and clearly aligned metrics across the business. The Remuneration Committee also considered the longer term sustainability
targets and the decarbonisation roadmap through to 2030. To align the targets with the long-term incentive plan, the committee set a
challenging target to complete key carbon abatement projects by the end of 2025.
The Remuneration Committee concluded that the targets were considered to be realistic at the lower end of the performance range and
stretching at the top end of the range with the committee were comfortable that the targets were appropriately challenging and no less
challenging than the performance targets set in prior years allowing for current commercial circumstances.
A final review of the quantum and targets will be undertaken prior to granting the awards.
NON-EXECUTIVE DIRECTORS
Details of the Non-Executive Director’s fees are set out on page 131.
This report was approved by the Board of Directors and signed on its behalf by:
DR SALLY EYRE
CHAIR OF THE REMUNERATION COMMITTEE
16 March 2023
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
FINANCIAL STATEMENTS
INVESTING FOR THE FUTURE
Centamin is a robust business, committed
to responsible mining. In 2020 we set out
bold capital reinvestment plans required
to sustain our business and drive higher
production and improve margins for the
long term, and for the last two years we
have delivered on those plans.
Despite persisting global supply-side
issues and global inflation, our focus
is on what we can control. We do this
with rigorous planning and subsequent
disciplined compliance to plan, a thriving
culture of continuous improvement, and
active risk and opportunity assessment to
ensure we don’t stop at the minimum but
are always looking to improve.
FINANCIAL STATEMENTS
Directors’ Responsibilities
150
Independent Auditor’s Report
151
Consolidated Financial Statements
157
Notes to the Consolidated
Financial Statements
161
OVERVIEW
TOTAL REVENUE
(US$m)
2021: US$733m
US$
788
M
CASH AND LIQUID ASSETS
(1)
(US$m)
2021: US$257m
US$
157
M
TOTAL ADJUSTED CAPITAL
EXPENDITURE
(US$m)
2021: US$233m
US$
224
M
(1)
Cash and liquid assets are defined as cash, bullion on hand and gold sales
receivables. Cash cost of production, AISC, EBITDA and Adjusted EBITDA,
Cash, bullion on hand and gold sales receivables (also known as Cash and liquid
assets) and Free cash flow and Adjusted free cash flow are non-GAAP measures
and are defined in the Financial Review non-GAAP measures section.
(2)
Attributable to the financial year and final dividend is subject to
shareholder approval.
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
149
PROFIT AFTER TAX
(US$m)
2021: US$154m
US$
171
M
ADJUSTED EBITDA
(1)
(US$m)
2021: US$329m
US$
319
M
ADJUSTED FREE CASH FLOW
(1)
(US$m)
2021: US$(6)m
US$
(18)
M
TOTAL DIVIDEND
(2)
(US$m)
2021: US$105m
US$
58
M
ALL-IN SUSTAINING COSTS
(1)
(“AISC”) (per ounces sold)
2021: US$1,234/oz
US$
1,399/
oz
CASH COST PER OUNCE PRODUCED
(1)
(cash cost /oz produced)
2021: US$866m
US$
913
M
For more information on
our
FINANCIAL STATEMENTS
visit www.centamin.com
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150
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
DIRECTORS’ RESPONSIBILITIES
for the year ended 31 December 2022
DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE
ANNUAL REPORT AND FINANCIAL STATEMENTS
The Directors are responsible for preparing the financial
statements in accordance with applicable Jersey law and
International Financial Reporting Standards.
The Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of
affairs of the Group and of the profit or loss of the Group for that
period. In preparing the financial statements, the Directors are
responsible for:
• selecting suitable accounting policies and then applying them
consistently;
• stating whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
• making judgements and accounting estimates that are
reasonable and prudent; and
• preparing the financial statements on the going concern basis
unless it is inappropriate to
presume that the Group will
continue in business.
The Directors confirm that they have complied with the above
requirements in preparing the financial statements.
The Directors are responsible for ensuring that the financial
statements comply with The Companies (Jersey) Law, 1991
and safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities. So far as the Directors are aware, there is
no relevant audit information of which the Group’s auditors are
unaware, and each Director has taken all the steps that he or
she ought to have taken as a Director in order to make himself or
herself aware of any relevant audit information and to establish that
the Group’s auditors are aware of that information.
The Directors consider that the Annual Report and financial
statements, taken as a whole, are fair, balanced, and
understandable and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy.
The Directors have undertaken a robust assessment of the
principal and emerging risks impacting the Company. The
assessment identified strategic and operational risks at a corporate
level and principal risks impacting our operations in Egypt and
West Africa. Details of the risk assessment can be found in the
Audit and Risk Committee Report and the risk management and
principal risks section of the Strategic Report.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain the
Group’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group.
On behalf of the Board:
MARTIN HORGAN
ROSS JERRARD
CHIEF EXECUTIVE OFFICER
CHIEF FINANCIAL OFFICER
DIRECTOR
DIRECTOR
16 March 2023
16 March 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
151
INDEPENDENT AUDITORS’ REPORT
to the members of Centamin plc
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
In our opinion, Centamin plc’s Group financial statements:
• give a true and fair view of the state of the Group’s affairs as at 31 December 2022 and of its profit and cash flows for the year then
ended;
• have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
We have audited the financial statements, included within the Annual Report & Accounts, which comprise: the Consolidated Statement of
Financial Position as at 31 December 2022; the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Cash
Flows, and the Consolidated Statement of Changes in Equity for the year then ended; and the notes to the financial statements, which
include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of
our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the Financial Reporting Council’s (“FRC”) Ethical Standard, as applicable to listed public interest
entities in accordance with the requirements of the Crown Dependencies; Audit Rules and Guidance for market-traded companies, and
we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 6.5 to the financial statements, we have provided no non-audit services to the Company or its
controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
• We performed an audit of one significant component of the Group, Sukari Gold Mining Company (“Sukari”), based in Egypt, and
performed specified procedures over other components in the Group, which are based in three other locations, namely Burkina
Faso, Côte d’Ivoire and Jersey. This enabled us to obtain coverage over 100% of Group consolidated revenue and 99.9% of Group
consolidated total assets.
Key audit matters
• Ongoing legal actions
• Amounts due to the government with respect to the Sukari operation
Materiality
• Overall materiality: US$11.2m (2021: US$11.5m) based on 5% of three-year average of profit before tax, adjusted to exclude
one-off items.
• Performance materiality: $8.4m (2021: $8.6m).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
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152
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT
CONTINUED
to the members of Centamin plcKey audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The restoration and rehabilitation provision, which was a key audit matter last year, is no longer included because of the external review
commissioned by management, which in our view has derisked the process. Otherwise, the key audit matters below are consistent with
last year.
Key audit matter
How our audit addressed the key audit matter
Ongoing legal actions
Refer to page 195 (note 5.1 to the financial statements) and page 58 (Principal risks).
The Group is in the process of appealing a ruling passed by the Egyptian Administrative
Court in October 2012. On 14 January 2023, the Egyptian Law No. 32 of 2014 (“Law
32”) which limits the right of third parties to challenge bilateral agreements involving
the Egyptian government and an investor, was upheld as constitutional by the Egyptian
Supreme Constitutional Court (SCC), having been under challenge since 2014. The
judgement permits Centamin to appeal to the Supreme Administrative Court on the legal
inadmissibility of the 2011 challenge to the Sukari Concession Agreement on the basis that
the original complainant was not a party to the Concession Agreement.
If the original 2012 ruling was upheld, the Group’s operations at the Sukari site may be
significantly reduced and there is, therefore, a risk of material impairment of non-current
assets at Sukari, which have a carrying value of $1,148m at 31 December 2022.
The outcome of this matter is subject to significant uncertainty due to the political, social
and economic environment in Egypt.
We reviewed the official SCC’s judgement as gazetted on 17 January
2023 and discussed the case with the Group’s external legal
counsel, obtained a legal letter and read correspondence and related
documentation, including the Concession Agreement, to understand
the legal challenge and the basis of the Directors’ assessment of the
likely outcome of the case. All the evidence we obtained was consistent
with the Directors’ assessment of the case, and in line with our
understanding.
We assessed the competence and objectivity of the external legal
counsel by considering factors, including professional qualifications
and fee arrangements. These procedures satisfied us that the external
legal advisors were competent and objective.
Based on our work summarised above, we determined that the Directors
had reflected all available information in their assessment, and that
this case does not give rise to a provision as at 31 December 2022.
Amounts due to the government with respect to the Sukari operation
Refer to page 169 (note 2.1 to the financial statements), page 174 (note 2.4 to the financial
statements) and page 58 (Principal risks).
The nature of the Concession Agreement means that there are items that can be open
to interpretation. As a result, the Group is subject to periodic challenges by the Egyptian
Mineral Resource Authority (‘EMRA’) on amounts owed under the Concession Agreement.
The amounts owed to EMRA with respect to the profit-sharing arrangement under the
Concession Agreement are based on management’s best estimate of the probable amount of
the profit share liability.
For the year ended 31 December 2022, the Group has paid dividends to the non-controlling
interest in SGM of $35 million as the result of the profit sharing and cost recovery
mechanisms under the Concession Agreement, which we considered merited our focus due to
its size and nature.
The Group has recognised a liability of $12m as at 31 December 2022, in relation to a
settlement of historic profit share items, in line with the remaining instalments payable
under the EMRA settlement agreement signed in March 2021.
We held discussions with management regarding their calculation of the
amount due to EMRA.
We agreed the amounts in the calculation to source documentation and
the underlying accounting records.
We read the minutes of meetings with EMRA and held discussions with
the Group’s external legal advisors regarding the current disputed items.
We agreed the closing liability of $12m to the remaining instalments
payable as set out in the EMRA settlement agreement. We performed
procedures to check the completeness of amounts due to EMRA, with no
material unrecorded amounts identified that are assessed as likely to
result in additional payments to EMRA.
We read the disclosures in notes 2.1 and 2.4 of the financial statements
to check they were consistent with our knowledge and understanding of
the matter obtained in the course of the audit, with no issues noted.
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
153
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the group, the accounting processes and controls, and the industry in which it operates.
The Group’s principal operation is the Sukari Gold Mine in Egypt. In addition, the Group continues its exploration projects in Côte
d’Ivoire, has an exploration licence in Burkina Faso, and has corporate activity in Jersey. For financial reporting purposes, each of these
represents a separate component of the Group.
Our group audit scope focused primarily on the Sukari Gold Mine, which was subject to a full-scope audit. We visited the Sukari Gold
Mine and conducted audit fieldwork in Egypt. During these visits, we observed and discussed mining and exploration operations with
local management.
In addition, specific audit procedures were performed by the Group audit team over significant balances for three components relating to
the Group’s exploration operations and corporate activities.
Additionally, we performed work over the consolidation of the Group’s components and the parent Company.
Note that all procedures were performed by the Group engagement team, including the work on the in-scope components.
The impact of climate risk on our audit
As part of our audit, we made enquiries of management to understand their process to assess the extent of the potential impact of
climate change risks on the Group and its financial statements. During the year, the Group continued to develop its strategy in response
to the potential risks associated with climate change by commissioning the 36MW solar PV project and battery storage facility. This is
in an effort to reduce Scope 1 emissions and giving consideration to further reduce carbon intensity and reliance on diesel, including
grid connection and fuel switching to natural gas. Management assessed the Group to be resilient to physical climate change risks,
particularly increased precipitation and rising temperatures, for the operational life of the Sukari Gold Mine.
Management has explained how it has considered the impact of climate change on the financial statements, specifically in respect of
impairment trigger assessments, and the impact of the solar plant on operating costs and emission targets, in note 1.3.2 to the financial
statements. We agreed with management that the most relevant impacted areas in financial reporting are impairment assessments of the
Group’s non-current assets.
We used our knowledge of the Group to consider the completeness of the climate risk assessment performed by management, including
its assessment of the strategic and financial resilience of the Sukari Gold Mine, under various scenarios impacting precipitation and
temperature fluctuations. Whilst the impact is uncertain, we particularly considered the impact of both physical and transition risks
arising due to climate change, as well as related opportunities and climate targets made by the Group. We also took into consideration the
relatively short remaining life of mine at Sukari, the physical location of the mine and the local regulatory environment. We agreed with
management’s conclusion that the risk of material financial impact on the Group’s non-current assets is low.
We also read the disclosures made in relation to climate change, in the other information within the Annual Report which includes
reporting based on the Task Force on Climate-related Financial Disclosures recommendations, and considered their consistency with the
financial statements and our knowledge from our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall group materiality
US$11.2m (2021: US$11.5m).
How we determined it
5% of three-year average of profit before tax, adjusted to exclude one-off items.
Rationale for benchmark applied
We chose profit before tax as it is one of the key indicators of the financial performance of the Group.
We used a three-year average due to the volatility of annual Sukari gold production and gold prices.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of
materiality allocated across components was between $5.1 million and $10.2 million.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the
nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes.
Our performance materiality was 75% (2021: 75%) of overall materiality, amounting to US$8.4m (2021:US$8.6m) for the Group financial
statements.
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154
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT
CONTINUED
to the members of Centamin plc
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above $560,000
(2021: $575,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s ability to continue to adopt the going concern basis of accounting included:
• obtaining the board approved budget and life of mine model, challenging management’s assumptions used and verifying that it is
consistent with our existing knowledge and understanding of the business including the latest life of mine forecast;
• obtaining and reviewing the Group’s cashflow forecasts for the going concern period, agreeing the opening cash balance to the audited
financial statements, agreeing the inputs back to the board approved budget, and testing the model for mathematical accuracy; and
• reviewing the Group’s cashflow forecasts under a severe but plausible downside scenario, evaluating the assumptions used, and
assessing that the Group is able to maintain liquidity within the going concern period under this scenario.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s ability to
continue as a going concern.
In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this
report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform
procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report based on these responsibilities.
Corporate governance statement
The Listing Rules require us to review the Directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing
material to add or draw attention to in relation to:
• The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;
• The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material uncertainties to the Group’s ability to continue to do so over a
period of at least twelve months from the date of approval of the financial statements;
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
155
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why the period is
appropriate; and
• The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the Group was substantially less in scope than an audit and
only consisted of making inquiries and considering the Directors’ process supporting their statement; checking that the statement is in
alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with
the financial statements and our knowledge and understanding of the Group and its environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides
the information necessary for the members to assess the Group’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by
the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements, the Directors are responsible
for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true
and fair view. The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either
intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to legal action before the Supreme Administrative Court in Egypt in relation to the validity of the Sukari Concession
Agreement (see page 195 in the Annual Report), which was accepted as constitutional in the year, and we considered the extent to
which non-compliance might have a material effect on the financial statements.
We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies (Jersey)
Law 1991. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including
the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to
manipulate results, and management bias in accounting estimates, including in relation to the restoration and rehabilitation provision
and valuation of long-term stockpiles. Audit procedures performed by the engagement team included:
• performing enquiries with the Group’s external legal counsel and obtaining a legal letter regarding the Sukari Concession Agreement
case;
• inspecting correspondence and related documentation, including the Concession Agreement, to understand any challenges to the cost
recovery amounts and the basis of the Directors’ assessment of the likely outcome of the challenges (refer to the “Key audit matters”
section above for further information on the procedures performed);
• testing journals that exhibit risk-based criteria, including unexpected account combinations that could be used to manipulate results
including EBITDA and other key performance indicators, and journals posted by unexpected personnel;
• critical assessment of material estimates and judgements used by management, including in relation to the provision for restoration
and rehabilitation, valuation of long-term stockpiles, and amounts due to government.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT
CONTINUED
to the members of Centamin plc
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also,
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling
to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Article
113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
OTHER REQUIRED REPORTING
Companies (Jersey) Law 1991 exception reporting
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit;
• proper accounting records have not been kept; or
• the Group financial statements are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed by the members on 24 January 2014 to audit
the financial statements for the year ended 31 December 2014 and subsequent financial periods. The period of total uninterrupted
engagement is 9 years, covering the years ended 31 December 2014 to 31 December 2022.
OTHER MATTER
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements
form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct Authority in
accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the
annual financial report has been prepared using the single electronic format specified in the ESEF RTS.
JONATHAN LAMBERT
FOR AND ON BEHALF OF PRICEWATERHOUSECOOPERS LLP
CHARTERED ACCOUNTANTS AND RECOGNIZED AUDITOR
LONDON
16 March 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
157
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2022
Note
31 December 2022
US$’000
31 December 2021
US$’000*
Revenue
2.2
Cost of sales
2.3
(544,075 )
(487,376 )
Gross profit
Exploration and evaluation expenditure
2.1
(29,723 )
(13,879 )
Other operating costs
2.3
(49,003 )
(48,427 )
Other income
2.3
Finance income
2.3
Finance costs
2.3
(2,459 )
(673 )
Impairment of exploration and evaluation asset
2.10
(35,208 )
Profit for the year before tax
Tax
2.5
(226 )
Profit for the year after tax
Profit for the year after tax attributable to:
–
the owners of the parent
–
non-controlling interest in SGM
2.4
Total comprehensive income for the year
Total comprehensive income for the year attributable to:
–
the owners of the parent
–
non-controlling interest in SGM
2.4
Earnings per share attributable to owners of the parent:
Basic (US cents per share)
6.4
Diluted (US cents per share)
6.4
*
In the 2021 Consolidated Statement of Comprehensive Income, Finance costs were included and disclosed in the line ‘Other operating costs’, in these financial
statements they are now separately disclosed in their own line and as such ‘Other operating costs’ for 2021 have changed.
The above audited consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
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158
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2022
Note
31 December 2022
US$’000
31 December 2021
US$’000
Non-current assets
Property, plant and equipment
2.9
Exploration and evaluation asset
2.10
Inventories
2.11
Other receivables
2.7
Total non-current assets
Current assets
Inventories
2.11
Trade and other receivables
2.7
Prepayments
2.8
Cash and cash equivalents
2.16(a)
Total current assets
Total assets
Non-current liabilities
Other payables
2.12
Provisions
2.13
Total non-current liabilities
Current liabilities
Trade and other payables
2.12
Tax liabilities
2.5
Provisions
2.13
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
2.14
Share option reserve
2.15
Accumulated profits
Total equity attributable to:
–
owners of the parent
–
non-controlling interest in SGM
2.4
(40,256 )
Total equity
The above audited consolidated statement of financial position should be read in conjunction with the accompanying notes.
The audited consolidated financial statements were authorised by the Board of Directors for issue on 16 March 2023 and signed on its
behalf by:
MARTIN HORGAN
CHIEF EXECUTIVE OFFICER
DIRECTOR
16 March 2023
ROSS JERRARD
CHIEF FINANCIAL OFFICER
DIRECTOR
16 March 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
159
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Note
Issued
capital
US$’000
Share option
reserve
US$’000
Accumulated
profits
US$’000
Total
US$’000
Non-controlling
interests
US$’000
Total
equity
US$’000
Balance as at 1 January 2022
(40,256 )
Profit for the year after tax
Total comprehensive income for the year
Net recognition of share-based payments
2.15
Transfer of share-based payments
2.15
(1,463 )
Dividend paid – non-controlling interest in SGM
2.4
(35,492 )
(35,492 )
Dividend paid – owners of the parent
(86,204 )
(86,204 )
(86,204 )
Balance as at 31 December 2022
Note
Issued
capital
US$’000
Share option
reserve
US$’000
Accumulated
profits
US$’000
Total
US$’000
Non-controlling
interests
US$’000
Total
equity
US$’000
Balance as at 1 January 2021
(17,196 )
Profit for the year after tax
Total comprehensive income for the year
Own shares acquired
2.14
(1,391 )
(1,391 )
(1,391 )
Net recognition of share-based payments
2.15
Transfer of share-based payments
2.15
(2,115 )
Dividend paid – non-controlling interest in SGM
2.4
(75,200 )
(75,200 )
Dividend paid – owners of the parent
(80,517 )
(80,517 )
(80,517 )
Balance as at 31 December 2021
(40,256 )
The above audited consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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160160160
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2022
Note
31 December
2022
US$’000
31 December
2021
US$’000
Cash flows from operating activities
Cash generated from operating activities
2.16(b)
Income tax (paid)/received
(230 )
Net cash generated from operating activities
Cash flows from investing activities
Acquisition of property, plant, and equipment
(263,622 )
(224,929 )
Brownfield exploration and evaluation expenditure
(12,175 )
(15,943 )
Finance income
2.3
Net cash used in investing activities
(274,583 )
(240,676 )
Cash flows from financing activities
Cash element of share-based payments
(523 )
Own shares acquired
(1,391 )
Dividend paid – non-controlling interest in SGM
2.4
(35,492 )
(75,200 )
Dividend paid – owners of the parent
3.2.2
(86,204 )
(80,517 )
Net cash used in financing activities
(122,219 )
(157,108 )
Net decrease in cash and cash equivalents
(104,866 )
(87,906 )
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes
(582 )
Cash and cash equivalents at the end of the year
2.16(a)
The above audited consolidated statement of cash flows should be read in conjunction with the accompanying notes.
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
161161161
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2022
These financial statements are denominated in US dollars (“US$”), which is the presentation currency of Centamin plc. All companies
in the Group use the US$ as their functional currency. All financial statements presented in US$ have been rounded to the nearest
thousand dollars, unless otherwise stated.
These financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as adopted
by the European Union (“EU”) and interpretations issued from time to time by the IFRS Interpretations Committee (“IFRS IC”) and which
are mandatory for reporting as at 31 December 2022 and the Companies (Jersey) Law 1991. The Group has not early adopted any other
amendments, standards or interpretations that have been issued but are not yet mandatory or effective.
The consolidated financial statements have been prepared on a going concern basis and under the historical cost convention, as
modified by financial assets and financial liabilities (including derivative) instruments which are measured at fair value.
The consolidated financial statements for the year ended 31 December 2022 were authorised by the Board of Directors of the Company
Under guidelines set out by the FRC, the directors of UK listed companies are required to consider whether the going concern basis is
the appropriate basis of preparation of consolidated financial statements, under the historical cost convention, as modified by financial
assets and financial liabilities (including derivative) instruments which are measured at fair value.
The FRC has released updated guidelines regarding disclosure of ‘material uncertainties’ related to going concern in current
circumstances. Material uncertainties refers to uncertainties related to events or conditions that may cast significant doubt upon the
entity’s ability to continue as a going concern. In other words, if boards identify possible events or scenarios (other than those with a
remote possibility of occurring) that could lead to corporate failure, then these should be disclosed. When assessing whether material
uncertainties exist, boards should consider both the uncertainty and the likely success of any realistically possible response to mitigate
this uncertainty.
