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ANNUAL REPORT
& ACCOUNTS 2023
CONTENTS
OVERVIEW
Highlights
02
Chair’s Foreword
04
Who We Are
06
STRATEGIC REPORT
CEO’s Statement
10
Our Business Model
14
Our Strategy
16
Responding to our Stakeholder Priorities
18
Key Performance Indicators
22
Operational Review
26
Financial Review
32
Managing Risk
41
Climate Change Disclosures
54
Viability Statement
60
FINANCIAL STATEMENTS
Directors’ Responsibilities
134
Independent Auditors’ Report
135
Consolidated Financial Statements
141
Notes to the Consolidated Financial Statements 145
ADDITIONAL INFORMATION
Mineral Resource and Reserve Statements
194
Company Details
200
Dividend Policy
203
Glossary
204
Offices
206
Forward-looking Statements
207
INTRODUCTION
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 saw the modernisation
of an ancient gold mining jurisdiction, which
remains one of the few underexplored gold
belts – Egypt’s mineral rich Eastern Desert, part
of the wider Arabian Nubian Shield. The mine is
located within the Egyptian Nubian Shield, some
700km southeast of Cairo and 25km from the
Red Sea.
Today, Sukari is Egypt’s first large-scale modern
mine and a hub of employment and opportunity
for Egypt, with a workforce of some 4,477
people, of which 96% are Egyptian. Egypt is an
excellent operating jurisdiction, boasting a stable
political environment, good security and a well
developed infrastructure network, including a
new high-voltage power network which the mine
plans to connect to in 2025.
In 2022, Sukari produced its five millionth ounce
of gold since it began production 15 years ago.
This is a milestone and journey that we are
exceptionally proud of, but our focus is on the
future. In 2023 we published an updated Life of
Mine Plan that demonstrates that Sukari has at
least eleven years of production to come from
the six million ounce gold reserve.
Centamin is committed to developing a thriving
Egyptian gold industry for the benefit of people
and country. This will be achieved through
further investment at Sukari and, more broadly,
across Egypt where Centamin holds c. 3,000km
2
of new exploration licences.
Outside of Egypt, Centamin continues to progress
a portfolio of exploration and development
projects in West Africa. In 2023 this included the
delivery of a positive pre-feasibility study for the
Doropo Gold Project in Côte d’Ivoire, which will
be advanced in a definitive feasibility study in
2024. Centamin aspires to create opportunities
for people while delivering on our Vision of
becoming a multi-asset gold producer, delivering
value through responsibly mining high-quality,
long-life assets.
CORPORATE GOVERNANCE
Governance Overview
64
Chair’s Introduction
65
Board of Directors
66
Corporate Governance and
Compliance Statement
70
Our Governance Structure
72
Our Management Structure
74
Key Activities in 2023
75
2024 Focus Areas
76
Stakeholders and Principal Decision Making
77
Stakeholder Engagament
78
Monitoring our Culture
82
Board Roles and Division of Responsibility
84
Board Diversity
86
Nomination Committee Report
88
Technical Committee Report
92
Sustainability Committee Report
94
Audit and Risk Committee Report
98
Remuneration Committee Report
106
DELIVERING ON OUR
DECARBONISATION
ROADMAP
In March 2023, we set out our Decarbonisation Roadmap to reduce
Scope 1 and 2 GHG emissions by 30% by 2030. Our vision for a
low carbon future is a mining business with sources of onsite
and imported renewable energy, reductions in absolute energy
consumption through operational efficiencies and creative new
technological solutions, staged electrification of our mobile fleet
and increased recycling in our supply chain.
In 2023, Centamin achieved short-term targets set for the
reduction of its GHG emissions having delivered a 7% reduction in
absolute carbon emissions (tCO
2
e) and a 14% reduction in carbon
intensity (tCO
2
e/oz Au), relative to the 2021 base year. This success
was largely attributed to 2023 being the first full year operating the
new solar power plant.
Looking forward to 2024, further decarbonisation progress is
expected to be made through the reduction in waste mining
volumes associated with the completion of the waste mining
contract. We also plan to start construction of the Grid Connection
Project that will deliver both cost and carbon savings from 2025.
Further information can be found
in the
Sustainability Report
.
01
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
b
HIGHLIGHTS
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 and financial instruments
at fair value through profit or loss (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.
OPERATIONAL
SUSTAINABILITY
FINANCIAL
GOLD PRODUCTION
(ounces)
2022: 440,974oz
450,058
oz
TOTAL RECORDABLE INJURY RATE
(per one million hours worked)
2022: 2.61
2.83
ADJUSTED EBITDA MARGIN
(1)
(%)
2022: 40%
45
%
CASH COSTS OF PRODUCTION
(1)
(per ounces produced)
2022: US$913/oz
US$875
/oz
DIRECT NATIONAL EMPLOYEES
(%)
2022: 95%
95
%
TOTAL REVENUE
(US$m)
2022: US$788m
US$891
M
TOTAL MATERIAL MINED
(million tonnes)
2022: 137Mt
131
Mt
LOCAL PROCUREMENT
(% of total procurement spent
domestically)
2022: 77%
81
%
PROFIT AFTER TAX
(US$m)
2022: US$171m
US$195
M
ALL-IN SUSTAINING COSTS
(1)
(“AISC”)
(per ounces sold)
2022: US$1,399/oz
US$1,205
/oz
WORKPLACE DEVELOPMENT
(total training hours)
2022: 44.3
42.8
TOTAL GROSS CAPITAL
EXPENDITURE
(US$m)
2022: US$284m
US$204
M
CONSOLIDATED MINERAL
RESOURCES
(Moz)
2022: 13.6Moz
13.4
Moz
CO
2
EQUIVALENT EMISSIONS
(CO
2
-e Scope 1 & 2)
2022: 0.50Mt
0.45
MT
CASH AND LIQUID ASSETS
(1)
(US$m)
2022: US$157m
US$153
M
TOTAL DIVIDEND
(2)
(US$m)
2022: US$58m
US$46
M
02
03
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CHAIR’S FOREWORD
INTRODUCTION
The world economy has proved to be
remarkably resilient, despite having to deal
with the shocks of post-COVID supply chain
disruptions and the continuing impact of
Russia’s invasion of Ukraine. With inflation
in several major economies falling faster
than originally expected and concerted
Central Bank interest rate increases serving
to dampen overall demand, the IMF in its
most recent update modestly raised its
forecasts for global GDP growth for both
2024 and 2025, while at the same time
acknowledging the potential risks to those
forecasts of any escalation of the conflict
in Gaza.
GOLD MARKET UNDERPINNED BY
CENTRAL BANK PURCHASES
Having navigated the headwinds from
higher interest rates during 2022, the gold
market maintained its strong performance
during 2023. The gold price averaged
US$1,941/oz, which was not only 8%
higher than the US$1,800 achieved in
2022 but also a new record high in US$
and every major currency.
Demand for gold in 2023 was underpinned
by the continued elevated level of central
bank purchases, which, based on World
Gold Council data, totalled 1,037 tonnes.
This was just 45 tonnes shy of the 2022
record high of 1,082 tonnes, but still more
than twice the annual average of around
500 tonnes for the preceding decade.
The World Gold Council calculates that,
since 2010, central banks have acquired
over 7,800 tonnes of gold, of which over
a quarter has been bought in the past two
years alone.
EASTERN DESERT EXPLORATION
PROGRAMME
During 2023 we completed the first drilling
programme on our expanded 3,000km
2
of
exploration licences in the Egyptian Eastern
Desert, which is a highly prospective region
for gold exploration. The initial results from
the Nugrus Block are very encouraging,
with drill intersects of gold mineralisation
identified less than 30km from the
Sukari Mine.
DEFINITIVE FEASIBILITY NOW
UNDERWAY AT DOROPO PROJECT
In addition, we announced the results from
the pre-feasibility study for the Doropo
greenfield gold project in Côte d’Ivoire,
which demonstrated an economically robust
project producing average gold production
of approximately 175,000 ozs per annum
at AISC of US$1,000/oz over a ten-year life
of mine. Work on the definitive feasibility
study and environmental and social impact
assessment is now underway and is due to
be completed by mid-2024.
SUSTAINABILITY IS CORE TO OUR
BUSINESS MODEL
Reflecting our purpose statement, which
is ‘to create opportunity for people through
responsible mining’, we place enormous
emphasis on positioning sustainability at
the heart of the business. We have therefore
continued to prioritise gender diversification,
training and the development of local
employees into management positions in
the countries in which we operate.
Another important element of our
responsible mining commitment is
our transition to a low carbon future.
During 2023, we published our interim
Decarbonisation Roadmap to 2030, in
which we set a tangible target of a 30%
reduction in Scope 1 and 2 greenhouse gas
emissions by 2030, compared to 2021 as
the base year.
Importantly this target is derived from
clearly identifiable projects to reduce
emissions at Sukari, focused primarily on
energy consumption. The first of these
involves an expansion of the capacity of
the solar plant, which would mean that the
baseload power demand of the mine would
be fully met during peak daylight hours.

We have repositioned Sukari,
we as a tier one asset and have
made significant progress in
unlocking organic growth in
Egypt and Côte d’Ivoire.
JAMES RUTHERFORD
NON-EXECUTIVE CHAIR
This emergence of what might be termed
as a ‘price insensitive’ buyer helps explain
why the strong correlation between the
gold price and real interest rates, for the
time being appears to have broken down.
The pattern of central bank purchases is
broad-based and dominated by emerging
market countries (notably China) wishing
to diversify their reserve base, suggesting
that large central bank purchases could
well remain an ongoing feature of the gold
market.
A YEAR OF ACHIEVEMENT
In the 2020 Annual Report, we described
the three year plan to unlock Centamin’s
true potential, a plan that was grounded
in operational discipline and rigorous
long-term planning.
During 2023, the management team made
further impressive progress on delivering on
that plan. We reported a strong operational
performance for the year. Gold production
at Sukari, our flagship asset, grew by 2%
to 450,058ozs and our guidance for 2024
is for a further increase in gold production
to between 470,000 and 500,000 oz. Of
equal importance, the continued focus on
safety was reflected in the Lost Time Injury
Frequency Rate being maintained at just
0.08 per million hours worked. At the same
time, a continued focus on cost control
and productivity improvements meant
that, despite continuing local inflationary
pressures, we were able to report a 14%
reduction in the All-In Sustaining Cost
(“AISC”) of production from US$1,399
to US$1,205/oz of gold.
Total revenue for the year rose 13% from
US$788 million to US$891 million, while
net profit after tax posted a welcome 14%
increase from US$171 million to US$195
million and EPS from 6.29 to 7.97 US cents
per share.
The second project involves establishing
a connection to the national grid, which,
following recent upgrades, has been
extended to Marsa Alam, just 25km from
Sukari. This connection, combined with
the existing solar plant, would fully meet
the electricity needs of the mine without
the need for onsite power generation
using diesel fuel.
BOARD
Four years ago, we undertook a
considerable reshaping of both the
Board and committee structure, when
we strengthened the technical mining
capability on the Board with the
appointment of Dr. Catharine Farrow and
Dr. Sally Eyre, who both have a strong
background in geology, and Hennie Faul,
who is an experienced mining engineer.
With the operational reset at Sukari
progressing to completion, during 2023
we took the opportunity to initiate the next
stage of Board evolution, this time focusing
on augmenting our understanding and
experience of Egypt and the broader Middle
Eastern business environment.
In January, we were pleased to announce
the appointment of Hoda Mansour and
Iman Naguib as Non-Executive Directors.
They bring a wealth of commercial
and financial experience and extensive
knowledge of Egypt and the broader region
and will be a true asset to the Company as
we move into our next phase of growth.
Hoda is Chief Operating Officer for IFS
in Asia Pacific, Japan, Middle East and
Africa, a global cloud-based enterprise
software company. She previously worked
for ten years for SAP, the market leader in
enterprise application software, where she
held several country head and leadership
roles before becoming the Senior Vice
President and Head of Business Process
Transformation for the Southern Europe,
Middle East and Africa regions in 2021.
Iman is a partner at Karnak Capital, an
investment management vehicle that she
founded in 2015. Prior to that, between
2012 and 2015, she was Group Chief
Financial Officer at La Mancha Resources,
a gold mining company with operating
mines and exploration and development
projects across Africa, Australia and
Argentina. Before that, Iman also served
as Corporate Finance Director for Orascom
Telecom Holding and Weather Investments,
an international telecoms group operating
in Europe, Middle East, Africa and Asia.
DIVIDEND
Against the backdrop of the significant
reinvestment into the Sukari Mine, the
Board has remained very mindful of
the importance of delivering returns to
shareholders and remains committed to a
long-term dividend policy of paying out a
minimum of 30% of free cash flow.
The Board is proposing a final dividend
for 2023 of 2.0 US cents per share, which
will be subject to shareholder approval at
the Annual General Meeting on 21 May
2024. This would represent a proposed
full-year dividend of 4.0 US cents per share,
equivalent to US$101 per gold ounce sold.
ESTABLISHING A PLATFORM FOR
GROWTH
The publication in October 2023 of the
new Life of Mine (“LOM”) Plan for Sukari
provided confirmation of the significant
progress that has been made in delivering
the operational turnround and firmly
re-established the mine as a global Tier 1
operation.
Since coming on stream in 2009, Sukari
has produced 5.7 million ounces of gold
and has contributed US$968 million to the
Egyptian economy in the form of royalties
and profit share, without taking account of
the impact of wages and local purchases
of supplies and equipment. With six million
ounces in Proven & Probable Reserves,
Sukari is well placed to produce its ten
millionth ounce in the years ahead. Sukari
as our flagship asset therefore provides a
strong platform from which we can grow our
business through our exploration in Egypt
and projects in Côte d’Ivoire.
As part of the ongoing Board succession,
Dr. Ibrahim Fawzy has indicated that he
does not intend to stand for re-election as
a non-executive director at the Company’s
upcoming Annual General Meeting in
May. I would like to extend my personal
thanks to Prof. Fawzy for the invaluable
contribution that he has made to Centamin
as a Board member during his tenure.
We have benefited from his wise counsel
and his extensive experience across both
the public and the private sector. We wish
him all the very best with his important
ongoing academic work in Egypt.
THANK YOU
The completion of the extensive three-year
restructuring and reinvestment programme
at Sukari means that Centamin is now
strongly positioned to focus on developing
the growth potential that exists within our
asset base in Egypt and Côte d’Ivoire. On
behalf of the Board, I would like to thank
the Centamin management and workforce
for their diligence and dedication and our
wider stakeholders for their support and
commitment during what has been another
successful year.
Similarly, I would like to acknowledge
the ongoing guidance and support of the
Egyptian government, through the Ministry
of Petroleum and Natural Resources and
the Egyptian Mineral Resources Authority
(“EMRA”), who are our partners at Sukari.
The history of gold mining in Egypt is a
long and illustrious one, on some estimates
dating back as much as six thousand years.
Centamin is the modern day custodian
of that legacy and we share the Egyptian
government’s determined ambition to
develop a successful, modern Egyptian
gold industry and thereby enable mining to
become a growth driver for the country.
Thank you.
JAMES RUTHERFORD
NON-EXECUTIVE CHAIR
04
05
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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3
1
2
4
WHO WE ARE
OUR PURPOSE
OUR VISION
OUR PORTFOLIO
OUR VALUES
DELIVERING GROWTH
FROM AN INTEGRATED
EXPLORATION PIPELINE
EGYPT
CÔTE D’IVOIRE
Creating opportunities for people through
responsible mining.
We recognise that we have an important role to play in shaping
the future for our stakeholders and the wider society around our
operations. 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.
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.
Our Values guide our behaviours and define
the way we work with each other and within
the wider society.
EDUCATE
Education shapes our workforce
and broader society
PASSION
We are passionate about what we
do and the legacy we create
PROTECT
We protect and respect each other
and our environment
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 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.
1
SUKARI
GOLD MINE
Egypt (160km
2
)
Production
450koz
Reserves
5.8Moz
Resources
(inc. Reserves)
10.3Moz Measured
& Indicated,
1.0Moz Inferred
Safety
0.09 LTIFR,
2.91 TRIFR
Workforce
4,477
2
EASTERN DESERT
EXPLORATION
(“EDX”)
(2,989km
2
)
Stage
Greenfield exploration
Safety
0.00 LTIFR, 0.00 TRIFR
Workforce
95
3
DOROPO
PROJECT
(1,847km
2
)
Stage
Pre-development
Reserves
1.9Moz
Resources
(inc. Reserves)
3.1Moz Measured
& Indicated,
0.3Moz Inferred
Safety
0.00 LTIFR,
2.56 TRIFR
Workforce
298
4
ABC
PROJECT
(1,149km
2
)
Stage
Early stage exploration
Resources
2.15Moz Inferred
Safety
0.00 LTIFR,
0.00 TRIFR
Workforce
4
06
07
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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STRATEGIC
REPORT
IN THIS SECTION
CEO’s Statement
10
Our Business Model
14
Our Strategy
16
Responding to our Stakeholder Priorities
18
Key Performance Indicators
22
Operational Review
26
Financial Review
32
Managing Risk
41
Climate Change Disclosures
54
Viability Statement
60
09
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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08
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CEO’S STATEMENT

The new Sukari Life of Mine Plan benefits from our
improved geological understanding, the operational reset
and significant investment over the last three years,
resulting in increased production at lower costs while
substantially delivering on our decarbonisation targets.
MARTIN HORGAN
CHIEF EXECUTIVE OFFICER AND DIRECTOR
DEAR STAKEHOLDERS,
I am pleased to report that 2023 was the
third consecutive year of delivery into our
production guidance while beating our all-in
sustaining cost and capex forecasts. Our
focus on operation delivery, alongside a
strong gold price environment enabled the
Company to generate robust cash flows,
supporting the continued investment in our
operations without the need to draw down
on our sustainability-linked loan.
2023 was the last full year of our
operational reset plan as we unlock the
full potential of the Company’s portfolio,
at the Sukari Mine we have focused on
the optimisation of the operations and we
published a new Life of Mine Plan. The
plan maximises the production opportunity
and returns the mine to a 500,000 ounce
annual production run rate in the long term
while simultaneously focusing on cost and
operational efficiencies that will position
the mine in the lower half of the industry
cost curve and, when combined with
the increased gold production, deliver a
sustainable improvement in cash flows.
Alongside Sukari, we have made
encouraging progress across our EDX
portfolio with the identification of potential
satellite feed targets in close proximity to the
Sukari Mine, whilst in Côte d’Ivoire, we have
delivered a Pre-Feasibility Study for our
Doropo Project.
Sukari Gold Mine
We view safety performance as a good
proxy for management capability – 2023
saw continued improvement with only a
single LTI recorded within the period and
an improvement across LTIFR and TRIFR
metrics relative to the three year trailing
average. Following an ISO audit we are
pleased to have been certified for ISO
45001 Occupational Health and Safety
management systems, giving external
validation to the strength of our safety
systems and processes and external
validation of the work completed by the
team at Sukari over the last few years.
Our work on sustainability continued
with a focus on defining and delivering
our Decarbonisation Roadmap, staffing
across gender diversification, training and
management promotion. We also developed
a roadmap for Global Industry Standard
on Tailings Management (“GISTM”)
conformance with the Engineer of Record
(“EoR”) to manage our tailings facilities –
targeting conformance by 2025 for SGM
across the TSFs we operate.
This year was the first full year that Sukari
benefited from the cost savings and
decarbonisation impact of the 30MW
AC
solar plant commissioned in 2022. The
facility achieved design specifications in
terms of reduction in diesel consumption
and hence carbon abatement and it
is pleasing to see that we are already
delivering into our carbon reduction targets.
Given the success of this facility we are
assessing the solar expansion project
which would provide further cost and
decarbonisation benefits by generating
Having delivered on our commitments
during 2023, we enter 2024 with
confidence and the potential to realise
further opportunity across our portfolio,
supported by a strong balance sheet. With
the investment in resetting our operations
now pivoting to investment in growth we
believe we are at an inflection point that
will soon see us rewarded for the multi-year
investment programme, with stronger free
cash flow enabling us to deliver that growth
while maintaining our track record
of dividend payments.
Egypt
It was a challenging year within the broader
North Africa and Middle East region as
a result of multiple conflicts across the
region alongside the ongoing impact of the
global inflationary environment. Despite
these challenges, the Company was
well positioned to navigate the operating
environment with limited impact on
our business. We believe that the risk
management processes developed through
COVID have enabled the Company to
continue to better identify and therefore
mitigate risks. For example, to minimise
disruption to operations the Sukari Mine
carries higher levels of inventory which are
sourced from a more diversified supply
chain, helping to minimise any potential
interruption to our business in 2023.
We continue to monitor the state of the
broader Egyptian economy as it navigates
short-term pressures and note that as a
‘dollar functional business’ Centamin has
been largely insulated from many of these
pressures.
all our power requirements from full
solar power during daylight hours. In
parallel our Grid Connection Project offers
further carbon abatement and significant
cost benefits following the planned
implementation in 2025 with the aim of
displacing diesel completely from power
generation at Sukari on a combined basis.
2023 saw the publication of the updated
Life of Mine Plan (“LOM”) Plan which
confirms Sukari’s status as a Tier 1 asset
based on the forecast production and cost
profile over the next decade of operations.
We have demonstrated a fully engineered
plan that sees production return to 500,000
ounces per year, costs in the lower half of
the industry cost curve and a mine life in
excess of ten years. The plan is centred
around the lowering of operating risk
through the use of improved data and
technical understanding, underpinning
a more robust planning process that
incorporates operational contingency to
address unforeseen issues that arise from
time to time.
Despite the excellent progress already
made, we are continually searching for
continuous improvement opportunities.