Management has performed detailed analyses and forecasts to assess the economic impact of various downside scenarios from a going
concern and viability perspective. The Group continues to benefit from a strong balance sheet with large cash balances and no debt.
At 31 December 2022 the Group had cash and cash equivalents of US$102 million. As part of assessing the Group’s ability to continue
as a going concern, management performed various downside stress testing scenarios to assess the impact on liquidity headroom. The
scenarios were considered without applying any mitigating actions over a period of at least twelve months from 16 March 2023, examples
of such mitigating actions which were not applied would be drawdowns of the US$150 million revolving credit facility which was available
as of 13 March 2023.
Key assumptions underpinning this forecast include:
• Available cash balances;
• Favourable litigation outcomes, for current litigation refer to note 5.1 to the financial statements;
• A fuel price of US$0.90/litre;
• A processing plant recovery rate of 88.2%
• Gold price of at least US$1,600/oz.; and
• Production volumes in line with 2023 guidance
The scenarios and impact on liquidity is as follows:
• Base case: No change to parameters, expected closing cash balance of US$52 million;
• Average gold price reduction to US$1,475 per ounce: resulted in a closing cash balance of US$6 million;
• Fuel price increase to US$1.25/litre: resulted in a closing cash balance of US$9 million;
• Processing capacity reduction by 20%: resulted in a closing cash balance of US$10 million; and
• Processing plant recovery rate reduction to 85.0%: resulted in a closing cash balance of US$37 million.
The sensitivities applied were informed by internal and external data sources, including a review of the Group’s most recent production
levels with reductions or increases of various levels to various stages of slowdown, or metal content. The Group doesn’t engage in any
hedging activities and as such all gold sales are exposed to movements in market prices. In each scenario, sufficient liquidity was
maintained without applying mitigating measures.
The above sensitivity analysis was also used to assess each scenario’s outcome as a short-term impairment trigger necessitating a need
for a full impairment assessment review for the Sukari operating assets as at the reporting date. All the various outcomes assessed did not
reflect an adverse position that would be indicative of a potential impairment trigger for the Sukari operating assets.
Based on a detailed cash flow forecast prepared by management, and the various downside scenarios, the Directors have a reasonable
expectation that the Group will have adequate resources to continue in operational existence for twelve months from 16 March 2023 and
that currently there are no material uncertainties regarding going concern.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2022Basis of preparation
continued
These financial statements for the year ended 31 December 2022 have therefore been prepared on a going concern basis, which
contemplate the realisation of assets and liquidation of liabilities during the normal course of operations, in preparing these financial
statements.
In preparing the financial statements, we have considered the potential impact of climate-related physical and transition risks, in the
context of the disclosures included in the Strategic Report. Based on this assessment, climate-related risk is not assessed to have a
ACCOUNTING POLICIES
Accounting policies are selected and applied in a manner which ensures that the resulting financial statements satisfy the concepts of
relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. These policies
have been consistently applied to all the years presented, unless otherwise stated.
There were no material updates and/or changes to critical accounting judgements and estimates that management has made in the year
in applying the Group’s accounting policies that have a significant effect on the amounts recognised and the related disclosures in the
financial statements.
1.2 CHANGES IN POLICIES AND ESTIMATES
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not
mandatory for 31 December 2022 reporting periods and have not been early adopted by the Group.
New or amended accounting standards
The amendments to accounting standards that are effective for annual periods beginning on 1 January 2022 did not have a significant
impact on the Group’s results for the year and are also not expected to have a significant impact in future reporting periods and on
foreseeable future transactions.
Further details of new or revised accounting standards, interpretations or amendments which are effective for the periods beginning on or
after 1 January 2022 and their impact on the Group are listed below:
Accounting standard
Requirement
Impact on financial statements
Amendment to IAS 16
‘Property, Plant and
Equipment
’: proceeds before intended use.
The amendment to IAS 16 ‘
Property, Plant and Equipment
’ (“PP&E”) prohibits an entity
from deducting from the cost of an item of PP&E any proceeds received from selling items
produced while the entity is preparing the asset for its intended use. It also clarifies that an
entity is ‘testing whether the asset is functioning properly’ when it assesses the technical
and physical performance of the asset. The financial performance of the asset is not
relevant to this assessment.
No material change to the Group’s
financial position or performance.
Amendments to IAS 37 ‘
Provisions,
Contingent Liabilities and Contingent
Assets
’: Onerous Contracts – Cost of
Fulfilling a Contract.
The amendment of ISA 37 clarifies that the direct costs of fulfilling a contract include both
the incremental costs of fulfilling the contract and allocation of other costs directly related
to fulfilling contracts. Before recognising a separate provision for an onerous contract, the
entity recognises any impairment loss that has occurred on assets used in fulfilling the
contract.
No material change to the Group’s
financial position or performance.
Annual improvements to IFRS Standards
2018 – 2020.
The following improvements we finalised in May 2020:
• IFRS 9 ‘
Financial Instruments
’ – clarifies which fees should be included in the 10% test
for derecognition of financial liabilities.
• IFRS 16 ‘
Leases
’ – amendment of illustrative example 13 to remove the illustration of
payments from the lessor relating to leasehold improvements, to remove any confusion
about the treatment of lease incentives.
No material change to the Group’s
financial position or performance.
Amendments to IFRS 3 ‘
Business
Combinations
’ – Reference to the
Conceptual Framework.
Minor amendments were made to IFRS 3 ‘
Business Combinations
’ to update the references to
the Conceptual Framework for Financial Reporting and add an exception for the recognition
of liabilities and contingent liabilities within the scope of IAS 37 ‘
Provisions, Contingent
Liabilities and Contingent Assets
’ and Interpretation 21 ‘
Levies
’. The amendments also
confirm that contingent assets should not be recognised at the acquisition date.
No material change to the Group’s
financial position or performance.
The following are the critical judgements and estimates that management has made in the process of applying the Group’s accounting
policies and that have the most significant effect on the amounts recognised in the financial statements.
Management has discussed its critical accounting judgements and estimates and associated disclosures with the Company’s Audit and
Risk Committee.
The critical accounting judgements are as follows:
1.3.1 Judgement: Control
1.3.1.1 Judgement: Accounting treatment of the Sukari Gold Mining Company (“SGM”)
Pharaoh Gold Mines NL (the holder of an Egyptian branch) (“PGM”) and EMRA are 50:50 partners in SGM. However, SGM is fully
consolidated within the Group as if it were a subsidiary due to it being a controlled entity, reflecting the substance and economic reality of
the Concession Agreement (“CA”) (see note 4.1 and note 4.2 to the financial statements).
IFRS 10
‘Consolidated financial statements’
defines control as encompassing three distinct principles, which, if present, identify the
existence of control by an investor over an investee, hence forming a parent-subsidiary relationship. The principles are:
1.
power over the investee;
2.
exposure, or rights, to variable returns from its involvement with the investee; and
3.
the ability to use its power over the investee to affect the amount of the investor’s returns.
An investor has power over an investee when the investor has existing rights that give it the current ability to direct the relevant activities
(i.e., the activities that significantly affect the investee’s returns).
The Company’s control of SGM, through PGM
PGM is a 100% owned subsidiary of the Company. The Company, through PGM, has the right to appoint or remove the managing
director of SGM under the terms of the CA and in doing so controls the activities in relation to the operation of SGM that most significantly
affect the returns of SGM. These are all illustrated in the sections that follow:
a) The duties of PGM
• PGM controls the appointment of the General Manager (“GM”) at the Sukari Gold Mine;
• By controlling the appointment of the GM and directing their activities, the GM will make all day-to-day decisions to allow the mine to
operate in a manner that aligns with the Company’s objectives which involve:
–
preparing SGM’s work programmes through determination of the daily and longer-term mine plans, the budgets covering the
operations to be carried out throughout the life of the mine (“LOM”) and approval of the same;
–
managing capital expenditure, procurement, cost control and treasury;
–
conducting exploration, development, production, and marketing operations;
–
co-ordinating SGM operations and activities, including its dealings with all contractors and subcontractors;
–
bearing ultimate responsibility for all costs and expenses required in carrying out any and all operations under the CA;
–
funding the operations of SGM and recovering costs and expenses throughout the LOM (i.e., exploration, development, and
production phases);
–
funding additional exploration and expansion programmes within the mine during the production phase;
–
taking custody of SGM’s stock and management of its funds;
–
selling and shipping of all gold and associated metals produced; and
–
entering into and managing gold sales or hedging contracts and forward sale agreements.
b) The duties of EMRA
• EMRA must, under the terms of the CA, provide the required approvals to allow the mine to operate.
c) The duties, role, and function of the board of SGM:
• The board of SGM has six board members:
–
three of which are appointed by the Company, through PGM; and
–
three of which are appointed by EMRA:
–
the executive chairman, as one of the three EMRA appointed board members, is a representative of EMRA and is appointed by
the Egyptian Ministry of Finance.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
• The board of SGM convenes twice a year to:
–
facilitate a forum for sharing information between the owners of SGM;
–
provide a mechanism to scrutinise the timing and amounts of expenses; rather than as a decision-making body over SGM’s most
significant relevant activities;
–
consider, review, and approve all the following in relation to SGM:
–
the budget;
–
the annual financial statements;
–
the cost recovery position; and
–
other compliance matters.
–
The board of SGM is not allowed to unreasonably withhold approval of any of the above.
• If there is a disputed matter or deadlock position at an SGM board level, it is resolved as follows:
–
through open discussion at board level;
–
the executive chairman does not have a veto or casting vote;
–
where matters cannot be agreed upon, an ad-hoc committee is appointed with each party having equal representation. This
committee will then recommend an appropriate course of action to the board with the best interest of all shareholders in mind; and
–
should the board still not agree on a course of action, there is a provision for arbitration and ultimately matters can be presented to
the International Court of Arbitration at The Hague.
• the board of SGM cannot appoint or remove the GM, this right belongs solely to the Company, through PGM, under the terms of
the CA;
EMRA and/or the Egyptian government have no downside risk in their share of SGM. If SGM were to become loss making or insolvent,
these costs are absorbed in its entirety by the Company, through PGM, in accordance with the CA.
The Company, through PGM, is therefore exposed to the variable returns of SGM, has the ability to affect the amount of those returns,
has power over SGM through its ability to direct its relevant activities and therefore meets all the criteria of control to consolidate SGM’s
results within the Group to reflect the substance and economic reality of the CA.
As the Company, through PGM, is determined to be the controlling party, it should consolidate SGM, and should apply consolidation
procedures, combining balance sheet and profit and loss items line by line as well as applying the rest of the consolidation procedures
set out in IFRS 10 App B para B86. The Group therefore prepares consolidated financial statements on this basis.
1.3.1.2 Judgement: Treatment and disclosure of EMRA profit share
EMRA holds 50% of the shares in the Group controlled entity, SGM, which are not attributable to the Company, and it is entitled to
receive net proceeds from the operations of SGM on a residual basis in accordance with their specified shareholding per the CA (this
distribution is in accordance with the profit share mechanism and not as a consequence of accumulated profits as defined by accounting
standards). Therefore, the Group recognises a Non-Controlling Interest (“NCI”) in SGM to represent EMRA’s participation.
In terms of the CA, the NCI’s rights to any profit share payments (dividend distributions) is only triggered after the cost recovery of all
amounts invested (or spent during operations) during the exploration, construction and development stages have been repaid to PGM.
The profit share mechanism was only triggered in November 2016 (after all amounts due to be cost recovered were complete). Until that
time the NCI had no rights to claim any distribution of accumulated profits or profit share.
It is important to note that the availability of cash in SGM for distribution to its shareholders as profit share is under the control of the
Company, through PGM, by the decisions made on SGM’s strategic direction and day-to-day operational requirements of running the
mine. This is regarded as discretionary and exposes the Company to variable returns.
Distributions to shareholders in SGM:
• once all expenditure requirements, including current cost recovery payments due, have been met, excess cash reserves, if any, are
distributed to both SGM shareholders:
–
distributions are always made simultaneously to both shareholders;
–
the split of the distribution is in accordance with the ratchet mechanism (i.e. the standard profit share ratios of 60/40 (first two years
from 1 July 2016), 55/45 (second two years from 1 July 2018) and 50/50 (from 1 July 2020) to PGM and EMRA respectively
through time) as governed by the CA; but:
–
distributions are not mandatory, entirely discretionary and there are only distributions if there are excess funds;
–
distributions are paid in advance on a weekly or fortnightly basis by mutual agreement between shareholders;
• at the end of the SGM reporting period, final profits are determined, externally audited, and then approved by the SGM board :
–
final profit distributions become payable within 60 days of the financial year end, SGM is unable to avoid payment at this point and
the amount payable is recorded as equity attributable to the NCI until paid;
• the CA is merely a shareholder agreement specifying how and when profits from SGM will be distributed to shareholders and is typical
of a minority shareholder protection mechanism.
The Group should attribute the profit or loss for the year after tax and each component of other comprehensive income for the year to
the owners of the parent and to the NCI in SGM. The entity shall also attribute total comprehensive income for the year to the owners of
the parent and to NCI even if this results in the NCI having a deficit balance (IFRS 10 App B para B94). The CA only contemplates the
distribution of profit to shareholders.
The NCI would only have a deficit balance where advance distributions paid during the year have exceeded final distributions payable
after year-end financial statements have been prepared and audited. This deficit would be entirely funded by the Company, through
PGM, and would first be redeemed from future excess cash before regular distributions to both parties resume. SGM has no claw back
provision for advance profits paid to the NCI. We note that annual dividend payments, after approval of audited financial statements, is a
standard feature of transactions with an NCI and that such payments are not normally treated as non-discretionary payments triggering
a liability in the consolidated statement of financial position of the parent.
Any losses generated by SGM will be entirely funded by the Company, through PGM, but attributed to both shareholders. These losses
will first be recovered before further profit share distributions commence.
In the Group statement of financial position, all the accumulated profits of SGM are attributable to the Company as EMRA have already
received their share through the advance profit distribution payments made, therefore NCI is usually disclosed in the financial statements
as nil unless there is an outstanding distribution payable to or deficit from EMRA due to timing differences of the cash sweep. Please
refer to note 2.4 for further information.
1.3.2 Judgement: Impairment trigger assessment – Sukari
IFRS requires management to test for impairment if events or changes in circumstances indicate that the carrying amount of a finite life
asset may not be recoverable. Considering the requirements of ‘
IAS 36 Impairment of Assets’
an impairment trigger assessment has
been performed.
Group operating assets
As part of the impairment trigger assessment, management has also considered movements in the key assumptions which have
historically been used in impairment assessments and is satisfied that there have not been any changes that would constitute an
impairment trigger.
These include changes to:
• forecast gold prices, considering current and historical prices, price trends and related factors;
• discount rates;
• operating performance which includes production and sales volumes;
• exploration potential and reserves and resources report;
• operating costs, taking into consideration the impact of the solar plant on those costs and emissions targets;
• recovery rates; and significant changes to the mine plan with an impact on the mine’s cost of mineral extraction.
On review, no impairment triggers were identified.
Consideration of climate change risks
In preparing the financial statements, the Directors have considered the potential impact of climate-related physical and transitional risks
for the Group operating assets, in the context of the TCFD disclosures. The Directors recognise that climate-related risks have potential
to impact the carrying value of assets through its effects on future cash flow projections and impairments on the useful life of assets. The
financial statement also considers the opportunities arising from our transition to a low carbon future and achievement of our target for
reducing GHG emissions.
In particular, the Directors have qualitatively assessed the financial and strategic viability of the business to the likely impact of climate-
related risk in respect of the following areas:
• Going concern and viability of the Group over the short term, arising from market and investor uncertainty
• Cash flow forecasts considering increased price forecasts for commodities and consumables
• Effects on property, plant and equipment, arising from carbon pricing and the adoption/deployment of low carbon technology
• Capital expenditure over the short and medium term, arising from the adoption/deployment of low carbon technology
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
1. CURRENT REPORTING PERIOD AMENDMENTS
CONTINUED
The Directors have made judgements and assumptions using available internal and external information to assess the impact of climate-
related risks on the future cash flows and operations of the business. The Directors are aware of the uncertainty around how climate-
related transition risks will affect global and national economies over the medium and longer term, and more specifically: gold price,
carbon pricing, other regulatory mechanisms and the availability of low carbon technology of relevance to our operations. In 2023, we
will undertake a more detailed analysis of climate-related scenarios aligned to the Intergovernmental Panel on Climate Change (“IPCC”)
and review the impact of these transition risks on business strategy and financial performance over the life of our assets. Centamin will
monitor and routinely test climate-related risk against judgements and estimates made in preparation of the Group’s financial statements.
Based on the considerations of climate-related transition risk in the short term, no factors are expected to have a material impact on the
carrying values of assets or liability of the Group in the next financial year. Capital expenditure to support our target for GHG emissions
reduction is assessed to be financially material in the short term, however the technology is commercially available and the expenditure is
value accretive. At Sukari, our planned extension to solar plant and grid connection are forecast to provide a positive return on investment
within the life of asset.
We have assessed the physical risks to our operations under future emissions scenarios. Our business was assessed to be resilient to
physical risks for the near-term predictions indicating that adaptation specifically to mitigate the effects of climate change is not required
for the operational life of Sukari. The useful life of the Sukari asset is not expected to be reduced by climate-related physical risks.
1.3.3 Judgement: Litigation
The Group exercises judgement in measuring and recognising provisions and the exposure to contingent liabilities related to pending
litigation, (see note 5.1 to the financial statements). Judgement is necessary in assessing the likelihood that a pending claim will succeed,
or a liability will arise, and to quantify the possible range of any financial settlement.
The Group is party to a significant legal action in Egypt, which could potentially adversely affect its profitability and affect its ability to
operate the mine at Sukari in the manner in which it is currently operated. The details of this litigation, which relate to the Concession
Agreement under which Sukari operates, and the latest developments, are provided in note 5.1 to the financial statements.
With respect to the Administrative Court ruling in the Concession Agreement case (discussed in note 5.1 below), on 20 March 2013
the Supreme Administrative Court upheld the Company’s application to suspend this decision until the merits of the Company’s appeal
are considered and ruled on, thus providing assurance that normal operations will be able to continue during this process. In 2016, the
Company’s appeal was indefinitely stayed by the Supreme Administrative Court, pending judgment in a separate case currently before
the Supreme Constitutional Court, the outcome of which affects the Concession Agreement case. The Supreme Constitutional Court has
now given a favourable judgment in that case, as a result of which an application has been made to resume proceedings in the original
appeal (which is a purely procedural matter). The Group’s Egyptian lawyers will then make an application to the Supreme Administrative
Court to have the original case dismissed and the judgment cancelled. Further details are provided in note 5.1.
In the unlikely event that the Group is unsuccessful in this action and the operating activities are restricted to a reduced area, it is
management’s belief that the Group would be able to continue as a going concern. The Group is in regular contact with its Egyptian
lawyers, who are monitoring developments on a day-to-day basis, and is therefore able to react swiftly if action is required.
The changes to critical accounting estimates and assumptions are disclosed in notes 1.2 and 1.3 above. The other critical estimates and
assumptions are as follows:
1.3.4 Estimate: Mineral Reserve and Resource statement impact on ore reserves
Ore reserves and mineral resource estimates are estimates of the amount of ore that can be economically and legally extracted from
the Group’s mining properties. The Group Mineral Reserve and Resource statement for SGM with an effective date of 30 June 2022 is
contained in the supplementary section of the 2022 Annual Report. The information on the Mineral Resources and Reserves statement
was prepared by Qualified Persons as defined by the National Instrument 43-101 of the Canadian Securities Administrators.
There are numerous uncertainties inherent in estimating Mineral Resources and Mineral Reserves. Assumptions that are valid at the time
of estimation may change significantly when new information becomes available. Estimates of recoverable quantities of reserves include
assumptions on commodity prices, exchange rates, discount rates and production costs for future cash flows. It also involves assessment
and judgement of complex geological models. The economic, geological, and technical factors used to estimate ore reserves may change
from period to period.
Ore reserves are integral to the recognised amounts of depreciation and amortisation and the valuation of inventory because of the unit of
production (“UOP”) amortisation method. Therefore, ore reserves and mineral resource estimates and changes to these may impact the
Group’s reported financial position and results in the following way:
• The carrying value of mine development properties, which incorporates the rehabilitation obligation assets may be affected due to
changes in estimated future cash flows. The recoverable amount of mine development properties is directly linked to the quantities of
the economically recoverable reserves of the mine and therefore with other factors held constant, a significant decrease in the reserves
might result in an impairment loss on the asset and have a negative impact on the carrying values;
• Capitalised stripping costs recognised in the statement of financial position, as either part of mine development properties or inventory
or charged to profit or loss, may change due to changes in stripping ratios;
• Depreciation and amortisation charges in the statement of profit or loss and other comprehensive income may change where such
charges are determined using the UOP, or where the useful life of the related assets change. The Group’s mine development properties
asset category, incorporating the deferred stripping asset and rehabilitation obligation assets is amortised using the UOP method; and
• Provisions for rehabilitation and environmental provisions may change where reserve estimate changes affect expectations about when
such activities will occur and the associated cost of these activities.
Production forecasts from the underground mine at Sukari are partly based on estimates regarding future resource and reserve growth.
It should be specifically noted that the potential quantity and grade from the Sukari underground mine is conceptual in nature and that
it is uncertain if exploration will result in further targets being delineated as a mineral resource. Please refer to the Mineral Reserve and
Resource statement impact on ore reserves sensitivity, note 3.1.1(h).
1.3.5 Estimate: Long-term gold price used in the non-current stockpiles net realisable value (“NRV”) assessment
All inventories are stated at the lower of cost and net realisable value. Management and Directors believe that the estimates used
regarding long-term gold prices in the non-current stockpiles NRV assessment are critical estimates and are realistic based on current
information. Please refer to inventories, note 2.11.
1.3.6 Estimate: Restoration and rehabilitation provision unit rates
The Sukari’s life of asset review was completed in Q4 of 2021 and announced to the market on 8 December 2021. After completion
of the life of asset review, work commenced on the full review of the restoration and rehabilitation plan for Sukari to determine the
Company’s obligation as at 31 December 2022. This work which involved an external third party to verify the assumptions and
methodology used in the restoration and rehabilitation plan has been completed. On the financial side, the restoration and rehabilitation
plan and provision assessment resulted in a decrease of the provision by US$5.8million (2021: US$ 21.9million increase) to US$37
million as at 31 December 2022, see note 2.13.