We have already identified areas to refine
and improve this plan.During 2024 we will
continue to investigate these opportunities
and seek further opportunity for growth
and optimisation.
In addition to articulating our long term
vision for the Sukari mine, we also
maintained our focus on delivery into
guidance. Our production was in the lower
end of the guidance range which given the
unscheduled, preventative maintenance
We recognise the importance of the Sukari
Gold Mine and our exploration blocks to our
host nation, Egypt. Through royalties and
profit share payments we have returned
US$139m to the government in 2023 while
indirectly contributing US$686m through
employment and local procurement. The
Sukari Mine is an important employer within
Egypt with over 4,400 jobs at the mine site
through direct and contractor employment.
Given mining’s current and potential
contribution to the broader Egyptian
economy, I am pleased to note that the
modernisation of the Egyptian Mining
industry continued during 2023, with
an in-principle agreement around the
terms of a new Model Mining Exploitation
Agreement (MMEA) with EMRA and the
Ministry of Petroleum & Natural Resources.
The successful completion of two years
of negotiation between an industry group
and the government lays the foundation for
a balanced economic outcome between
state and industry that sits within a robust
development framework that is in-line with
international practices. The new MMEA
unlocks untapped potential of the Arabian
Nubian Shield in Egypt and we have been
able to leverage off our previous success
at Sukari to be one of the first movers in
Egypt’s Eastern Desert and despite only
starting drilling in 2023, we have already
enjoyed drilling success which we will build
on in 2024.
completed in the milling circuit during the
third quarter was pleasing and highlighted
the contingency in the operating plan.
The focus on cost control and prudent
budgeting continued through 2023,
enabling us to beat the all-in sustaining cost
guidance while we further improved cash
flow through capex savings associated with
a change in our rebuild strategy alongside
some deferrals on project spend.
Since 2020 we have placed a significant
focus on our geological understanding
of our assets and 2023 saw continued
progress delivering Resource and Reserve
growth at the operation, driven by
underground exploration success and a
redesign of the open pit and underground
mining areas in the new LOM Plan.
Operationally, the open pit performed well
with the planned waste movement being
achieved while the team mined 44% more
ore compared to 2022 due to mining in
the northerly Stage 7 area of the pit which
saw significant waste to ore conversion
resulting from a lack of drill coverage due
to steep terrain – it is not anticipated that
this will continue into 2024 or beyond. The
underground achieved the targeted volume
growth with one million tonnes of ore hauled
to surface by our mining fleet, up from
625,000 tonnes in 2020 when underground
mining was carried out by a contractor.
We remain on track to achieve 1.4Mt per
annum by 2026 as per the new LOM Plan.
Despite the unscheduled mill maintenance
issue, the processing facility achieved 12Mt
milled with metallurgical recoveries at the
top end of the targeted performance range
which was an excellent outcome.
10
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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CEO’S STATEMENT
CONTINUED
In respect of our tailings facilities, further
progress was made with our work to bring
Centamin in line with the requirements
of the GISTM and we have developed a
roadmap of work streams that will see the
Company conforming by the end of 2025.
Our facilities are in a good position at this
time and the work being completed at
Sukari will ensure we continue to work in
line with international standards around
tailings facilities.
On the workforce front, we continued to
make good progress around our gender
diversity targets and as 2023 saw a
further increase in female employment
at the Sukari Mine – this initiative is
a key priority for the Company and
performance in this area is embedded
in both our corporate lending facility
and management performance metrics
relating to remuneration. While gender
diversification lends itself to new employees,
it has not come at the cost of our existing
workforce – our Employee Development
Pathway training programme continued to
make good progress since commencement
in 2021 and last year we introduced the
Leadership Development Pathway focusing
on the identification and development
of talented individuals and providing a
framework for them to reach their full
potential.
Looking forward to 2024, we expect to
see continued Resource and Reserve
development resulting from our focused
geological exploration efforts, maintain our
upward trajectory in regards to production
growth and retain a focus on cost control to
drive improved cash flow through delivering
such outcomes as the grid connection and
potential solar expansion.
Eastern Desert Exploration (“EDX”)
It was a landmark year for our Egyptian
exploration activities outside of the Sukari
Mining Concession. In 2020, with the
launch of Egypt’s EDX bid round and
vision for a new modern mining industry,
Centamin applied for a number of
exploration licences across the Eastern
Desert – both adjacent to the Sukari Mine
and more remote from the operations. Since
being successfully awarded approximately
3,000km
2
of ground, Centamin has
embarked on both field work to generate
drill targets while simultaneously working
with the government of Egypt and an
industry group to finalise the terms of the
new Model Mining Exploitation Agreement
(“MMEA”).
2024 OUTLOOK
In 2024 we look to continue our track
record of delivery and building on
the platform for growth that has been
established by the reinvestment programme
at Sukari. We are forecasting increased
production of 470,000 to 500,000 ounces
and are targeting all-in sustaining costs of
US$1,200-1,350 per ounce sold.
This year capex at Sukari will be US$215m,
plus US$91m of sustaining deferred
stripping reclassified from operating
costs. This includes the final phase of
contracted waste-stripping programme
which is expected to be completed during
the middle of the year. Other investments
include the Grid Connection Project, fleet
expansion and underground expansion
which will combine to support long-term
production rates of around 500,000
ounces per year and improved margins.
In mid-2023, negotiations between
government and industry were concluded to
set out the final terms of a comprehensive
legal and fiscal framework applicable to
any future discovery in the EDX blocks that
compliments the agreed exploration terms
finalised in 2021. Following agreement of
the terms, the MMEA will be submitted to
Parliament for approval as a special law.
The MMEA terms represent a balanced
and equitable outcome for stakeholders
(government / industry / local communities)
while providing a robust legal framework
in line with the internationally accepted
standards required by the industry for the
long-term investment horizons associated
with mining projects. It also places Egypt in
a competitive position compared to other
mining jurisdictions as it seeks to unlock
its untapped geological potential.
In parallel with the negotiation process,
Centamin continued exploration field work
across our portfolio with an initial focus
on the areas immediately adjacent to the
Sukari Mine.
During 2022 and the first half of 2023, a
series of drill targets in the Nugrus Block
were identified by our team with some eight
zones of interest all within 30km of Sukari.
H2 2023 saw the mobilisation of an Reverse
Circulation (“RC”) rig to undertake an initial
16,216 metre scout drilling campaign
across these targets. The results were
released in early 2024 showing promise at
two of the eight targets – Little Sukari and
Um Majal – where potentially commercial
zones of mineralisation were identified.
In parallel, soil sampling was completed
across the Um Rus block some 50km north
of Sukari with the aim of testing geological
structures for potential gold mineralisation
that could be developed into drill targets.
Late in the year, field work commenced
at the Nadj block, some 100km north of
Sukari, with the timing aimed at seeking to
work in the cooler winter and spring months
ahead of the summer.
2024 will see an aggressive follow up to the
success seen in Nugrus at Little Sukari and
Um Majal. Further mapping, IP surveys and
an extended drilling campaign are planned
to further define the potential of both
targets. Work will continue at Um Rus and
Nadj blocks with the potential to generate
drill targets that can be tested in late
2024 and into 2025, subject to successful
outcomes.
We will follow up on our initial success at
EDX to assess the potential for satellite
feed to be trucked to the Sukari Mine and
complete the Doropo Definitive Feasibility
Study. In respect of government interaction
we will look to finalise the MMEA signature
and have this ratified by Parliament and
progress the work on our 15 year Tax
Exemption Renewal for Sukari to take
effect from March 2025.
After a successful year of excellent progress
across our portfolio, I would like to thank
all our stakeholders who have made this
progress possible. From the dedication
and hard work of our workforce across our
portfolio, through to our host governments
and local stakeholders, it is their support
and engagement that has enabled us to
continue the journey at Centamin across
2023 and set us up for further success
into 2024 and beyond.
MARTIN HORGAN
CHIEF EXECUTIVE OFFICER
AND DIRECTOR
Côte d’Ivoire – Doropo
Good progress was achieved across our
Côte d’Ivoire portfolio with a specific
focus on the advancement of the Doropo
project in northern Côte d’Ivoire. The Pre-
Feasibility Study (“PFS”) demonstrated
a viable project with an attractive scale
of gold production at a competitive cost
profile in line with capital cost intensity
as seen across the region. Based on the
PFS outcomes the project currently meets
Centamin’s hurdles for scale, quality and
financial metrics which supported the
decision to commence a full Feasibility
Study and associated ESIA for Doropo
which will be completed in mid-2024.
The development plan is technically simple
in terms of robust geology, supporting
relatively shallow open pit mining across
multiple sites which feed into an industry
standard process facility – the main
challenge with the project relates to its
interaction with and impacts on local
communities during the construction
and operation phases.
As such, a significant effort has been
completed in respect of mapping and
understanding the baseline social and
environmental setting of the project area
and importantly ensuring that this data
is utilised in the project design phase to
minimise impacts on local communities by
following a hierarchy of: avoid / minimise
/ mitigate / compensate. This has led to
changes in project design to accommodate
this strategy and ultimately deliver a more
robust outcome for all stakeholders.
The delivery of the Doropo PFS has enabled
Centamin to publish our first non-Sukari
reserve and has been one of the key drivers
of the Company exceeding its stated aim
of growing the Group Reserves by more
than 3Moz over the three years from 2021
to 2023, having now delivered 3.5Moz of
Reserve growth.
Building on the success of the PFS,
the Company launched the Definitive
Feasibility Study (“DFS”) and associated
ESIA in mid-2023 with aim of submitting
a mining licence application in mid-2024.
In parallel, we have started to assess the
funding options for the construction phase
of Doropo with the aim of reaching a final
investment decision point in late 2024
with a fully funded construction package
in place alongside the requisite in-country
permits required to enable the Board
to make an informed decision on the
construction phase.
12
13
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OUR BUSINESS MODEL
GEOLOGY & EXPLORATION
WHAT WE DO
GOVERNANCE & SUSTAINABILITY
RISK & OPPORTUNITIES
VALUE CREATED – 2023
EXPLORE
CLOSURE
DEVELOP &
CONSTRUCT
MINE &
PROCESS
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 26
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 page 18
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 41
TALENTED PEOPLE
2,356 EMPLOYEES
US$
62.6
M
paid in wages, salaries and benefits
UNDERSTANDING OUR
LOCAL COMMUNITIES
US$
801
k
invested in our local communities
A ROBUST AND RESPONSIBLE
SUPPLY CHAIN
80
%
Sukari and EDX goods and services are
procured locally from Egyptian suppliers
IN PARTNERSHIP WITH
THE GOVERNMENT
US$
142
M
in payments to government
INCREASED FOCUS
ON PARTNERING WITH
LOCAL CONTRACTORS
95
%
of our contracted workforce
is employed nationally
MINIMISING OUR
ENVIRONMENTAL
FOOTPRINT
7
%
reduction in Scope 1 & 2 GHG emissions relative
to 2021 base year, resulting in a 14% reduction
in carbon intensity on a per ounce basis
REWARDING OUR
SHAREHOLDERS
US$
46
M
in cash dividends attributable to 2023 (including
the proposed final dividend which is subject
to shareholder approval at the AGM)
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.
As we look to expand our operations in Egypt and West Africa we are serious in the
application of ethical business practices, supported by robust systems of corporate
governance, transparency and accountability.
REINVESTMENT OF CASH FLOW IN GROWTH
DISTRIBUTION
OF CASH
DIVIDENDS TO
SHAREHOLDERS
14
15
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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OUR STRATEGY
DELIVERING
GROWTH AND
STAKEHOLDER
RETURNS
In 2023, the Company continued to deliver
against its strategic objectives with
the reinvestment programme at Sukari
advancing towards an expected completion
during 2024. We continued to progress our
organic growth projects in Egypt and Côte
d’Ivoire and have demonstrated continued
commitment to stakeholder returns through
our contribution to the Egyptian economy
and dividend payments to shareholders.
SUKARI VALUE
MAXIMISATION
GROWTH AND
DIVERSIFICATION
COMMITMENT TO
STAKEHOLDER RETURNS
2023 PROGRESS
• Achieved 9.5 million hours LTI-free, an
83% improvement on three-year rolling
average LTIFR
• 2023 guidance delivered
• Achieved gross four-year cost savings target
of US$150 million
• Published the updated Life of Mine Plan
(NI 43-101) for Sukari
• Commissioned the paste-fill plant
• Completed gravity gold circuit study
2023 PROGRESS
• Agreed the EDX exploitation terms with the
Egyptian government
• Completed maiden drilling programme at EDX
• Published Doropo PFS
• Increased M&I resources at Doropo by 23%
2023 PROGRESS
• US$112m paid in EMRA profit share
• US$27m in royalties to Egypt
• US$46m paid and proposed as a FY23 dividend
to shareholders
• Published our Climate Change Strategy to 2030
including our Decarbonisation Roadmap
• Expanded our Egyptian supply chain to 80% of
total procurement with US$631m spent locally
2024 PRIORITIES
• 25% improvement on three-year rolling average
TRIFR
• Produce 470,000-500,000 ounces
• AISC US$1,200-1,350 per ounce sold
• Complete the 285,000 metre drill programme
at Sukari Mine
• Complete the open pit accelerated waste
stripping programme
• Connect to the Egyptian Grid
• Advance and complete the Tax Exemption
Renewal – to take effect from March 2025,
as discussed in note 2.6 on page 161.
2024 PRIORITIES
• Complete the Doropo DFS and ESIA, submit
mining licence application
• Continue Systematic EDX field exploration,
including completing 15,000 metre second
drilling programme in Nugrus
• Continue to evaluate inorganic opportunities
2024 PRIORITIES
• Foreign direct investment to our host countries
• Complete Doropo environmental and social
impact assessment
• Develop Egyptian public engagement campaign
• Deliver on Sustainability Linked Loan targets for
diversity, workforce development and climate
• Return a minimum of 30% of free cash flow to
shareholders in cash dividends
Read more about
SUKARI VALUE
MAXIMISATION
on page 26
Read more about
GROWTH AND
DIVERSIFICATION
on page 26
Read more about
COMMITMENT TO
STAKEHOLDER RETURNS
on page 32
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17
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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TAILINGS MANAGEMENT
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 full conformance
with the Global Industry Standard Tailings
Management (“GISTM”). The standard sets
a high bar and contains 77 requirements
integrating social, environmental, local
economic and technical considerations; with
the aim to eliminate harm to people and the
environment.
Centamin manages two TSFs at Sukari, both
of which are active. Our TSFs are designed,
constructed and operated to a rigorous set
of standards and are carefully managed to
ensure structural stability, human safety and
environmental protection, whilst maintaining
efficient and responsible production. We
publish an annual disclosure report on our
tailings facilities to our website.
Our Tailings Management Critical Risk
Standard sets the minimum requirements for
the management of tailings through facility
design, operation and closure. The standard
also covers incident and emergency
response, management of change
processes, performance reviews
and independent audits.
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 a layered management
assurance system comprising: a formally
appointed external Engineer of Record
(“EoR”) who conducts quarterly dam safety
inspections; a Senior Independent Technical
Reviewer and the Accountable Executive.
The Accountable Executive has ultimate
accountability for the safe management
of our tailings facilities.
Actions
Key areas of improvement in 2023 included:
• Review and update of the quantitative
performance objectives and the Trigger
Action Response Plans (“TARPs”) for
each facility
• Review and update of the Operations,
Maintenance and Surveillance Manual for
each facility and the overarching Tailings
Management System
• Review and update of the Operations,
Maintenance and Surveillance Manual for
each facility and the overarching Tailings
Management System
• Conduct of a Failure Modes and Effects
Analysis (FMEA) for the facilities and risk
assessment
• Routine quarterly meetings involving the
Accountable Executive, the EoR and all
safety-critical roles
Results
In 2023, we made significant progress to
align our tailings management framework to
the GISTM and are able to report our level of
conformance against each principle of the
standard. Overall, our tailings management
and governance system was assessed to
be in conformance with 80 to 85% of the
GISTM requirements as presented in our
Sustainability Report, page 74. We have put in
place a clear action plan and roadmap to fully
conform with the GISTM by end-2025. We will
monitor and report on our progress towards
full conformance.
We publish an annual disclosure report on our
tailings facilities to our website. In 2024, the
content of this disclosure will be updated to
align with Principle 15 of the GISTM.
TRAINING AND PROFESSIONAL DEVELOPMENT
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 fulfil 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.
SENIOR AND MIDDLE MANAGEMENT
ROLES HELD BY NATIONALS
76
%
Approach
All employees across the Group participate
in our annual performance appraisal and
objective setting process. This is a structured
process between each employee and
their line manager to review progress and
mutually agree forward-looking objectives
and personal development goals.
At Sukari we have a professional
development framework for all employees.
The framework sets 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. Each role has
four levels of progression – entry, competent,
productive and proficient; and all employees
have the opportunity to progress to the top
level if they have the ability.
Actions
In 2023 we extended the scope of the Sukari
professional development framework to
include management and supervisory roles.
Performance criteria have been defined
for management and supervisory roles that
comprise both technical and soft skills,
including: management of change; problem
solving; people management; honesty and
integrity; and accountability.
Results
In 2023, 100% of our employees across
the Group participated in their annual
performance appraisal.
Under the scope of the Sukari professional
development framework, 67% of in-scope
employees met the required performance
criteria for progression to a higher level of
competency.
At Group-level, employees received on
average 42.8 hours of total professional
development training.
RESPONDING TO OUR STAKEHOLDER PRIORITIES
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 as presented in
our 2023 Sustainability Report,
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.
Our approach to identifying and
assessment of material issues is presented
in the Sustainability Report on page 14.
OUR MATERIAL ISSUES
SAFETY, HEALTH AND WELLBEING
The nature of our core business activities
of exploration, construction, mining
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.
The policy is implemented at our operations
through robust health and safety systems
that are framed around 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. The key
elements of the safety, health and wellbeing
management system are described in our
Sustainability Report, page 28 to 35.
Actions
In 2023 we advanced compliance to ISO
45001 certification. We appointed an
accredited auditor who concluded that our
occupational health and safety management
system was comprehensive at Sukari and
recommended the operation for certification.
Certification was awarded in March 2024.
We continue to reinforce the involvement of
senior management in demonstrating visible
safety leadership. Managers are required
to participate in at least one structured
assessment of a work activity per week which
encourages them to engage with the workforce
on measures to improve safety performance.
We have made significant progress in mitigating
the risk of unstable ground where the open pit
interacts with historic underground workings by
implementing a state-of-the-art paste backfill
system, enabling a safer and more efficient
mining sequence. This approach eliminates the
need to mine through or around voids, provides
confinement and support below the final
designed pit wall, and prevents void propagation
along fault structures which was a historical
cause of high-level incidents.
In 2023, we enhanced our mental wellbeing
programme through the establishment of
a network of psychological first aiders and,
through certified training, equipping them with
the skills to promote mental wellbeing within
the workplace and to recognise when their co-
workers may need support and / or professional
psychological intervention.
We advanced our employee wellbeing
programmes through the establishment of a
dedicated committee tasked with promoting
a healthier lifestyle through participation in a
variety of sport and social activities. The testing
and screening capabilities of our onsite medical
clinics continued to expand and employees
are now provided with an individual health
management programme as appropriate.
Results
Centamin recorded a Total Recordable Injury
Frequency Rate (“TRIFR”) of 2.83 which
was a 24% improvement on our three-year
trailing average and which included a new
safety record at Sukari of 9.5 million LTI free
workplace hours, a record that has continued
to extend through the end of 2023.
IMPROVEMENT TO TRIFR
24
%
SHAREHOLDERS
LINKS TO OUR STAKEHOLDERS
OUR PEOPLE
COMMUNITIES
& GOVERNMENT
ENVIRONMENT
SUPPLIERS,
CONTRACTORS
& REFINER
18
19
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
RESPONDING TO OUR STAKEHOLDER PRIORITIES
CONTINUED
ENERGY AND CLIMATE CHANGE
The transition to a net zero carbon economy
is expected to profoundly affect our business
model over the medium and long term due
to factors including: the pricing of carbon
emissions; the availability and costing
of commodities and consumables; and
changing market and investor sentiment
towards gold. Decarbonisation is an
environmental, regulatory, financial and
reputational risk and therefore imperative to
embed within our strategic and operational
processes.
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. Our approach is
based on 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 reducing our
contribution to climate change, while also
building operational resilience in the face of
global warming. We recognise that this will
require transformation of how we extract
mineral resources and integration of climate-
related impacts and risk into our business
strategy and financial planning.
Approach
In 2023, the Board approved an Energy
and Climate Change Policy which 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.
Our climate change disclosures are aligned
to the Listing Rules of the UK Financial
Conduct Authority and the Task Force
on Climate-related Financial Disclosures
(“TCFD”) recommendations as presented on
page 54.
Our vision for a low carbon future is a mining
business with sources of onsite and imported
renewable energy, reductions in absolute
energy consumption through operational
efficiencies and creative new technological
solutions, staged electrification of our mobile
fleet and increased recycling in our supply
chain.
Actions
In 2023 we published an interim
Decarbonisation Roadmap to 2030, which
targeted a 30% reduction in operational
Scope 1 and 2 GHG emissions, compared to
our 2021 base-year. Under the scope of this
interim target in 2023:
• We successfully operated our existing
30MW
AC
solar plant generating 86,700
MWh of renewable energy and reducing
our Scope 1 emissions by more than
57,000 tCO
2
-e per annum
• We advanced design and procurement
in support of two new carbon abatement
projects, namely: a 50MW
AC
grid
connection and a 15MW
AC
solar plant
expansion which are scheduled for
commissioning in 2025
In 2023 we completed a detailed scenario
analysis of climate-related transition risks
over the medium and long term to assess
the impact of these risks on business
strategy. This has enabled us to achieve full
consistency with the TCFD recommendations
on strategy.