The US$5.8 million decrease in the provision was mainly due to an increase in the discount rate to 3.63% in 2022 from 1.38% in 2021
and decrease in the inflation rate to 2.37% in 2022 from 2.50% in 2021. The cost base before discounting however increased by a net
amount of US$4.7 million. The key drivers for the cost base increase were mainly due to the following significant changes:
• TSF1 – A US$1million increase (2021: $9 million increase) in the cost of loading and hauling waste rock to create a two-metre cover
over the tailings surface;
• TSF2 – the TSF usable area is significantly bigger in 2022 compared to 2021 as construction work of certain stages was completed.
There is US$3 million decrease (2021: $5 million increase) in the cost of loading and hauling and spreading the waste rock to create a
two-metre cover over the tailings surface. The 2022 cost base is determined using the actual surface area of the tailings dam as at year
end compared to the surface area of the entire TSF in 2021;
• North and west dump leach area – A US$0.4 million (2021: $2.6 million) increase in the cost including the cost of supplying and
installing an impermeable liner over the dump leach areas; and
• US$1.5 million (2021: $1.6 million) increase in the engineering cost of mine closure planning and design related work.
Estimates in the process include the unit costs used in calculating the provision e.g., ripping and grading, hauling and application, regrading
slopes, construction of bunds and demolition of buildings and certain fixed costs, including labour and dismantling of equipment.
For rehabilitation activities measured in tonnes, the unit costs range between $0.31/t to US$0.77/t and those measured in cubic metres
and for surface areas measured in metres, the unit cost used are as follows:
• Load and haul waste rock by mass (average haul distance of 2km)
$0.31/t
• Load and haul waste rock by mass (average haul distance of 6km)
$0.77/t
• Load and haul waste rock by volume (average haul distance of 2km)
$0.66/m
3
• Spread waste rock to create cover
$1.25/m
3
• Load and haul demolition waste for on-site landfill
$1.97/m3
• Demolish concrete foundations (medium reinforced)
$53.00/m
3
• Regrade slopes and batters
$0.40/m
2
• Rip and grade compacted surfaces
$0.95/m
2
• Demolish buildings (mix of prefabricated, steel and blockwork)
$8.00/m
2
The range of the estimated unit costs as outlined above is primarily driven by the level of the work required for each work area requiring
restoration and rehabilitation activity, the extent of the mine areas and/or infrastructure or equipment requiring such work as well as the
expected mix of the resources to execute the activities i.e., either internally sourced, contracted third party, other specialist resource or a
combination of the three.
Sukari has a life of mine which runs through to 2033 and while generally the majority of restoration and rehabilitation work will be
undertaken when the economically viable resources of the mine are depleted at the end of the life of mine, the actual estimated timing of
cash outflows for the restoration and rehabilitation work may be different and, in some cases, significantly different due to various factors,
including the discovery of more resources that increase the quantities of economically recoverable resources and therefore, extend the
life of mine. The ore reserves available for economic extraction, the extent of the area they are located and the timeframe within which
they are reasonably expected to be depleted and consequently for rehabilitation activities to commence therefore, have a significant
impact on the estimation process of the restoration and rehabilitation provision amount.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
1. CURRENT REPORTING PERIOD AMENDMENTS
CONTINUED
Most of the unit rates have not changed from prior year while others have marginally changed. As the rehabilitation and restoration work
will be done in-country, management has considered the year-on-year inflation in Egypt and particularly the devaluation of the Egyptian
currency, EGP against the USD in the year (of over 45%) and concluded that maintaining the unit rates within the same range as the
prior year would be reasonable in the estimation process for the current year provision.
Management has performed sensitivity analyses of reasonably possible changes in the significant assumptions which are primarily the
unit costs of the rehabilitation activities above as well as the discount and inflation rates.
The sensitivity results below are based on illustrative percentage changes, however the estimates may vary by greater amounts. The
provision for restoration and rehabilitation may also change where reserve estimate changes affect expectations about when such
activities will occur and therefore the associated cost of these activities.
The reported provision and corresponding asset amount would change as shown below should there be a change in the estimated
unit cost rates, discount rates and inflation rate assumptions on the basis that all the other factors that can potentially change remain
constant. Also analysed was a change in the estimated unit cost due to the rehabilitation process being executed illustratively five years
later due to changes in the reserve estimates altering the expected dates of performing the rehabilitation:
• A 10% increase in these estimated unit and fixed costs elements would result in a US$3.1million increase on the provision and
corresponding asset amounts, while a 10% decrease would result in a US$3.1million decrease.
• A 10% increase in these unit and fixed costs with a five year longer time horizon to perform the rehabilitation activities would result
in a US$0.7 million increase on the provision and corresponding asset amounts, while a 10% decrease would result in a US$5.1
million decrease.
• A 10% increase in the discount rate would result in a US$1.4 million decrease on the provision and corresponding asset amounts,
while a 10% decrease would result in a US$1.4 million increase.
• A 10% increase in the inflation rate would result in a US$0.9 million increase on the provision and corresponding asset amounts, while
a 10% decrease would result in a US$0.9 million decrease.
The above scenarios resulted in increases of the restoration and rehabilitation provision ranging from US$0.7 million to US$3.1 million
and decreases ranging from US$0.9 million to US$5.1 million. All the scenarios would have an insignificant effect on the consolidated
statement of comprehensive income, through immaterial movements in the interest cost on the liability and reduced rehabilitation asset
amortisation charge. Refer to note 2.13 for additional information on the restoration and rehabilitation provision movements.
The sensitivities analysed above reflect both reasonably possible changes in the provisions in response to changes in the underlying
1.4 OTHER SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the
consolidated entity, being the Company (the parent entity) and its subsidiaries. Subsidiaries are all entities (including structured entities)
over which the Group has control, as defined in IFRS 10 ‘
Consolidated financial statements
’. Consistent accounting policies are employed
in the preparation and presentation of the consolidated financial statements.
The consolidated financial statements include the information and results of each subsidiary and controlled entity from the date on which
the Company obtains control and until such time as the Company ceases to control such entities. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity.
In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the
2. HOW NUMBERS ARE CALCULATED
meaning of IFRS 8 ‘
Operating segments
’. Management has determined the operating segments based on the information reviewed by the
Board for the purposes of allocating resources and assessing performance.
The Board considers the business from a geographic perspective and a mining of precious metals versus exploration for precious metals
perspective. Geographically, management considers separately the performance in Egypt, Burkina Faso, Côte d’Ivoire and Corporate
(which includes Jersey, United Kingdom, and Australia). From a mining of precious metals versus exploration for precious metals
perspective, management separately considers the Egyptian mining of precious metals from the Egyptian and West African exploration
for precious metals in these geographies. The Egyptian mining operations derive revenue from the sale of gold while the West African and
the new Egyptian entities are currently only engaged in precious metal exploration and do not produce any revenue.
The Board assesses the performance of the operating segments based on profits and expenditure incurred as well as exploration
expenditure in each region. Egypt is the only operating segment with one of its entities, SGM, mining precious metals and therefore
has revenue and cost of sales whilst the remaining operating segments do not. All operating segments are reviewed by the Board as
presented and are key to the monitoring of ongoing performance and assessing plans of the Company.
Non-current assets, including financial instruments by country:
31 December 2022
Total
US$’000
Egypt
US$’000
Burkina Faso
US$’000
Côte d’Ivoire
US$’000
Corporate
US$’000
Non-current assets (excl. financial assets)
1,206,231
1,204,956
–
826
449
Non-current assets (financial instruments)
1,372
1,270
20
82
–
Total non-current assets
1,207,603
1,206,226
20
908
449
31 December 2021
Total
US$’000
Egypt
US$’000
Burkina Faso
US$’000
Côte d’Ivoire
US$’000
Corporate
US$’000
Non-current assets (excl. financial assets)
1,046,234
1,044,543
505
516
670
Non-current assets (financial instruments)
101
–
21
80
–
Total non-current assets
1,046,335
1,044,543
526
596
670
Additions to non-current assets mainly relate to Egypt and are disclosed in note 2.9.
Statement of financial position by operating segment:
31 December 2022
Total
US$’000
Egypt
Mining
US$’000
Egypt
Exploration
US$’000
Burkina
Faso
US$’000
Côte
d’Ivoire
US$’000
Corporate
US$’000
Total assets
1,493,533
1,413,266
4,057
40
4,074
72,096
Total liabilities
(152,126)
(142,556)
(533)
(470)
(3,421)
(5,146)
Net assets (liability)/total equity
1,341,407
1,270,710
3,524
(430)
653
66,950
31 December 2021
Total
US$’000
Egypt
Mining
US$’000
Egypt
Exploration
US$’000
Burkina
Faso
US$’000
Côte
d’Ivoire
US$’000
Corporate
US$’000
Total assets
1,423,420
1,228,758
935
1,724
1,650
190,353
Total liabilities
(133,662)
(129,762)
–
(368)
(829)
(2,703)
Net assets/total equity
1,289,758
1,098,996
935
1,356
821
187,650
Statement of comprehensive income by operating segment:
For the year ended 31 December 2022
(1)
Total
US$’000
Egypt
Mining
US$’000
Egypt
Exploration
US$’000
Burkina
Faso
US$’000
Côte
d’Ivoire
US$’000
Corporate
US$’000
Revenue
788,424
788,424
–
–
–
–
Cost of sales
(544,075)
(544,075)
–
–
–
–
Gross profit
244,349
244,349
–
–
–
–
Exploration and evaluation costs
(29,723)
–
(1,675)
(2,928)
(25,120)
–
Other operating costs
(1)
(49,003)
(27,299)
(116)
(506)
(326)
(20,756)
Other income
6,623
8,039
196
(168)
(666)
(778)
Finance income
1,214
99
–
–
–
1,115
Finance costs
(1)
(2,459)
(1,098)
(19)
(2)
(58)
(1,282)
Impairment of intra-group loans
–
–
–
140,623
–
(140,623)
Profit/(loss) for the year before tax
171,001
224,090
(1,614)
137,019
(26,170)
(162,324)
Tax
(226)
(226)
–
–
–
–
Profit/(loss) for the year after tax
170,775
223,864
(1,614)
137,019
(26,170)
(162,324)
Profit/(loss) for the year after tax attributable to:
–
the owners of the parent
(2)
72,490
125,579
(1,614)
137,019
(26,170)
(162,324)
–
non-controlling interest in SGM
(2)
98,285
98,285
–
–
–
–
(1)
In the 2021 Consolidated Statement of Comprehensive Income, Finance costs were included and disclosed in the line ‘Other operating costs’, in these financial
statements they are now separately disclosed in their own line and as such ‘Other operating costs’ for 2021 have changed.
(2)
Please note that the cost recovery model on which profit share is based under the Concession Agreement is different to the accounting results presented above due
to various adjustments and as such the share of profit disclosed above is not reflective of the 55%:45% split that was in place from 1 July 2018 to 30 June 2020 and
50%:50% split from 1 July 2020 onwards that occurs in practice, refer to the statement of cash flows by operating segment below for further information.
Statement of comprehensive income by operating segment:
For the year ended 31 December 2021
Total
US$’000
Egypt
Mining
US$’000
Egypt
Exploration
US$’000
Burkina
Faso
US$’000
Côte
d’Ivoire
US$’000
Corporate
US$’000
Revenue
733,306
733,306
–
–
–
–
Cost of sales
(487,376)
(487,376)
–
–
–
–
Gross profit
245,930
245,930
–
–
–
–
Exploration and evaluation costs
(13,879)
–
–
(2,380)
(11,499)
–
Other operating costs
(1)
(48,427)
(15,158)
–
(19)
(227)
(33,024)
Other income
5,708
6,922
–
(105)
(238)
(871)
Finance income
196
(1)
–
–
–
197
Finance costs
(1)
(673)
(598)
–
(2)
(20)
(52)
Impairment of exploration and evaluation asset
(35,208)
–
–
(35,208)
–
–
Profit/(loss) for the year before tax
153,647
237,095
–
(37,714)
(11,984)
(33,750)
Tax
20
20
–
–
–
–
Profit/(loss) for the year after tax
153,667
237,115
–
(37,714)
(11,984)
(33,750)
Profit/(loss) for the year after tax attributable to:
–
the owners of the parent
(2)
101,527
184,975
–
(37,714)
(11,984)
(33,750)
–
non-controlling interest in SGM
(2)
52,140
52,140
–
–
–
–
(1)
In the 2021 Consolidated Statement of Comprehensive Income, Finance costs were included and disclosed in the line ‘Other operating costs’, in these financial
statements they are now separately disclosed in their own line and as such ‘Other operating costs’ for 2021 have changed.
(2)
Please note that the cost recovery model on which profit share is based under the Concession Agreement is different to the accounting results presented above due
to various adjustments and as such the share of profit disclosed above is not reflective of the 55%:45% split that was in place from 1 July 2018 to 30 June 2020 and
50%:50% split from the 1 July 2020 onwards that occurs in practice, refer to the statement of cash flows by operating segment below for further information.
Statement of cash flows by operating segment:
For the year ended 31 December 2022
Total
US$’000
Egypt
Mining
US$’000
Egypt
Exploration
US$’000
Burkina Faso
US$’000
Côte d’Ivoire
US$’000
Corporate
US$’000
Statement of cash flows
Net cash generated from/(used in) operating activities
(1)
291,936
320,954
1,912
(2,644)
1,673
(29,959)
Net cash (used in)/generated from investing activities
(274,583)
(274,120)
(976)
–
(595)
1,108
Net cash used in financing activities
(122,219)
(35,492)
–
–
–
(86,727)
Own shares acquired
(523)
–
–
–
–
(523)
Dividend paid – non-controlling interest in SGM
(35,492)
(35,492)
–
–
–
–
Dividend paid – owners of the parent
(86,204)
–
–
–
–
(86,204)
Net (decrease)/increase in cash and cash equivalents
(104,866)
11,342
936
(2,644)
1,078
(115,578)
Cash and cash equivalents at the beginning of the year
207,821
13,609
935
5
859
192,413
Effect of foreign exchange rate changes
(582)
2,422
100
2,640
(515)
(5,229)
Cash and cash equivalents at the end of the year
102,373
27,373
1,971
1
1,422
71,606
(1) Please note that the cash generated by operating activities for Burkina Faso and Côte d’Ivoire are affected by the movements in working capital, specifically intercompany
loans, with its direct parent entity Centamin West Africa Holdings Limited which is included within the corporate segment.
For the year ended 31 December 2021
Total
US$’000
Egypt
Mining
US$’000
Egypt
Exploration
US$’000
Burkina Faso
US$’000
Côte d’Ivoire
US$’000
Corporate
US$’000
Statement of cash flows
Net cash generated from/(used in) operating activities
(1)
309,878
372,972
887
200
901
(65,082)
Net cash (used in)/generated from investing activities
(240,676)
(241,250)
–
(1)
(308)
883
Net cash used in financing activities
(157,108)
(150,400)
–
–
–
(6,708)
Own shares acquired
(1,391)
–
–
–
–
(1,391)
Dividend paid – non-controlling interest in SGM
(75,200)
(75,200)
–
–
–
–
Dividend (paid)/received – controlling interest in SGM
–
(75,200)
–
–
–
75,200
Dividend paid – owners of the parent
(80,517)
–
–
–
–
(80,517)
Net (decrease)/increase in cash and cash equivalents
(87,906)
(18,678)
887
199
593
(70,907)
Cash and cash equivalents at the beginning of the year
(2)
291,281
11,899
–
5
456
278,921
Effect of foreign exchange rate changes
(2)
4,446
20,388
48
(199)
(190)
(15,601)
Cash and cash equivalents at the end of the year
(2)
207,821
13,609
935
5
859
192,413
(1)
Please note that the cash generated by operating activities for Burkina Faso and Côte d’Ivoire are affected by the movements in working capital, specifically
intercompany loans, with its direct parent entity Centamin West Africa Holdings Limited which is included within the corporate segment.
(2)
The numbers have been restated to reflect a reclassification of US$2m on the opening cash and cash equivalents balance and US$5m on the foreign exchange rate
change between Corporate and Egypt Mining segments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
2. HOW NUMBERS ARE CALCULATED
CONTINUED
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The
chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has
An analysis of the Group’s revenue for the year, is as follows:
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Gold sales
786,921
731,945
Silver sales
1,503
1,361
788,424
733,306
All gold and silver sales during the year were made to a single customer in North America, Asahi Refining Canada Ltd.
Revenue is measured at the fair value of the consideration received or receivable for goods in the normal course of business.
Sale of goods
Under IFRS 15, revenue from the sale of mineral production is recognised when the Group has passed control of the mineral production
to the buyer (the performance obligation), it is probable that economic benefits associated with the transaction will flow to the Group, the
sales price can be measured reliably, and the Group has no significant continuing involvement and the costs incurred or to be incurred
in respect of the transaction can be measured reliably. This is when insurance risk has passed to the buyer and the goods have been
collected at the agreed location.
The performance obligation is satisfied when the doré bars are packaged and collected by the approved carrier with the appropriate
required documentation at the gold room and the approved carrier accepts control of the shipment by signature. 98% of the payable gold
and silver content of the refined gold bars will be priced and paid within one working day after receipt of the shipment at the refinery with
the balance being paid five working days after receipt. There are no significant judgements applied to the determination of revenue.
Where the terms of the executed sales agreement allow for an adjustment to the sales price based on a survey of the mineral production
by the buyer (for instance an assay for gold content), recognition of the revenue from the sale of mineral production is based on the most
recently determined estimate of product specifications.
Royalty
The Arab Republic of Egypt (“ARE”) is entitled to a royalty of 3% of net sales revenue (revenue net of freight and refining costs) as
defined from the sale of gold and associated minerals from SGM. This royalty is calculated and recognised on receipt of the final
certificate of analysis document received from the refinery. Due to its nature, this royalty is not recognised in cost of sales but rather in
Profit for the year before tax has been arrived at after crediting/(charging) the following gains/(losses) and income/(expenses):
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000*
Other income
Net foreign exchange gains
6,559
5,158
Other income
64
550
6,623
5,708
Finance cost, net
Interest received
1,214
196
Finance costs
(2,459)
(672)
Expenses
Cost of sales
Mine production costs
(408,543)
(368,327)
Movement in inventory
10,659
19,968
Depreciation and amortisation
(146,191)
(139,017)
(544,075)
(487,376)
Other operating costs
Corporate compliance
(2,869)
(2,698)
Fees payable to the external auditors
(895)
(856)
Corporate consultants
(2,697)
(1,914)
Salaries and wages
(11,979)
(10,094)
Other administration expenses
(3,272)
(3,070)
Employee equity settled share-based payments
(2,570)
(3,747)
Corporate costs (sub-total)
(24,282)
(22,379)
Other provisions
1,180
(731)
Net movement on provision for stock obsolescence
(579)
(3,135)
Other non-corporate operating expenses
(1,480)
(511)
Royalty – attributable to the ARE government
(23,842)
(21,672)
Other operating costs (total)
(49,003)
(48,428)
*
In the 2021 Consolidated Statement of Comprehensive Income, Finance costs were included and disclosed in the line ‘Other operating costs’, in these financial
statements they are now separately disclosed in their own line and as such ‘Other operating costs’ for 2021 have changed.
Finance income
Finance income is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be
measured reliably. Finance income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that discounts estimated future cash receipts through the expected life of the financial asset to that asset’s
net carrying amount.
Finance income is generated mainly from treasury activities (e.g., income on surplus funds invested for the short term) and therefore is
separately disclosed outside of the Group’s operating profit in the consolidated statement of comprehensive income and disclosed as a
separate line under investing activities in the consolidated statement of cash flows.
The individual financial statements of each Group entity are presented in its functional currency being the currency of the primary
economic environment in which the entity operates. For the purpose of the consolidated financial statements, the results and financial
position of each entity are expressed in US dollars, which is the functional currency of all companies in the Group and the presentation
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. HOW NUMBERS ARE CALCULATED
CONTINUED
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency
are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary items denominated
in foreign currencies are retranslated at the rates prevailing at the reporting date. Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are
Finance costs
Finance costs for the Group will normally include:
• Costs that are ‘borrowing costs for the purposes of
IAS 23
Borrowing Costs’
:
–
interest expense calculated using the effective interest rate method as described in IFRS 9 ‘
Financial Instruments’;
–
interest in respect of lease liabilities; and
–
exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.
• the unwinding of the effect of discounting provisions.
time to get ready for its intended use or sale (a qualifying asset) are capitalised as part of the cost of the respective asset. Borrowing costs
consist of interest and other costs that the Group incurs in connection with the borrowing of funds.
Where funds are borrowed specifically to finance a project, the amount capitalised represents the actual borrowing costs incurred.
Where surplus funds are available for a short term from funds borrowed specifically to finance a project, the income generated from the
temporary investment of such amounts is also capitalised and deducted from the total capitalised borrowing cost. Where the funds used
to finance a project form part of general borrowings, the amount capitalised is calculated using a weighted average of rates applicable to
relevant general borrowings of the Group during the period.
All other borrowing and finance costs which are generally incurred in the Group’s ordinary activities are recognised in the statement of profit
or loss and other comprehensive income in the period in which they are incurred, and the Group would also include foreign exchange
differences on directly attributable borrowings as borrowing costs capable of capitalisation to the extent that they represented an adjustment
to interest costs. These finance costs are separately disclosed in the consolidated statement of comprehensive income as required by
‘
IAS 1
Presentation of Financial Statements‘
and disclosed under operating activities in the consolidated statement of cash flows.
Even though exploration and evaluation assets can be qualifying assets, they generally do not meet the ‘probable economic benefits’
test therefore any related borrowing costs incurred during this phase are generally recognised in the statement of profit or loss and other
EMRA is a 50% shareholder in SGM and is entitled to a share of 50% of SGM’s net production surplus which can be defined as ‘revenue
less payment of the fixed royalty to the ARE and recoverable costs’.
Earnings attributable to the non-controlling interest in SGM (i.e., EMRA) are pursuant to the provisions of the CA and are recognised
as profit attributable to the non-controlling interest in SGM in the attribution of profit section of the statement of comprehensive income
of the Group. The profit share payments during the year will be reconciled against SGM’s audited financial statements. SGM financial
statements for the year ended 30 June 2022 have been audited and signed off at the date of this report.
Certain terms of the CA and amounts in the cost recovery model may also vary depending on interpretation and management and the
Board making various judgements and estimates that can affect the amounts recognised in the financial statements.