Results
Emissions intensity of 1.0 tCO
2
-e per oz Au
produced, equivalent to a 7% reduction in
Scope 1 and 2 GHG emissions compared to
our 2021 base-year.
Scope 3 GHG emissions reduction target is
under development in 2024.
Modelling of climate-related risks and
opportunities predicted that the carrying
value of the Group was most significantly
affected by changes in carbon pricing under
a net zero by 2050 Scenario in the medium
and long term. Overall, while the cumulative
impact of these transition risks is assessed
to be material, the business is still judged to
be financially and strategically viable over the
life of our assets.
REDUCTION IN SCOPE 1 & 2
GHG EMISSIONS
7%
SUSTAINABILITY
EXTERNAL
RECOGNITION
In addition to regular engagement
with our institutional shareholders’
stewardship departments,
Centamin engages with various
independent sustainability and
ESG performance benchmarking
and research groups. Centamin’s
sustainability performance and
ESG credentials have resulted in
inclusion in several ESG specific
indices including, but not limited to:
The notable voluntary commitments
and standards to which we aspire,
and the partnerships that support
our effort to create opportunity
through responsible mining include:
DIVERSITY AND INCLUSION
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.
Mining has historically been a male-
dominated industry. In Egypt, Centamin
has faced additional and significant legal
and cultural challenges to the employment
of women. In 2021, Centamin welcomed
changes to the Egyptian regulatory
framework that eased restrictions on the
employment of women to the mining sector.
The new regulations specifically grant
women the right to work in managerial,
technical and administrative roles – however
maintain certain restrictions on the terms of
employment and the types of roles, including
shift work and underground mining.
Furthermore, 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.
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 are committed to addressing gender
imbalance across the Company with gender
diversity representing a key performance
metric under our Remuneration Policy.
Actions
At Board-level, a recruitment process was
initiated as part of ongoing succession
planning and efforts to improve gender
balance in leadership. In January 2024,
Centamin was pleased to announce
the appointment of Ms Hoda Mansour
and Ms Iman Naguib to the Board as
Independent Non-Executive Directors.
In 2023, we maintained focus 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
With recent changes to Board membership,
female representation is now 45% and
meets the targets set by the FTSE Women
Leader Review for 2025.
At Group level, we increased the
representation of women in the workplace to
3.4% from 2.7% in 2022.
In Egypt we are continuing to set a new
benchmark for diversity and inclusion within
the mining sector. Our employees at Sukari
and EDX comprise 58 women, an increase
from 34 women in 2022 and the majority of
whom are in qualified roles.
We are proud to retain our partnership with
Women in Mining UK through which we
actively promote the role of women in the
mining industry.
FEMALES EMPLOYED IN EGYPT
58
SHAREHOLDERS
LINKS TO OUR STAKEHOLDERS
OUR PEOPLE
COMMUNITIES
& GOVERNMENT
ENVIRONMENT
SUPPLIERS,
CONTRACTORS
& REFINER
20
21
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
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.
FINANCIAL
(1)
Why we measure
Performance
NON-FINANCIAL
ADJUSTED
EBITDA
(1)
(US$ million)
GROUP MINERAL
RESOURCES
(Million ounces)
Adjusted EBITDA gives an indication of the Company’s
ability to generate profit from gold sales.
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.
Free cash flow allows Centamin to pursue opportunities
that return shareholder value.
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.
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.
Adjusted EBITDA increased by 25% to US$398 million, as a result of
increased revenue.
Consolidated Group Mineral Resources are 13.4Moz, inclusive of 7.7Moz of
Mineral Reserves. In 2023, Group Mineral Reserves grew by 1.7Moz net of
twelve months depletion driven largely by the addition of maiden reserves
for Doropo.
Adjusted free cash flow for 2023 was US$49.0
million, up 379% on the prior
year (2022: Negative US$17.6 million) reflecting the improved margins.
Gold production for 2023 was 450,058 ounces and within the stated guidance
range of 450,000 – 480,000 ounces.
AISC
(1)
were US$1,205/oz sold, below the guidance range of US$1,250
–1,400/oz sold.
US$204.1 million spent in 2023 (2022: US$283.5 million) of which US$87.8
million was sustaining capital and US$116.3m was non-sustaining capital.
Total 2023 dividend per share of 4.0 cents, equating to a c.3% yield and
including the final proposed dividend of 2.0 cents which is subject to
shareholder approval at the 2024 AGM.
ADJUSTED FREE
CASH FLOW
(1)
(US$ million)
GOLD PRODUCTION
(Ounces)
ALL-IN SUSTAINING
COST
(1)
(US$ per ounce sold)
GROSS CAPITAL
INVESTMENT
(US$ million)
DIVIDEND PER
SHARE (“DPS”)
(US cents)
2023
US$398.2m
US$319.0m
£328.6
2022
2021
2023
US$49.0m
US$(17.6)m
£(6.8)m)
2022
2021
2023
US$204.1m
US$283.5m
$240.9m
2022
2021
2023
4.5c
5.0c
9.0c
2022
2021
2023
13.4
13.6
12.1
2022
2021
2023
450,058
440,974
415,370
2022
2021
2023
1,205
1,399
1,234
2022
2021
R
R
R
R
R
R
R
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.
R
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.
TOTAL MATERIAL
MOVED
(Million tonnes)
Total material movement serves as an indication of
operational effectiveness. If the fleet remains constant
and material moved increases, it demonstrates better
utilisation.
Material movement in 2023, of 130.7Mt of open pit and underground
(ore and waste), above planned volumes.
2023
130,655
137,947
111,297
2022
2021
IMPROVED ON PRIOR YEAR
CONSISTENT WITH PRIOR YEAR
DOWN ON PRIOR YEAR
22
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OVERVIEW
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ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
KEY PERFORMANCE INDICATORS
CONTINUED
ENVIRONMENTAL AND SOCIAL
SAFETY:
GLOBAL TRIFR
(per 1,000,000 hours worked)
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.
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 CO
2
emissions on an
absolute and intensity basis per ounce of gold
production and the effectiveness of our programmes to
reduce our exposure to climate-related risk.
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.
The Employee Development Pathway is 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 work-force training.
Group TRIFR increased by 8% on 2022, to 2.83 per 1,000,000 hours worked,
but representing a 24% improvement on the three-year trailing average.
Group LTIFR remained constant on 2022, at 0.08 per 1,000,000 hours
worked, an 83% improvement on the three-year trailing average, with the
Sukari site achieving nine and a half million hours LTI-free.
Consistent with recent years, 95% of Centamin’s workforce are employed
locally to the country of operation.
81% of goods and services procured from suppliers local to the country of
operation in 2023.
7% decrease in absolute Scope 1 & 2 GHG emissions compared to our 2021
base-year, primarily resulting from a full year’s operation of our 30MW
AC
solar plant.
In 2023, we increased the representation of women in the workplace to
3.44%, from 2.7% in 2022. We now employ 58 women in Egypt, the majority
of whom are in qualified roles.
In 2023 we maintained a high level of training hours per employee. This
includes technical and leadership training programmes.
SAFETY:
GLOBAL LTIFR
(per 1,000,000 hours worked)
LOCAL EMPLOYMENT
% of Group total workforce
LOCAL PROCUREMENT
% of total procurement
GHG EMISSIONS
INTENSITY
Scope 1 & 2 GHG emissions per Au ounce
(tCO
2
-e per Au oz)
GENDER DIVERSITY
(per 1,000,000 hours worked)
WORKPLACE
DEVELOPMENT
Hours of training per employee
(OHS+TECHNICAL)
2023
3.4%
2.7%
2.4%
2022
2021
2023
42.8
44.3
27.3
2022
2021
R
R
R
R
R
S
S
S
Why we measure
Performance
2023
2.83
2.61
3.01
2022
2021
2023
0.08
0.08
0.46
2022
2021
2023
95.1
96.0
94.2
2022
2021
2023
81.0
77.0
62.0
2022
2021
2023
1.00
1.15
1.16
2022
2021
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.
R
S
IMPROVED ON PRIOR YEAR
CONSISTENT WITH PRIOR YEAR
DOWN ON PRIOR YEAR
24
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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OPERATIONAL REVIEW
GOLD PRODUCTION
450,058
oz
+6%
ALL-IN SUSTAINING COSTS
US$1,205/
oz
EGYPT
SUKARI GOLD MINE
2023 VS 2022
In 2023, Centamin delivered another
excellent performance, underpinned by our
improved safety results. We have extended
our track record of meeting production
guidance to a third year, and importantly
beat our AISC guidance, demonstrating the
flexibility within the Sukari Mine resulting
from the operational reset. In line with the
three year operational reset started in 2020
we published the updated Life of Mine Plan,
this marked the culmination of the last three
years of work with a revised outlook offering
not only a substantial improvement on what
was previously published but, importantly
the plan delivers lower operational costs,
reduced operational risk and significantly
reduced carbon emissions.
We remain focused on the protection of
our workforce and the local communities
that we work in. Our safety performance
continues to be strong; while noting that
our ultimate ambition is to create a zero-
harm workplace. We ended the year with
approximately nine and a half million hours
worked at Sukari without a Lost Time Injury
(“LTI”), an 83% improvement on Lost Time
Injury Frequency Rate (“LTIFR”) and a
24% improvement on Total Recordable
Injury Frequency Rate (“TRIFR”) compared
to the three-year trailing average. We had
only one lost time injury in H1 2023 at
Sukari, notwithstanding, there has been
an increase in low consequence, minor
injuries. Proactive measures have been
taken to understand these injuries, identify
trends, and implement mitigations. These
measures include ‘safety stops’ focused on
awareness sessions and the implementation
of programmes that ensure greater
management oversight and enhance
hazard identification education.
In 2023, Sukari achieved gold production
of 450,058 ounces which was in line with
the Company’s guidance of 450,000 to
480,000 ounces and was 2% more than
the prior twelve months in 2022 (‘year-on-
year’).
In line with the new Life of Mine Plan
which provides a roadmap to producing
approximately 500,000 ounces per annum
from Sukari, the 2024 Sukari production
guidance is 470,000 to 500,000 ounces
per annum.
COSTS
Despite the continuing local inflationary
pressures, we remain firmly focused on
stringent cost control and identifying
new potential cost savings opportunities.
Prudent forecasting combined with our
ongoing stretch cost-savings programme
enabled us to deliver costs in line with or
better than the 2023 guidance. Absolute
cash costs of production were US$394
million, a 2% decrease year-on-year. Unit
cash costs of production were US$875/
oz produced, a 4% decrease year-on-year,
reflecting the higher gold production.
Absolute AISC for gold sold was US$550
million, a 10% decrease year-on-year,
reflecting lower production costs and
sustaining capital expenditure, with some
costs deferred in 2024. The resultant unit
AISC was US$1,205 per ounce sold, a
14% decrease year-on-year.
For 2024, we believe we have continued
to take a prudent approach to forecasting
and are guiding cash costs of production to
be between US$700–US$850 per ounce
produced and AISC between US$1,200–
US$1,350 per ounce sold.
OPEN PIT MINING
The open pit exceeded its planned total
material movement driven in part by
outperformance by the accelerated waste-
stripping programme. The accelerated
waste-stripping programme outperformed
by 22% and is expected to be completed
by the middle of the 2024. This continues
to yield positive results, increasing
operational flexibility with multiple working
areas available. An increase in ore tonnes
mined resulted from material originally
designated as waste reclassified to low-
grade ore in Stage 7, consequently leading
to a reduction in the strip ratio and overall
mined grade.
Total open pit material mined of 129Mt, a
5% decrease year-on-year, including:
• Open pit ore mined was 16.8Mt at an
average grade of 0.78g/t, ore was mined
from multiple working areas with ore
processed sourced primarily from Stage
5 North and East. The lower-grade
reclassified ore mined from Stage 7
was primarily sent to the dump leach
or stockpiles
• Open pit waste material mined was
112Mt, a 10% decrease year-on-year
primarily due to the above reclassification
of waste to ore countered in part by
outperformance against the accelerated
waste stripping programme
Stockpiles closed the year at 20.7Mt @
0.46g/t Au.
UNDERGROUND MINING
During 2023, total ore mined was 1,004kt
at an average total grade of 4.33g/t. This
represented a 21% increase in tonnes
year-on-year due to ongoing improvements
in operating flexibility, equipment and
highlighting the benefits of transitioning to
owner-mining in 2022. Grades decreased
by 9% year-on-year as per the mine
plan. The paste-fill plant was successfully
commissioned during H1-23 and is now
fully incorporated into the mining cycle,
adding improved geotechnical benefits for
the operation.
The underground ore split was:
• 673kt of ore mined from stopes, at an
average grade of 4.76g/t, a 34% increase
in tonnes year-on-year and a 19%
decrease in grade year-on-year
• 331kt of ore mined from development,
at an average grade of 3.47g/t, a 1%
increase in tonnes and a 16% increase in
grade year-on-year
PROCESSING
The plant processed 12.0Mt of ore,
at an average feed grade of 1.27g/t, a
1% decrease in throughput and a 1%
improvement in grade year-on-year.
The flexibility that now exists within the
operation was demonstrated during the year
when an issue was identified on SAG mill
1 (“SAG1”) and the decision was taken to
undertake pre-emptive repairs, the work
was successfully completed and an agile
response by the team onsite meant that
we remained able to deliver our stated
guidance. The metallurgical gold recovery
rate was 88.7%, a 1% increase from year-
on-year driven by higher grades, usage of
new reagents and improved comminution
control.
• 11.0Mt from open pit material, at an
average milled grade of 1.0g/t, a 2%
increase in tonnes and consistent grade
year-on-year
• 1.0Mt from underground material, at an
average milled grade of 4.34g/t, a 17%
increase in tonnes and 9% decrease in
grade year-on-year
Dump leach operations contributed
15,841 ounces, a 138% decrease year-
on-year and in line with the mine plan.
With contributions from the south dump
leach pad which is at capacity, alongside
the expanded north dump leach which
commenced leaching on the expanded
pads in the second half 2023.
In line with cost optimisation and
performance studies, 2024 throughput is
expected to be between 12 and 12.25Mtpa.
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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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26
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OPERATIONAL REVIEW
CONTINUED
RESULTS SUMMARY
FY 2023
FY 2022
% Δ
H2 2023
H1 2023
OPEN PIT
Total material mined (kt)
129,186
136,420
-5%
63,885
65,301
Ore mined (kt)
16,784
11,696
44%
9,902
6,882
Ore grade mined (g/t Au)
0.78
0.99
-21%
0.70
0.88
UNDERGROUND
Ore mined (kt)
1,004
829
21%
546
458
Ore grade mined (g/t Au)
4.33
4.75
-9%
4.44
4.21
PROCESSING
Ore processed (kt)
12,020
12,114
-1%
5,938
6,082
Feed grade (g/t Au)
1.27
1.26
1%
1.30
1.23
Gold recovery (%)
88.7
88.2
1%
88.8
88.5
Gold production (oz)
450,058
440,974
2%
229,497
220,561
COST & SALES
Gold sold (oz)
456,625
438,638
4%
237,272
219,353
Cash cost (US$’000)
393,823
402,546
-2%
206,666
187,157
Cash costs (US$/oz produced)
875
913
-4%
901
849
AISC (US$’000)
550,354
613,868
-10%
280,898
269,414
AISC (US$/oz sold)
1,205
1,399
-14%
1,184
1,228
Realised gold price (US$/oz)
1,948
1,794
9%
1,963
1,936
CAPITAL PROJECTS
Total capital expenditure in 2023 was
US$204.1 million, including US$87.8
million of sustaining and US$116.3 million
of non-sustaining capital expenditure.
Adjusted capital expenditure was US$203.3
million, removing the US$0.8 million impact
of sustaining waste-stripping.
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
87% complete with 104Mt of waste mined
as at 31 December 2023. In 2024, the
remaining balance of 16Mt of waste is
scheduled to be moved by the contractor.
Paste-fill plant
Construction was completed and the
plant was commissioned during 2023
using trial stopes within historically mined
areas, ensuring no disruption to current
mining operations. Implementation
was done in parallel with the existing
underground backfilling system of
cemented rock fill (“CRF”) which mitigated
any implementation risk while maintaining
ongoing mining operations. Paste-fill is
now fully integrated into the underground
mining cycle.
SUKARI GOLD MINE
The simplified and methodical approach
to geology and orebody stewardship has
delivered excellent resource and reserve
growth since its implementation, adding 1.6
million ounces to reserves before depletion
since 2020, providing the foundation for the
transition to owner-mining and expansion of
underground production. Reserve growth
has come from both the open pit and
underground driven by the recent improved
geological understanding, resource
modelling and mine design. This has led to
improved continuity of mineralisation and
an increase in reserves in deeper sections
of the orebody.
2023 marked the transition of the open
pit resource modelling from external
consultants to in-house, managed by
Centamin’s Mineral Resource Management
department, having transitioned the
underground modelling back in 2021. Our
improved geological understanding has
resulted in an in-house model which better
reflects the known distribution of the open
pit mineralisation, consequently improving
its application for mine planning.
In 2024, the primary focus will be on
expanding resources in the underground
sector, concentrating on converting Inferred
Resources to Measured and Indicated
categories to offset mining depletion. The
strategy involves ongoing underground
target generation, leveraging geological
interpretation and structural modelling.
Furthermore, drilling will be conducted
on identified targets from designated
exploration drives, aiming to augment
Inferred Resources to the south of Horus
and Horus Deeps where mineralisation
remains open. In the open pit, the goal
remains to continue improving our
understanding of the orebody and increase
the classification of Indicated to Measured
resources. This will be done largely through
advanced grade control drilling specifically
target Sukari Hill, encompassing Stage 7,
and Stage 8, which currently represents
the ultimate pit shell, to further support
near-term mine planning.
Sukari mining concession (160km
2
)
Surface exploration work in 2023 followed
up on the geochemical sampling, drilling
and airborne geophysical survey completed
in 2022 and comprised systematic soil
sampling, detailed geological mapping and
reverse circulation (“RC”) and core drilling.
During the year surface geochemical
sampling coverage of the Sukari Mining
Concession area was completed.
Geological focus delivers growth target
The Mineral Resource Management
(“MRM”) and Exploration teams continue
to deliver impressive results which
demonstrate the quality of our portfolio.
Since 2020 we have added 3.5 million
ounces of Mineral Reserve growth, before
mining depletion, exceeding our 3 million
ounce target. This has been driven by
reserve growth of almost 1.6 million ounces
at Sukari and a maiden 1.9 million ounce
reserve at Doropo. The progress made
in 2023 is testament to the geological
opportunity within our portfolio, the quality
of Centamin’s geological leadership team
and investment in our orebodies.
At Sukari, positive drill results have partially
offset mining depletion and support a
mine life of 13 years for the open pit and
eight years for the underground. The
team also made excellent progress across
our organic pipeline of projects that offer
growth and diversification, including a
23% increase in Measured and Indicated
Resources at Doropo and completion of our
maiden drilling programme within our EDX
blocks, with several targets demonstrating
encouraging results that will be followed up
during 2024.
• V-Shear East – Extension drilling was
done to test potential strike extensions
located to the NE and SW of the
mineralised zone – results indicated that
there are no significant extensions
• Wadi Alam – Follow up drilling showed
several narrow mineralised intercepts,
confirming mineralisation under surface
soil anomalies but no significant
intercepts requiring further drilling
• Quartz ridge – Drilling consisted of an
extension and sterilisation RC drilling
programme, this concluded a final
programme of infill drilling, with results
now handed over to the MRM team
• Arc – The prospect was remapped
showing three parallel bodies of granite
with widths ranging from 30m to 70m
over a strike length of over 1.5km. An
RC drilling programme was completed
with results indicating anomalous gold
over wider intersections. Arc was the last
remaining prospect within the Sukari
Mining Concession requiring drill testing,
at this stage
This work has concluded exploration
of resource targets within the mining
concession pending any follow-up infill or
resource drilling. Over the last two years
we have systematically covered the Sukari
Mining Concession; the surface programmes
have included soil sampling of close to 50%
of the surface area of the mining concession,
rock chip sampling and mapping of selected
drill targets and drill testing of ten identified
prospects. In addition, the entire surface
area of the mining concession was flown
for Magnetic, Radiometric and VTEM
geophysical data, a first for Egypt. The
geophysical dataset alongside the existing
geochemical and drilling data informed the
2023 surface drilling programme across
the concession area. Whilst also providing
a unique understanding of the geophysical
signature of the Sukari orebody which will be
used to inform exploration targeting across
our EDX blocks.
EASTERN DESERT EXPLORATION
(“EDX”)
The EDX blocks comprise 3,000km
2
of
highly prospective greenfield exploration
tenements and represents a significant
landholding of underexplored geological
terrane. Based on remote sensing studies,
including mapping of artisanal mining
sites, the interpretation of satellite imagery
and mineral mapping techniques, all three
blocks of ground are considered to be
highly prospective.
Centamin’s EDX blocks are divided into
three exploration licences:
1.
Nugrus block is 1,086km
2
and adjacent
to the Sukari Gold Mine 160km
2
mining
concession
2.
Um Rus block is 524km
2
and located
50km north of Sukari
3.
Najd block is 1,374km
2
and located
southeast of the former El Sid gold mine
In 2023 Centamin completed a 16,216
metre RC maiden drill programme across
eight targets on the Nugrus block which
is located adjacent to the Sukari Mining
Concession. This was in addition to
comprehensive geochemical and mapping
programmes across Nugrus and um Rus,
with Najd prepared for fieldwork which has
commenced in early 2024.
Nugrus block
Exploration activity commenced in the first
half 2022 with priority given to Nugrus
given its proximity to the Sukari Mining
Concession and consequent lowering of the
threshold of potential economic discovery
due to the possibility of utilising the Sukari
Mine processing infrastructure, subject
to agreement with our local partners, the
Egyptian Mineral Resource Authority.
Since starting fieldwork, 741 BLEG
samples, 18,257 soil samples and 3,066
rock chip samples have been collected
across the Nugrus block. This systematic
fieldwork initially delineated seven high
priority drill targets for a maiden drill testing
programme which commenced in May
2023. An eighth target (Wadi Marwah)
was added mid-programme, following
encouraging ongoing generative exploration
results. Significant drill intercepts include:
Little Sukari prospect (28km west of the
Sukari Gold Mine):
• 46m at 3.3 grams per tonne of gold (“g/t
Au”) from 91m downhole
• 77m at 1.84 g/t Au from 44m
• 69m at 2.01 g/t Au from 81m
• 46m at 2.14 g/t Au from 116m
• 29m at 2.71 g/t Au from 2m
Umm Majal prospect (23km west of Sukari
Gold Mine):
• 18m at 2.33 g/t Au from 21m
• 15m at 1.46 g/t Au from 4m
• 8m at 2.67 g/t Au from 2m
• 5m at 16.20 g/t Au from 44m
RESERVE GROWTH
TARGET
3
Moz
add 3Moz in reserves by 2024
TODAY
3.5
Moz – Target achieved
added 3.5Moz in reserves before depletion
28
29
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
OPERATIONAL REVIEW
CONTINUED
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.
The Little Sukari prospect returned the most
encouraging results of the programme.
Zones of consistent gold mineralisation up
to 30-60 metres wide occur over a strike
length of at least 250 metres and extend
at least 230 metres downdip to a vertical
depth of approximately 200 metres below
surface. Mineralisation remains open at
depth.
The Umm Majal prospect is located
five km southeast of Little Sukari. The
gold mineralisation is hosted in an altered
granitoid that appears to be distinct
from the host rocks at Little Sukari, but
occurs within a similar ophiolitic-melange
sequence. Mineralisation occurs over a
strike length of 200-250 metres and the
gold mineralised zone is up to 20 metres
wide. Initial shallow drill testing has
demonstrated gold mineralisation up to
30-40 metres below surface. No deep holes
were drilled to test continuity at greater
depths and the mineralisation remains
open downdip.
Um Rus Block
Exploration activities commenced in the
second half of 2022 with systematic
generative fieldwork carried out with the
aim of identifying justifiable drill targets.
Fieldwork comprised the collection of
302 BLEG samples, 2,700 soil samples,
and 69 rock grab and chip samples. Soil
sampling blocks were identified through
BLEG anomalism, the occurrence of
artisanal mining and favourable lithology
and structure. This first phase of work
was completed in December 2023. Soil
geochemistry results are expected in
early 2024 with follow up work, including
drill testing of justifiable drill targets, to
commence during 2024.
Najd Block
During Q4 2023 a field camp was set up
in the Najd block, and by late December
2023, a BLEG sampling programme
had been initiated. The programme
was designed based on a blend of
geomorphological and lithostructural
interpretation, spectral and alteration
mapping, and the identification of artisanal
mining sites, all of which were derived from
satellite imagery. BLEG sampling will be
carried out through Q1 2024. A follow up
exploration programme will be driven by the
results of the BLEG survey.
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
Doropo Gold Project is in the northeast of
Côte d’Ivoire, situated in the north-eastern
Bounkani region between the Comoè
National Park and the international border
with Burkina Faso, 480km north of the
capital Abidjan and 50km north of the city
of Bouna.
The licence holding is currently 1,847km
2
and covers 13 gold deposits, named
Souwa, Nokpa, Chegue Main, Chegue
South, Tchouahinin, Kekeda, Han, Enioda,
Hinda, Nare, Kilosegui, Attire and Vako.
Approximately 85% of the gold deposits are
concentrated within a 7km radius (‘Main
Resource Cluster’), with Vako and Kilosegui
deposits located within an approximate
15km and 30km radius, respectively.
Geologically, Doropo lies entirely within the
Tonalite-Trondhjemite-Granodiorite domain,
bounded on the eastern side by the
Boromo-Batie greenstone belt, in Burkina
Faso, and by the Tehini-Hounde greenstone
belt on the west.
The PEA was completed in 2021, and in
2023 Centamin published the pre-feasibility
study (“PFS”) which demonstrated an
economically robust project that met
Centamin’s hurdle rates to proceed with
a definitive feasibility study (“DFS”), the
DFS is due to be published by the middle
of 2024.
Highlights from the PFS include:
• Maiden Mineral Reserve Estimate of
1.87 million ounces (“Moz”) of Probable
Mineral Reserves, at an average grade
of 1.44 grams per tonne of gold (“g/t
Au”), supporting a ten-year life of mine
(“LOM”)
• Average annual gold production of
173koz over the LOM, with an average of
210koz in the first five years
• All-in sustaining costs (“AISC”) of
US$1,017 per ounce (“/oz”) sold over
the LOM, with an average AISC of
US$963/oz for the first five years
• The mine plan assumes conventional
open pit mining of a sequence of shallow
pits
• Total construction capital expenditure
(“capex”) of US$349 million, inclusive
of a 10% contingency, with a 2.3 year
payback at a US$1,600/oz gold price
• Robust economics with a post-tax net
present value of US$330 million and
internal rate of return (“IRR”) of 26%,
using 5% discount rate (“NPV5%”) and
US$1,600/oz gold price
Mineral Reserve Estimate
June 2023
2022
Category
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
OPEN PIT
Proven
–
–
–
–
–
–
Varied cut-offs 0.39 to 0.71g/t
Probable
40.6
1.44
1.9
–
–
–
TOTAL MINERAL RESERVE
P & P
40.6
1.44
1.9
–
–
–
The Mineral Reserve was published with the PFS and is reported in accordance with the CIM Definition Standards for Mineral Resources
and Mineral Reserves (CIM, 2014). The Mineral Resource was converted by applying Modifying Factors. The Probable Mineral Reserve
estimate is based on the Mineral Resource classified as Indicated. The project has a current Mineral Reserve life of ten years.
RESOURCE GROWTH
Following the completion of the DFS drill
programme the Doropo M&I Mineral
Resources increased by 23% to 77Mt at
1.26g/t for 3.1Moz of contained gold. The
updated resource will form the basis of the
DFS reserve update.
A total of 49,831 metres of drilling was
completed between October 2022 and
October 2023, and focused on converting
Inferred to M&I Resources within the
resource pit shells, confirming reserve pit
depths and initial grade control drilling. The
grade control drilling was conducted for
planning and optimisation purposes. This
programme resulted in a maiden Measured
Resource classification at largely consistent
or higher grades than the deposits
respective Indicated Resources. Cut-off
grades were lowered from 0.5g/t to 0.3g/t
to account for the Mineral Reserves, as
detailed below, in the oxide material which
are approximately 0.4g/t. The gold price
assumption for Mineral Resource estimates
was unchanged at US$2,000/oz.
PROJECT UPDATE – DFS AND ESIA
The ESIA has been submitted to relevant
authorities for review, with local community
engagement ongoing. Work on the DFS is
well advanced and encouragingly much of
the work and has been supportive or in line
with the work done during the PFS. The
DFS is due to be published by mid-2024,
a progress summary is below.
Metallurgy
• More detailed test work completed to
refine and support PFS assumptions
• Results are largely in line with the PFS
Infrastructure design
• Major infrastructure locations are
finalised
• HV powerline design work continues
to progress
• Geotechnical drilling complete
Geotechnics, hydrogeology and
hydrology
• Drilling has been completed
• Similar pit slope design parameters to
PFS
• Geochemical studies showing no Acid
Rock Drainage issues
Process design
• No changes in process methodology
• Plant layout being optimised
• Capital and operating costs estimates
progressing well
Mine design
• Mining contract tendering complete with
evaluation ongoing
• Initial mine optimisation complete
• Pit designs and scheduling well
advanced
Doropo Project Mineral Resource table
October 2023
October 2022
Category
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
2023 0.3g/t cut-off
2022 0.5g/t cut-off
Measured (M)
1.5
1.60
0.1
–
–
–
Indicated (I)
75.3
1.25
3.0
51.5
1.52
2.5
M+I
76.9
1.26
3.1
51.5
1.52
2.5
Inferred
7.4
1.23
0.3
13.7
1.14
0.5
Please refer to the Additional Information section for the Consolidated Mineral Resource statements and notes.
ABC PROJECT
The ABC Project is located in western Côte d’Ivoire. The Company has a total 1,149km
2
of landholding. In 2023, three RC drill rigs were
deployed to ABC to carry out resource extension drilling with the aim of linking up the Kona Central and Kona South resource areas.
RC results defined potential mineralised extensions to the Kona South and Kona Central resource areas with gold associated with the
same meta-psammite unit consistently. Potential extensions include 600m (300m at either end) of the Kona South resource area, and
a roughly 500m extension to the Kona Central resource area. Mineralisation is now indicated over 11km of strike within the Kona permit
along the Lolosso structure.
30
31
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
FINANCIAL REVIEW
The last three years have been about
delivering the bold capital reinvestment
plans required to sustain our business and
drive both higher production and improved
margins for the next decade and beyond.
We exit this reinvestment period with a
much improved business which is well set
for the future.
The significance of having a tier one asset
is evident when faced with economic
challenges. Inflation was the one common
threat that had an impact across the whole
industry in 2023. Despite these pricing
pressures and persisting global supply-side
issues, our focus was firmly on what we
could control. We did this through rigorous
planning and subsequent disciplined
compliance to plan, underpinned by
our culture of continuous improvement
disciplined execution on plans, and
supported by a robust risk and opportunity
assessment to ensure we were always
striving to improve.
FINANCIAL PERFORMANCE
Centamin delivered a resilient financial
performance that was in line with our
expectations and guidance for the year. The
Company’s strong operational performance
throughout the year was supported by the
healthy gold price environment, which
remained robust in 2023.
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. All of which are external factors of
which we need to minimise the impact. We
have protected our exposure to the gold
price through the gold price protection
programme from July 2023 through to June
2024 (240,000 ounces at a US$1,900 gold
price per ounce) to match the remaining
significant capital investment period
through to June which ends in H1 2024.
Operational cash flow increased by 21% to
US$354 million. Cash flows from investing
activities were impacted mainly by gross
capital expenditure of US$204 million,
predominantly invested in sustaining the
long-term production from Sukari.
During 2023 each partner received Profit
share distributions of US$112 million
(2022: US$36 million (EMRA) and US$46
million (Centamin).
In addition to the profit share distributions,
Centamin also received cost recovery
payments totalling US$45 million from
SGM.
Centamin financed growth projects of
US$36 million into Sukari, spent US$31
million in greenfield exploration related
costs, advancing of our organic growth
pipeline at our exploration projects Doropo,
EDX and ABC, plus paid for our corporate
activities.
COST MANAGEMENT
Our approach to forecasting and stringent
cost management meant we were able to
counter some of the global inflationary cost
pressures last year and delivered costs
either below or as stated in our guidance
(albeit that the ounce profile was at the
lower end of the range).
Continued good progress was made during
the year on the cost savings programme.
At 31 December 2023 we had extracted
US$185 million of sustainable cost savings
from the business over the period of the
programme. We remain motivated to find
further opportunities, initiatives included
the solar plant, light weight truck trays,
re-ripping of dump leach material and
appointment of a new underground drilling
contractor.
The most significant future opportunity
remains the national grid power tie in. The
tender for connection to the national grid
was successfully completed, and the Sukari
leadership is busy drafting a definitive
agreement with the winning bidder, with
an estimated energisation date at the
beginning of 2025.
Programme 2020 -2023
Cost savings achieved per year
31 Dec 2023
US$’000
2020
44,000
2021
28,870
2022
43,273
2023
68,777
Cumulative total cost savings
since start of initiative
184,920
Revenues increased year-on-year by 13%
to US$891 million, generated from annual
gold sales of 456,625 ounces, up 4%, at
an average realised price of US$1,948 per
ounce, up 9% year-on-year. A total of 6,915
ounces of unsold gold bullion was held
onsite at year end, due to the timing of gold
shipments across the year end.
As a Group, Adjusted EBITDA increased by
25% to US$398 million, at a 45% EBITDA
margin, principally driven by;
• a 2% increase in gold production, as
scheduled, at an average realised gold
price that was 9% higher as compared to
last year
• cost of sales (excluding the effect of
depreciation and amortisation) remaining
flat year-on-year which was due to a 5%
decrease in the combined open pit and
underground material mined at a slightly
higher cost per tonne, part of this cost
has been capitalised to mining properties
as a waste stripping asset
Profit before tax increased by 14% to
US$195 million, due to;
• a 13% increase in revenue of
US$103 million as compared to 2022,
in line with both increased gold sales
and gold prices
• a 10% increase in cost of sales driven
by a marginal change in mine production
costs, however a 25% movement of
mining inventory (decrease) against
a 35% movement depreciation and
amortisation costs (increase), accounts
for the net change
• a 240% increase in interest income
due to higher interest rates on amounts
placed in interest bearing deposit
products in 2023 as compared to
deposit yields in 2022
Cash costs of production were US$875
per ounce produced, down 4%, reflecting
a 5% decrease in total open pit material
mined tonnes, and a 2% decrease in
tonnes processed, offset by a 36% year-
on-year increase in total underground
mined tonnes and a 2% increase in gold
ounces produced.
AISC was US$1,205 per ounce sold, down
14%, mainly due to a 63% decrease
in other sustaining capital expenditure,
partially offset by a 12% increase in
royalties on gold sales paid to the Egyptian
government, a 36% increase in corporate
administration costs which was driven by a
number of one off projects. This was also
complemented by a 4% increase in gold
ounces sold (which was as scheduled and
in line with guidance).
FUEL PRICES
Major macroeconomic and geopolitical
events influenced the oil price throughout
2023 with rising interest rates and the risks
of recessions weighing on oil price demand
outlooks.
Oil price is the most significant commodity
assumption materially affecting the cost
base of our business. The average price
realised for the 2023 year was US$0.80
per litre which was below actual spend and
what we had budgeted for and resulted
in savings of US$15m despite using 2.3
million litres more than budgeted (actual
fuel used in 2023 was 165m litres) with
majority being used in the underground
operations due to increased activity.
Total diesel consumption across the
Sukari operation in 2024 is expected to be
160m litres equating to US$145 million at
US$0.90/litre. The solar plant performance
has resulted in a significant reduction in
diesel consumption compared to historical
averages, while the mining contractor’s
diesel consumption is reduced by 50% as
the waste mining contract comes to an end
by June 2024.
Further fuel savings are expected beyond
2024 with the Grid Connection Project and
solar expansion opportunities. Refer to our
Decarbonisation Roadmap on page 21
or more information on the initiatives
underway to fully displace the use of
diesel oil for power generation at Sukari.
• a 12% decrease in other income, mainly
driven by foreign exchange movements
during the year
• a 40% increase in other operating costs
of US$20 million mainly due to a non-
cash US$4 million inventory write off, a
US$3 million increase in royalties (due
to the higher gold sales) and an US$9
million non-cash loss on asset disposals
The Group implemented a new
Enterprise Resource Planning (“ERP”)
software system, SAP (S4 HANA) during
the year. As part of the implementation
and migration from the legacy system,
an extensive review process of the fixed
assets was performed as part of the fixed
asset register and operational records
clean up. Consequently assets that were
identified as not being in use and/or
had been previously replaced by other
assets (e.g. mobile equipment rebuilds)
had their carrying values derecognised
from the statement of financial position
resulting in a US$9 million loss on asset
disposals, a 6% increase in greenfield
exploration and evaluation expenditure.
As expected, and in line with our three-year
reinvestment plans, Centamin’s cash flows
and earnings were positively impacted in
2023 by higher gold production and sales,
offset by higher costs.
CASH FLOWS
Operational cash flow increased by 21% to
US$354 million. Cash flows from investing
activities were impacted mainly by gross
capital expenditure of US$204 million,
predominantly invested in sustaining the
long-term production from Sukari.
IMPACT OF FOREX
Some of Egypt’s more long-standing
challenges have intersected with multiple
global shocks causing a foreign exchange
crisis, historic inflation, and pressures to
worsen the already-stretched fiscal and
external accounts.
While triggered by the global polycrisis, the
rising macroeconomic imbalances in Egypt
reflect pre-existing domestic challenges,
including the sluggish non-oil exports and
FDI, constrained private sector activity and
job-creation, as well as the elevated and
rising government debt. Egypt’s overall
macroeconomic environment during
FY2023/24 is expected to be undermined
by the concurrent global shocks and
domestic macroeconomic imbalances
and regional instability, before starting to
improve over the medium-term as the
country continues to push ahead with
stabilisation and structural reforms.
The three pillars of Egypt’s path forward
focus on foreign exchange management,
inflation targeting at the central bank,
and private sector development / State
Owned Enterprises (“SOE”) reform. There
remain notable opportunities for Egypt
to attract foreign capital and investment
which will drive much-needed sustainable
inflows for a medium-term solution to the
current economic imbalances. A significant
step forward was made on the reform
programme when the Egyptian pound
(“EGP”) was free floated on 6 March 2024.
Our business is primarily USD denominated
so largely protected against the EGP
devaluation, but local supply chain
costs and availability of goods becomes
challenging. The workforce in Egypt were
awarded two sets of increases during 2023
with a 15% increase in January 2023 and
a further 30% increase in October 2023.
We continue to focus on and manage these
challenges as a business to ensure that our
EGP component cost base remains well
managed (circa 15% of the Group spend)
and anticipate that while inflation remains
a challenge in the short term, expect it to
settle over the longer term.
ROSS JERRARD
CHIEF FINANCIAL OFFICER
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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
FINANCIAL REVIEW
CONTINUED
CAPITALISATION OF OPEN PIT
WASTE-STRIPPING
The largest investment in 2023 was on
the accelerated waste-stripping (deferred
waste-stripping) which added US$90
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$1 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.
Refer to note 2.10 to the financial
statements for further information.
STRONG BALANCE SHEET
Centamin closed the 2023 financial
year with cash and liquid assets of
US$153 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 and funded by Centamin,
is recovered over three years, making these
investments ideally suited for the structure
of the RCF. Due to the strong operational
performance supported by the gold price
we were able to manage our investments
without drawing on the RCF facility during
2023.
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 a key consideration when assessing
capital allocation.
2023 DIVIDEND
Stakeholder, and specifically shareholder
returns, are central to our Company
strategy. We have built a ten-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 2023 as the final full year
of reset of Sukari, the Board proposes a
2023 final dividend, for the year ended
31 December 2023 of 2.0 US cents per
share (circa.US$23 million), bringing the
proposed total dividend for 2023 to 4 US
cents per share (circa.US$46 million):
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 2023, a key focus was on improving
operational efficiencies to achieve
consistent operational performance with
US$88 million spent on sustaining capital
expenditure and US$116 million on non-
sustaining, or ‘growth’ capital expenditure.
Impressive progress was made on project
delivery as we achieved several further
important milestones, most notable the
successful implementation of the SAP (S4
HANA) ERP system which will greatly assist
in centralising our accounting and internal
control systems across the Group and will
enable faster and more efficient reporting.
ACCELERATING BUSINESS
TRANSFORMATION:
2023 has been pivotal in our ongoing
digital transformation journey, marking a
significant step in enhancing operational
efficiency and financial oversight across
our Group.
The successful implementation of SAP
across our key operational areas – finance,
procurement, human resources, and
maintenance, marks a transformative
step in our commitment to operational
efficiencies, financial excellence and
strategic growth.
Enhanced financial oversight
Integrating SAP’s financial management
solutions has started and will continue
to evolve and transform our approach to
fiscal operations, centralising financial
activities across all our entities, enabling
real-time, integrated financial reporting and
providing greater transparency and control.
This streamlined financial consolidation
will facilitate strategic decision making,
particularly in cost management, and is
a good foundation for robust financial
governance.
• Interim 2023 dividend paid: 2.0 US cents
per share
• Final 2023 dividend proposed: 2.0 US
cents per share
The final 2023 dividend is subject to
shareholder approval at the AGM on 21
May 2024 and following approval would
be paid on 19 June 2024.
MANAGING OUR RISKS AND
OPPORTUNITIES
In an unpredictable world, due to increasing
macroeconomic and geopolitical pressures,
you can read in the Principal Risks and
Uncertainties on page 44 some of the
main areas we consider to enable more
effective decision making that supports
the delivery of our objectives and improves
our performance as a responsible mining
company.
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 2024
as 2023, 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.
ROSS JERRARD
CHIEF FINANCIAL OFFICER
Revitalising procurement and supply
chain management
SAP’s advanced procurement solutions
are expected to significantly enhance
our procurement and supply chain
management processes. This will lead to
increased time and cost efficiencies and
strengthened supplier relationships, further
bolstering our supply chain resilience and
strategic purchasing capabilities.
Human resources
The SAP suite has brought a new
dimension to our human resources
management. By automating and
streamlining HR processes, we will enhance
employee engagement and efficiency, whilst
aligning our workforce strategy with our
broader business objectives.
Transforming maintenance operations
A notable addition to our SAP integration is
through our maintenance teams. The SAP
Maintenance module will improve how we
manage and optimise our maintenance
activities. This integration ensures more
efficient scheduling, tracking, and execution
of maintenance tasks, and is expected to
significantly reduce downtime and increase
operational reliability. The enhanced
visibility and control over maintenance
operations will improve asset longevity
and contribute to overall operational cost
savings.