(a) Statement of comprehensive income and statement of financial position impact
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Statement of comprehensive income
Profit for the year after tax attributable to the non-controlling interest in SGM
(1)
98,285
52,140
Statement of financial position
Total equity attributable to non-controlling interest in SGM
(1)
(opening)
(40,256)
(17,196)
Profit for the year after tax attributable to the non-controlling interest in SGM
(1)
98,285
52,140
Dividend paid – non-controlling interest in SGM
(35,492)
(75,200)
Total equity attributable to non-controlling interest in SGM
(1)
(closing)
22,537
(40,256)
(1) Profit share commenced during the third quarter of 2016. The first two years was a 60:40 split of net production surplus to PGM and EMRA respectively. From 1 July
2018 this changed to a 55:45 split for the next two-year period until 30 June 2020, after which all net production surpluses have been split 50:50.
Any variation between payments made during the year (which are based on the Company’s estimates) and the SGM audited financial
statements, may result in a balance due and payable to EMRA or advances to be offset against future distributions. This will be reflected
as an amount attributable to the non-controlling interest in SGM on the statement of financial position and statement of changes in equity.
(b) Statement of cash flows impact
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Statement of cash flows
Dividend paid – non-controlling interest in SGM
(1)
(35,492)
(75,200)
(1) Profit share commenced during the third quarter of 2016. The first two years was a 60:40 split of net production surplus to PGM and EMRA respectively. From 1 July
2018 this changed to a 55:45 split for the next two-year period until 30 June 2020, after which all net production surpluses will be split 50:50.
EMRA and PGM benefit from advance distributions of profit share which are made on a weekly or fortnightly basis and proportionately in
accordance with the terms of the CA. Future distributions will consider ongoing cash flows, historical costs that are still to be recovered
and any future capital expenditure. All profit share payments will be reconciled against SGM’s audited June financial statements for
The Group operates in several countries and, accordingly, it is subject to the various tax regimes in the countries in which it operates.
From time to time the Group is subject to a review of its related tax filings and in connection with such reviews, disputes can arise with
the taxing authorities over the interpretation or application of certain rules to the Group’s business conducted within the country involved.
If the Group is unable to resolve any of these matters favourably, there may be an adverse impact on the Group’s financial performance,
cash flows or results of operations. If management’s estimate of the future resolution of these matters changes, the Group will recognise
the effects of the changes in its consolidated financial statements in the period that such changes occur.
In Egypt, Pharaoh Gold Mines NL (“PGM”) has entered into a Concession Agreement (“CA”) that provides that the income generated
by SGM’s activities is granted a long-term tax exemption from all taxes imposed in Egypt, other than the fixed royalty attributable to the
Egyptian government, rental income on property and interest income on cash and cash equivalents.
The CA grants certain tax exemptions, including the following:
• from 1 April 2010, being the date of commercial production, SGM is entitled to a 15-year exemption from any taxes imposed by the
Egyptian government on the revenues generated from SGM. PGM and EMRA intend that SGM will in due course file an application to
extend the tax-free period for a further 15 years. The extension of the tax-free period requires that there have been no tax problems or
disputes in the initial period and that certain activities in new remote areas have been planned and agreed by all parties;
• PGM and SGM are exempt from custom taxes and duties with respect to the importation of machinery, equipment and consumable
items required for the purpose of exploration and mining activities at SGM. The exemption shall only apply if there is no local
substitution with the same or similar quality to the imported machinery, equipment, or consumables. Such exemption will also be
granted if the local substitution is more than 10% more expensive than the imported machinery, equipment, or consumables after the
addition of the insurance and transportation costs;
• PGM, EMRA and SGM and their respective buyers will be exempt from any duties or taxes on the export of gold and associated
minerals produced from SGM;
• PGM at all times is free to transfer in US$ or other freely convertible foreign currency, any cash of PGM representing its share of net
proceeds and recovery of costs, without any Egyptian government limitation, tax or duty;
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. HOW NUMBERS ARE CALCULATED
CONTINUED
• PGM’s contractors and subcontractors are entitled to import machinery, equipment, and consumable items under the ‘Temporary
Release System’ which provides exemption from Egyptian customs duty; and
• legal title of all operating assets of PGM will pass to EMRA when cost recovery is completed. The right of use of all fixed and movable
assets remains with PGM and SGM.
Relevance of tax consolidation to the consolidated entity
In Australia, Centamin Egypt Limited and Pharaoh Gold Mines NL, both wholly owned Australian resident entities within the Group,
have elected to form a tax-consolidated group from 1 July 2003 and therefore are treated as a single entity for Australian income
tax purposes. The head entity within the tax-consolidated group is Centamin Egypt Limited. Pharaoh Gold Mines NL, which has a
registered Egyptian branch, benefits from the ‘branch profits exemption’ whereby foreign branch income will generally not be subject to
Australian income tax. Ampella Mining Limited is a single entity for Australian income tax purposes.
Nature of tax funding arrangements and tax-sharing agreements
Entities within the Australian tax-consolidated group have entered into a tax funding arrangement and a tax-sharing agreement with the
head entity. Under the terms of the tax-funding agreement, Centamin Egypt Limited and each of the entities in the tax-consolidated group
have agreed to pay a tax-equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity.
Such amounts are reflected in amounts receivable from or payable to other entities in the tax-consolidated group.
The tax-sharing agreement entered between members of the tax-consolidated group provides for the determination of the allocation
of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been
recognised in the financial statements in respect of this agreement as payment of any amounts under the tax-sharing agreement
is considered remote.
Tax recognised in profit is summarised as follows:
Tax (expense)/credit
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Current tax
Current tax (expense)/credit in respect of the current year
(226)
20
Deferred tax
–
–
Total tax (expense)/credit
(226)
20
The tax (expense)/credit for the year can be reconciled to the profit per the consolidated statement of comprehensive income as follows:
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Profit for the year before tax
171,001
153,647
Tax expense calculated at 0%
(1)
(2021: 0%)
(1)
of profit for the year before tax
–
–
Tax effect of:
Other
(226)
20
Tax
(226)
20
(1) The tax rate used in the above reconciliation is the corporate tax rate of 0% payable by Jersey corporate entities under the Jersey tax law (2021: 0%). There has been no
change in the underlying corporate tax rates when compared with the previous financial period.
Tax recognised in the balance sheet is summarised as follows:
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Current tax liabilities
249
253
FINANCIAL STATEMENTS
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business
combination, or items recognised directly in equity or in OCI.
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the consolidated
statement of comprehensive income because of items of income or expense that are taxable or deductible in other periods and items that
are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax
assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a
2.6 FINANCIAL INSTRUMENTS
US$150 million Revolving Credit Facility (“RCF”)
On 22 December 2022, the Company entered into an agreement for a US$150 million RCF with four banks: Bank of Montreal (London
Branch), HSBC Bank plc, ING Bank N.V. (Amsterdam Branch) and Nedbank Limited (London Branch).
As at 31 December 2022, there were no drawdowns on the facility and therefore no interest expense was recognised in the period. A
facility establishment and commitment fee of US$1.2 million was recognised in the profit or loss statement.
The terms of the facility imposes certain financial covenants on the Company in respect of each Relevant Period that has an outstanding
borrowing as outlined below i.e., the Company shall ensure that:
a)
Interest Cover
: Interest Cover in respect of any Relevant Period shall not be less than the ratio of 4:1;
b)
Leverage
: Leverage in respect of any Relevant Period shall not exceed the ratio of 3:1;
c)
Liquidity
: Liquidity shall at all times exceed US$50,000,000; and
d)
Reserve Tail:
at each Scheduled Reserves Assessment Date, the Reserve Tail Ratio is not less than thirty per cent.
As at 31 December 2022, the Company’s compliance requirements and obligations in respect of financial covenants and financial
conditions were not yet effective as conditions precedent were not yet satisfied and completed to make the agreement effective and
available for drawdown.
The Relevant Period is defined as each period of twelve months ending on or about the last day of the Financial Year and each period of
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual
arrangement as defined below. Financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Other financial liabilities
subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. HOW NUMBERS ARE CALCULATED
CONTINUED
The Group classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through OCI or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments
that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to
Recognition and derecognition
Purchases and sales of financial assets are recognised on trade date, being the date on which the Group commits to purchase or sell
the asset.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred
and the Group has transferred substantially all the risks and rewards of ownership. If the Group neither transfers nor retains substantially
all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the
asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership
of a transferred financial asset, it continues to recognise the financial asset and also recognises a collateralised borrowing for the
proceeds received.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at Fair Value through
Profit or Loss (“FVPL”), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at FVPL are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety
when determining whether their cash flows are solely payment of principal and interest.
Subsequent to initial recognition, investments in subsidiaries are measured at cost in the Company’s financial statements. The
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Financial assets at amortised cost
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are
classified as financial assets at amortised cost. This category of financial assets is measured at amortised cost using the effective interest
rate method less impairment. Interest is recognised by applying the effective interest rate except for short-term receivables when the
recognition of interest would be immaterial.
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each reporting date. In
accordance with of IFRS 9
‘Financial Instruments’
, a loss allowance shall be recognised for expected credit losses on a financial asset
in accordance with paragraphs 4.1.2 or 4.1.2A, a lease receivable, a contract asset or a loan commitment and a financial guarantee
contract to which the impairment requirements apply in accordance with paragraphs 2.1(g), 4.2.1(c) or 4.2.1(d).
The objective of the impairment requirements is to recognise lifetime expected credit losses for which there have been significant
increases in credit risk since initial recognition, whether assessed on an individual or collective basis, considering all reasonable and
supportable information, including that which is forward-looking.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-
impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets through the use of an
allowance account, with a simplified approach for trade receivables. When a trade receivable is uncollectible, it is written off against the
allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the
carrying amount of the allowance account are recognised in profit or loss.
With the exception of financial assets at fair value through other comprehensive income equity instruments, if, in a subsequent period,
the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment
was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the
investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not
been recognised.
In respect of FVOCI equity instruments, any subsequent increase in fair value after an impairment loss is recognised in other
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Non-current
Other receivables – deposits
1,372
101
Current
Gold and silver sales debtor
29,832
29,147
Other receivables
5,796
3,432
35,628
32,579
Trade and other receivables are classified as financial assets subsequently measured at amortised cost.
All gold and silver sales during the year were made to a single customer in North America, Asahi Refining Canada Ltd, and are neither
past due nor impaired.
The average age of the receivables is 16 days (2021: 16 days) and expected credit losses are considered immaterial. No interest is
charged on the receivables. Of the trade receivables balance, the gold and silver sales debtor is all receivable from Asahi Refining Canada
Ltd. The amount due has been received in full after year end. Other receivables represent GST and VAT owing from various jurisdictions
that the Group operates in.
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value, therefore no
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Current
Prepayments
(1)
13,864
7,964
13,864
7,964
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. HOW NUMBERS ARE CALCULATED
CONTINUED
Office
equipment
US$’000
Buildings
US$’000
Plant and
equipment
US$’000
Mining
equipment
US$’000
Mine
development
properties
US$’000
Capital
work in
progress
US$’000
Total
US$’000
Year ended 31 December 2022 Cost
Balance at 1 January 2022
9,243
13,823
625,077
359,467
816,224
85,003
1,908,837
Additions
127
1,041
526
281
–
261,647
263,622
Additions: IFRS 16 right of use assets
–
2,342
1,399
4,005
–
–
7,746
Decrease in rehabilitation asset
–
–
–
–
(5,839)
–
(5,839)
Transfers from capital work in progress
508
6,587
10,808
63,201
186,742
(267,846)
–
Transfers from exploration and evaluation asset
–
–
–
–
12,627
–
12,627
Disposals
(1,727)
(1,019)
(2,434)
(43,294)
–
–
(48,474)
Disposals: IFRS 16 right of use assets
–
(1,073)
–
(139)
–
–
(1,212)
Balance at 31 December 2022
8,151
21,701
635,376
383,521
1,009,754
78,804
2,137,307
Accumulated depreciation and amortisation
Balance at 1 January 2022
(7,543)
(3,026)
(275,640)
(288,323)
(378,088)
–
(952,620)
Depreciation and amortisation
(818)
(2,221)
(34,467)
(43,455)
(65,808)
–
(146,769)
Disposals
1,727
1,674
2,073
43,257
–
–
48,731
Balance at 31 December 2022
(6,634)
(3,573)
(308,034)
(288,521)
(443,896)
–
(1,050,658)
Year ended 31 December 2021 Cost
Balance at 1 January 2021
8,792
5,690
617,465
359,009
662,496
44,554
1,698,006
Additions
11
–
54
231
–
224,633
224,929
Increase in rehabilitation asset
–
–
–
–
21,875
–
21,875
Transfers from capital work in progress
1,127
8,489
7,848
54,042
112,678
(184,184)
–
Transfers from exploration and evaluation asset
–
–
–
–
19,175
–
19,175
Disposals
(687)
(5)
(290)
(53,673)
–
–
(54,655)
Disposals: IFRS 16 right of use assets
–
(351)
–
(142)
–
–
(493)
Balance at 31 December 2021
9,243
13,823
625,077
359,467
816,224
85,003
1,908,837
Accumulated depreciation and amortisation
Balance at 1 January 2021
(7,542)
(1,641)
(242,853)
(298,572)
(317,514)
–
(868,122)
Depreciation and amortisation
(688)
(1,597)
(33,077)
(43,518)
(60,574)
–
(139,454)
Disposals
687
212
290
53,769
–
–
54,958
Balance at 31 December 2021
(7,543)
(3,026)
(275,640)
(288,323)
(378,088)
–
(952,620)
Net book value
As at 31 December 2022
1,517
18,128
327,342
95,000
565,858
78,804
1,086,649
As at 31 December 2021
1,700
10,797
349,437
71,144
438,136
85,003
956,217
Included within the depreciation charge in relation to depreciation of ROU assets is US$1 million within the buildings asset class (2021:
US$0.7 million), US$0.3 million within plant and equipment (2021: US$0.1 million) and US$0.9 million related to mining equipment
(2021: US$ Nil ).
The net book value of the assets in the note above includes the following amounts relating to ROU assets on leases; US$2.4 million
(2021: US$1.0 million) within buildings, US$1.1 million (2021: US$0.1 million) within plant and equipment and US$3.2 million (2021:
US$0.1 million) within mining equipment.
An impairment trigger assessment was performed in 2022 on all Cash Generating Units (“CGUs”) including the Sukari Mine, refer to note
1.3.2 above, however no impairment triggers on property, plant and equipment were identified in the assessment.
Deferred stripping assets of US$141 million (2021: $59 million) were recognised in the year ended 31 December 2022 and have been
included within mine development properties. An amortisation charge of US$26 million (2021: $10 million) has been recognised in the
year relating to the deferred stripping assets.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Assets that have been cost recovered in Egypt under Concession Agreement (“CA”) terms are included on the statement of financial
position under property, plant, and equipment due to the Company having the right of use of these assets. These rights will expire
together with the CA.
None of the Group’s property, plant and equipment items is pledged as security and the Group had US$19 million capital expenditure
commitments as at 31 December 2022 (2021: US$17 million).
PPE is stated at cost less accumulated depreciation and impairment. PPE will include capitalised development expenditure.
Cost includes expenditure that is directly attributable to the acquisition of the item and the estimated cost of abandonment. In the event
that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the
future to their present value as at the date of acquisition. Subsequent costs are included in the asset’s carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group
and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to the income statement during the financial year in which they are incurred. The cost of PPE includes the
estimated restoration costs associated with the asset.
Depreciation is charged on PPE, except for capital work in progress. Depreciation is calculated on a straight-line basis so as to write off
the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. Depreciation on capital
work in progress commences on commissioning of the asset and transfer to the relevant PPE category.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual financial year, with the effect
of any changes recognised on a prospective basis. The following estimated useful lives are used in the calculation of straight-line basis
depreciation:
Plant and equipment:
2–20 years
Office equipment:
3–7 years
Mining equipment:
2–13 years
Buildings
4–20 years
Where the assets relate to an active mine site, the shorter of the above periods or remaining life of mine are used.
Freehold land is not depreciated, and all other depreciable assets are depreciated over their useful life or the life of mine whichever
is shorter.
The gain or loss arising on the disposal or scrappage of an asset is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in other income or operating expenses.
Mine development properties
Where mining of a mineral reserve has commenced, the accumulated costs are transferred from exploration and evaluation assets
to mine development properties.
Amortisation is first charged to new mine development ventures from the date of first commercial production. Amortisation of mine
properties is on a unit of production basis resulting in an amortisation charge proportional to the depletion of the proven and probable ore
reserves. The unit of production is on an ore tonne depleted basis for open pit mining property assets and an ounce depleted basis for
underground mining property assets.
Capitalised underground development costs incurred to enable access to specific ore blocks or areas of the underground mine,
and which only provide an economic benefit over the period of mining that ore block or area, are depreciated on a unit of production
basis, whereby the denominator is estimated ounces of gold in proven and probable reserves within that ore block or area where it is
considered probable that those reserves will be extracted economically.
IFRIC 20 ‘Stripping costs in the production phase of a surface mine’
IFRIC 20 provides clarity on how to account for and measure the removal of mine waste materials which provide access to mineral ore
deposits. Within Sukari’s open pit operations, removal of mine overburden or waste material is routinely necessary to gain access to
mineral ore deposits and this waste removal activity is known as ‘stripping’. There can be two benefits accruing to the entity from the
stripping activity:
• usable ore that can be used to produce inventory; and
• improved access to further quantities of material that will be mined in future periods.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. HOW NUMBERS ARE CALCULATED
CONTINUED
The costs of stripping activity to be accounted for in accordance with the principles of IAS 2
‘Inventories’
to the extent that the benefit
from the stripping activity is realised in the form of inventory produced. The costs of stripping activity which provides a benefit in the form
of improved access to ore is recognised as a non-current ‘stripping activity asset’ where the following criteria are met:
• it is probable that the future economic benefit (improved access to the ore body) associated with the stripping activity will flow to
the entity;
• the entity can identify the component of the ore body for which access has been improved; and
• the costs relating to the stripping activity associated with that component can be measured reliably.
When the costs of the stripping activity asset and the inventory produced are not separately identifiable, production stripping costs are
allocated between the inventory produced and the stripping asset by using an allocation basis that is based on a relevant production
measure. A stripping activity asset is accounted for as an addition to, or as an enhancement of, an existing asset and classified as
tangible or intangible according to the nature of the existing asset of which it forms part.
A deferred stripping asset is initially measured at cost and subsequently carried at cost or its revalued amount less depreciation or
amortisation and impairment losses. A stripping asset is depreciated or amortised on a systematic basis, over the expected useful life
of the identified component of the ore body that becomes more accessible as a result of the stripping activity. The stripping activity
asset is depreciated using a unit of production method based on the total ounces to be produced for the component over the life of the
component of the ore body.
Capitalised deferred stripping costs are included in ‘Mine Development Properties’, within property, plant, and equipment. These form
part of the total investment in the relevant cash generating unit, which is reviewed for impairment if events or a change in circumstances
indicate that the carrying value may not be recoverable. Amortisation of deferred stripping costs is included in cost of sales.
The stripping costs associated with the current period operations are expensed during that period and any stripping activity cost
associated with producing future benefit is deferred on the balance sheet and amortised over the period that the benefit is received i.e., is
classified as capital expenditure, creating a Deferred Stripping asset.
The pit components are the separate stages of the open pit mine. For each component, the stripping ratio is determined, and costs are
capitalised if the stripping ratio in the year for that component is greater than the overall LOM stripping ratio for that component.
The change in mine plan has necessitated an increase in stripping activity during the year (more than has been experienced in the past)
and includes activity from both internal and external parties. As a result, there has been a significant increase in the stripping activity.
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is
estimated to determine the extent of the impairment loss (if any). For the purposes of assessing impairment, assets are grouped at the
lowest levels for which they potentially generate largely independent cash inflows (cash generating units).
Recoverable amount is the higher of fair value loss costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of
money and the risks specific to the asset for which the estimates of future flows have not been adjusted.
If the recoverable amount of a cash generating unit (“CGU”) is estimated to be less than its carrying amount, the carrying amount of the
CGU is reduced to its recoverable amount. Where an impairment loss subsequently reverses, the carrying amount of the cash generating
unit is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the cash generating unit in
prior years.
A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Balance at the beginning of the year
25,261
63,701
Expenditure for the year
12,175
15,943
Transfer to property, plant, and equipment
(12,627)
(19,175)
Impairment charge on exploration and evaluation asset
–
(35,208)
Balance at the end of the year
24,809
25,261
The exploration and evaluation asset relates to the drilling, geological exploration and sampling of potential ore reserves and can all be
attributed to Egypt (US$24.8 million (2021:$25.3 million)).
In accordance with the requirements of IAS 36 ‘
Impairment of assets
’ and IFRS 6 ‘
Exploration for and evaluation of mineral resources
’
exploration and evaluation assets are assessed for impairment when facts and circumstances (as defined in IFRS 6 ‘
Exploration
for and evaluation of mineral resources’
) suggest that the carrying amount of exploration and evaluation assets may exceed its
recoverable amount.
An impairment trigger assessment was performed in 2021 on the exploration and evaluation assets, and the asset in Burkina Faso
of US$35.2 million relating to the acquisition of Ampella Mining Limited was impaired in full. No impairment triggers were noted in the
current year following a similar impairment trigger and review assessment on the Group’s E&E assets.
Exploration and evaluation expenditures in relation to each separate area of interest are differentiated between greenfield and brownfield
exploration activities in the year in which they are incurred.
The greenfield and brownfield terms are generally used in the minerals sector and have been adopted to differentiate high risk remote
exploration activity from near-mine exploration activity:
(a)
greenfield exploration refers to territory, where mineral deposits are not already developed and has the goal of establishing a
new mine requiring new infrastructure, regardless of it being in an established mining field or in a remote location. Greenfield
exploration projects can be subdivided into grassroots and advanced projects embracing prospecting, geoscientific surveys, drilling,
sample collection and testing, but excludes work of brownfields nature, pit and shaft sinking and bulk sampling; and
(b)
brownfield exploration, also known as near-mine exploration, refers to areas where mineral deposits were previously developed.
In brownfield exploration, geologists look for deposits near or adjacent to an already operating mine with the objective of extending its
operating life and taking advantage of the established infrastructure.
Greenfield exploration costs will be expensed as incurred and will not be capitalised to the balance sheet until a decision is made to
pursue a commercially viable project. Brownfield exploration costs will continue to be capitalised to the statement of financial position.