Future proofing our business
The strategic implementation of SAP
solutions across our diverse operational
areas signifies our commitment to
leveraging technology for sustainable and
scalable growth. This comprehensive digital
transformation enhances our day-to-day
operations, long-term strategic planning and
execution capabilities.
As we move forward, the SAP
implementation will continue to support the
redefinition of our business processes and
will be instrumental in driving our success
whilst maintaining our commitment to
excellence within our sector.
PRIMARY STATEMENTS HIGHLIGHTS
Year ended
31 December 2023
US$’000
Year ended
31 December 2022
US$’000
Revenue
891,262
788,424
Revenue from gold and silver sales for the year increased by 13% year-on-year to US$891 million (2022: US$788 million) with the year-
on-year average realised gold price also increasing by 9% to US$1,948 per ounce sold (2022: US$1,794 per ounce sold) complemented
by a 4% increase in gold ounces sold of 456,625 ounces (2022: 438,638 ounces).
Year ended
31 December 2023
US$’000
Year ended
31 December 2022
US$’000
Cost of sales
(596,836)
(544,075)
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 10% year-on-year to US$597 million, mainly as a result of:
• 35% increase (US$51 million) in depreciation and amortisation charge which increased from US$146 million to US$197 million (+ve),
primarily due to the following drivers:
–
increase in the depreciation and amortisation base from new fixed assets capitalised during the year in addition to increased charges
due to additional volumes moved; and importantly
–
SAP (S4 HANA) was implemented during the year, an extensive review process of the fixed asset components and useful lives was
performed as part of the implementation and migration from the legacy system to the new SAP fixed asset register, this accelerated
the depreciation of some assets resulting in a higher depreciation charge in the year as asset categories were depreciated at a much
more granular component level.
Year ended
31 December 2023
US$’000
Year ended
31 December 2022
US$’000
Dividend paid – non-controlling interest in SGM
(112,000)
(35,492)
The profit share payments during the year are reconciled against SGM’s audited financial statements. Any variation between payments
made during the year (which are based on the Company’s estimates) and the audited financial statements, may result in a balance due
and payable to EMRA or advances to be offset against future distributions. SGM’s 30 June 2023 financial statements have been audited
and signed off.
Refer to note 1.2.1.2 in the notes for details of the treatment and disclosure of the EMRA profit share.
34
35
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
FINANCIAL REVIEW
CONTINUED
CAPITAL EXPENDITURE
The following table provides a breakdown of the total capital expenditure of the Group:
Year ended
31 December 2023
US$’000
Year ended
31 December 2022
US$’000
Underground exploration
9,225
8,636
Underground mine development
32,350
32,107
Other sustaining capital expenditure
46,241
124,162
Total sustaining capital expenditure
87,816
164,905
Non-sustaining exploration expenditure
2,947
3,539
Other non-sustaining capital expenditure
(1)
113,348
115,099
Total gross capital expenditure
204,111
283,543
Less:
Sustaining element of waste stripping capitalised
(2)
(843)
(51,527)
Capitalised Right of Use Assets
(1,216)
(7,746)
Adjusted capital expenditure (after reclassification)
202,052
224,270
(1)
Non-sustaining capital expenditure included further spend on the solar plant, underground paste-fill plant and the Capital Waste Stripping. Non-sustaining costs are
primarily those costs incurred at ‘new operations’ and costs related to ‘major projects at existing operations’ that will materially benefit the operation.
(2) Reclassified from operating expenditure.
EXPLORATION EXPENDITURE
The following table provides a breakdown of the total exploration expenditure of the Group:
Year ended
31 December 2023
US$’000
Year ended
31 December 2022
US$’000
Greenfield exploration
Burkina Faso
869
2,928
Côte d’Ivoire
25,226
25,120
Egypt – Eastern Desert Exploration
5,558
1,675
Total greenfield exploration expenditure
31,653
29,723
Brownfield exploration
Sukari Tenement
12,172
12,175
Total brownfield exploration expenditure
12,172
12,175
Total exploration expenditure
43,825
41,898
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$2 million
or 6% as more exploration and evaluation work specifically drilling and assaying at the two Côte d’Ivoire sites was done in 2023 as
compared to 2022 as well as the expansion of exploration work in the Eastern Desert Exploration area under the new Egypt permit areas.
The brownfield capitalised exploration costs on the the Sukari Mining Concession area remained flat year-on-year.
The spend in Burkina Faso was on key services, wind down procedures and other regulatory obligations to formally exit the country.
The process to formally exit and wind-up the in country incorporated entities is at an advanced stage.
SUBSEQUENT EVENTS
As referred to in note 5.3 of the Group Consolidated Financial Statements, subsequent to the year end, the Board proposed a final
dividend for 2023 of 2.0 US cents per share. Subject to shareholder approval at the Annual General Meeting on 21 May 2024, the final
dividend will be paid on 19 June 2024 to shareholders on record date of 31 May 2024.
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 flows 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 under IFRS.
EBITDA excludes the impact of depreciation and amortisation, income from 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 fair value movements on derivative financial instruments, 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 2023
US$’000
31 December 2022
US$’000
Profit for the year before tax
195,140
171,001
Finance income
(4,127)
(1,214)
Finance costs
3,526
2,459
Depreciation and amortisation
198,127
146,769
EBITDA
392,666
319,015
Add back:
Net fair value loss on derivative financial instruments
5,509
–
Adjusted EBITDA
398,175
319,015
36
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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
FINANCIAL REVIEW
CONTINUED
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 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
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 would choose 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.
RECONCILIATION OF CASH COST OF PRODUCTION PER OUNCE PRODUCED:
31 December 2023
31 December 2022
Mine production costs (note 2.3)
US$’000
412,827
408,543
Less: Refinery and transport
US$’000
(1,871)
(2,324)
Movement in inventory
(1)
US$’000
(17,133)
(3,673)
Cash cost of production – gold produced
US$’000
393,823
402,546
Gold produced – total (oz.)
oz
450,058
440,974
Cash cost of production per ounce produced
US$/oz
875
913
(1)
The movement in inventory on ounces produced is only the net movement in mining stockpiles and ore in circuit while the movement in ounces sold is the net
movement in mining stockpiles, ore in circuit and gold in safe inventory.
A reconciliation has been included below to show the cash cost of production metric should gold sold ounces be used as a denominator.
RECONCILIATION OF CASH COST OF PRODUCTION PER OUNCE SOLD:
31 December 2023
31 December 2022
Mine production costs (note 2.3)
US$’000
412,827
408,543
Royalties
US$’000
26,682
23,842
Movement in inventory
(1)
US$’000
(9,536)
(6,789)
Cash cost of production – gold sold
US$’000
429,973
425,596
Gold sold – total (oz.)
oz
456,625
438,638
Cash cost of production per ounce sold
US$/oz
942
970
31 December 2023
(1)
31 December 2022
(1)
Movement in inventory
Movement in inventory – cash (above)
US$’000
(9,536)
(6,789)
Effect of depreciation and amortisation – non-cash
US$’000
22,855
17,448
Movement in inventory – cash & non-cash (note 2.3)
US$’000
13,319
10,659
(1)
The movement in inventory on ounces produced is only net the movement in mining stockpiles and ore in circuit while the movement in ounces sold is the net
movement in mining stockpiles, ore in circuit and gold in safe inventory.
RECONCILIATION OF AISC PER OUNCE SOLD:
31 December 2023
31 December 2022
Mine production costs (note 2.3)
US$’000
412,827
408,543
Movement in inventory
US$’000
(9,536)
(6,789)
Royalties (note 2.3)
US$’000
26,682
23,842
Corporate administration costs
US$’000
33,110
24,282
Rehabilitation provision interest expense – unwinding of discount
US$’000
1,333
588
Sustaining underground development and exploration
US$’000
41,575
40,743
Other sustaining capital expenditure
US$’000
46,241
124,162
By-product credit
US$’000
(1,878)
(1,503)
All-in sustaining costs
(1)
US$’000
550,354
613,868
Gold sold – total (oz.)
oz
456,625
438,638
AISC per ounce sold
US$/oz
1,205
1,399
(1) Includes refinery and transport.
38
39
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
FINANCIAL REVIEW
CONTINUED
3)
Cash and cash equivalents, bullion on hand and gold and silver sales debtor silver sales debtor and financial assets
at fair value through profit or loss
Cash and cash equivalents, bullion on hand, gold and silver sales debtor is a non-GAAP financial measure of the available cash and
liquid assets at a point in time. Management uses this measure internally to better assess performance trends for the Company as a
whole. Management considers that, in addition to conventional measures prepared in accordance with GAAP, certain investors use such
non-GAAP information to evaluate the Company’s performance and ability to generate cash flow and the measure is intended to provide
additional information.
This non-GAAP measure does not have any standardised meaning prescribed by GAAP and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with GAAP. This measure is not necessarily indicative of cash and cash
equivalents as determined under GAAP and other companies may calculate it differently.
RECONCILIATION TO CASH AND CASH EQUIVALENTS, BULLION ON HAND, GOLD AND SILVER SALES DEBTOR
AND FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS:
31 December 2023
US$’000
31 December 2022
US$’000
Cash and cash equivalents (note 2.17(a))
93,322
102,373
Bullion on hand (valued at the year-end spot price)
14,261
24,440
Gold and silver sales debtor (note 2.8)
44,917
29,832
Derivative financial instruments
654
–
Cash and cash equivalents, bullion on hand, gold and silver sales debtor and financial assets at fair value
through profit or loss
153,154
156,645
The majority of funds have been invested in international rolling short-term interest money market deposits.
4) Free cash flow and adjusted free cash flow
Free cash flow is a non-GAAP financial measure. Free cash flow is a measure of the available cash after distributions to the Non-
Controlling Interest (“NCI”) in SGM, being EMRA, that the Group has at its disposal to use for capital reinvestment and to distribute
to shareholders of the parent. Free cash flow is intended to provide additional information, does not have any standardised meaning
prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance
with GAAP. This measure is not necessarily indicative of operating profit or cash flow from operations as determined under GAAP and
other companies may calculate this measure differently.
31 December 2023
US$’000
31 December 2022
US$’000
(1)
Net cash generated from operating activities
353,600
292,524
Less:
Net cash used in investing activities
(198,768)
(274,583)
Dividend paid – non-controlling interest in SGM
(112,000)
(35,492)
Free cash flow
42,832
(17,551)
Add back:
Transactions completed through specific available cash resources
(2)
6,163
–
Adjusted free cash flow
48,995
(17,551)
(1)
The comparatives in the Consolidated Statement of Cash Flows for the year ended 31 December 2022 have been restated to reflect an increase of cash generated from
operating activities of $2.5m, interest paid of $1.9m and a reduction of the effect of foreign exchange rate changes of $0.6m.
(2)
Adjustments made to free cash flow, for example the cost of the put options under the gold price protection programme, acquisitions and disposals of financial assets at
fair value through profit or loss, which are completed through specific allocated available cash reserves.
MANAGING RISK
INCREASING RESILIENCE IN A WORLD
OF 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.
2023 continued to be a year of extremes
due to the ongoing macroeconomic and
geopolitical pressures, the continuing
conflict in Ukraine and the potential for
any escalation of the situation in Gaza
including the recent impacts of limitations
in transporting through the Red Sea. We
have continued to deliver our operational
and strategic priorities whilst managing the
financial pressures faced by all. Further
information on these areas have been
provided throughout the Strategic Report
and specific examples will be referenced
where most relevant below.
Through 2023 there have been limited
changes to the ‘principal’ and ‘emerging’
risks to the business, where there has been
a change in the trend from 2022 to 2023
this is given in the principal risks detail
overleaf.
The focus over the last year has been
to establish an operational steady
state supported by long-term planning
which includes identifying, assessing,
managing and monitoring of our risks and
opportunities. With 2021 being a year of
transformation and understanding, to 2022
where we focused on delivery, 2023 was
a year of strong operational performance,
focus on costs control and productivity
improvements. This included prioritising our
digital transformation which has baselined
key processes and controls across major
areas of the business. 2024 will be where
we build on this through developing our
internal controls and assurance approach,
with further information provided in the
Corporate Governance Report on page 98.
We have highlighted the delivery of key
controls in the detail on the relevant
principal risks including reference to
where further information is provided.
Through 2024 there are a number of
key priorities for the business which will
ensure a clearer understanding of the risks
and opportunities associated with these
activities, which include:
• The delivery of the grid connection for
Sukari to minimise our reliance on fuel
and benefit from associated renewable
energy sources
• Engagement with the Egyptian
government on renewal of the next
15-year Tax Exemption under the Sukari
Concession Agreement from 2025 to
2040
• Positioning of the next steps with Doropo
including the project assessment
and financing, environmental and
sustainability considerations and
licensing of the concession
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
managing potential causes of the risks.
We may need to focus on understanding
and mitigating the potential negative
consequences to our business.
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, deliver 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 60. Risks and opportunities are also
considered when challenging the strategic
objectives of the Company that underpin
Our Strategy as shown on page 16.
FOCUS ON EFFECTIVE
AND EFFICIENT CONTROLS
CRAIG MURRAY
HEAD OF RISK
40
41
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
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 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 98 within Corporate Governance.
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 2023,
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 and discusses updates
from across the business.
MEASURING OUR POTENTIAL RISK
The Board considers risks in terms of
potential severity based on the ‘likelihood’
of the risk occurring given the mitigating
factors in place, relative ‘impact’ should an
event materially impact on the business,
and ‘velocity’ which gauges the speed
of impact if the risk was to materialise 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 risk radar 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, the risk trend from 2022 to 2023 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 appetite, trend and velocity, mitigation
measures, ongoing strategy to manage the
risk and link to the strategic pillars. We have
also given a summary of the emerging risks.
MANAGING RISK
CONTINUED
RISK RADAR
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
14
13
12
11
3
2
4
8
9
15
1
5
6
10
16
7
Very Slow
Moderate
Rapid
Instantaneous
Slow
Risk Velocity
Risk Trend
Risk Appetite
Consistent
Controlled
Balanced
Informed
Opportunistic
Improved
Slightly Worse
Cyber security
Cyber security risks, such as data breaches, cyber-attacks, phishing, and
compliance challenges, pose significant threats to our operational integrity. These
require proactive and flexible risk management strategies. These risks can cause
disruptions to our data and systems, undermining their security and integrity.
This can potentially lead to operational difficulties and a decrease in stakeholder
confidence. The Company is committed to increasing its investment in cyber
security. This involves strengthening our resilience and advancing our technology
infrastructure through a comprehensive digital transformation initiative, ensuring
robust defence against emerging threats.
Climate change
Understanding of the physical and transition risks associated with Climate
Change and the required adaptation to these are given in greater detail on
Climate Change Disclosures on page 54 and in our 2030 Decarbonisation
Roadmap update in the 2023 Sustainability Report. At an emerging risk level,
our operations and projects are expected to face physical risks in the medium
to longer term alongside the wider systemic challenges within our countries of
operation and globally.
Risks associated with the global transition to a low carbon economy to reduce
global warming could also affect the economic performance of the Company. We
have undertaken modelling of the potential physical and transition risks to the
Sukari asset, and when practical will do for our other projects, to ensure that we
can respond accordingly. Financial modelling of key transition related risks and
opportunities under a ‘Net Zero by 2050’ climate scenario assessed Centamin to
remain financially viable over the life of mine.
Infectious disease
Potential of a regional/global outbreak of a new disease bringing medical,
economic and social challenges. We continue to 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. During 2023 we have continued to manage the
ongoing macroeconomic and supply chain shocks with minimal impact to the
business.
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 which are difficult to predict.
Emerging risks are considered as part of the Company’s strategic
discussions through all levels of the Group. This year there are no
risks which have been elevated to a principal risk, but we recognise
the focus on climate change and have given more information
in our Climate change disclosures on page 54 and in the 2023
Sustainability Report.
The Audit and Risk Committee and Board regularly review the
principal risks as well as the wider operational, corporate and
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.
42
43
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
MANAGING RISK
CONTINUED
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite, 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. The Company
continues to adapt to the changing regional
security in our development and exploration
projects in Côte d’Ivoire. Outside of our host
countries we are monitoring the ongoing conflicts
in Ukraine, Gaza and the Red Sea to ensure we
can mitigate where possible the potential wider
impact of this on the Company. This is discussed
further in the Chair’s Foreward on page 4.
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 undertakes to abide by the spirit and letter of the
Concession Agreement as well as local laws/regulations in Egypt
including around the areas of exploration and furthermore where our
development and exploration activities are taking place in Côte d’Ivoire.
Appetite: Balanced
W
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 was passed as a law
and can only be amended by means of another law amending this law, so we
have the right to export gold, repatriation of funds, existing Tax Exemption and
further considerations.
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. Examples 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 in addition
to added protection afforded by double tax and bilateral investment treaties
in Australia and the United Kingdom. Further to this the negotiation of the
Mining Model Exploitation Agreement (“MMEA”) provides a new legal and fiscal
framework for any new EDX commercial discoveries, with further detail in the
CEO’s Statement on page 10. Appropriate monitoring procedures are in place,
and we ensure that we manage legal and regulatory compliance where required.
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.
Appetite: Balanced
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 was party to a single
legal action in Egypt. The details of this litigation,
which relates to the Sukari Concession Agreement,
are given on our website in the update issued
on the 29 November 2023. This challenge to the
Sukari Concession Agreement could have affected
the Company’s ability to operate the mine.
In order to mitigate this risk Centamin had (a) retained reputable legal
advisers and continues to actively pursue its legal rights with respect to this
case; and (b) maintained regular contact with its Egyptian legal advisers who
actively monitored developments in both court and local media for signs of any
legislative or similar developments that related to this litigation or which may
have otherwise threatened its operations, finances or prospects.
The potential for serious impact was 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.
This was upheld in the final judgment by the Egyptian Supreme
Administrative Court setting aside the 2011 third party challenge to the
validity of the Sukari Gold Mine exploitation licence issued under the Sukari
Concession Agreement. Further detail is given on our website in the update
issued on the 29 November 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.
Appetite: Balanced
I
Velocity: Slow
EXTERNAL RISKS
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SUKARI VALUE
MAXIMISATION
SLIGHTLY WORSE
CONSISTENT
IMPROVED
NEW
MITIGATED
GROWTH &
DIVERSIFICATION
W
C
I
N
M
PRINCIPAL RISKS
44
45
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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|
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
MANAGING RISK
CONTINUED
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite, trend and velocity
Links to strategy
GLOBAL
MACROECONOMIC
DEVELOPMENTS
Economies across the world negatively impacted
by COVID have been further impacted by ongoing
conflicts in Ukraine, Gaza and the Red Sea plus
wider macroeconomic developments globally.
From 2021 we saw increases in operating costs
and greater inflationary pressures, together with a
shortage of critical consumables and equipment.
We expect this uncertainty to continue in 2024.
This situation could create an adverse impact on
our operations, costs, sales and profits.
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 development, exploration and the timing of certain capital
expenditures. We focus on cost efficiencies and capital discipline to deliver
competitive all-in sustaining cost.
The Group must continue with the disciplined approach to managing operating
costs, continual investigation and implementation of cost saving opportunities
to counter inflation and improve margins. 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 alongside continual engagement with our
partners to assist with support of managing our supplies in a timely manner.
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. Initiatives to manage these
external pressures include the RCF, Gold Price Protection Programme,
the solar plant, Grid Connection Project and potential solar plant
extension at Sukari. Further information is provided in the Financial
Review on page 32.
Appetite: Balanced
W
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, has
in place the Gold Price Protection Programme and
continues to consider other options where these
would be viewed as beneficial for our commitment
to stakeholder returns.
The Group continues to be exposed to the gold price; however, in 2023 we
introduced the Gold Price Protection Programme (note 2.4 of the financial
statements in the 2023 Annual Report gives further information) and 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, alongside
retaining an element of downside protection, which have been positive over the
course of 2023 with a realised average price of $1,948.
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.
Appetite: Balanced
I
Velocity: Moderate
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite, 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, to deliver
key projects which, in 2024, is a focus on development
at Doropo and 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. Additional optionality could be generated through the use or
extension of the RCF.
The Group must continue with the disciplined approach to managing operating
costs, continual investigation and implementation of cost saving opportunities
to counter inflation and improve margins with recent examples including
delivery of the solar plant, competitive tendering on operational contracts
and the project allowing for connection to the Grid due to start in 2024.
Further options being considered include a solar plant extension, underground
operational expansion and proactive management of the supply chain to meet
our operational needs.
We have a robust investment approval process involving the management and
the Board as required.
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.
Appetite: Balanced
W
Velocity: Moderate
STRATEGIC RISKS
EXTERNAL RISKS
CONTINUED
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SUKARI VALUE
MAXIMISATION
SLIGHTLY WORSE
CONSISTENT
IMPROVED
NEW
MITIGATED
GROWTH &
DIVERSIFICATION
W
C
I
N
M
46
47
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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|
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
MANAGING RISK
CONTINUED
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite, trend and velocity
Links to strategy
DIVERSIFICATION
Sukari currently constitutes Centamin’s main
mineral resource providing production and
revenue. We recognise until further production
growth beyond the core Sukari asset is identified
there is the challenge of diversification.
Sukari has a number of measures to increase operational and financial
resilience including, two distinct ore sources (open pit and underground), the
processing plant has two separate circuits and there are two separate power
stations. These factors and the investment in opening up multiple mining areas
during 2021-23 results in improved operational flexibility. The commissioning
of the solar plant, the project allowing for connection to the Grid and further
opportunities to reduce operating costs all act to improve margins at Sukari,
and therefore strengthen the Group’s balance sheet.