Brownfield exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration
and evaluation asset in the year in which they are incurred where the following conditions are satisfied:
• The rights to tenure of the area of interest are current; and
• At least one of the following conditions is also met:
–
the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the
area of interest, or alternatively, by its sale; or
–
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation
to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploration drilling,
trenching, and sampling and associated activities. General and administrative costs are only included in the measurement of exploration
and evaluation costs where they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances (as defined in IFRS 6 ‘
Exploration for
and evaluation of mineral resources
’) suggest that the carrying amount of exploration and evaluation assets may exceed its recoverable
amount. The recoverable amount of the exploration and evaluation assets (or the cash generating unit(s) to which it has been allocated,
being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an
impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years. The E&E asset’s recoverable amount which is the higher of the amount
to be recovered through use of the asset and the amount to be recovered through sale of the asset is determined based on the provisions
of ‘
IAS 36, Impairment of Assets’
.
In accordance with IFRS 6, the full balance of the Groups’ E&E assets which do not currently generate cash inflows is allocated to a
producing mine’s cash-generating unit (CGU) for the purpose of assessing and testing the assets for impairment as this is considered
the most appropriate level of reporting reflecting the way the Groups’ operations are managed. Management considers an operation
actively mining precious metals as a distinct CGU and only E&E expenditure on such active mining operations is capitalised. Any E&E
expenditure on operations exploring for precious metals is expensed.
The application of the Group’s accounting policy for E&E expenditure requires judgement to determine whether future economic benefits
are likely from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of
the existence of reserves.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. HOW NUMBERS ARE CALCULATED
CONTINUED
In addition to applying judgement to determine whether future economic benefits are likely to arise from the Group’s E&E assets or
whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves, the Group has to apply
a number of estimates and assumptions. The determination of the Group’s ore reserves and mineral resource estimates is itself an
estimation process that involves varying degrees of uncertainty depending on how the resources are classified (i.e., measured, indicated
or inferred), refer to note 1.3.4. The estimates directly impact when the Group reclassifies E&E expenditure to mine development
properties. The reclassification process requires management to make certain estimates and assumptions about future events and
circumstances, particularly, when a decision is made to proceed with development in respect of a particular exploration area to start
economic extraction operation of the ore. Any such estimates and assumptions may change as new information becomes available.
If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the relevant
capitalised amount is written off to the statement of profit or loss and other comprehensive income in the period when the new
information becomes available.
Where a decision is made to proceed with development in respect of a particular area of interest based on the commercial and technical
feasibility, the relevant exploration and evaluation asset is tested for impairment, reclassified to mine development properties, and then
amortised over the life of the reserves associated with the area of interest once mining operations have commenced.
Mine development expenditure is recognised at cost less accumulated amortisation and any impairment losses. When commercial
production has commenced, the associated costs are amortised over the estimated economic life of the mine on a units of production
basis. Changes in factors such as estimates of proved and probable reserves that affect the unit of production calculations are dealt with
on a prospective basis.
Income derived by the entity prior to the date of commercial production is offset against the expenditure capitalised and carried in the
consolidated statement of financial position. All revenues recognised after commencement of commercial production are recognised in
accordance with the Revenue Policy stated in note 2.2.
The treatment and classification of mining stockpiles within inventory is split between current and non-current assets. Priority is placed on
the higher-grade ore, accordingly, stockpiles which will not be consumed within the next twelve months based on mining and processing
forecasts have been classified to non-current assets. The volume of ore extracted from the open pit in the year exceeded the volume that
could be processed, which has caused a large increase in the volume and value of the mining stockpiles.
The carrying value of the non-current asset portion is assessed at the lower of cost or net realisable value. The long-term gold price would
have to reduce to approximately US$1,415 per ounce for the net realisable value to fall below carrying value.
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Non-current
Mining stockpiles
94,773
64,756
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Current
Mining stockpiles, ore in circuit, doré supplies
40,836
60,194
Stores inventory
99,733
74,452
Provision for obsolete stores inventory
(6,504)
(5,925)
134,065
128,721
The calculation of weighted average costs of mining stockpiles is applied at a detailed level of ore grade categories. The open pit ore on
the Mine ROM is split into seven different grade categories and the underground ore is treated as a single high-grade category. Each
grade category is costed individually on a weighted average basis applying costs specifically related to extracting and moving that grade of
ore to and from the Mine ROM pad. The grade categories range from high-grade underground and open pit ore to low-grade open pit ore.
Costs per contained ounce differ between the various cost categories.
Currently at Sukari, low-grade (0.4 to 0.5g/t) open pit stockpile material above the cut-off grade of 0.4g/t has been classified as follows on
the statement of financial position:
• Current assets (ore tonnes scheduled to be processed within the next twelve months): None
• Non-current assets (ore tonnes not scheduled to be processed within the next twelve months): 13.7Mt at 0.45g/t
Inventories include mining stockpiles, gold in circuit, doré supplies and stores and materials. All inventories are stated at the lower of cost
and net realisable value (“NRV”). The cost of mining stockpiles and gold produced is determined principally by the weighted average cost
method using related production costs.
Cost of mining stockpiles include costs incurred up to the point of stockpiling, such as mining and grade control costs, but exclude future
costs of production. Ore extracted is allocated to stockpiles based on estimated grade, with grades below defined cut-off levels treated as
waste and expensed. Material piled on the ROM pad is accounted for in their separate grade categories. While held in physically separate
stockpiles, the Group blends the ore from selected stockpiles when feeding the processing plant to achieve the resultant gold content. In
such circumstances, lower and higher-grade ore stockpiles each represent a raw material, used in conjunction with each other, to deliver
overall gold production, as supported by the relevant feed plan.
The processing of ore in stockpiles occurs in accordance with the LOM processing plan and is constantly being optimised based on
the known Mineral Reserves, current plant capacity and mine design. Ore tonnes contained in the stockpiles which exceed the annual
tonnes to be milled as per the mine plan in the following year, are classified as non-current in the statement of financial position.
Costs of gold inventories include all costs incurred up until production of an ounce of gold such as milling costs, mining costs and directly
attributable mine general and administration costs but exclude transport costs, refining costs and royalties. NRV is determined with
reference to estimated contained gold and market gold prices.
Stores and materials consist of consumable stores and are valued at weighted average cost after appropriate impairment of redundant
and slow-moving items. Consumable stock for which the Group has substantially all the risks and rewards of ownership are brought onto
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Non-current
Other creditors
(1)
11,801
10,386
Current
Trade payables
43,493
36,050
Other creditors and accruals
(1)(2)
55,902
39,709
99,395
75,759
(1)
Included within non-current other creditors and current other creditors and accruals is $7.3m (2021: $9.8m) and $4.9m (2021: $2.4m) respectively in relation to the
remaining instalments of a $17.6m settlement agreement signed with EMRA in 2021. By its nature, elements of the cost recovery mechanism within the Concession
Agreement are subject to interpretation and ongoing audits by EMRA. It is possible that future settlement agreements may be agreed with EMRA in relation to historic
items. The Directors have assessed that it is not probable that any additional settlements with EMRA will be required as at 31 December 2022, and therefore no
additional provisions have been recognised within these financial statements.
Also included within current and non-current other creditors are lease liabilities of US$1.9m and US$4.5m respectively.
(2)
Included within the current other creditors is a US$12m increase in SGM’s stock item accruals as at 31 December 2022 as compared to the prior year mainly driven by
increased material procurement following the underground transition from Barminco to owner operated model in Q1 2022.
Trade payables principally comprise the amounts outstanding for trade purchases and ongoing costs. The average credit period taken for
trade purchases is 29 days (2021: 29 days). Trade payables are interest free for periods ranging from 30 to 180 days. Thereafter interest
is charged at commercial rates.
The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. Other
creditors and accruals relate to various accruals that have been recognised due to amounts known to be outstanding for which the
related invoices have not yet been received.
The Directors consider that the carrying amount of trade payables approximate their fair value.
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid.
The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current
liabilities unless payment is not due within twelve months after the reporting period. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective interest method.
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, bonuses,
pensions, and sick leave when it is probable that settlement will be required, and they are capable of being measured reliably.
Liabilities recognised in respect of employee benefits expected to be settled within twelve months, are measured at their nominal values
using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of employee benefits which are
not expected to be settled within twelve months are measured at the present value of the estimated future cash flows to be made by the
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. HOW NUMBERS ARE CALCULATED
CONTINUED
Superannuation
The Company contributes to, but does not participate in, compulsory superannuation funds (defined contribution schemes) on behalf of
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Current
Employee benefits
(1)
2,276
2,798
Other current provisions
(2)
980
1,819
3,256
4,617
Non-current
Restoration and rehabilitation
(3)
37,396
42,647
Other non-current provisions
29
–
37,425
42,647
Movement in restoration and rehabilitation provision
Balance at beginning of the year
42,647
20,496
(Decrease)/Increase in provision
(5,839)
21,875
Interest expense – unwinding of discount
588
276
Balance at end of the year
37,396
42,647
(1) Employee benefits relate to annual, sick, and long service leave entitlements and bonuses.
(2) Provision for customs, rebates and withholding taxes.
(3)
The provision for restoration and rehabilitation has been discounted by 3.63% (2021: 1.38%) using a US$ applicable rate and inflation applied at 2.37% (2021:
2.5%). The annual review undertaken as at 31 December 2022 has resulted in a US$5.8 million decrease in the provision (2021: US$21.9 million increase). The key
assumptions within the estimate, the various ranges and further details are disclosed in note 1.3.6.
The Group is working towards conformance with the Global Industry Standard for Tailings Management (“GISTM”). Whilst not a member
of ICMM, the Group has committed to a plan for conformance by August 2023, with respect to its two active TSFs (“TSF1” and “TSF2”)
at Sukari by August 2023. In 2022, we continued to review our conformance, and completed a gap analysis of our tailings governance
and management framework, with reference to the ICMM Conformance Protocols for the GISTM.
In 2023, we will develop a road-map that further reinforces our tailings governance and management framework to conform with the
GISTM. While this work is ongoing, it is not currently possible to reliably estimate the value of incremental costs required to achieve
conformance with the new standard and hence no provision has been recorded.
A provision for restoration and rehabilitation is recognised when there is a present legal or constructive obligation as a result of
exploration, development and production activities undertaken, it is probable that an outflow of economic benefits will be required to
settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of
dismantling and removal of facilities, restoration, and monitoring of the affected areas. The provision for future restoration costs is the best
estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date in accordance with the
requirements of the Concession Agreement. Future restoration costs are reviewed annually and any changes in the estimate are reflected
in the present value of the restoration provision at each reporting date.
The provision for restoration and rehabilitation represents the present value of the Directors’ best estimate of the future outflow of
economic benefits that will be required to decommission infrastructure, restore affected areas by ripping and grading of compacted
surfaces to blend with the surroundings, closure of project components to ensure stability and safety at the Group’s sites at the end of the
life of mine. This restoration and rehabilitation estimate has been made based on benchmark assessments of restoration works required
following mine closure and after considering the projected area disturbed to date.
Discount rates to present value the future obligations are determined by reference to risk free rates for periods which approximate the
period of the associated obligation.
The initial estimate of the restoration and rehabilitation provision relating to exploration, development and mining production activities is
capitalised into the cost of the related asset and amortised on the same basis as the related asset, unless the present obligation arises
from the production of the inventory in the period, in which case the amount is included in the cost of production for the period. Changes
in the estimate of the provision of restoration and rehabilitation are treated in the same manner, except that the unwinding of the effect of
31 December 2022
31 December 2021
Number
US$’000
Number
US$’000
Fully paid ordinary shares
Balance at beginning of the year
1,156,450,695
669,531
1,155,955,384
668,807
Own shares acquired during the year
(1)
–
–
–
(1,391)
Employee share option scheme – proceeds from shares issued
–
–
495,311
–
Transfer from share option reserve
–
1,463
–
2,115
Balance at end of the year
1,156,450,695
670,994
1,156,450,695
669,531
(1) The US$nil (2021: US$1.4m) represents the cost of shares in Centamin plc purchased in the market and held by the Centamin plc Employee Benefit Trust to satisfy
share awards under the Group’s share options plans.
The authorised share capital is an unlimited number of no-par value shares.
Pursuant to the plan rules, at 31 December 2022, the trustee of the deferred bonus share plan held 1,187,779 ordinary shares (2021:
2,205,280 ordinary shares).
Fully paid ordinary shares carry one vote per share and carry the right to dividends. See note 6.3 for more details of the share awards.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity
as a deduction, net of tax, from the proceeds.
Where the Company or other members of the consolidated Group purchase the Company’s equity share capital, the consideration paid
is deducted from the total shareholders’ equity of the Group and/or of the Company as treasury shares until they are cancelled. Where
such shares are subsequently sold or reissued, any consideration received is included in shareholders’ equity of the Group and/or
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Share option reserve
Balance at beginning of the year
4,975
3,343
Share-based payments expense
2,570
4,044
Transfer to accumulated profits
–
(297)
Transfer to issued capital
(1,463)
(2,115)
Balance at the end of the year
6,082
4,975
The share option reserve arises on the grant of share options to employees under the employee share option plan. Amounts are
transferred out of the reserve and into issued capital when the options and warrants are exercised/vested. Amounts are transferred out of
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
2. HOW NUMBERS ARE CALCULATED
CONTINUED
For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand and at bank and deposits.
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Cash and cash equivalents
102,373
207,821
Most funds have been invested in international rolling short-term interest money market deposits.
The Company secured an RCF on 22 December 2022 (see note 2.6) and the facility is secured by certain financial covenants on the
Company which are applicable from the date the conditions precedent are met. The covenant specific to the Company’s cash assets
states that:
• Liquidity shall at all times exceed US$50 million
The carrying amounts of financial assets pledged as security for the facility, being the cash is included in 2.16 above.
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily
(b) Reconciliation of profit before tax for the year to cash flows from operating activities
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Profit for the year before tax
171,001
153,647
Adjusted for:
Impairment of exploration and evaluation assets
–
35,208
Depreciation/amortisation of property, plant, and equipment
146,769
139,454
Inventory written off
2
21
Inventory obsolescence provision
579
3,135
Foreign exchange gains, net
(6,559)
(5,158)
Share-based payments expense
2,570
3,747
Finance income
(1,214)
(196)
Loss on disposal of property, plant, and equipment
899
53
Changes in working capital during the year:
Increase in trade and other receivables
(3,049)
(14,155)
Increase in inventories
(35,940)
(13,036)
(Increase)/decrease in prepayments
(7,172)
946
Increase in trade and other payables
25,053
8,823
Decrease in provisions
(773)
(2,616)
Cash flows generated from operating activities
292,166
309,873
(c) Non-cash financing and investing activities
3.1 GROUP FINANCIAL RISK MANAGEMENT
3.1.1 Financial instruments
(a) Group risk management
The Group manages its capital to ensure that entities within the Group will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the cash and equity balance. The Group’s overall strategy remains unchanged from the
previous financial year.
The Group has no debt and thus not geared at the year end or in the prior year. However, on 22 December 2022, the Company entered
into an agreement for a US$150 million revolving credit facility (“RCF”) with four banks. The facility will introduce debt and gearing to
the Company when drawn down. As at 31 December 2022, the facility was not yet available for draw down on as there were conditions
precedent not yet satisfied.
The capital structure currently consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising
issued capital and reserves as disclosed in notes 2.14 and 2.15. The Group operates in Australia, Jersey, Egypt, Burkina Faso, and Côte
d’Ivoire. None of the Group’s entities are subject to externally imposed capital requirements.
The Group utilises inflows of funds toward the ongoing exploration and development of SGM in Egypt and the exploration projects in Côte
d’Ivoire and Egypt.
Categories of financial assets and liabilities
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Financial assets
Non-current
Other receivables – deposits
1,372
101
Current
Cash and cash equivalents
102,373
207,821
Trade and other receivables
35,628
32,579
139,373
240,501
Financial liabilities
Non-current
Other payables
11,801
10,386
Current
Trade and other payables
99,395
75,759
111,196
86,145
(b) Financial risk management and objectives
The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential
risk adverse effects and ensure that net cash flows are sufficient to support the delivery of the Group’s financial targets whilst protecting
future financial security. The Group continually monitors and tests its forecast financial position against these objectives.
The Group’s activities expose it to a variety of financial risks: market, commodity, credit, liquidity, foreign exchange, and interest rate.
These risks are managed under Board approved directives through the Audit and Risk Committee. The Group’s principal financial
instruments comprise interest bearing cash and cash equivalents. Other financial instruments include trade receivables and trade
payables, which arise directly from operations.
It is, and has been throughout the period under review, Group policy that no speculative trading in financial instruments be undertaken.
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with
respect to the Australian dollar, Great British pound, and Egyptian pound. Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities that are denominated in a currency that is not the entity’s functional currency.
The risk is measured by regularly monitoring, forecasting and performing sensitivity analyses on the Group’s financial position.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
Financial instruments denominated in Great British pounds, Australian dollars and Egyptian pounds are as follows:
Great British pound
Australian dollar
Egyptian pound
31 December
2022
US$’000
31 December
2021
US$’000
31 December
2022
US$’000
31 December
2021
US$’000
31 December
2022
US$’000
31 December
2021
US$’000
Financial assets
Cash and cash equivalents
622
1,392
343
16,063
837
2,147
622
1,392
343
16,063
837
2,147
Financial liabilities
Trade and other payables
2,084
1,835
11,751
15,530
37,218
23,727
2,084
1,835
11,751
15,530
37,218
23,727
Net exposure
(1,462)
(443)
(11,408)
533
(36,381)
(21,580)
The following table summarises the sensitivity of financial instruments held at the reporting date to movements in the exchange rate of
the Great British pound, Egyptian pound, and Australian dollar to the US dollar, with all other variables held constant. The sensitivities are
based on reasonably possible changes over a financial year, using the observed range of actual historical rates.
Impact on profit
Impact on equity
31 December
2022
US$’000
31 December
2021
US$’000
31 December
2022
US$’000
31 December
2021
US$’000
US$/GBP increase by 10%
482
634
–
–
US$/GBP decrease by 10%
(590)
(774)
–
–
US$/AUD increase by 10%
98
866
–
–
US$/AUD decrease by 10%
(119)
(1,058)
–
–
US$/EGP increase by 10%
(2,816)
(1,476)
–
–
US$/EGP decrease by 10%
3,443
1,804
–
–
The amounts shown above are the main currencies to which the Group is exposed. The Group also has small deposits in
Euro US$335,586 (2021: US$37,552) and West African Franc US$1,422,704 (2021: US$863,807), and net payables in Euro
US$5,277,783 (2021: US$2,384,886) and in West African Franc US$3,064,019 (2021: US$1,105,789). A movement of 10% up or
down in these currencies would have a negligible effect on the assets/liabilities.
The Group has not entered into forward foreign exchange contracts. Natural hedges are utilised wherever possible to offset
foreign currency liabilities. The Company maintains a policy of not hedging its currency positions and maintains currency holdings in line
(d) Commodity price risk
The Group’s future revenue forecasts are exposed to commodity price fluctuations, in particular gold that it produces and sells into the
global markets and fuel prices. The market prices of gold is the key driver of the Group’s capacity to generate cash flow. The Group has
not entered into any forward gold or fuel hedging contracts.
Gold price
The table below summarises the impact of increases/decreases of the average realised gold price on the Group’s profit after tax for
the year. The analysis assumes that the average realised gold price per ounce had increased/decreased by 10% with other variables
held constant.
Impact on average realised gold price
31 December 2022
US$/Oz
31 December 2021
US$/Oz
Average realised gold price
1,794
1,797
Average realised gold price with impact of increase by 10% US$/oz
1,973
1,977
Average realised gold price with impact of decrease by 10% US$/oz
1,615
1,618
Impact on after tax profit
31 December 2022
US$’000
31 December 2021
US$’000
After tax profit
170,775
153,667
After tax profit with impact of increase by 10% US$/oz
247,106
223,346
After tax profit with impact of decrease by 10% US$/oz
94,444
81,349
Fuel price
Any variation in the fuel price has an impact on the mine production costs. The analysis assumes that the average fuel price had
increased/decreased by a few US cents per litre with all other variables held constant.
Impact on fuel price
31 December 2022
US$/litre
31 December 2021
US$/litre
Fuel price
0.88
0.52
Fuel price with impact of increase by 10% US$/litre
0.99
0.57
Fuel price with impact of decrease by 10% US$/litre
0.81
0.47
Impact on mine production costs
31 December 2022
US$’000
31 December 2021
US$’000
Mine production costs
(408,543)
(368,327)
Mine production costs with impact of increase by 10% US$/litre
16,943
9,714
Mine production costs with impact of decrease by 10% US$/litre
(16,943)
(9,714)
The Group’s main interest rate risk arises from cash and short-term deposits and is not considered to be a material risk due to the short-
term nature of these financial instruments. Cash deposits are placed on a term period of no more than 30 days at a time.
The financial instruments exposed to interest rate risk and the Group’s exposure to interest rate risk as at the balance sheet date were as
per the table below. The table analyses the Group’s financial liabilities into relevant maturity groupings based on their expected settlement
profiles for all non-derivative financial liabilities. The amounts disclosed in the table are the undiscounted expected cash flows. A separate
line for lease liabilities has been presented in the maturity analysis of the Group’s financial liabilities in the table below.
The Group’s liquidity position is managed to ensure that sufficient funds are available to meet its financial commitments in a timely and
cost-effective manner.
Ultimate responsibility for liquidity risk management rests with the Board, which has established an appropriate management framework
for the management of the Group’s funding requirements. The Group manages liquidity risk by maintaining adequate cash reserves and
management monitors rolling forecasts of the Group’s liquidity based on expected cash flow. The tables in section (a) to (c) of this note
above reflect a balanced view of cash inflows and outflows and show the implied risk based on those values. Trade payables and other
financial liabilities originate from the financing of assets used in the Group’s ongoing operations. These assets are considered in the
Group’s overall liquidity risk. Management continually reviews the Group’s liquidity position including cash flow forecasts to determine the
forecast liquidity position and maintain appropriate liquidity levels.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
Weighted
average
effective
interest rate
%
Less than one
month
US$’000
One to twelve
months
US$’000
One to two
years
US$’000
Two to five
years
US$’000
Total
US$’000
31 December 2022
Financial assets
Variable interest rate instruments
1.04%
21,394
54,998
–
–
76,392
Non-interest bearing
–
61,610
–
–
–
61,610
83,004
54,998
–
–
138,002
Financial liabilities
Non-interest bearing
0%
97,716
2,500
2,500
5,000
107,716
Lease liabilities
234
1,929
1,750
3,136
7,049
97,950
4,429
4,250
8,136
114,765
31 December 2021
Financial assets
Variable interest rate instruments
0.13%
60,278
125,058
–
–
185,336
Non-interest bearing
0%
55,064
–
–
–
55,064
115,342
125,058
–
–
240,400
Financial liabilities
Non-interest bearing
0%
73,514
2,851
1,829
6,828
85,022
Lease liabilities
21
260
632
463
1,376
73,535
3,111
2,461
7,291
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral or other security where
appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures credit risk on a fair value basis. The
Group’s credit risk is concentrated on one entity, the refiner Asahi Refining Canada Ltd, but the Group has a good credit check on its
customer and none of the trade receivables from the customer has been past due. Also, the cash balances held in all currencies are held
with financial institutions with a high credit rating.