The Group’s organic growth opportunities progressed in 2023 with the delivery
of a positive update on the pre-feasibility study for Doropo, with additional
updates on the EISA and DFS planned for mid-2024. We also started fieldwork
on the highly prospective Eastern Desert Exploration ground in Egypt with an
update available on our website dated 9 January 2024 on the encouraging
maiden EDX drill results.
Our existing assets offer longevity and organic growth which stand to deliver
diversification over time. Outside of this, where opportunities would provide the
correct asset quality and meet returns criteria, we would also consider further
expansion to the portfolio through acquisitions.
We are therefore actively looking to diversify the portfolio at all
development stages. From the earliest stage targeting exploration
ground which could build our long-term development programme, to
considering the acquisition of production and development assets.
These opportunities are subject to strict investment criteria and a robust
investment approval process involving the management team and the
Board, as required.
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
2024 in updates on the development and exploration activities including
the release of the latest position for Doropo.
Appetite: Informed
C
Velocity: Slow
CONCESSION
GOVERNANCE AND
MANAGEMENT
SGM is 50:50 jointly owned by PGM (the Company’s
wholly owned subsidiary who operate Sukari) 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 adherence to the
Sukari Concession Agreement. With the onset of profit sharing, the proper
application of the cost recovery, net profit share payment provisions and SGM
protocols under the Concession Agreement, has become a key priority.
It is a key focus to maintain good working relations with EMRA, other relevant
ministries and the wider government to ensure successful operation of the
Sukari Gold Mine including our appointment of external PR consultants. 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 EDX
Exploration 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 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. A key focus
in 2024 will be the engagement with the government on the Tax Renewal
for the Sukari Concession (as set out in more detail in footnote 2.6 to the
Notes to consolidated financial statements).
Appetite: Balanced
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 act in an ethical, responsible and transparent manner. This
includes establishing clear performance standards that meet both industry
good practice and local expectations within our areas of operation.
Confirming compliance with applicable regulatory requirements by maintaining
an up-to-date compliance register for each asset and routinely review our
performance against these commitments and obligations.
Sustain broad-based support to our investment plans through informed
consultation and participation with stakeholders e.g. community development
contribution negotiated under the MMEA for future commercial discoveries.
Establish baseline environmental and social conditions that provide a robust science-
based assessment of risks and impacts at the earliest stage in the project cycle.
The government in Côte d’Ivoire have recognised the Doropo project as a
strategic priority for the country, we will ensure we continue to engage with the
appointed Technical Committee on the progress of the EIS and DFS.
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.
We will continue to reinforce our sustainability performance framework –
policies, standards and management assurance – to support growth.
Further information is shown in our 2023 Sustainability Report.
Appetite: Balanced
C
Velocity: Moderate
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.
The Company will provide professional and personal development opportunities
that empower employees to fulfil their potential and operate at a proficient
level, including succession planning.
All employees participate in an annual performance appraisal and objective
setting process that defines their expectations and the support required for
further development.
We ensure that we raise workplace awareness of our organisational values and
the critical behaviours required for successful performance.
We provide visible leadership to improve diversity and inclusion in the
workplace supported by target setting to increase female representation.
To reinforce awareness of our Code of Conduct, sustain resourcing
towards training and professional development programmes and
reinforce leadership to overcome barriers to diversity and inclusion.
Further information is shown within Corporate Governance on page 91.
Appetite: Balanced
C
Velocity: Moderate
STRATEGIC RISKS
CONTINUED
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SUKARI VALUE
MAXIMISATION
SLIGHTLY WORSE
CONSISTENT
IMPROVED
NEW
GROWTH &
DIVERSIFICATION
W
C
I
N
MITIGATED
M
48
49
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
MANAGING RISK
CONTINUED
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite, trend and velocity
Links to strategy
STAKEHOLDER
ENVIRONMENTAL
AND SOCIAL
EXPECTATIONS
Elevated expectations on sustainability, including
stakeholder scrutiny, third-party assurance,
reporting and disclosure, regulatory requirements
and application of good industry practice.
Recent high-profile external events have put
a spotlight on the need for increased levels of
corporate accountability on matters including
tailings management, climate change,
biodiversity, water management, responsible
supply chains, diversity and inclusion.
The Company will engage with industry groups, investors and regulators to
understand their expectations.
We have established clear performance standards that meet both industry
good practice and local expectations within our areas of operation. Key
industry standards include the RGMPs, GISTM, TCFD and the emergence of the
Integrated Reporting Framework (“IFRS”).
We have defined environmental and social objectives and set targets to drive
continuous improvement. We measure, evaluate, report and disclose on our
sustainability performance.
We shall continue to build the capacity of our asset-level HSES specialist teams
to meet our performance standards including the development of operational
management systems aligned to ISO standards.
Ensuring we continue to monitor the emergence of new industry
standards and their application to Centamin’s business. Reinforce
our Sustainability Performance Framework – policies, standards
and management assurance – and its integration into asset-level
management systems and practice.
Continue to build the capacity and awareness of our asset-level teams
to integrate environmental and social risks and opportunities into
operational activities.
Further information is shown in our 2023 Sustainability Report.
Appetite: Balanced
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.
We will focus on execution of our 2030 Decarbonisation Roadmap to reduce
emissions, from the existing business, by 30% versus a 2021 base-year. This
target is underpinned by: (i) a 50MW
AC
connection to the national grid and (ii)
a 15MW
AC
expansion of the solar PV plant. A key carbon abatement initiative
which was delivered is the operation of the 30MW
AC
solar PV plant.
The Company continues to investigate other carbon abatement opportunities
including electrification of our mining fleet and energy efficiency programmes.
We have completed scenario analysis of climate-related transition risks
and opportunities over the long term as shown in the 2023 Sustainability
Report, and assess the impact of these risks on business strategy. We will
systematically review our climate-related transition risks and opportunities on
an annual basis, including application to growth projects.
Continued execution of our 2030 Decarbonisation Roadmap including
assessing other carbon abatement opportunities to a higher level of
detail.
Integration of the results of the scenario analysis for climate-related
transition risks into our business model and life of mine planning as
appropriate.
Further information on our Climate Change Governance, Strategy, Risks,
Metrics and Targets are given in our Climate Change Disclosures on
page 54 and our 2030 Decarbonisation Roadmap issued in March 2023.
Appetite: Balanced
C
Velocity: Slow
STRATEGIC RISKS
CONTINUED
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SUKARI VALUE
MAXIMISATION
SLIGHTLY WORSE
CONSISTENT
IMPROVED
NEW
GROWTH &
DIVERSIFICATION
W
C
I
N
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite, 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.
We have defined our OHS objectives and set targets to drive continuous
improvement. These are supported by a process to measure, evaluate, report
and disclose on our safety performance.
We have continued to reinforce our critical risk and control standards, review
and test our crisis management plan, and enhanced employee benefits
including delivery of a health & wellbeing plan. We continue to build the
awareness and capacity of senior management teams to operationalise our
critical risks standards and it should be noted that our OHS management
system at Sukari is now certified to ISO 45001.
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. We will ensure we sustain visible leadership
in the achievement of a zero-harm workplace. Further information
in relation to our commitments and standards to Safety, Health and
Wellbeing is given in the 2023 Sustainability Report.
Appetite: Controlled
C
Velocity: Rapid
OPERATIONAL RISKS
MITIGATED
M
50
51
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
|
|
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
MANAGING RISK
CONTINUED
LINKS TO STRATEGY
TREND KEY
COMMITMENT TO
STAKEHOLDER RETURNS
SUKARI VALUE
MAXIMISATION
SLIGHTLY WORSE
CONSISTENT
IMPROVED
NEW
GROWTH &
DIVERSIFICATION
W
C
I
N
Principal risk
Nature of risk
Mitigation measures
Ongoing strategy
Risk appetite, trend and velocity
Links to strategy
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 and greenfield
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.
Before undertaking any exploration activities a risk-based approach is undertaken
to filter projects considering a number of factors.
There is a structured approach established with the 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 is supported by independent advice and an investment in
technology.
2023 delivered a positive update on the finalisation of the pre-feasibility study
for Doropo with additional updates on the EISA and DFS planned for mid-2024,
we started fieldwork on the highly prospective and underexplored ground in Egypt
with an update available on our website dated 9 January 2024. During 2023 we
invested a total of US$31M in greenfield exploration and development activities,
with further detail given in the Financial Review on page 36. An initial US$9M is
budgeted for exploration expenditure at EDX and US$14M on project development
at Doropo in 2024.
Ensuring we have an effective and efficient exploration and development
programme to meet our strategic targets, long-term production and
reserves goals. During the first half of 2024, we will release the results
of the maiden drilling campaign across our Egyptian exploration
portfolio and will also aim to publish the updated reserve numbers for
Doropo.
Further information is given in the Geological focus section in the
Operational Review Section on page 26.
Appetite: Opportunistic
I
Velocity: Slow
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 for the Company.
Orebody stewardship ensures geology and the geologist are 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. A specific
example would be the change in drilling strategy for 2024, with a focus on grade
control and infill drilling to support short- and medium-term operational planning
as well as the introduction of underground RC grade control drilling.
Detail on increases in the Group Resource and Reserves was issued on 24 January
2024 and further updates are provided in the Operational Reveiw on page 26.
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 updated
Life of Mine Plan for Sukari issued in 2023 including average guidance
issued to 2034.
Appetite: Informed
I
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.
Over 2021 and 2022 the Company focused on improving mining flexibility,
delivering growth and building consistency alongside other improvements.
During 2023 we extended our track record of meeting production guidance to a
third year, commissioned the underground paste plant, updated the market on the
new Life of Mine (“LOM”) Plan, issued estimated average guidance until 2034,
continued with accelerated waste-stripping due to complete in mid 2024, started
the Grid Connection Project and provided a Group Resource & Reserve update.
We also had a change in drilling strategy, further detail is shown in the Geological
focus section of the 2023 ARA, to further reinforce operational delivery in the
near term.
The LOM should deliver increased gold production, lower operational costs, reduce
operational risk and significantly reduce carbon emissions. Further details can be
found in the announcements we have made to the market and most recently in
the Q4 report on 18 January 2024.
To achieve reliable and consistent production, whilst optimising the
potential of the operation as highlighted in the Operational Review of
the 2023 ARA. 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 which
we are looking to manage where possible.
In order to deliver our growth strategy and to maintain and improve
our competitive position, the Group must continue with the disciplined
approach to managing operating costs, continual investigation and
implementation of cost saving opportunities and maintain consistent
operational delivery.
Appetite: Informed
I
Velocity: Moderate
OPERATIONAL RISKS
CONTINUED
MITIGATED
M
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STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CLIMATE CHANGE DISCLOSURES
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 September 2023, the UK government
updated its climate change target to cut
emissions by 77% 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 2°C 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.
In 2023, the Board approved 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.
The Board, with technical guidance from
the Sustainability Committee, has overall
responsibility for providing the strategic
direction on climate-related risk and to
review the performance of the Company.
Climate change is a standing agenda item
for Sustainability Committee meetings and
the chair of the 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 150.
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 the 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 disclosing actual
and potential climate-related risks and
opportunities for our business strategy and
financial planning, where such information
is material. We obtain assurance over GHG
accounting data and related assertions.
SRK Consulting was engaged by Centamin
to independent assure our Scope 1 and 2
GHG emissions against ISO 14064-3 for
the financial year ending 31 December
2023 and concluded that the emissions
as reported are, in the scope of Limited
assurance, supported by the evidence
obtained.
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 2023 Annual Report.
TCFD COMPLIANCE STATEMENT
Our Board has judged that our climate
change disclosures as presented in the
2023 Annual Report are fully consistent
with the TCFD recommendations on
governance, strategy, risk management
and metrics and targets.
In 2023 we completed a detailed scenario
analysis of climate-related transition
risks over the medium and long term
to assess the impact of these risks on
business strategy. This has enabled us to
achieve full consistency with the TCFD
recommendations on strategy.
The TCFD Content Index presented
below, summarises our response to each
recommendation and provides specific
signposting to where the disclosures can
be found, including supporting information
presented in the Energy and Climate
Change section of our Sustainability Report
https://www.centamin.com/responsibility/
environmental-responsibility/. The Content
Index identifies where our disclosures are
judged to be: either (i) fully consistent
with the TCFD recommendations; or (ii)
consistent with the recommendations
but where we recognise opportunity
for improvement. In preparing these
disclosures, we have considered the TCFD
Guidance for All Sectors.
During 2024 we will continue to focus on
opportunities for improvement and maturing
our reporting process.
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CLIMATE CHANGE DISCLOSURES
CONTINUED
TCFD recommendation
Response / progress
Consistency of our
disclosures to the
TCFD
Steps to improve
our disclosures
a)
Describe the climate-
related risks and
opportunities the
organisation has
identified over the
short, medium, and
long term
•
Climate-related transition risks and opportunities over the short (1 to 2
years), medium (3 to 5 years) and long term (6 plus years) are described
in the Sustainability Report page 87. The priority climate-related risks and
opportunities assessed include: carbon pricing; diesel fuel pricing; utility
pricing; and gold price arising from market uncertainty. The priority climate-
related opportunities assessed include gold price arising from market
uncertainty and technological shifts
•
Climate-related physical risks over the near term (2030-2060) and long term
(2070-2100), are described in the Sustainability Report page 85. We have
specifically assessed changes to precipitation, air temperature and sea level
rise
•
Decarbonisation has been identified as a principal business risk as
described in the Risk Review on page 41. Climate Change has more broadly
been identified as an emerging risk to the business due to the external and
potential longer-term impacts
Consistency level:
Full
Annually review
the prioritisation of
climate-related risks and
opportunities as relevant
to the business
b)
Describe the
impact of climate-
related risks and
opportunities on
the organisation’s
businesses, strategy,
and financial planning
•
The impact of climate-related transition risks and opportunities are
described in the Sustainability Report page 87. The impact on Centamin’s
free cash flow and attributable value was tested for each climate-related
risk and opportunity. Under a ‘Net Zero by 2050’ climate scenario, the
introduction of carbon pricing was predicted to have a material financial
impact on the business over medium and long term
•
The impact of climate-related physical risks are described in the
Sustainability Report page 85. Climate-related physical risk is not predicted
to have a material financial impact on the business during the current
operational life of Sukari
•
Both transitional and physical risks are recognised as emerging risks with
potential material impacts on our growth and diversification across Africa
•
The impact of climate-related risks and opportunities are also noted in our
Business Model and Strategy on page 14, Financial Review on page 32 and
Risk Review on page 41
Consistency level:
Full
Annually review the
impact of climate-
related transition risk
on business strategy,
cash flow and financial
viability
Assess the impact of
climate-related transition
and physical risks on key
investment decisions
and opportunities for
business growth and
diversification across
Africa
c)
Describe the
resilience of the
organisation’s
strategy, taking
into consideration
different climate-
related scenarios,
including a 2ºC or
lower scenario
•
Our climate change transition strategy is described in the Sustainability
Report page 84. The strategy comprises four areas of focus: (i) reducing our
carbon footprint (Scope 1 and 2); (ii) collaboration with our supply chain
(Scope 3); (iii) operational resilience to physical risks; and (iv) transparency
•
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 a 30% reduction in
GHG emissions by 2030 and an accompanying roadmap aligned with a 2ºC
pathway. The projects underpinning this 2030 target are in advanced stages
of planning as described in our Sustainability Report page 83
•
The lack of net-zero aligned policies and frameworks increase the
uncertainty around how and when climate-related regulatory mechanism will
be implemented. As a consequence, carbon pricing is not expected to have a
material impact on the carrying values of assets or liability of the Group in
the short-term
•
Under a ‘Net Zero by 2050’ climate scenario, the cumulative impact of
transition risks on cash flow and attributable value were assessed to be
material over the medium and long term, however the business is still
judged to be financially viable over the life of our Sukari asset
•
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:
Full
Annually review the
quantitative scenario
analysis and the
resilience of our climate
change strategy
Continue to investigate
the feasibility of
additional opportunities
for carbon abatement
to align with a 1.5ºC
pathway, and associated
capital requirements
STRATEGY
TCFD recommendation
Response / progress
Consistency of our
disclosures to the TCFD
Steps to improve
our disclosures
a)
Describe the Board’s
oversight of climate-
related risks and
opportunities
•
Our management and governance structure is described on page 72
•
The charter of the Board of Directors and more specifically the
Sustainability Committee as published on our website, 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 business risks
and opportunities including those related to climate change. See Risk
Review on page 41. 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 2023 are presented in the Board and Committee
Reports on page 75. Specifically the Board oversaw studies in support of
our 2030 Decarbonisation Roadmap, namely a 50MW
AC
grid connection
at Sukari and a 15MW
AC
solar PV expansion. The Board reviewedapproved
our Energy and Climate Change Policy which was approved in March 2023
and reviewed the results of our quantitative scenario analysis of climate-
related risks and opportunities
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 72 and
within our Sustainability Report on page 82
•
The insights of the CEO and Executive that underpin the formulation of the
Group’s long-term strategy are described in the CEO’s Statement on page
10. Climate-related risks and opportunities are considered in our Business
Model and Strategy on page 14, Financial Review on page 32 and Risk
Review on page 41
•
Management is incentivised to take accountability for sustainability
performance through the Company’s remuneration structure, which
includes climate-related targets; see the Remuneration Committee Report
on page 106
•
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 leads the assessment of climate-related
risks and opportunities; and engages with the Executive and operational
management team to integrate climate change commitments into
business and operational decision making. In 2023, a scenario analysis
of climate-related risks and opportunities was coordinated by the Working
Group
Consistency level:
Full
Formalise the role
and responsibilities of
the Climate Change
Working Group to provide
technical guidance on
climate-related risks and
opportunities
GOVERNANCE
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STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CLIMATE CHANGE DISCLOSURES
CONTINUED
TCFD recommendation
Response / progress
Consistency of our
disclosures to the TCFD
Steps to improve
our disclosures
a)
Disclose the
metrics used by
the organisation
to assess climate-
related risks and
opportunities in line
with its strategy and
risk management
process
•
Metrics are presented in the Sustainability Report page 91
• Scope 1, 2, 3 GHG emissions
•
Scope 1, 2, 3 GHG emissions intensity
• Energy consumption and intensity
• Renewable energy generation
• Capital allocation for carbon abatement
•
Carbon price, diesel price and grid electricity price
Consistency level:
Full
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 as presented in the Sustainability Report page 91
•
In 2023, our Group Scope 1 & 2 emissions were 452,272 tCO
2
-e; and our
Group Scope 3 emissions were 950,265
tCO
2
-e. per oz Au
•
Our Scope 1, 2 & 3 GHG emissions data has been subject to independent
Limited assurance for accuracy and completeness against ISO:14064:3
•
We are actively engaging with our supply chain to verify and improve the
accuracy of our Scope 3 GHG emission estimate
Consistency level:
Full
Continue to engage
with our main suppliers
to verify and improve
the accuracy and
completeness 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
•
Our climate-related targets and performance are presented in the
Sustainability Report on page 91
•
We have set an interim target for a 30% reduction in Scope 1 & 2 GHG
emissions by 2030 and an accompanying Decarbonisation Roadmap
aligned with a 2ºC pathway as described on the website https://www.
centamin.com/investors/principal-risks-and-uncertainties/. Our progress
against this Decarbonisation Roadmap is presented in the Sustainability
Report on page 87
•
We aim to set targets for a reduction in our Scope 3 GHG emissions by the
end of 2024
Consistency level:
Full
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
METRICS AND TARGETS
TCFD recommendation
Response / progress
Consistency of our
disclosures to the TCFD
Steps to improve
our disclosures
a)
Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks
•
The processes for identifying and assessing climate-related transition
risks are described in the Sustainability Report page 87. In 2023 we
completed a detailed quantitative scenario analysis to test the resilience
of our business under two scenarios (i) ‘Current Policies’ and (ii) ‘Net Zero
by 2050’; and over the short, medium and long term
•
The processes for identifying and assessing climate-related physical risks
are described in the Sustainability Report page 85. 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)
Consistency level:
Full
Annually review the
prioritisation and
quantified modelling of
climate-related transition
risks and opportunities
as relevant to the
business
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, as described on our website
https://www.centamin.com/investors/principal-risks-and-uncertainties/
•
Climate-related risks and opportunities are systematically reviewed by
the Climate Change Working Group, who engages with the Executive and
operational management team to develop strategy and integrate climate
change commitments into business and operational decision making
•
In cases where a significant growth project or capital investment triggers
the requirement for an environmental impact assessment, this will
routinely include a climate-related risk assessment
Consistency level:
Full
Assess climate-related
risks and opportunities
under the scope of the
Doropo DFS
c)
Describe how
processes for
identifying, assessing
and managing
climate-related risks
are integrated into
the organisation’s
overall risk
management
•
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 and climate change is recognised as an emerging risk to the business
•
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, as described on our website
https://www.centamin.com/investors/principal-risks-and-uncertainties/
•
Processes for identifying, assessing and managing climate-related risks
are aligned with our overall risk management framework, including
application of consistent thresholds and triggers for the assessment of
materiality
Consistency level:
Full
None
RISK AND OPPORTUNITIES
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
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 Group
financial statements.
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 on page 14,
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 24-month financial
budget and longer-term life of mine outlook
in line with the strategy. Accordingly, a
period of five-years, from 31 December
2023, has been selected as the appropriate
period over which to assess the short
to medium-term viable prospects of the
Group. We have selected this period due to
our ability to model this out with a greater
degree of certainty. We appreciate that
the Life of Mine Plan has a longer outlook
but due to the factors which we need to
consider for the modelling, particularly
those macroeconomic and geopolitical
factors, we believe that we can have greater
confidence in the five-year period which
has been selected.