The gross carrying amount of financial assets recorded in the financial statements represents the Group’s maximum exposure to credit
(g) Fair value
The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective fair values,
principally as a consequence of the short-term maturity thereof.
(h) Mineral reserve and resource statement impact on ore reserves
The following disclosure provides information to help users of the financial statements understand the judgements made about the future
and other sources of estimation uncertainty. The key sources of estimation uncertainty described in note 1.3.4 above and the range of
possible outcomes are described more fully below.
Depreciation of capitalised underground mine development costs
Depreciation of capitalised underground mine development costs at SGM is based on reserve estimates. Management and Directors
believe that these estimates are both realistic and conservative, based on current information. The sensitivity analysis assumes that the
reserve estimate has increased/decreased by 25% with all other variables held constant.
Decrease by 25%
US$’000
31 December 2022
US$’000
Increase by 25%
US$’000
Amortisation of rehabilitation asset (within mine development properties)
(3,978)
(2,984)
(2,238)
Amortisation of mine development properties (remainder)
(83,766)
(62,824)
(47,118)
Mine development properties – net book value
549,761
571,697
588,149
Property, plant, and equipment – net book value*
1,070,553
1,092,489
1,108,941
* Reflects the impact on the overall property, plant and equipment carrying amount at the reporting date from the movements in mine development amortisation above.
Decrease by 25%
US$’000
31 December 2021
US$’000
Increase by 25%
US$’000
Amortisation of rehabilitation asset (within mine development properties)
(1,915)
(1,436)
(1,077)
Amortisation of mine development properties (remainder)
(78,850)
(59,138)
(44,353)
Mine development properties – net book value
417,945
438,136
453,280
Property, plant, and equipment – net book value*
937,951
958,142
973,286
* Reflects the impact on the overall property, plant and equipment carrying amount at the reporting date from the movements in mine development amortisation above.
The sensitivity analysis presented above includes the impact on the amortisation amounts of the capitalised deferred stripping asset.
The deferred stripping asset and the rehabilitation asset are included within the Mine Development Properties category in the Group’s
property, plant and equipment.
(i) Loan covenants
On 22 December 2022, the Company entered into an agreement for a US$150 million RCF with four banks: Bank of Montreal (London
Branch), HSBC Bank plc, ING Bank N.V. (Amsterdam Branch) and Nedbank Limited (London Branch) (see note 2.6).
As at 31 December 2022, there were no drawdowns on the facility. The terms of the facility impose certain financial covenants on the
Company in respect of each Relevant Period that has an outstanding borrowing, refer to note 2.6 for further information on the covenant
requirements.
However, as at 31 December 2022, the Company’s compliance requirements and obligations in respect of the financial covenants and
financial conditions had not yet started as there were certain conditions precedent that were still to be satisfied to make the agreement
effective. The conditions precedent were met on 13 March 2023 and the facility is available for draw down from this date.
3.2.1 Risk management
The Group’s objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for
other stakeholders; and
• maintain an optimal capital structure to reduce the cost of capital.
To maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to owners of the parent, return capital to
owners of the parent or issue new shares.
3.2.2 Dividends to owners of the parent
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Ordinary shares
Final dividend for the year ended 31 December 2021 of 5.0 US cents per share (2021: Q1 interim dividend for the year
ended 31 December 2021 of 3.0 US cents per share)
57,740
34,461
Q2 Interim dividend for the year ended 31 December 2022 of 2.5 US cents per share (2021: Q2 Interim dividend for the
year ended 31 December 2021 of 4.0 US cents per share)
28,464
46,056
Total dividends provided for or paid
86,204
80,517
Dividends to owners of the parent:
Paid in cash
86,204
|
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
4.1 SUBSIDIARIES AND CONTROLLED ENTITIES
The parent entity of the Group is Centamin plc, incorporated in Jersey, and details of its subsidiaries and controlled entities are as follows:
Nature of
activity
Country of
incorporation
Ownership interest
31 December 2022
%
31 December 2021
%
Centamin Egypt Limited
Holding company
Australia
(2)
100
100
Pharaoh Gold Mines NL (holder of an Egyptian branch)
Holding company
Australia
(2)
100
100
Sukari Gold Mining Company
(10)
Mining company
Egypt
(5)
50
50
Centamin Group Services UK Limited
Services company
UK
(3)
100
100
Centamin West Africa Holdings Limited
Holding company
UK
(4)
100
100
Sheba Exploration Limited (liquidated) (holder of an Ethiopia branch)
Holding company
UK
(4)
–
100
Sheba Exploration Holdings Limited (liquidated)
(1)
Exploration company
UK
(4)
–
100
Centamin Group Services Limited
Services company
Jersey
(9)
100
100
Centamin Holdings Limited
Holding company
Jersey
(9)
100
100
MHA Limited
Holding company
Jersey
(9)
100
100
Centamin Limited (liquidated)
Holding company
Bermuda
(8)
–
100
Ampella Mining Limited
Holding company
Australia
(2)
100
100
Ampella Mining Gold SARL
Exploration company
Burkina Faso
(6)
100
100
Ampella Mining SARL
Exploration company
Burkina Faso
(6)
100
100
Ampella Resources Burkina Faso
Exploration company
Burkina Faso
(6)
100
100
Konkera SA
Mining company
Burkina Faso
(6)
100
100
Ampella Mining Côte d’Ivoire
Exploration company
Côte d’Ivoire
(7)
100
100
Centamin Côte d’Ivoire
Exploration company
Côte d’Ivoire
(7)
100
100
Ampella Mining Exploration CDI
Exploration company
Côte d’Ivoire
(7)
100
100
Centamin Exploration CI
Exploration company
Côte d’Ivoire
(7)
100
100
Centamin Egypt Investments 1 (UK) Limited
Holding company
UK
(11)
100
100
Centamin Egypt Investments 2 (UK) Limited
Holding company
UK
(11)
100
100
Centamin Egypt Investments 3 (UK) Limited
Holding company
UK
(11)
100
100
Centamin Mining Services Egypt LLC
Services company
Egypt
(12)
100
100
Centamin Central Mining SAE
Exploration
Egypt
(12)
100
100
Centamin North Mining SAE
Exploration
Egypt
(12)
100
100
Centamin South Mining SAE
Exploration
Egypt
(12)
100
100
(1) Previously Sheba Exploration (UK) plc.
(2)
Address of all Australian entities: Suite 8, 7 The Esplanade, Mount Pleasant, WA 6153.
(3)
Address of Centamin Group Services UK Limited, Second Floor, 9-10 Savile Row, London, W1S 3PF.
(4)
Address of all other UK entities: Hill House, 1 Little New Street, London, EC4A 3TR.
(5)
Address of all Egypt entities (except the new exploration entities in (11) and (12): 361 El-Horreya Road, Sedi Gaber, Alexandria, Egypt.
(6)
Address of all Burkina Faso entities: Ampella Resources Burkina Faso: 11 BP 1974 Ouaga 11. Ampella Mining SARL: 01 BP 1621 Ouaga 01. Ampella Mining Gold
SARL: 11 BP 1974 CMS 11 Ouaga 11. Konkera SA: 11 BP 1974 Ouaga CM11.
(7)
Address of all Côte d’Ivoire entities: 20 BP 945 Abidjan 20.
(8)
Address of Bermuda entity: Appleby Corporate Services (Bermuda) Ltd, Canon’s Court, 22 Victoria Street, Hamilton HM EX, Bermuda.
(9)
Address of all Jersey entities: 2 Mulcaster Street, St Helier, Jersey JE2 3NJ.
(10)
Sukari Gold Mining Company is fully consolidated within the Group under IFRS 10
‘Consolidated financial statements’
as if it were a subsidiary due to it being a
controlled entity, reflecting the substance and economic reality of the Concession Agreement (“CA”) (see note 1.3.1, note 4.1 and note 4.2).
(11) Address of all the UK holding companies of the new Egypt exploration companies; Hill House, 1 Little New Street, London, EC4A 3TR.
(12) Address of the new Egypt exploration companies: c/o Arabella Plaza, Building 2 First Floor, Office no. 1 to 3, Gamal Abdelansser Street, New Cairo.
Through its wholly owned subsidiary, PGM, the Company entered into the Concession Agreement (“CA”) with EMRA and the ARE
granting PGM and EMRA the right to explore, develop, mine and sell gold and associated minerals in specific concession areas located in
the Eastern Desert of Egypt. The CA came into effect under Egyptian law on 13 June 1995.
In 2005 PGM, together with EMRA, were granted an exploitation lease over 160 km
2
surrounding the Sukari Gold Mine site.
The exploitation lease was signed by PGM, EMRA and the Egyptian Minister of Petroleum and gives tenure for a period of 30 years,
commencing 24 May 2005 and extendable by PGM for an additional 30 years upon PGM providing reasonable commercial justification.
In 2006 SGM was incorporated under the laws of Egypt. SGM was formed to conduct exploration, development, exploitation, and
marketing operations in accordance with the CA. Responsibility for the day-to-day management of the project rests with the general
manager, who is appointed by PGM.
The fiscal terms of the CA require that PGM solely funds SGM. PGM is however entitled to recover from sales revenue recoverable costs,
as defined in the CA. EMRA is entitled to a share of SGM’s net production surplus or profit share (defined as revenue less payment of
the fixed royalty to ARE and recoverable costs). As at 31 December 2015, PGM had not recovered its cost and, accordingly, no EMRA
entitlement had been recognised at that date. During 2016, payments to EMRA commenced as advance profit share distributions. Any
The consolidated entity has interests in the following joint arrangements:
Name of joint operation
Percentage interest
31 December 2022
%
31 December 2021
%
Sukari Gold Mining Company
(1)
50
50
Egyptian Pharaoh Investments
(2)
50
50
(1)
Sukari Gold Mining Company is fully consolidated within the Group under IFRS 10
‘Consolidated financial statements’
as if it were a subsidiary due to it being a
controlled entity, reflecting the substance and economic reality of the Concession Agreement (“CA”) (see note 1.3.1, note 4.1 and note 4.2).
(2) Dormant company.
The Group has a US$1 (cash) interest in the Egyptian Pharaoh Investments joint operation. The amount is included in the consolidated
financial statements of the Group. There are no capital commitments arising from the Group’s interests in this joint operation.
The Group applies IFRS 11 ‘
Joint arrangements
’. Under IFRS 11, investments in joint arrangements are classified as either joint
operations or joint ventures depending on the contractual rights and obligations of each investor. Joint ventures are accounted for using
the equity method. In relation to its interests in joint operations, the Group recognises its share of assets and liabilities; revenue from the
sale of its share of the output; and its share of expenses.
SGM is wholly consolidated within the Centamin Group of companies, reflecting the substance and economic reality of the CA
5. UNRECOGNISED ITEMS
Concession Agreement court case
On 30 October 2012, the Administrative Court in Egypt handed down a judgment in relation to a claim brought by, amongst others, an
independent member of a previous parliament, in which he argued for the nullification of the agreement that confers on the Group rights
to operate in Egypt. This agreement, the Concession Agreement, was entered into between the ARE, EMRA and Centamin’s wholly owned
subsidiary, Pharaoh Gold Mines NL, and was approved by the People’s Assembly as Law 222 of 1994.
In summary, that judgment states that, although the Concession Agreement itself remains valid and in force, insufficient evidence had
been submitted to court to demonstrate that the 160km² exploitation lease between PGM and EMRA had received approval from the
relevant minister as required by the terms of the Concession Agreement. Accordingly, the Court found that the exploitation lease in
respect of the area of 160km² was not valid although it stated that there was in existence such a lease in respect of an area of 3km².
Centamin, however, is in possession of the executed original lease documentation which clearly shows that the 160km² exploitation lease
was approved by the Minister of Petroleum and Mineral Resources. It appears that an executed original document was not supplied to
the Court in the first instance.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
Upon notification of the judgment the Group took immediate steps to protect its ability to continue to operate the mine at Sukari. These
included lodging a formal appeal before the Supreme Administrative Court on 26 November 2012. In addition, in conjunction with the
formal appeal, the Group applied to the Supreme Administrative Court to suspend the initial decision until such time as the Court was
able to consider and rule on the merits of the appeal. On 20 March 2013, the Court upheld this application thus suspending the initial
decision and providing assurance that normal operations would be able to continue whilst the appeal process was underway.
EMRA lodged its own appeal in relation to this matter on 27 November 2012, the day after the Company’s appeal was lodged, supporting
the Group’s view in this matter. Furthermore, in late December 2012, the Minister of Petroleum lodged a supporting appeal and shortly
thereafter publicly indicated that, in his view, the terms of the Concession Agreement were fair, and that the exploitation lease was valid.
The Minister of Petroleum also expressed support for the investment and expertise that Centamin brings to the country.
The Group believes this demonstrates the government’s commitment to their investment at Sukari and the government’s desire to
stimulate further investment in the Egyptian mining industry.
In 2016 the Supreme Administrative Court stayed the Concession Agreement appeal until the Supreme Constitutional Court has ruled
on the validity of Law no. 32 of 2014. Law no. 32 of 2014 restricts the right of third parties to challenge contractual agreements between
the Egyptian government and an investor and has partial retrospective effect, applying to any cases then before the Courts but in which
no final judgment had been given. Law 32 should, therefore, render the third party challenge to the Concession Agreement inadmissible
(as no final judgment has yet been given in that case), although the validity of Law 32 was challenged and has been under review by
the Supreme Constitutional Court. The Court finally issued judgment in the case on 14 January 2023, dismissing the various challenges
and upholding the constitutionality of Law 32. The Group’s Egyptian lawyers have now filed an application to the Supreme Administrative
Court to resume proceedings in the original appeal (this is a purely procedural step) and they will then make a further application to the
Supreme Administrative Court, on behalf of PGM, asking the Court to confirm that the original complainant had no capacity to bring the
claim in the first place, as he was not a party to the Concession Agreement. They will ask the Court to reject the case in its entirety and
treat it as never having been filed. If that occurs, the earlier judgment at first instance would be cancelled and the appeal proceedings
would be terminated.
The Group’s Egyptian lawyers have confirmed that continuing operations at Sukari will be unaffected by the judgment in the Law 32 case,
as they are protected by the suspension of enforcement of the first instance judgment, which was granted pending the hearing of the
appeal, and which will remain effective until final judgment is handed down by the Supreme Administrative Court or the original case is
dismissed and the first instance judgment cancelled.
Contingent assets
The dividends paid in 2022 were US$86 million and are reflected in the consolidated statement of changes in equity for the year (2021:
US$81 million).
A final dividend in respect of the year ended 31 December 2022 of 2.5 US cents per share, totalling approximately US$29 million has
been proposed by the Board of Directors and is subject to shareholder approval at the annual general meeting on 23 May 2023. These
financial statements do not reflect the dividend payable.
As announced on 9 January 2017, the update to the Company’s dividend policy sets a minimum payout level relative to cash flow while
considering the financial condition of, and outlook for, the Company. When determining the amount to be paid, the Board will take into
consideration the underlying profitability of the Company and significant known or expected funding commitments. Specifically, the
Board will aim to approve an annual dividend of at least 30% of the Company’s net cash flow after sustaining capital costs and following
As referred to in note 5.2, subsequent to the year end, the Board proposed a final dividend for 2022 of 2.5 US cents per share. Subject
to shareholder approval at the Annual General Meeting on 23 May 2023, the final dividend will be paid on 23 June 2023 to shareholders
on record date of 02 June 2023.
Also refer to note 5.1 above for more information on the Law 32 judgement that was handed down in January 2023.
The Company’s compliance requirements and obligations in respect of the US$150 million revolving credit facility (“RCF”) had not yet
commenced as at 31 December 2022 as there were certain conditions precedent that were still to be satisfied to make the agreement
effective. The conditions precedent were met on 13 March 2023 subsequent to year end and before the annual financial statements
were signed and the facility is available for draw down from this date the conditions precedent were met.
Other than as noted above, there were no other significant events occurring after the reporting date requiring disclosure in the financial
6. OTHER INFORMATION
(a) Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 4.1.
Equity interest in associates and jointly controlled arrangements
Details of interests in joint ventures are disclosed in note 4.2.
Key management personnel are persons having authority and responsibility for planning, directing, and controlling the activities of the
Group, directly or indirectly, including any Director (executive or otherwise) of the Group.
The aggregate compensation made to key management personnel of the consolidated entity is set out below:
For the year ended
31 December 2022
US$
For the year ended
31 December 2021
US$
Short-term employee benefits
10,261,960
7,370,964
Post-employment benefits
1,320
7,852
Share-based payments
1,949,569
1,500,304
12,212,849
8,879,120
(c) Key management personnel equity holdings
The details of the movement in key management personnel equity holdings of fully paid ordinary shares in Centamin plc during the
financial year ended 31 December 2022 are as follows:
For the year ended
31 December 2022
Balance at
1 January 2022
Granted as
remuneration
(“DBSP”)
Granted as
remuneration
(“PSP”)
Net other
change – share
plan lapse
(1)
Net other
change
(2)
Balance at
31 December
2022
(3)
M Horgan
1,281,405
–
979,000
–
65,788
2,326,193
R Jerrard
2,077,000
–
821,000
(617,000)
67,000
2,348,000
J Rutherford
250,000
–
–
–
–
250,000
S Eyre
15,000
–
–
–
–
15,000
M Bankes
289,000
–
–
–
30,000
319,000
M Cloete
15,000
–
–
–
–
15,000
C Farrow
30,000
–
–
–
–
30,000
I Fawzy
140,000
–
–
–
–
140,000
H Faul
–
–
–
–
–
–
Gustav Du Toit
950,000
–
492,000
–
–
1,442,000
A Hassouna
236,931
–
492,000
(31,000)
–
697,931
C Barker
300,000
–
471,000
–
–
771,000
M Stoner
–
–
314,000
–
–
314,000
H Bills
500,000
–
480,000
–
–
980,000
P Cannon
250,000
–
377,000
–
–
627,000
C Murray
474,000
–
461,000
–
(24,000)
911,000
A Carse
648,688
–
377,000
(169,000)
–
856,688
D Le Masurier
517,300
–
287,000
(127,000)
–
677,300
R Nel
401,973
–
332,000
(110,000)
(16,667)
607,306
(1) ‘Net other change – share plan lapse’ relates to awards that have lapsed due to the full performance conditions not being met on the 2019 grant.
(2) ‘Net other change’ relates to the on-market acquisition or disposal of fully paid ordinary shares.
(3) Balance includes unvested grants under the Company’s performance share plan.
Since 31 December 2022 to the date of this report there have been no transactions notified by the Company in accordance with the
requirements of Article 19 of the UK Market Abuse Regulation (Regulation (EU) 596/2014.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
The details of the movement in key management personnel equity holdings of fully paid ordinary shares in Centamin plc during the
financial year ended 31 December 2021 are as follows:
For the year ended
31 December 2021
Balance at
1 January 2021
Granted as
remuneration
(“DBSP”)
Granted as
remuneration
(“PSP”)
Net other
change – share
plan lapse
(1)
Net other
change
Balance at
31 December
2021
(2)
M Horgan
606,405
–
650,000
–
25,000
1,281,405
R Jerrard
1,882,000
–
570,000
(408,000)
33,000
2,077,000
J Rutherford
200,000
–
–
–
50,000
250,000
S Eyre
–
–
–
–
15,000
15,000
M Bankes
190,000
–
–
–
99,000
289,000
M Cloete
15,000
–
–
–
–
15,000
C Farrow
–
–
–
–
30,000
30,000
I Fawzy
–
–
–
–
140,000
140,000
H Faul
–
–
–
–
–
–
Y El-Raghy
691,662
–
160,000
(104,000)
–
747,662
Gustav Du Toit
–
510,000
440,000
–
–
950,000
H Bills
200,000
–
300,000
–
–
500,000
P Cannon
–
–
250,000
–
–
250,000
J Singleton
746,000
–
250,000
–
–
996,000
C Murray
200,000
–
250,000
–
24,000
474,000
A Carse
541,592
–
250,000
(168,000)
25,096
648,688
D Le Masurier
437,300
–
200,000
(120,000)
–
517,300
R Nel
330,000
–
200,000
(96,000)
(32,027)
401,973
(1) ‘Net other change’ relates to the on-market acquisition or disposal of fully paid ordinary shares.
(2) Balance includes unvested grants under the Company’s performance share plan.
(d) Key management personnel share option holdings
There were no options held, granted, or exercised during the year by Directors or senior management in respect of ordinary shares in
Centamin plc.
(e) Other transactions with key management personnel
The related party transactions for the year ended 31 December 2022 are summarised below:
• salaries, superannuation contributions, bonuses, LTIs, consulting and Directors’ fees paid to Directors during the year ended
31 December 2022 amounted to US$3,918,404 (31 December 2021: US$3,694,236).
(f) Transactions with the government of Egypt
Royalty costs attributable to the government of Egypt of US$23,842,287 (2021: US$21,671,928) were incurred in 2022. Profit share to
EMRA of US$ 35,492,459 (2021: US$75,200,000) was incurred in 2022.
(g) Transactions with other related parties
Other related parties include the parent entity, subsidiaries, and other related parties.
During the financial year, the Company recognised tax payable in respect of the tax liabilities of its wholly owned subsidiaries.
Payments to/from the Company are made in accordance with terms of the tax funding arrangement.
During the financial year the Company provided funds to and received funding from subsidiaries.
All amounts advanced to related parties are unsecured. No expense has been recognised in the year for bad or doubtful debts in respect
of amounts owed by related parties.
Transactions and balances between the Company and its subsidiaries were eliminated in the preparation of the consolidated financial
6.2 CONTRIBUTIONS TO EGYPT
(a) Gold sales agreement
On 20 December 2016, SGM entered a contract with the Central Bank of Egypt (“CBE”). The agreement provides that the parties may
elect, on a monthly basis, for the CBE to supply SGM with its local Egyptian currency requirements for that month to a maximum value
of EGP80 million (2021: EGP80 million). In return, SGM facilitates the purchase of refined gold bullion for the CBE from SGM’s refiner,
Asahi Refining Canada Ltd. This transaction has been entered into as SGM requires local currency for its operations in Egypt (it receives
its revenue for gold sales in US dollars). Forty-five transactions have been entered into at the date of this report, eleven of which in the
current year, pursuant to this agreement, and the values related thereto are as follows:
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Gold purchased
50,497
56,147
Refining costs
28
31
Freight costs
56
55
50,581
56,233
For the year ended
31 December 2022
Oz
For the year ended
31 December 2021
Oz
Gold purchased
27,907
31,219
At 31 December 2022 the amount receivable from CBE is approximately US$23,681 (2021: US$24,761 net payable).
(b) University grant
During 2018, the Group together with Sami El-Raghy and the University of Alexandria Faculty of Science initiated a sponsored
scholarship agreement, the Michael Kriewaldt Scholarships, to outstanding geology major students to enrol at the postgraduate
research programme of the geology department of the University for their MSc and/or PhD in mining and mineral resources. An
amount of EGP10,000,000 was deposited with an Egyptian bank as a nucleus of the scholarship fund in a fixed deposit account, with
contributions of EGP7,330,000 from PGM and EGP2,670,000 from Sami El-Raghy. The interest earned on the account will be put
towards the cost of the scholarships and will be administered by the University on the conditions set out in the agreement. This amount
has been accounted for under donations expense in profit and loss in 2021 and in 2022 the interest earned has also been accounted
for under donations expense.
Performance share plan
The Company’s shareholder approved Performance Share Plan (“PSP”) allows the Company the right to grant awards (as defined below)
to employees of the Group. Awards may take the form of either conditional share awards, where shares are transferred conditionally upon
the satisfaction of performance conditions; or share options, which may take the form of nil cost options or have a nominal exercise price,
the exercise of which is again subject to satisfaction of applicable performance conditions.
The awards granted in May 2022 will vest following the passing of three years. Vesting will be subject to the satisfaction of the
performance conditions (and for Executive Directors a full two-year post-vesting holding period). Awards will vest based upon a blend of
three-year relative TSR, cash flow and production targets, full details of which are set out in the Directors’ Remuneration Report. These
measures are assessed by reference to current market practice and the Remuneration Committee will have regard to current market
practice when establishing the precise performance conditions for awards.
To date, the Company has granted the following conditional awards to employees of the Group:
June 2018 awards
Of the 4,908,000 awards granted on 27 June 2018 under the PSP, 495,311 awards vested to eligible participants (27 in total).
June 2019 awards
Due to the performance conditions not being met, all remaining awards eligible to participants lapsed in 2021.
June 2020 awards
Of the 2,582,500 awards granted on 5 June 2020 under the PSP, 1,370,625 awards remain granted to eligible participants (nine in total)
applying the following performance criteria:
• 50% of the award shall be assessed by reference to a target total shareholder return;
• 25% of the award shall be assessed by reference to compound growth in adjusted free cash flow; and
• 25% of the award shall be assessed by reference to compound growth in gold production.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
April 2021 awards
Of the 5,945,000 awards granted on 30 April 2021 under the PSP, 5,375,000 awards remain granted to eligible participants (28 in total)
applying the following performance criteria:
• 50% of the award shall be assessed by reference to a target total shareholder return;
• 25% of the award shall be assessed by reference to compound growth in adjusted free cash flow; and
• 25% of the award shall be assessed by reference to compound growth in gold production.
May 2022 awards
Of the 9,042,000 contingent share awards granted on 20 May 2022 under the Incentive Share Plan (“ISP”), 9,042,000 awards remain
granted to eligible participants (34 in total) applying the following performance criteria:
• 50% of the award shall be assessed by reference to a target total shareholder return;
• 25% of the award shall be assessed by reference to compound growth in adjusted free cash flow; and
• 25% of the award shall be assessed by reference to compound growth in gold production.
Conditional share awards and options together constitute ‘awards’ under the plan and those in receipt of awards are ‘award holders’.
A detailed summary of the scheme rules is set out in the 2022 AGM proxy materials which are available at www.centamin.com. In brief,
awards will vest following the passing of three years from the date of the award and vesting will be subject to satisfaction of performance
conditions. The above measures are assessed by reference to current market practice and the Remuneration Committee will have regard
to market practice when establishing the precise performance conditions for future awards.
Where the performance conditions have been met, in the case of conditional awards awarded to certain participants, 50% of the total
shares under the award will be issued or transferred to the award holders on or as soon as possible following the specified vesting date,
with the remaining 50% being issued or transferred on the second anniversary of the vesting date.
Performance share plan awards granted during the year:
Grant date
ISP 2022
20 May 2022
Number of instruments
1,524,223
TSR: fair value at grant date GBP
(1)(2)
0.34
TSR: fair value at grant date US$
(1)(2)
0.43
Adjusted free cash flow and gold production: fair value at grant date GBP
(1)(2)
0.73
Adjusted free cash flow and gold production: fair value at grant date US$
(1)(2)
0.92
Vesting period (years)
3
Holding period applicable to the award (years)
(2)
2
Expected volatility (%)
51.0%
Expected dividend yield (%)
0%
Number of instruments
7,517,777
TSR: fair value at grant date GBP
(1)
0.39
TSR: fair value at grant date US$
(1)
0.50
Adjusted free cash flow and gold production: fair value at grant date GBP
(1)
0.83
Adjusted free cash flow and gold production: fair value at grant date US$
(1)
1.06
Vesting period (years)
3
Holding period applicable to the award (years)
0
Expected volatility (%)
51.0%
Expected dividend yield (%)
0%
(1)
The vesting of 50% of the awards granted under this plan are dependent on a TSR performance condition. As relative TSR is defined as a market condition under
IFRS 2
‘Share-based payments’
, this requires that the valuation model used considers the anticipated performance outcome. We have therefore applied a Monte-Carlo
simulation model. The simulation model considers the probability of performance based on the expected volatility of Centamin and the peer group companies and the
expected correlation of returns between the companies in the comparator group. The remaining 50% of the awards are subject to adjusted free cash flow and gold
production performance conditions. As these are classified as non-market conditions under IFRS 2 they do not need to be considered when determining the fair value.
These grants have been valued using a Black-Scholes model. The fair value calculated was then converted at the closing GBP:US$ foreign exchange rate on that day.
(2) A discount for lack of marketability has been applied to account for the decrease in value of the award by reason of the two-year holding period restriction.
Restricted share awards (“RSA”)
Under the Company’s Incentive Share Plan (“ISP”), the Company has restricted share awards, which are a long-term share incentive
arrangement for senior management (but not Executive Directors) and other employees (participants).
The RSA awards shall be subject to the terms and conditions of the ISP and shall ordinarily vest in three equal tranches on the
anniversary of the grant date, conditional upon the continued employment with the Group.
RSA awards granted during the year:
Grant date
RSA 2022
20 May 2022
Number of instruments
2,010,000
Fair value at grant date Tranche 1 £
(1)
0.80
Fair value at grant date Tranche 1 US$
(1)
1.01
Fair value at grant date Tranche 2 £
(1)
0.75
Fair value at grant date Tranche 2 US$
(1)
0.95
Fair value at grant date Tranche 3 £
(1)
0.71
Fair value at grant date Tranche 3 US$
(1)
0.90
Vesting period Tranche 1 (years)
(2)
1
Vesting period Tranche 2 (years)
(2)
2
Vesting period Tranche 3 (years)
(2)
3
Expected dividend yield Tranche 1 (%)
4.4%
Expected dividend yield Tranche 2 (%)
5.1%
Expected dividend yield Tranche 3 (%)
5.2%
(1)
The fair value of the shares awarded under the RSA were calculated by using the closing share price on grant date, converted at the closing GBP:US$ foreign exchange
rate on that day. No other factors were considered in determining the fair value of the shares awarded under the RSA.
(2) Variable vesting dependent on one to three years of continuous employment.
Equity settled share-based payments with employees and others providing similar services are measured at the fair value of the equity
instrument at grant date. Fair value is measured using the Black-Scholes model. Where share-based payments are subject to market
conditions, fair value was measured using a Monte-Carlo simulation. A discount for lack of marketability has been applied to account for
the decrease in value of the award by reason of the two-year holding period restriction. The fair value determined at the grant date of the
equity settled share-based payments is expensed over the vesting period, based on the consolidated entity’s estimate of shares that will
eventually vest.
Share-based payments
Equity settled share-based transactions with other parties are measured at the fair value of the goods or services received, except where
the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured
at the date the entity obtains the goods or the counterparty renders the service. The fair value of the employee services received in
exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair
value of the options granted:
• including any market performance conditions (for example, an entity’s share price);
• excluding the impact of any service and non-market performance vesting conditions (for example, profitability and remaining an
employee of the entity over a specified period); and
• including the impact of any non-vesting conditions (for example, the requirement for employees to save or holding shares for a
specific period).
When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share premium. The expected life used in the model has been adjusted, based
on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. Further
details on how the fair value of equity settled share-based transactions has been determined can be found above. At each reporting
date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original
estimates, if any, is recognised in profit or loss over the remaining vesting period, with corresponding adjustment to the equity settled
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
For the year ended
31 December 2022
US cents per share
For the year ended
31 December 2021
US cents per share
Basic earnings per share
6.287
8.811
Diluted earnings per share
6.203
8.738
Basic earnings per share attributable to owners of the parent
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Earnings used in the calculation of basic EPS
72,490
101,527
For the year ended
31 December 2022
Number of shares
For the year ended
31 December 2021
Number of Shares
Weighted average number of ordinary shares for the purpose of basic EPS
1,152,960,534
1,152,246,924
Diluted earnings per share attributed to owners of the parent
The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Earnings used in the calculation of diluted EPS
72,490
101,527
For the year ended
31 December 2022
Number of shares
For the year ended
31 December 2021
Number of shares
Weighted average number of ordinary shares for the purpose of basic EPS
1,152,960,534
1,152,246,924
Shares deemed to be issued for no consideration in respect of employee options
15,597,563
9,717,092
Weighted average number of ordinary shares used in the calculation of diluted EPS
1,168,558,097
1,161,964,016
No potential ordinary shares were excluded from the calculation of weighted average number of ordinary shares for the purpose of diluted
The analysis of the auditors’ remuneration is as follows:
For the year ended
31 December 2022
US$’000
For the year ended
31 December 2021
US$’000
Fees payable to the Company’s auditors and their associates for the audit of the Company’s annual
financial statements
Audit fee for the current year audit
(1)
630
586
Fees payable to the Company’s auditors and their associates for other services to the Group
Audit fee of the Company’s subsidiaries
126
132
Total audit fees
756
718
Non-audit fees:
Audit related assurance services – interim review
139
138
Total non-audit fees
139
138
(1) 2022 fee includes amounts in relation to the base audit fee US$562k (2021: US$566k) and prior year overruns of US$26k, new applicable regulatory and auditing
standards US$37k (2021: US$ nil), and corporate reporting review US$ nil (2021: US$20k).
All audit fees are billed in GBP and were translated at an average foreign exchange rate for the year ended 31 December 2022 of US$1.23:GB£1 (rate on 31 December
jointly controlled entities operating in Egypt, Burkina Faso, Côte d’Ivoire, United Kingdom, Jersey and Australia. It is the Parent Company
of the Group, comprising the Company and its subsidiaries and joint arrangements.
Registered office and principal place of business:
Centamin plc
2 Mulcaster Street
St Helier
JE2 3NJ
The nature of the Group’s operations and its principal activities are set out in the Governance Report and the Strategic Report of the 2022
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Please refer to the tables below for details
regarding mineral Reserve and Resource
estimation, including data verification
procedures, key assumptions, parameters,
methods used, data verification procedures,
associated risks and classification.
CONSOLIDATED MINERAL
RESOURCE ESTIMATE
The Mineral Resource data presented
in the tables included in this document
comprises a summary extract of the Mineral
Resource Report for the Group’s assets.
For comparative purposes, data for 2021
has been included where possible. The
significant figures used in the table are
intended to reflect the level of accuracy
of the different resource classifications
reported. Numbers have been rounded and
therefore there may be small differences in
the totals. Varying cut-off grades have been
clearly stated.
The consolidated Group Measured and
Indicated Resources are 13.6 million
ounces of gold with the addition of
approximately 3.6 million ounces of gold in
the Inferred category. The Sukari Measured
and Indicated Resource represents
approximately 81% of the Group Measured
and Indicated Resources and is the
Company’s only operating mine.
Sukari Gold Mine (Egypt)
The Sukari Mineral Resource estimate
at the end of June 2022 was 11.11Moz
at 1.08 grams per tonne of gold (“g/t
Au”), representing a 13% increase in
ounces (1.3Moz) after twelve months of
mining depletion, and inclusive of Mineral
Reserves. This included a 19% increase
in Measured Resource ounces driven by
a 22% increase in tonnes, reflecting the
significant improvements to geological
understanding.
An update to the open pit Multiple Indicator
Kriging (“MIK”) Sukari Mineral Resource
was performed by H&S Consultants Pty Ltd
(“H&SC”):
• H&SC depleted the 2022 open pit MIK
Mineral Resource estimate for Sukari as
at 30 June 2022, within a whittle pit shell
generated by Centamin at a gold price of
US$2,000/oz
• The open pit Mineral Resource estimate
includes the planned underground voids
within the selected pit shell
• A cut-off grade of 0.3 g/t Au is used for
reporting the open pit Mineral Resource
estimate
In respect of the Sukari underground
Mineral Resource, the estimate was
performed by Centamin and audited by
Cube Consulting Pty Ltd as at 30 June
2022:
• The model has been developed utilising
additional drilling (79,364 metres) and
geological information at a consistent
domain cut-off grade of 0.5g/t Au with a
cut-off date of 30 June 2022
• The estimation methodology of Ordinary
Kriging (“OK”) employed in preparing the
updated underground Mineral Resource
is consistent with the 2021 estimate,
using the reporting cut-off grade of 1.0g/t
Au
• The Sukari underground Mineral
Resources are defined below the
US$2,000/oz open pit shell and
combined with the open pit Mineral
Resources to provide an overall Sukari
Mineral Resource estimate
Sukari Operations has budgeted for
280,000 metres of diamond and reverse
circulation drilling in 2023, focusing on
reserve replacement, near-term resource
growth, long-term resource definition and
new life of mine target generation.
Doropo Project (Côte d’Ivoire)
The Doropo Mineral Resource estimate at
the end of October 2022 was 2.52Moz at
1.52 g/t Au, all in the Indicated Resource
category, reflecting an upgrade of 2.36Moz
due to the PFS infill drilling programme.
It is important to note, the 2022 Mineral
Resource Estimate has been constrained
using optimised economic open pit shells,
whereas the 2021 Mineral Resource
Estimate was not constrained.
• A material feature for 2022 is
constraining within optimised pit shells
using an unchanged metal price
assumption of US$2,000/oz for Mineral
Resource reporting
• This is a more rigorous approach
involving the application of the
Reasonable Prospects for Eventual
Economic Extraction (“RPEEE”) criterion
reflected in most current reporting codes
The Doropo PFS is scheduled for
completion later in H1 2023 with additional
exploration work testing extensional and
regional resource upside potential.
30 June 2022
30 June 2021
Category
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
SUKARI GOLD MINE
Measured (M)
267
1.04
8.90
220
1.06
7.45
Indicated (I)
53
1.30
2.21
70
1.05
2.36
M+I
320
1.08
11.11
290
1.05
9.81
Inferred
18
1.6
1.0
14
1.4
0.6
October 2022
February 2021
DOROPO PROJECT
Measured (M)
–
–
–
–
–
–
Indicated (I)
51.51
1.52
2.52
2.34
2.13
0.16
M+I
51.51
1.52
2.52
2.34
2.13
0.16
Inferred
13.67
1.14
0.5
142.9
1.13
5.21
2022
2021
ABC PROSPECT
Measured (M)
–
–
–
–
–
–
Indicated (I)
–
–
–
–
–
–
M+I
–
–
–
–
–
–
Inferred
72
0.93
2.16
72
0.93
2.16
GROUP MINERAL RESOURCES
M+I
371
1.14
13.6
349.0
1.08
12.1
Inferred
104.1
1.08
3.6
231.7
1.09
8.1
RESOURCE NOTES
SUKARI GOLD MINE
Sukari Open Pit
• All open pit Mineral Resources are
estimates of recoverable tonnes and
grades using MIK with block support
correction produced in the GS3 software
• Measured Resources lie in areas where
drilling is available at a nominal 25 x
25 metre spacing, Indicated Resources
occur in areas drilled at ~25 x 50 metre
spacing and Inferred Resources exist in
areas of broader spaced drilling
• The open pit Mineral Resource estimate
at a 0.3 g/t Au cut-off grade extends over
a strike length of ~2.5 kilometres, a width
of ~500 metres and from current surface
to a depth of ~900 metres
• The open pit Mineral Resource estimate
used surface rock chip, diamond, reverse
circulation and advanced grade control
drilling, while open-pit grade control
and underground face samples were
excluded with the dataset being closed
off as at 15 July 2022. The open-pit
resource data set comprised 553,776
two-metre drill hole composites and
surface rock chip samples
• The Mineral Resource estimates were
adjusted to the mining surface and
underground mining voids as at 30 June
2022, and includes some material that
could be mined by underground methods
Sukari Underground
• All underground Mineral Resources are
estimated using OK and Vulcan software
• Measured Resources lie in areas where
drilling is available on at least 20 x
20 metre spacing and the interpreted
mineralisation defined by underground
mine development. Indicated Resources
occur in areas drilled at ~50 x 25 metre
spacing and Inferred Resources exist in
areas of broader spaced drilling of ~100
x 50 metre spacing
• The underground Mineral Resource
estimate at a 1.0 g/t Au cut-off grade is
unconstrained and extends over a strike
length of ~2.5 kilometres, a width of
~500 metres and from current surface to
a depth of ~1,200 metres
• All available surface drilling, channel and
underground samples were used as at 30
June 2022. The resource data set used
directly in the Mineral Resource Estimate
comprised a total of 125,547 one metre
down hole drilling composites, 188,559
one metre down hole channel sample
composites and 31,288 two and a half
metre down hole drilling composites
• The Mineral Resource Estimates were
adjusted to the mining surface and
underground mining voids as at 30 June
2022
Stockpiles
• Open Pit, Underground and Coarse Ore
Stockpile material have been reported at
a cut-off of 0.4g/t Au
MINERAL RESOURCE &
RESERVE STATEMENTS
204
205
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2022
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
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2022
2021
Category
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
OPEN PIT
Proven
108.9
0.9
3.3
100.4
1.2
3.9
Probable
27.5
1.5
1.3
20.8
1.0
0.6
P & P
136.4
1.0
4.6
121.1
1.2
4.6
UNDERGROUND
Proven
4.0
3.6
0.5
2.1
3.3
0.2
Probable
5.3
4.2
0.7
5.7
3.6
0.7
P & P
9.3
4.0
1.2
7.8
3.5
0.9
STOCKPILES
Proven
17.4
0.5
0.3
17.4
0.5
0.3
Probable
–
–
–
–
–
–
P & P
17.4
0.5
0.3
17.4
0.5
0.3
SUKARI MINERAL RESERVE
P & P
163.1
1.1
6.0
146.4
1.2
5.8
DOROPO PROJECT
• All available data was used as at 25th
October 2022
• The gold grade estimation method is
Localised Uniform Conditioning (“LUC”)
• The rounding of tonnage and grade
figures has resulted in some columns
showing relatively minor discrepancies in
sum totals
• All Mineral Resource Estimates have
been determined and reported in
accordance with NI 43-101 and the
classification adopted by the CIM
• A cut-off grade of 0.5 g/t gold is used for
reporting as it is believed that the majority
of the reported Mineral Resources can be
mined at that grade
• The 2022 MRE was limited to blocks with
a maximum depth of 250 metres below
surface and within 80 metres of drill hole
data
• Pit optimisations based on a US$2,000/
oz gold price were used to constrain
the 2022 Mineral Resource and were
generated by Orelogy Mine Consultants,
who are working on the PFS
• This updated Mineral Resource Estimate
was prepared by Mr. Mike Millad of Cube
Consulting Pty Ltd who is the Qualified
Person for the estimate
• This updated Mineral Resource Estimate
is not expected to be materially affected
by environmental, permitting, legal title,
taxation, socio-political, marketing or
other relevant issues
• The data sets include Reverse Circulation
(“RC”) and diamond drill data with gold
estimates based on 50-gram fire assay
analysis completed at Bureau Veritas
Mineral Laboratories, Abidjan up until
December 2021. An onsite sample
preparation laboratory then became
operational at Danoa.
Pulp samples were
subsequently submitted to BV Abidjan
and ALS Loughrea, Ireland for analysis
ABC PROJECT
• Mineral Resources which are not Mineral
Reserves do not have demonstrated
economic viability
• The ABC resource estimate comprises
two (2) deposits – Kona South & Kona
Central
• Drill spacing is a nominal 50 x 50 x 1
metre spacing
• RC and Diamond (DDH) drilling only has
been used for the estimation
• An OK and LUC estimation using IK at
Kona Central to define ore and waste
boundaries
• The grade estimate has been classified
as Inferred in accordance with the CIM
2014 guidelines
• The economic cut-off grade of 0.5g/t gold
is used for reporting, 250m below surface
and within 100 metres of the nearest
sample
• This Mineral Resource Estimate was
prepared by Mr. Patrick Adams of Cube
Consulting who represents the Qualified
Person for the estimate
• This Mineral Resource Estimate is not
expected to be materially affected by
environmental, permitting, legal title,
taxation, socio-political, marketing or
other relevant issues
• The data sets include RC and diamond
drill data with gold estimates based on
50-gram fire assay analysis completed
at Bureau Veritas Mineral Laboratories,
Abidjan
MINERAL RESERVE ESTIMATE
(SUKARI GOLD MINE ONLY)
The Mineral Reserve data presented in the
tables included in this document comprise
a summary extract for the Sukari Gold
Mine Mineral Reserve report. Currently all
the Mineral Reserves are contained within
the Sukari tenement. For comparative
purposes, data for 2021 has been included.
Numbers have been rounded and therefore
there may be small differences in the totals.