VIABILITY ASSESSMENT
The Board assessed the current position
and prospects of the Group, taking account
of the potential impact of the principal
risks to the Group’s business model and
ability to deliver its strategy, including
solvency and liquidity risks during the
five-year assessment period. The Board
considered the key strategic drivers, which
are based around the Company’s strategic
pillars: Sukari value maximisation, growth
and diversification and commitment to
stakeholder returns, as set out in Our
Strategy on page 16. 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 gold price,
macroeconomic, geopolitical, capital
allocation and liquidity, and operational
performance and planning.
The Group is constantly monitoring the
risks identified above and believes it can
sufficiently mitigate these impacts through
the disciplined approach to managing
operating costs, continual investigation and
implementation of cost saving opportunities,
savings in capital and operating expenditure
programmes, working capital reduction
measures and the gold price protection
programme.
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, geopolitical 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.
In mid-2023 we took the decision to
put in place the Gold Price Protection
Programme for the twelve months to
June 2024, with the purchase of put
options for 240,000 ounces of gold at an
average monthly price of US$1,900/oz.
This strategic decision means in a weaker
gold price environment, the commitment
to cost control helps ensure business
continuity, alongside the downside
protection ensuring we have a minimum
return of US$1,900/oz, on 20,000 oz per
month, of our production.
•
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 20% of
our operational costs and is therefore a
significant input assumption in both the
budget process and the Sukari Life of
Mine Plan. 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
88.4% in 2024. Maintaining and
improving productivity is fundamental
to our business and long-term strategy.
Sukari has built up 20.7Mt of low-grade
stockpiles at an average grade of 0.46g/t,
which are readily available for processing
if required. 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
and EMRA’s support remain key to
maintaining the ongoing equitable
profit-sharing and cost recovery
arrangement, as per the Concession
Agreement (including obtaining the
renewal of the existing fifteen year
Taxation Exemption by Q1 2025), which
covers the 160km
2
Sukari Gold Mine
tenement. We also recognise the highly
prospective and underexplored ground
in Egypt’s Eastern Desert on which we
have started fieldwork and our potential
growth projects in Côte d’Ivoire where the
government have identified the Doropo
Project as a strategic priority for the
country; we will ensure we continue to
engage with the government appointed
Technical Committee on the progress of
the EIS and DFS for Doropo.
•
Financial position:
The Company
maintains cash and liquid assets of
US$153 million, as at 31 December
2023 and total liquidity of US$303 million
including the undrawn US$150 million
sustainability-linked revolving credit
facility which is in place until March
2027. Management expect to have the
ability to extend the period and expand
the facility whilst ensuring compliance
with all covenants and restrictions whilst
this is in place.
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 (although no decision
has been made) based on initial costs
estimates from the PFS, 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 starting at $1,919 and decreasing
to a mean of $1,750 from 2028. As no
further mitigations were necessary to ensure
that the Company remained viable, it was
decided that this presented no threat to the
viability of the Company over the five-year
assessment period which we have selected.
To create a more stringent test and further
challenge the resilience of the Group, the
assessment was re-run using a few different
scenarios which have been outlined below:
• Scenario 1: A reduction in the forecasted
long-term gold price to US$1,600/oz over
the duration of the assessment.
• Scenario 2: A 15% increase in the
forecasted operational costs of mining
over the duration of the assessment.
• Scenario 3: An increase in the forecasted
price of fuel to US$1.25/litre over the
duration of the assessment.
Management considers that the scenarios
outlined above are extremely severe to
allow for stress testing of the viability.
Management do not believe that there
is any reasonable situation whereby
production would be impacted in such
a way that would threaten the viability
assessment.
When these scenarios were modelled there
were a few considerations. In the case
of scenarios 1 and 2, there were certain
months where mitigating factors, such as
those identified above, would need to be
utilised to support the overall viability of the
Group for the assessment. Under scenarios
3, there are no months where mitigating
factors would be required. It should be
noted that the RCF is assumed to remain
undrawn in all of the modelled scenarios.
Risk management and internal control
systems are in place which allows
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 can mitigate any
situation as they might reasonably occur.
Considering the Group’s current position and
robust assessment of principal 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 2028). 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.
MARTIN HORGAN
CHIEF EXECUTIVE OFFICER AND
DIRECTOR
60
61
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CORPORATE
GOVERNANCE
IN THIS SECTION
Governance Overview
64
Chair’s Introduction
65
Board of Directors
66
Corporate Governance and
Compliance Statement
70
Our Governance Structure
72
Our Management Structure
74
Key Activities in 2023
75
2024 Focus Areas
76
Stakeholders and Principal Decision Making
77
Stakeholder Engagament
78
Monitoring our Culture
82
Board Roles and Division of Responsibility
84
Board Diversity
86
Nomination Committee Report
88
Technical Committee Report
92
Sustainability Committee Report
94
Audit and Risk Committee Report
98
Remuneration Committee Report
106
63
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62
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CHAIR’S INTRODUCTION
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.
As at 21 March 2024
BOARD MEMBERS
2 Executive, Board Chair and
8 Independent Non-Executives
5 Female 6 Male
11
SENIOR MANAGEMENT FEMALE
REPRESENTATION
(1)
2022: 16%
16
%
FEMALE DIRECT REPORTS TO
SENIOR MANAGEMENT
2022: 29%
31
%
BOARD MEMBERS WITH MINING AND
RESOURCE EXPERIENCE
2022: 100%
100
%
BOARD MEMBERS WITH GOVERNMENT
RELATIONS, PUBLIC SERVICES AND
DEVELOPMENT EXPERIENCE
2022: 67%
67
%
INDEPENDENCE ON MANDATED
COMMITTEES
2022: 100%
100
%

Ensuring the right culture and structure to
deliver our strategy now and in the future.
JIM RUTHERFORD
NON-EXECUTIVE CHAIR
DEAR SHAREHOLDERS
I’m pleased to report that the Board
operated effectively through 2023, with a
focus on strategic planning and succession
for the future.
Over the last three years, the Board has
led the way in developing the right culture
and governance framework, which I’m
pleased to report is working effectively. The
opportunity exists to focus on the future
with careful and considered strategic
planning.
Despite the global challenges and external
inflationary pressures, our Board and
management team have remained focused
on our core values, ensuring we continue
to invest in our people, remain supportive
of sustainable operational practices and
understand our responsibility as a good
corporate citizen.
As set out in the CEO’s Statement, the
management team under the leadership
of our CEO Martin Horgan, has made
impressive progress on delivering the 2023
targets which were set by the Board and
have completed many of the longer term
plans set out in 2020.
In January 2024, the Board welcomed
two new Non-Executive Directors, namely
Iman Naguib and Hoda Mansour. Led by
the Nomination Committee, the process
began in Q2 2023 to identify candidates to
provide experience across one or more of:
Egyptian, legal and/or financial experience
to support both the Board and particularly
the Audit and Risk Committee into the
future. Both successful candidates provided
complementary skills and experience to
the Board and unanimous agreement was
reached to appoint both individuals.
In considering succession planning an
assessment of the tenure of all existing
Non-Executive Directors was undertaken.
With two new appointments and Dr Ibrahim
Fawzy reaching six years on the Board,
Ibrahim indicated he would not intend
standing for re-election as a Non-Executive
Director at the upcoming Annual General
Meeting in 2024.
We continue to maintain a commitment
to diversity in our workforce. Recognising
that broad and concerted leadership will
be required to advance the participation of
women within our workplace, we continue
to work on our understanding of the barriers
and ensure the best possible experience
when new recruits join Centamin.
As a company, we have put enormous
emphasis on positioning sustainability at
the heart of the business which reflects our
purpose statement, to ‘create opportunity
for people through responsible mining’. The
ESG team report in line with GRI, SASB and
TCFD and have developed systems and
roadmaps in conformance with key industry
standards including RGMP, GISTM and
TCFD frameworks.
I’d like to thank the ESG team and the
members of the Sustainability Committee
who have carried out valuable work
throughout the year. Full details of our ESG
initiatives can be found in our Strategic
Report and separately in the Sustainability
Report.
Our Technical Committee have also
worked closely with management to ensure
external validation over our Reserves and
Resources and ongoing compliance with
key reports, including oversight of the
process to develop our Life of Mine Plan
and publication of the supporting NI 43-101
Technical Report.
Turning to governance, the Audit and Risk
Committee undertook a tender process for
the appointment of the external auditor.
The Audit and Risk Committee took into
consideration the FRC’s ‘Audit Committees
and the External Audit: Minimum Standards
(2023)’. Details of the process are set out in
the Audit and Risk Committee Report where
we reappointed PricewaterhouseCoopers as
the Company’s external auditor.
The Board, through its committees and
direct engagement with management
remains well informed and apprised of
progress on all the Group’s projects at
Sukari, Egypt and across our assets in
Côte d’Ivoire.
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. Further
details of the Board’s consideration to all
stakeholders, in compliance with Section
172 Companies Act 2006, can be found
in the Strategic Report ‘Understanding our
Stakeholders’.
The next opportunity to meet with the
Board in person will be at the AGM on 21
May 2024 and we welcome shareholders’
attendance.
JIM RUTHERFORD
CHAIRMAN OF THE BOARD
As at 21 March 2024
INDEPENDENT NON-EXECUTIVE
DIRECTORS ON BOARD
2022: 75%
80
%
Note: Excludes the Board Chair who is Independent
on appointment
As at 31 December 2023
INDEPENDENT NON-EXECUTIVE
DIRECTORS ON BOARD
2022: 75%
75
%
Note: Excludes the Board Chair who is Independent
on appointment
FEMALE BOARD MEMBERS
2022: 33%
33
FEMALE BOARD MEMBERS
2022: 33%
45
%
65
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ADDITIONAL INFORMATION
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64
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
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
DR 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 industries, 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. Jim
joined Manara Minerals Investment Company as a
non-executive director in 2023, a venture between
the Saudi Arabian Mining company (Ma’aden) and
the Public Investment Fund (PIF) investing in mining
assets globally.
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 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 with Centamin’s existing
Board and business model.
Marna started her career in 2002 with
PricewaterhouseCoopers in the Metals and Mining
Division. She joined Group Five Limited, a large
South African listed construction company, in 2005
where she was responsible for Group Reporting.
Marna joined Ivanhoe Mines in July 2006 and was
promoted to chief financial officer of Ivanhoe Mines
in December 2009 and to President in 2020.
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)
Non-executive director of Manara Minerals
Investment Company
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
New Committees post 2020 AGM
Audit and Risk Committee
Sustainability Committee
Remuneration Committee
Technical Committee
Nomination Committee
Committee Chair
C
66
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ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
BOARD OF DIRECTORS
CONTINUED
HENDRIK (HENNIE) FAUL
INDEPENDENT NON-EXECUTIVE
DIRECTOR
MARK BANKES
INDEPENDENT NON-EXECUTIVE
DIRECTOR
HODA MANSOUR
INDEPENDENT NON-EXECUTIVE
DIRECTOR
PROFESSOR IBRAHIM FAWZY
INDEPENDENT NON-EXECUTIVE
DIRECTOR
IMAN NAGUIB
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Appointed
July 2020
Appointed
January 2024
Appointed
January 2024
Appointed
February 2011
Appointed
August 2018
Nationality
South African
Nationality
Egyptian and British
Nationality
Egyptian and French
Nationality
British
Nationality
Egyptian
Qualifications
BEng
Qualifications
BSc, Engineering, and MBA
Qualifications
MBA, Finance and Corporate Restructuring
Qualifications
BA (Law) and MA
Qualifications
BSc, PhD
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
Hoda has 25 years of experience working in leading
multinational software and technology companies
including Oracle, Microsoft, Acision, SAP and most
recently IFS.
During 2023, Hoda joined IFS, a global cloud-based
enterprise software and solutions company, as chief
operating officer for Asia Pacific, Japan, Middle
East, and Africa. For the previous ten years, Hoda
worked at SAP, the market leader in enterprise
application software, where she held several country
head and leadership roles before becoming the
senior vice president and head of Business Process
Transformation for the Southern Europe and Middle
East and Africa regions in 2021.
Since 2021, Hoda has served as a board director at
the American Chamber of Commerce in Egypt and
between 2020 and 2022 was vice president of the
German-Arab Chamber of Industry and Commerce.
Skills and experience
Iman has over 20 years of expertise in finance
and investment management, across the mining,
telecoms and financial services sectors, within
both emerging and developed markets. She brings
to Centamin extensive experience in corporate
finance and restructuring, investment and asset
management, liquidity management and mergers
and acquisitions.
Iman is a partner at Karnak Capital, an investment
management vehicle she founded in 2015. Prior
to that, between 2012 and 2015, Iman was Group
chief financial officer at La Mancha Resources, a
gold mining company with operating mines, and
exploration and development projects across Africa,
Australia and Argentina.
Before joining La Mancha, Iman was co-founder
and director of Accelero Capital, an investment
management group focused on telecommunications.
She also served as corporate finance director at
Orascom Telecom Holding and Weather Investments,
an international telecoms group operating networks
in Europe, Middle East, Africa and Asia.
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, 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.
See page 84 for the ‘Board roles and division of
responsibilities’ for the Board’s assessment of Mark
Bankes Independence.
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.
Committee memberships
C
Committee memberships
Committee memberships
Committee memberships
Committee memberships
Current external appointments
Non-executive director of Master Drilling Ltd
and ACG Acquisition Company Limited
Current external appointments
Chief operating officer for Asia Pacific, Japan,
Middle East & Africa at IFS
Non-executive director of the Commercial
International Bank (CIB)
Current external appointments
Partner of Karnak Capital
Current external appointments
Founding director of Bankes Consulting
SARL (private)
Current external appointments
Chairman of Egyptians Abroad company for
investment and development and director of
its subsidiary companies
Committee Memberships
New Committees post 2020 AGM
Audit and Risk Committee
Sustainability Committee
Remuneration Committee
Technical Committee
Nomination Committee
Committee Chair
C
68
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
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 (“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 and details of such application are to be found throughout the
2023 Annual Report as follows:
Board leadership & Purpose
Promoting the long-term sustainable success of the Company
See page 14 Our Business Model and page 72 Our Governance Structure
Stakeholder engagement and Section 172 of the UK Companies Act 2006
See page 77 Stakeholders and Principal Decision Making and page 78 Stakeholder
Engagement
Alignment of Purpose, Values and strategy with our culture
See page 82 Monitoring our Culture
Workforce policies and practices
See page 71 Workforce Engagement and page 94 of the Sustainability Committee Report
Division of responsibilities
The role of the Chair
See page 84 under Board Roles and Division of Responsibilities
Non-Executive Directors
See page 84 under Board Roles and Division of Responsibilities
Information and support
See page 200 under Company Details
Composition, succession and evaluation
Succession planning
See page 84 under Board Roles and Division of Responsibilities
Skills and experience
See pages 66 to 69 within Board of Directors
Board diversity
See page 86 within Board Diversity
Board evaluation
See page 85 within Board Evaluation
Audit, risk and internal control
Effective controls framework
See page 41 within Managing Risk
Internal and external audit functions
See page 101 within the Audit and Risk Committee Report
Fair, balanced and understandable
See page 99 within the Audit and Risk Committee Report
Risk management
See page 41 with the Strategic Report
Remuneration
Remuneration policies and practices supporting strategy and promoting
long-term sustainable success
See page 110 within the Remuneration Committee Report
Procedure for developing policy on executive remuneration
See page 115 within the Remuneration Committee Report
Shareholder engagement
See page 116 within the Shareholder Information
Workforce engagement and policy alignment
See page 116 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.
CASE STUDY
•
Operations update:
The full Board received a comprehensive
update on the status of the operations across the departments,
key projects, tailings management and maintenance updates.
•
Leadership Training:
The team presented the strategy and key
metrics for the leadership development programme that had
been successfully rolled out across the senior leadership team.
Site visits will be undertaken by the Sustainability Committee
at least annually. The Sustainability Committee also review the
whistleblower register and site-based reports on matters including
grievance, human resources and safety standards. 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 with the workforce.
Key Takeaways
It was clear from the meeting there is genuine interest and
drive to encourage a more diverse workforce. The discussion
group was collaborative and had a shared vision, reinforcing
the belief there is a strong culture of understanding and
improvement.
The social club provided an insight into the keen interests
of our workforce, outside their daily responsibilities.
Embracing these interests showed improved communication
and stronger relationships among the workforce and
demonstrated Passion as one of our core Values.
This working group reflects the key initiatives of the Technical
and Sustainability Committees, with the right culture to share
and learn from incidents and leading indicators reflecting our
Values to Protect and Educate.
Ownership and Innovation remain core to Centamin’s Values,
and demonstrated by the leadership team was the ability to
own the issues presented and find innovative solutions.
The leadership and development programme appeared
well structured and provided the right incentives, further
evidencing our core Values of Education.
The Board site visit provides an opportunity for the Non-Executive
Directors to visit Sukari, the Company’s operating asset, and meet
the teams and working committees.
The Board site visit also provides an opportunity for 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.
A member of the Sustainability Committee is designated to act as
the Board’s representative for workforce engagement, given the
scope of the committee’s focuses on human rights, diversity and
inclusion, workforce engagement, sustainability of communities
and engagement with the wider stakeholders. Catharine Farrow
and Hennie Faul acting as the Board representatives for workforce
engagement, met with several working groups.
As well as speaking with senior leaders and team members during
the site visit, specific engagement included the following:
•
Diversity Committee:
Attending the committee meeting and
discussing the key achievements in the year and areas of focus.
The committee had identified the key challenges, barriers and
opportunities to gender diversity at Sukari and had a clear
roadmap and objectives.
•
Wellbeing Committee:
The committee showed a passion for the
sporting and social initiatives. Given the proximity of Sukari to the
Red Sea, there was an update on the membership and activities
of the Sukari fishing club.
•
HSE team meeting:
Updates on the key metrics, leading
indicators and activities of the committee to ensure a safe
working environment. There was an opportunity to observe and
contribute to the weekly HSE team leader discussion.
•
Tool-Box talk:
Attendance with an opportunity to observe the
routine weekly tool-box talk.
WORKFORCE ENGAGEMENT
OVERVIEW
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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70
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
71
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
election or re-election. All Directors will
be put forward for election or re-election
at the next Annual General Meeting,
except Dr Fawzy who is not standing for
re-election. The experience and skills
that each Director contributes to the
Board are set out in their biographies
on pages 66 to 69.
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 84.
BOARD TRAINING
BOARD SITE VISITS
BOARD APPOINTMENTS
AND SUCCESSION
Regular training continued to be
provided to the Board in 2023 to
enhance their understanding and
awareness of the political and security
situation where we operate and their
neighbouring countries, ESG standards
and terminology, broader market and
legal updates from the Company’s
brokers and advisors.
The full Board returned to Sukari, Egypt
for a site visit in 2023, to see first-hand
the progress made since they last
visited in 2022. The visit provided an
opportunity to understand more about
the safety culture, the employee working
groups as well as key operational and
capital projects.
The Board welcomed two new members,
Ms Hoda Mansour and Ms lman
Naguib who joined in January 2024 as
Independent Non-Executive Directors.
As part of ongoing Board succession,
Dr Ibrahim Fawzy has indicated that he
does not intend to stand for re-election
at the upcoming Annual General
Meeting in 2024.
THE BOARD IS RESPONSIBLE FOR
SETTING THE STRATEGY AND ENSURING
ACCOUNTABILITY FOR ITS DELIVERY
OUR GOVERNANCE STRUCTURE
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 oversight of 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 the management
team. Oversight of the
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.
Read more on page 98
Read more on page 106
Read more on page 88
Read more on page 94
Read more on page 92
EXECUTIVE DIRECTORS
CORPORATE
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 producing asset, the Board and its committees play a significant role in all major decisions in the Group.
The Board has scheduled quarterly in-person meetings which allows for direct engagement with the Executive and senior members of the
management team. In addition to quarterly Board and committee meetings, a series of workshops are undertaken providing the opportunity for a
deeper dive into the underlying reports. These include Principal and Emerging Risks workshops which are undertaken to ensure the views of the
Board are understood when developing the principal and emerging risks and articulation of the Company’s risk appetite; budget workshops to
work through the options and underlying principles within the comprehensive budget booklet; and strategy workshops, which include training and
technical sessions from consultants and team members to ensure full awareness of the legal, technical or financial proposals.
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OUR MANAGEMENT STRUCTURE
KEY ACTIVITIES IN 2023
BUILDING A CULTURE OF
CONTINUOUS IMPROVEMENT
Centamin’s Executive and management team
comprise highly motivated, dynamic and
experienced individuals.