Included in the Mineral Resources, the
Mineral Reserves as of 30 June 2022 were
6.0Moz of gold. The increase, net of twelve
months depletion, from 2021 is attributable
to significant Mineral Resource to Mineral
Reserve drill conversion within the open
pit and underground. The gold price
assumption used for estimating Mineral
Reserves is unchanged at US$1,450/
oz. Based on the planned throughput
and mining rates, the remaining Mineral
Reserve life of Sukari open pit operation
and stockpiles is approximately 14 years
and ten years for the underground, as of
30 June 2022.
MINERAL RESOURCE & RESERVE STATEMENTS
CONTINUED
RESERVE NOTES
• Open pit and stockpiles cut-off grade for reporting of 0.4g/t Au
• Open pit Mineral Reserve estimate includes 8.1Mt at 0.4g/t Au for 0.1Moz gold, using a 0.2g/t Au cut-off grade, for dump leach
material
• Underground cut-off grade for reporting of 1.0g/t Au for development with stopes defined within a 2.2g/t Au cut-off
QUALIFIED PERSONS
Information of a scientific or technical nature in this document, including but not limited to the Mineral Reserve and Mineral Resource
estimates, was prepared by and under the supervision of Craig Barker, the Group’s Qualified Person(s), and independent Qualified
Person(s) as below:
A ‘Qualified Person’ is as defined by the National Instrument 43-101 of the Canadian Securities Administrators. The named Qualified
Person(s) have verified the data disclosed, including sampling, analytical, and test data underlying the information or opinions contained
in this announcement in accordance with standards appropriate to their qualifications. Each Qualified Person consents to the inclusion of
the information in this document in the form and context in which it appears.
Information of a scientific or technical nature in this document, including but not limited to the Mineral Resource estimates, was prepared
by and under the supervision of the Group Qualified Persons, Craig Barker, Group Mineral Resource Manager and Howard Bills, Group
Exploration Manager. A geoscientist who fulfils the requirements of being a ‘Qualified Person(s)’ under the CIM Definition Standards.
Sukari Gold Mine, Egypt
• Mineral Reserve (open pit)
Quinton de Klerk of Cube Consulting Pty Ltd
• Mineral Reserve (underground)
Quinton de Klerk of Cube Consulting Pty Ltd
• Mineral Resource (open pit)
Arnold van der Heyden of H&S Consultants Pty Ltd
• Mineral Resource (underground)
Craig Barker of Centamin plc
Doropo Project, Côte d’Ivoire
Mike Millad of Cube Consulting Pty Ltd
ABC Project, Côte d’Ivoire
Patrick Adams of Cube Consulting Pty Ltd
Investors should be aware that the figures stated are estimates and no assurances can be given that the stated quantities of metal will
be produced.
Mineral Resource Estimates contained in this document are based on available data as at 30 June 2022.
Varying cut-off grades have been used, and clearly marked, for estimating the Mineral Resource and Mineral Reserve estimates.
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FINANCIAL STATEMENTS
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COMPANY DETAILS
COMPANY LEGAL FORM
Details of all subsidiaries are listed in note 4.1 to the financial statements.
The Company’s principal asset, the Sukari Gold Mine, is operated by the Sukari Gold Mining Company, a joint stock company established
under the laws of Egypt, which is owned 50% by Pharaoh Gold Mines NL, a wholly owned subsidiary of the Company, and 50% held by
the Egyptian Mineral Resource Authority.
Centamin plc, number 109180 (the “Company”) is a mineral exploration, development and mining company dual listed on the London
Stock Exchange (LSE: CEY) and the Toronto Stock Exchange (TSX: CEE).
The Company is incorporated in the island of Jersey with company number 109180. The Company conducts limited activity in its own
right, with certain of the subsidiary entities carrying out exploration, development and mining activity.
Centamin plc (LSE: CEY, TSX: CEE)
ISIN: JE00B5TT1872
LEI: 213800PDI9G7OUKLPV84
Company number: 109180
CAPITAL STRUCTURE
The capital structure of the Company is detailed in the schedule below, which reflects the total issued shares in the Company at 31
December 2022 and those held by trustees pursuant to the Company’s DBSP.
As at
31 December 2022
Issued capital (including shares issued and held under the DBSP)
1,156,450,695
Total shares in issue under the DBSP
1,187,779
The issued capital of the Company at the date of this report is 1,156,450,695 ordinary shares.
The Company may from time to time pass an ordinary resolution (by a simple majority) authorising the Board to allot relevant securities
up to the amount specified in the resolution. The authority shall expire on the day specified in the resolution, not being more than five
years after the date on which the resolution is passed. Details of the share capital and reserves are set out in notes 2.14 and 2.15 to the
financial statements.
The Company was authorised by shareholders at the 2022 AGM to purchase in the market up to 10% of the Company’s issued shares,
as permitted under the Company’s Articles of Association. No shares were bought back under this authority during the year ended 31
December 2022. This standard authority is renewable annually and the Directors will seek to renew this authority at the 2023 AGM. This
current authority will expire on 30 June 2023.
ARTICLES OF ASSOCIATION
The Articles of Association govern many aspects of the management of the Company. The Articles may only be amended by a special
resolution at a general meeting of the shareholders.
The Articles of Association were adopted on 15 December 2011 and, together with the Memorandum of Association, are available for
inspection at the Company’s registered office during normal office opening hours. The liability of each member arising from the member’s
respective holding of a share in the Company is limited to the amount (if any) unpaid on it. The Company has unrestricted corporate
capacity.
DIRECTORS
Directors may be appointed by ordinary resolution. The Board may appoint a Director but such a Director may hold office only until the
dissolution of the next Annual General Meeting after their appointment unless they are re-appointed during that meeting. Each appointed
Director shall retire from office at each Annual General Meeting and may, if willing to act, be re-appointed.
All Directors must notify the Company of any shares held, acquired, or disposed of in the Company. A register of Director Shareholdings is
held at the registered office which is open to inspection by the members. The Directors are also required to disclose shares held by their
connected parties. Details of the interests of Directors and their connected persons in the Company’s shares are outlined in the Directors’
Remuneration Report.
As set out in the Code of Conduct, responsible persons are required to complete conflicts of interests forms and disclose any interests
they may have. A register is maintained of Directors’ interests and declarations made at the beginning of each meeting of the Board and
its subsidiaries. The Chair of the meeting will manage attendance at meetings, and should a Director have an interest, the individual
concerned will excuse themselves from the discussion and any vote held.
DIRECTORS’ INDEMNITY INSURANCE
In accordance with the Company’s Articles of Association and to the extent permitted by law, the Company may indemnify its Directors
out of its own funds to cover liabilities incurred as a result of their office.
The Company has entered into indemnity agreements with each Director to indemnify each Director to the extent permitted by applicable
law and excluding any matters involving fraud, dishonesty, wilful default or bad faith on the part of a Director.
During the year, the Company paid a premium in respect of a contract insuring the Directors and officers of the Company and any related
corporate body against a liability incurred as a Director or officer to the extent permitted by law. This provides insurance cover for any
claim brought against Directors or officers for wrongful acts in connection with their positions. The insurance provided does not extend to
claims arising from fraud or dishonesty and it does not provide cover for civil or criminal fines or penalties imposed by law.
SUBSTANTIAL SHAREHOLDERS
Based on shareholder disclosures and register analysis, the following shareholders had holdings of more than 3% (being the applicable
threshold adopted by Centamin in its Articles of Association, as though it were a UK issuer under the Disclosure Guidance and
Transparency Rules of the FCA (“DTRs”), in the issued share capital of Centamin in compliance with LR 9.8.6R (2):
Name
Shareholding
% holding
VanEck Global
111,244,970
9.62
BlackRock Inc
75,482,689
6.53
abrdn plc
59,896,169
5.18
Dimensional Fund Advisors
57,019,844
4.93
The Vanguard Group, Inc
52,983,780
4.58
Schroders
45,208,584
3.91
Ninety One
43,647,274
3.77
Aberforth Partners
41,332,214
3.57
Wellington Mgt
39,703,129
3.43
Hargreaves Lansdown Asset Manager
39,227,049
3.39
Note to table:
Information as at 31 December 2022 based on registry analysis and information received by the Company from holders of notifiable
interests and includes details of any notifications received by the Company pursuant to DTR 5 between the year end and the date of this
report.
The substantial shareholders do not have any different voting rights to other shareholders. To the extent known to the Company:
• No person other than the substantial shareholders detailed above has an interest of 3% or more in the Company’s capital;
• The Company is not aware of any persons who, directly or indirectly, jointly or severally, exercise or could exercise control over the
Company; and
• There are no arrangements, the operation of which may at a subsequent date result in a change of control of the Company UK listed
companies must report in accordance with the Listing Rules 9.8.4 R. There are no other disclosures to report under LR 9.8.4 R.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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SHAREHOLDER COMMUNICATION
ANNUAL GENERAL MEETING
The 2023 Annual General Meeting (“2023 AGM”) will be held at 10:00 AM BST on Tuesday, 23 May 2023 at Dukes London,
35 St James’s Place, London, SW1A 1NY.
ADVISERS
REGISTRAR SERVICES
Canada
Computershare 100 University Avenue
8th Floor
Toronto
ON M5J 2Y1
Telephone: +1 416 262 9200
Jersey, Channel Islands
Computershare Investor Services (Jersey) Ltd
13 Castle Street
St Helier
Jersey
JE1 1ES
PUBLIC RELATIONS
Buchanan
107 Cheapside
London
EC2V 6DN
Telephone: +44 (0)20 7466 5000
BROKERS
Bank of America Securities
2 King Edward Street
London
EC1A 1HQ
Telephone: +44 (0)20 7628 1000
BMO Capital Markets
6th floor 100 Liverpool street
London
EC2M 2AT
Telephone: +44 (0)20 7236 1010
INDEPENDENT AUDITOR
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
Telephone: +44 (0)20 7583 5000
DIVIDEND POLICY
DIVIDEND POLICY
The Company’s dividend policy sets a minimum payout level relative to cash flow while considering the financial condition of, and outlook
for, the Company. When determining the amount to be paid, the Board will take into consideration the underlying profitability of the
Company and significant known or expected funding commitments. Specifically, the Board will aim to approve an annual dividend of at
least 30% of the Company’s net cash flow after sustaining capital costs and following the payment of profit share due to the government
of Egypt.
The following dividends have been declared and proposed in 2022. Only the interim dividend and final dividend are attributable to the
2022 financial year’s performance, ending 31 December 2022.
2022 INTERIM DIVIDEND
An interim dividend of 2.5 US cents per share on Centamin plc ordinary shares (totalling approximately US$29 million) was declared on
4 August 2022. The interim dividend for the half-year period ending 30 June 2022 was paid on 7 October 2022 to shareholders on the
register on the record date of 2 September 2022.
2022 FINAL DIVIDEND
A final dividend of 2.5 US cents per share on Centamin plc ordinary shares (totalling approximately US$29 million) was proposed by
the Directors on 16 March 2023. The final dividend for the financial year ended 31 December 2022 will be paid on 23 June 2023 to
shareholders on the register on the record date of 2 June 2023. The final dividend is subject to approval at the 2023 AGM on 23 May
2023. The ex-dividend date is 1 June 2023 for LSE and TSX listed shareholders.
Summary table of dividends declared by Centamin PLC
2022
2021
2020
INTERIM
Declared on:
4 August 2022
5 August 2021
4 August 2020
Amount:
2.5 US cents per share
4.0 US cents per share
6.0 US cents per share
Paid on:
7 October 2022
30 September 2021
11 September 2020
Total
Approximately US$29 million
Approximately US$46 million
Approximately US$69.5 million
FINAL
Proposed:
16 March 2023
16 March 2022
22 March 2021
Declared:
23 May 2023
10 May 2022
11 May 2021
Amount:
2.5 US cents per share
5 US cents per share
3 US cents per share
Paid on:
23 June 2023
10 June 2022
15 June 2021
Total:
Approximately US$29 million
Approximately US$57.8 million
Approximately US$34.7 million
INDICATIVE FINANCIAL CALENDAR
Event
Date
Q1 2023 Report
20 April 2023
2023 Annual General Meeting
23 May 2023
Q2 2023 Report
26 July 2023
2023 Interim Financial Results
26 July 2023
Q3 2023 Report
19 October 2023
COMPANY DETAILS
CONTINUED
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GLOSSARY
2018 Code
the 2018 UK Corporate Governance Code published by the Financial Reporting Council
AGM
the annual general meeting of the Company
AISC
all-in sustaining costs
ARC
the Audit and Risk Committee of the Company
ARE
Arab Republic of Egypt
ARO
Asset Retirement Obligation
assay
qualitative analysis of ore to determine its components
Au
chemical symbol for the element gold
BEIS
Business, Energy and Industrial Strategy
CA
Concession Agreement / The Concession or Concession area. The Eastern Desert Concession Agreement dated 29 January 1995 between
PGM, EGSMA (now EMRA) and ARE relating to the exploration and exploitation of gold and associated minerals in the predetermined
localities in the Eastern Desert of Egypt
CBE
Central Bank of Egypt
CGU
cash generating unit
Code of Conduct
Company’s Code of Conduct Group Policy
Company
Centamin plc, number 109180 is a mineral exploration, development and mining company dual listed on the London Stock Exchange (LSE:
CEY) and the Toronto Stock Exchange (TSX: CEE)
Company Law
Company (Jersey) Law 1991 (as amended)
COVID
COVID is the disease caused by a new coronavirus called SARS-CoV-2 which was declared a global pandemic on the 11 March 2020 by the
World Health Organization
DBSP
deferred bonus share plan
Directors or Board
the Directors of the Board of Centamin plc
dump leach
a process used for the recovery of metal ore from typically weathered low-grade ore. Blasted material is laid on a slightly sloping,
impervious pad and uniformly leached by the percolation of the leach liquor trickling through the beds by gravity to ponds. The metals are
recovered by conventional methods from the solution
E&E
exploration and evaluation
EIA
Environmental Impact Assessment
EMRA
Egyptian Mineral Resource Authority
EoR
Engineer of Record. TSFs are monitored through a layered assurance system by a team of internal specialists, Sukari’s formally appointed
external Engineer of Record (“EoR”) and an Independent Technical Reviewer
EPS
earnings per share
ESG
Environmental, Social and Governance
ETF
Exchange Traded Funds
FCA
Financial Conduct Authority
feasibility study
extensive technical and financial study to assess the commercial viability of a project
flotation
mineral processing technique used to separate mineral particles in a slurry, by causing them to selectively adhere to a froth and float to
the surface
FRC
Financial Reporting Council
GHG
Green House Gas
GISTM
Global Industry Standard Tailings Management
Gold Doré
an alloy that is produced after the first stage of the purification process, containing approximately 90% gold as well as metals such as
silver or copper. It must be refined in order to achieve the levels of purity required to be traded on gold markets
grade
relative quantity or the percentage of ore mineral or metal content in an orebody
g/t
gram per metric tonne
Group
The Company and/or Centamin and its subsidiaries and subsidiary undertakings as the context requires, and SGM, which, for accounting
purposes is wholly consolidated within the Group, reflecting the substance and economic reality of the Concession Agreement
HSES
Health, Safety, Environmental and Sustainability Department
IFRS
International Financial Reporting Standards
Indicated Resource
as defined in the JORC Code, is that part of a Mineral Resource which has been sampled by drill holes, underground openings or other
sampling procedures at locations that are too widely spaced to ensure continuity but close enough to give a reasonable indication of
continuity and where geoscientific data is known with a reasonable degree of reliability. An Indicated Mineral Resource will be based on
more data and therefore will be more reliable than an Inferred Resource estimate
Inferred Resource
as defined in the JORC Code, is that part of a Mineral Resource for which the tonnage and grade and mineral content can be estimated
with a low level of confidence. It is inferred from the geological evidence and has assumed but not verified geological and/or grade
continuity. It is based on information gathered through the appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes which may be limited or of uncertain quality and reliability
ISAs
International Standards on Auditing
JORC
Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and the Minerals
Council of Australia
LBMA
London Bullion Market Association
LOM
life of mine
LTIs
lost time injury
LTIFR
lost time injury frequency rate
mill
equipment used to grind crushed rocks to the desired size for mineral extraction
mineralisation
process of formation and concentration of elements and their chemical compounds within a mass or body of rock
Moz
million ounces
Mineral Reserve
that part of a Mineral Resource which has been demonstrated to be economically exploitable
Mineral Resource
a concentration or occurrence of natural, solid, inorganic or fossilised organic material in or on the Earth’s crust in such form and
quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological
characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge
MRM
Mineral Resource Management
Mt
million tonnes
Mtpa
million tonnes per annum
NCI
non-controlling interest
net production surplus
or profit share
revenue less payment of the 3% royalty to ARE and recoverable costs
OHS
occupational health and safety
open pit
large scale hard rock surface mine or mine workings for ores open to the surface, a pit; like a quarry for stone
ore
mineral deposit that can be extracted and marketed profitably
orebody
mining term to define a solid mass of mineralised rock that can be mined profitably under current or immediately foreseeable
economic conditions
ore reserve
the economically mineable part of a measured or indicated mineral resource. It includes diluting materials and allowances for losses
which may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out,
and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental,
social and governmental factors. These assessments demonstrate at the time of reporting that extraction could be reasonably justified.
Ore reserves are sub-divided in order of increasing confidence into probable and proven
ounce or oz
troy ounce (= 31.1035 grams)
PEA
preliminary economic assessment
PFS
prefeasibility study
PGM
Pharaoh Gold Mines NL
PPE
property, plant and equipment as described in the financial statements
Probable Reserves
Measured and/or Indicated Mineral Resources which are not yet proven, but where technical economic studies show that extraction is
justifiable at the time of the determination and under specific economic conditions
PSP
performance share plan (formerly the restricted share plan)
R&R
Resources and Reserves
RCF/ SLL
Revolving Credit Facility / Sustainability-Linked Loan. A senior secured sustainability-linked revolving credit facility of US$150 million,
agreed on 22 December 2022, with a syndicate of leading international lending banks, offering the Company increased financial capacity
and flexibility for general corporate purposes
RGMP
Responsible Gold Mining Principles
Risk Management
Framework
Group’s risk management framework
ROM
run of mine
Section 172
Directors’ duties as set out in Section 172 of Companies Act 2006
SGM
Sukari Gold Mining Company
TCFD
Task Force on Climate-related Financial Disclosures
TRIFR
total recordable injury frequency rate
TSF1
first tailings storage facility
TSF2
second tailings storage facility
TSR
total shareholder return
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OFFICES
REGISTERED OFFICE
2 Mulcaster Street
St Helier
Jersey JE23NJ
T: +44 (0)1534 828 700
F: +44 (0)1534 731 946
E: info@centamin.com
Egypt
Pharoah Gold Mines (Egyptian Holding Company)
361 El Horreya Road
Sedi Gaber
Alexandria
Egypt
T: +20 (0)3541 1259
F: +20 (0)3522 6350
E: pgm@centamin.com
Eastern Desert Exploration
F-1-5, Agora Mall, EL Nasr St., 5th settlement
Cairo
Egypt
T: +20 (0)3541 1259
F: +20 (0)3522 6350
London
9-10 Savile Row
W1S 3PF
London
T: +44 (0)2081 766 261
Côte d’Ivoire
Cocody II Plateaux Vallons
Face Residence Bertille
Abidjan
T: +225 05 94 880 157
Website: www.centamin.com | Linkedin: @CentaminPLC | Twitter: @CentaminPlc
FORWARD LOOKING STATEMENTS
GUIDANCE
The Company actively monitors the developments of the COVID pandemic and guidance may be impacted if the workforce or operation
are disrupted.
FORWARD-LOOKING STATEMENTS
This announcement (including information incorporated by reference) contains “forward-looking statements” and “forward-looking
information” under applicable securities laws (collectively, “forward-looking statements”), including statements with respect to future
financial or operating performance. Such statements include “future-oriented financial information” or “financial outlook” with respect
to prospective financial performance, financial position, EBITDA, cash flows and other financial metrics that are based on assumptions
about future economic conditions and courses of action. Generally, these forward-looking statements can be identified by the use
of forward-looking terminology such as “believes”, “expects”, “expected”, “budgeted”, “forecasts” and “anticipates” and include
production outlook, operating schedules, production profiles, expansion and expansion plans, efficiency gains, production and cost
guidance, capital expenditure outlook, exploration spend and other mine plans. Although Centamin believes that the expectations
reflected in such forward-looking statements are reasonable, Centamin can give no assurance that such expectations will prove to be
correct. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations
and projections of the management of Centamin about future events and are therefore subject to known and unknown risks and
uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking
statements. In addition, there are a number of factors that could cause actual results, performance, achievements or developments to
differ materially from those expressed or implied by such forward-looking statements; the risks and uncertainties associated with the
ongoing impacts of COVID or other pandemic, general business, economic, competitive, political and social uncertainties; the results of
exploration activities and feasibility studies; assumptions in economic evaluations which prove to be inaccurate; currency fluctuations;
changes in project parameters; future prices of gold and other metals; possible variations of ore grade or recovery rates; accidents, labour
disputes and other risks of the mining industry; climatic conditions; political instability; decisions and regulatory changes enacted by
governmental authorities; delays in obtaining approvals or financing or completing development or construction activities; and discovery
of archaeological ruins. Financial outlook and future-ordinated financial information contained in this report is based on assumptions
about future events, including economic conditions and proposed courses of action, based on management’s assessment of the relevant
information currently available. Readers are cautioned that any such financial outlook or future-ordinated financial information contained
or referenced herein may not be appropriate and should not be used for purposes other than those for which it is disclosed herein. The
Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting
management’s best estimates and judgements at the date hereof, and represent, to the best of management’s knowledge and opinion,
the Company’s expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily
indicative of future results. There can be no assurance that forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such information or statements, particularly in light of the current
economic climate and the significant volatility, uncertainty and disruption caused by the outbreak of COVID. Forward-looking statements
contained herein are made as of the date of this announcement and the Company disclaims any obligation to update any forward-looking
statement, whether as a result of new information, future events or results or otherwise. Accordingly, readers should not place undue
reliance on forward-looking statements.
LEI: 213800PDI9G7OUKLPV84
Company No: 109180
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Registered office
2 Mulcaster Street
St Helier
Jersey JE2 3NJ
T: +44 (0)1534 828 700
F: +44 (0)1534 731 946
E: info@centamin.com
Egypt
361 EI-Horreya Road
Sedi Gaber
Egypt
T: +20 (0)3541 1259
F: +20 (0)3522 6350
E: pgm@centamin.com