CORPORATE
MANAGEMENT
OPERATIONAL
MANAGEMENT
TECHNICAL
MANAGEMENT
Financial Controller
Group Accountant
Head of Risk
IT Manager
Group Corporate Manager
Corporate Analyst
Corporate Communications
Group General Counsel
Company Secretary
SUKARI
Country Manager – Egypt
General Manager – Sukari
Côte d’Ivoire
Regional Manager
ESG Manager
Group Head of Exploration
Group Mineral Resource Manager
Group ESG Manager
Group Health and Safety Manager
Group Head of Projects
Group Mine Engineer
EXECUTIVE DIRECTORS
GOVERNANCE
FINANCIAL
The Nomination Committee led the process which resulted
in the following activity:
• Appointment of two new Non-Executive Directors and
active succession planning for the Board and committee
membership. See Case Study Non-Executive Director
Appointments
The Board carried out the following key activities to facilitate
decision making:
• Structured meetings allowing for constructive debate and
timely planning of long-term strategies
• Board workshops ahead of budget preparations and review
and approval of key technical reports
• Receiving regular advisor updates and training to ensure
board awareness and understanding of key issues that
need to be debated
The Audit and Risk Committee oversaw the following main
corporate activities as well as specific projects that enhanced
our internal control environment:
• Launch of the new SAP system to further develop our
financial systems and internal controls framework. See
Financial Review and the Audit and Risk Committee Report
• Overseeing the cost reduction initiatives across the business
• Approval of a senior secured sustainability-linked revolving
credit facility (“RCF”) of US$150 million
• Risk reviews and assessment, including a roadmap to meet
the revisions of the 2024 Corporate Governance Code
• Assessed dividend policy taking into consideration the cash
flow forecasting and future financing requirements
TECHNICAL STUDIES AND REPORTING
SUSTAINABILITY, PEOPLE AND CULTURE
The Technical Committee oversaw the process that led to the
following activities:
• Publication of the new Life of Mine Plan supported by
the Sukari Technical Report NI 43-101. See Technical
Committee Report
• Overseeing the progress towards adopting the MMEA as
new Egyptian Mining Regulatory Framework which, once
adopted, will establish a clear, competitive legal, fiscal and
regulatory framework structure for development of new
mining commercial discoveries
• Board approved publication of the pre-feasibility study at
Doropo Gold Project located in north-eastern Côte d’Ivoire
plan supported by the Doropo Technical Report NI 43-101
The Remuneration Committee (in consultation with other
committees) assessed the performance and set objectives:
• Ensuring targets aligned with the Group’s strategic goals
and incentivised the right behaviours
• Engagement with the wider workforce to ensure the
remuneration structure is reinforcing the right behaviours
across the workforce, management and Executive
The Technical Committee and Sustainability Committee
oversaw the process that led to the following Activities:
• Commissioning of the solar plant at Sukari
• Active engagement with the Egyptian government and
independent power providers for the supply of 50MW
AC
of
grid power to Sukari,See the FY23 Sustainability Report
• Publication of an interim Decarbonisation Roadmap to
2030, which targets a 30% reduction in operational Scope
1 and 2 greenhouse gas (“GHG”) emissions. See the FY23
Sustainability Report
• Workforce talent programmes rolled out across the business
to improve proficiency and opportunities for succession
pipelines
• Board engagement at an asset level with key personnel and
workforce committees
• Climate Change Strategy, carbon abatement reduction
opportunities and statement, TCFD statement and updated
ESG policies including the Energy and Climate Policy
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2024 FOCUS AREAS
STAKEHOLDERS AND PRINCIPAL DECISION MAKING
GOVERNANCE
FINANCIAL
OPERATIONAL
Enhance stakeholder engagement
across Egypt and Côte d’Ivoire.
Ensure suitable preparation to take
account of the changes to the 2024
UK Corporate Governance Code.
Ongoing government relations in Egypt
with a specific focus on Concession
Agreement compliance including profit
share and cost recovery management
and 15 Year Tax Exemption Renewal.
SAP phase 2 to enhance the software
and roll out further modules across the
Corporate functions to further enhance
controls and efficiencies.
Exploration across the Sukari Mining
Concession area.
EDX work programmes in the eastern
exploration areas in Egypt.
Doropo Project definitive feasibility study
and Environmental impact assessment.
Exploration projects in Côte d’Ivoire
and completion of strategic/finance
structuring for the project.
SUSTAINABILITY
ROUTINE ACTIVITIES
Health, safety and wellbeing initiatives including training and development programmes.
Environmental targets across incident reporting, water reuse and reduction in emissions.
Conformance with GISTM including the appointment of a tailings independent reviewer.
See full details in the FY23 Sustainability Report.
• Director approved interim dividend
and shareholder recommended final
dividend
• Periodic financial reporting and
monitoring of the internal control
environment
• Delivery of comprehensive budget
(including site level)
• Corporate policy training rolled out
across the business
• Assessment of M&A opportunities
• Risk and assurance mapping
The Strategic Report sets out the areas of focus for the Board for 2024 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:
The following table sets out how the Board
engages with stakeholders, the ways the
Board takes account of stakeholder views
in its decisions and how this is linked into
our strategy, risks and opportunities, having
consideration of the matters set out in
Section 172 of the Companies Act 2006 (a
requirement of the Corporate Governance
Code).
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.
ASSESSING MATERIAL ISSUES FOR
OUR STAKEHOLDERS
At Centamin, we know our presence in
the countries in which we operate can
be transformative through enhancing
existing infrastructure, providing training
and employment opportunities, pioneering
business opportunities for the domestic
private sector, catalysing socio-economic
development in our host communities and
delivering significant revenues for host
governments through profit share, royalties
and taxes. We are committed to developing
resources in a way that protects and
empowers people, respects human rights,
fosters socio-economic development and
safeguards the environment.
We analyse the most important, or material,
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.
Material issues are defined through the
regular review of principal risks, regular
stakeholder communication, routine review
of applicable regulatory requirements and
good practice industry standards, and an
annual materiality survey of internal and
external stakeholders, the results of which
are detailed in our FY23 Sustainability
Report and the ‘Responding to our
Stakeholder Priorities’ section within the
Strategic Report.
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STAKEHOLDER ENGAGEMENT
EMPLOYEES
We recognise our employees are vital to the success of the business, carrying
out the Company’s strategy, fulfilling our Purpose and instilling the right culture.
Evidence of effective management of health and safety, prioritising employees’
wellbeing over profit maximisation.
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.
Diversity across the Company, and particularly gender diversity, is a broader
societal expectation.
HOW THE BOARD ENGAGES AND IS KEPT INFORMED
The Board site visit to Sukari, Egypt allows direct engagement with site
personnel and workforce committees.
• Engagement forums
• Management meetings
• Interactive IT platform
• Training, events, social
• Performance reviews
• Grievance mechanism
• Whistleblower hotline
WHAT MATTERS MOST TO OUR STAKEHOLDERS
Feedback shows that training and career progression are key to motivation and
job satisfaction. Increasing employees’ knowledge and skills through training
and education benefit the individual and the business.
Employee safety and wellbeing.
From the engagement processes, embracing diversity, inclusion and equal
opportunity is widely acknowledged allowing for a range of perspectives, skills
and experiences in the workplace and instils a sense of belonging which can
improve employee retention.
HOW THE BOARD HAS CONSIDERED STAKEHOLDER
VIEWS DURING THE YEAR
Employee and leadership development plans.
Health, safety, wellbeing and diversity targets form part of the executive and
management key performance indicators.
Further details can be found in the Governance Report: Workforce Diversity and
the FY23 Sustainability Report: Workforce safety, wellbeing and training.
COMMUNITIES
We recognise the Company’s presence should have a positive benefit on local
economies.
Understanding our responsibility for the community and tailoring programmes
that will deliver genuine benefit.
There is a clear commitment from the Company, supported by programmes, to
ensure that mining activities positively impact the local communities.
HOW THE BOARD ENGAGES AND IS KEPT INFORMED
We undertake continuous, positive and meaningful engagement with our
communities.
Support the training and development of the local community with resources
and opportunities.
• Community leaders
• Engagement forums
• Circulars & leaflets
• Engagement officers
WHAT MATTERS MOST TO OUR STAKEHOLDERS
Please see details of our materiality assessment set out in the Sustainability
Report.
Feedback reflects the importance of job opportunities and providing support for
training and development of the local community.
Other key considerations include responsible management of waste to minimise
the impact on the local community and environment.
HOW THE BOARD HAS CONSIDERED STAKEHOLDER
VIEWS DURING THE YEAR
See the Sustainability Report for details of our community projects in Egypt and
Côte d’Ivoire.
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.
See also the FY23 Sustainability Report with details of our commitment to local
employee and contractors.
SHAREHOLDERS
As a publicly listed company, we understand the responsibility entrusted in our
Board and management to manage our capital responsibly.
Our commitment to responsible mining, cost saving initiatives and stakeholder
returns, aims to meet the growing demands of our knowledgeable and active
shareholder base.
HOW THE BOARD ENGAGES AND IS KEPT INFORMED
Production of annual, half-year and sustainability reports. Investor and analyst
webinars, retail investor events all accompanied by presentations and Q&A
sessions.
The Annual General Meeting provides the formal meeting to hear shareholder
views on all resolutions.
WHAT MATTERS MOST TO OUR STAKEHOLDERS
Sophisticated and retail investors, appreciate the Executive and management
taking the time to explain the message behind the figures and how they fit into
the overall strategy as well as engagement with analysts to ensure accurate
modelling and consensus data.
HOW THE BOARD HAS CONSIDERED STAKEHOLDER
VIEWS DURING THE YEAR
See our strategic priorities and our commitment to shareholder returns.
See also the Strategic Report: Business model and Commitment to Shareholder
Returns.
GOVERNMENTS
We recognise the importance of maintaining and strengthening our relations
with government to maintain our social licence to operate.
The Company’s presence in a country should benefit and provide opportunities
for the people of our host countries.
Economic growth supports local development and provides revenue to the local
governments to provide basic services.
HOW THE BOARD ENGAGES AND IS KEPT INFORMED
A priority of the Board is to maintain a healthy and transparent working
relationship with our 50% partner, EMRA, and adhere to the Sukari Concession
Agreement.
Direct engagement through ministry and other governmental representatives be
it through formal meetings or interaction at seminars and industry events.
•
Payments to government as per the Sukari Concession Agreement
• Formal meetings
• Site visits
• Budgets and reports
The group recently appointed external PR consultants and regional experts to
support the Board’s understanding of issues impacting Egypt.
WHAT MATTERS MOST TO OUR STAKEHOLDERS
Feedback shows local employment, workforce skill development and community
investment are key priorities.
Support for regional procurement to strengthen economic infrastructure and
improve the lives of the local population.
The Mining Model Exploitation Agreement (“MMEA”) negotiations in Egypt
provided active feedback from government on their priorities, striking a balance
in attracting investment to Egypt and ensuring fair and transparent fiscal
terms.
HOW THE BOARD HAS CONSIDERED STAKEHOLDER
VIEWS DURING THE YEAR
Negotiation of MMEA provides a new legal and fiscal framework for any new EDX
commercial discoveries.
Ongoing relationship with government and maintaining our licence to operate.
Further details can be found in the FY23 Sustainability Report and our Payments
to Government disclosures.
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We believe an open and honest stakeholder engagement process
is critical for the continuous improvement of our business. 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.
STAKEHOLDER ENGAGEMENT
CONTINUED
SUPPLIERS, CONTRACTORS & REFINER
The Company has a transparent supply chain with effective due diligence
processes in place.
The Company’s policy against corruption shows commitment to ethical
behaviour and to educating employees and contractors on the importance of
anti-bribery and corruption.
The welfare of the whole workforce is critical for the business to operate
effectively.
The Board recognises that local procurement reduces the impact of transport on
environment.
HOW THE BOARD ENGAGES AND IS KEPT INFORMED
The site operational, health and safety statistics incorporate all employee and
contractors at our operations.
We engage and keep informed through:
• Operational reporting
• Operational KPIs
• Policy & contracts
• Training & inductions
• Formal meetings
• Workshops, daily tool box briefings
• Performance reviews
• Supplier due diligence
WHAT MATTERS MOST TO OUR STAKEHOLDERS
Priorities from our contractors are aligned with our employees, with the addition
of fair and transparent tendering processes.
Further details on our materiality assessment can be found in the Sustainability
Report.
HOW THE BOARD HAS CONSIDERED STAKEHOLDER
VIEWS DURING THE YEAR
Formal and transparent tendering processes as evidenced in the renewal and
awarding of contracts in 2023 (see Strategic Report: Operational Review).
See further details of our activities in the Operational Review.
See 2.2 Revenue in the Financial Statements for details of the new refiner.
ENVIRONMENT
We have established clear performance standards that meet both industry
good practice and local expectations within our areas of operation. Key industry
standards include disclosure against the RGMPs, GISTM, TCFD and the
emergence of the integrated reporting framework (“IFRS”).
Visibility of the Company’s climate change strategy through reporting on
science-based targets, funding opportunities and initiatives, performance
against targets.
The Board has oversight on tailings facilities and is committed to international
tailings management standards.
HOW THE BOARD ENGAGES AND IS KEPT INFORMED
The Board continues to build the capacity of our asset-level HSES specialist
teams to meet our performance standards.
As well as setting clear environmental and social objectives the Board engages
through the following methods.
• Annual Sustainability Report
• Community leaders / chiefs
• Materiality assessment
• Disclosure statements (CDP, Tailings, Modern Slavery)
•
Measure, evaluate, report and disclose on our sustainability performance
WHAT MATTERS MOST TO OUR STAKEHOLDERS
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.
Actively pursuing renewable energies and reducing its reliance on non-
renewable energy sources and thereby minimising the Company’s greenhouse
gas emissions.
Compliant with industry best practice standards for management of tailings
and compliance with environmental regulatory requirements.
Responsibly manage mineral and non-mineral wastes and hazardous material.
HOW THE BOARD HAS CONSIDERED STAKEHOLDER
VIEWS DURING THE YEAR
See our Sustainability Report for details of our projects and initiatives to meet
our ongoing regulatory and environmental commitments.
See further details in our FY23 Sustainability Report.
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MONITORING OUR CULTURE
OUR VALUES AND THE WAY WE DO BUSINESS EXPRESS OUR CULTURAL IDENTITY
MONITORING
ACTIONS
VALUES
• Performance framework
• Management planning
• Budget and resource allocation
• Safety statistics
• Operational reports
• Internal reports
• External communication
• Shareholder feedback
• Investment in people and communities
• Internal & external assurance
• Engagement forums
• Management meetings
• Investor relations
• Published reports
• Deliver our strategy
• Employee wellbeing and safety
• Maintain our social licence to operate
• Safeguard our industry
• Care for our environment and communities
• Setting operating standards
• 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 to:
• Protect our environment
• Invest in our employees
• Maintain our social licence to operate
• Safeguard our industry
• Care for our communities
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
•
Established internship with Women in Mining UK
•
Established Diversity Committee and Social Committee in Egypt with direct reporting to the General
Manager and targets linked to remuneration
•
Policy development and roll out to ensure understanding and awareness of inclusion which is supported
by training and development
2.
CONTINUOUSLY CREATING
A SAFE WORKPLACE
•
Safety performance and incentivising continuous improvement and striving to achieve a zero-harm
workplace
•
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
•
Active workforce committees supporting wellbeing initiatives including social clubs
4.
CONTINUOUS EDUCATION
AND TRAINING
•
Professional development and leadership training in Egypt
•
Partnership with registered training organisations to deliver certified training modules in leadership and
management
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. Centamin’s culture
is key in working towards and
delivering on our Purpose,
Vision and strategy. Our
Purpose directs our decisions
and actions, shapes our culture
and drives our strategy. We
recognise we have an important
part to play in shaping the
future of our stakeholders and
supporting wider society.
CULTURE
V
A
L
U
E
S
A
C
T
I
O
N
S
M
O
N
I
T
O
R
I
N
G
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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 2023 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.
COMPOSITION, SUCCESSION AND EVALUATION
BOARD 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 next formal externally evaluated review will be undertaken in 2024.
The internal evaluation at the committee and Board level was conducted and proposals identified as follows:
Board
•
Recruitment for succession and rotation of Non-Executive Directors
•
Focused training and development of Board utilising consultants, advisors and in-house capability
•
Maintain discipline on the timing of Board papers, executive summaries and clear proposals for approval
Sustainability Committee
•
Maintaining a structured training programme for the Board and senior management team
•
Standing agenda items with progress updates and agreed roadmaps
•
Maintain communication across the Technical, Audit and Risk and Remuneration Committees for sharing of ideas
and constructively developing initiatives
Technical Committee
•
Providing clear timelines for the preparation and delivery of technical reports ensuring adequate committee oversight
•
Ongoing communication with the Sustainability Committee and Audit and Risk Committee on the development of
assurance, technical and operational compliance reports
Audit and Risk Committee
•
Maintain the ‘budget workshop’ and deeper dive meetings ahead of periodic financial reporting
•
Continue to keep communication channels open with the Sustainability Committee and Technical Committee in
relation to TCFD and climate change related disclosures and asset retirement obligations
Remuneration Committee
•
Development of targets in conjunction with the Sustainability Committee, Technical Committee and Audit and Risk
Committee
•
Further align Executive remuneration targets that align with the operations and encourage the right business
decisions and behaviours
Nomination Committee
•
Following the successful appointment of two new Non-Executive Directors, ensure tailored induction training and
interaction with the Board and key members of the senior management team
•
Address the feedback to the committee on the barriers to diversity at site and across the management team
BOARD ROLES AND DIVISION OF RESPONSIBILITIES
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. Martin represents the Group before
key stakeholders and government officials.
For a detailed list of the Chief Executive
Officer’s responsibilities, please see the
Board Charter on the Company’s website.
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.
At the date of this report, the Board is made up of the Chair, a Senior Independent Director plus seven Non-Executive Directors
and two Executive Directors with the following responsibilities:
Board attendance schedule in 2023
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
MARNA CLOETE,
DR CATHARINE FARROW,
HENNIE FAUL, HODA MANSOUR,
IMAN NAGUIB, MARK BANKES
AND DR IBRAHIM FAWZY
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.
Mark Bankes continues to provide a
wealth of legal, regulatory and compliance
knowledge and experience to the Board.
The Board agreed that it was important for
continuity and the retention of corporate
history and knowledge that Mark Bankes
be retained as a Non-Executive Director,
notwithstanding his tenure whereby he
reached his twelfth anniversary on the
Board in 2023. Mark Bankes continues to
ensure all matters at committee and Board
level are robustly debated and management
and the Executive are sufficiently
challenged. 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 Remuneration Committee.
As part of ongoing Board succession,
Dr Ibrahim Fawzy has indicated that he
does not intend to stand for re-election as
a Non-Executive Director at the Company’s
upcoming Annual General Meeting in 2024.
Ms Hoda Mansour and Ms lman
Naguib were appointed to the Board as
Independent Non-Executive Directors on
10 January 2024 and will both be standing
for election for the first time at the Annual
General Meeting in 2024.
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 2023.
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
6
6
Ross Jerrard
Appointed 5 February 2018
6
6
Non-Executive
Jim Rutherford
Appointed 1 January 2020
6
6
Dr Sally Eyre
Appointed 10 April 2019
6
6
Marna Cloete
Appointed 2 September 2019
6
6
Dr Catharine Farrow
Appointed 2 September 2019
6
6
Hennie Faul
Appointed 1 July 2020
6
6
Mark Bankes
Appointed 24 February 2011
6
6
Dr Ibrahim Fawzy
Appointed 14 August 2018
5
6
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BOARD DIVERSITY
NON-EXECUTIVE TENURE
BOARD EXPERIENCE BY SECTOR
Non-Executive
Executive
Percentage
Mining and Resource Industry
8
2
91%
Capital Markets
3
1
36%
Legal
1
0
9%
Finance, Accounting and Audit services
4
1
45%
Mergers and Acquisitions
3
1
36%
Government Relations, Public
Service & Development
5
2
67%
Investment Banking & Investment Management
2
1
27%
Years in tenure
0 – 2
2 – 4
4 – 6
6 – 9
9+
Jim Rutherford
Dr Sally Eyre
Marna Cloete
Dr Catharine Farrow
Hennie Faul
Hoda Mansour
Iman Naguib
Mark Bankes
(1)
Dr Ibrahim Fawzy
(1) See an explanation of Mark Bankes’ tenure on page 84.
Data as at 21 March 2024
NATIONALITIES
5
British
Egyptian
Australian
Canadian
South African
4
3
1
1
2
CASE STUDY
A further review was undertaken on the committee
composition and at the recommendation of the Nomination
Committee, the committee composition was approved, to
take effect following the conclusion of the Annual General
Meeting in 2024:
The Nomination Committee identified the recruitment opportunities
that could support the Board and ensure ongoing succession and
rotation. The initial brief to recruitment consultants, Korn Ferry, was
to identify preferred candidate(s) to provide experience across one
or more of: Egyptian, legal and/or financial experience to support
both the Board and particularly the Audit and Risk Committee into
the future. Consideration for the next appointment(s) would also
take into consideration greater diversity on the Board.
Selected from a comprehensive long list of candidates, six
individuals were identified and formed the short list, who would
be taken forward for formal interviews. The Company’s Chair,
Jim Rutherford and Senior Independent Director, Dr Sally Eyre,
conducted the initial interviews for all six short listed candidates
on behalf of the committee. Jim and Sally recommended that two
individuals from the short list of candidates meet with the Executive
Directors and the remaining members of the Audit and Risk
Committee and Technical Committee.
Feedback from these interviews were discussed by the full Board
in December 2023 and consideration was given to the merits of
appointing both candidates, Iman Naguib and Hoda Mansour.
The Nomination Committee felt that Hoda would bring a wealth of
experience to the Board and her extensive knowledge of Egypt and
the Middle East would be of great value to Centamin, particularly
given the EDX work programmes in the Eastern Desert and
finalisation of the model mining exploitation agreement (“MMEA”)
with the government. Iman, equally, brings extensive experience
across all aspects of corporate finance, asset management and
M&A within both emerging and developed markets, and has a
valuable skill set particularly as the Company moves to its next
phase of growth. Both appointments were concluded in January
2024 following completion of due diligence and approval by
the Board.
In considering succession planning, the Nomination Committee
assessed the tenure of all existing Non-Executive Directors. With
two new appointments and Dr Ibrahim Fawzy reaching six years
on the Board, Ibrahim indicated he did not intend to stand for
re-election as a Non-Executive Director at the upcoming Annual
General Meeting in 2024.
NON-EXECUTIVE DIRECTOR APPOINTMENTS
AUDIT AND RISK
COMMITTEE
Marna Cloete (C)
Dr Catharine Farrow
Iman Naguib
Hoda Mansour
NOMINATION
COMMITTEE
Jim Rutherford (C)
Dr Sally Eyre
Mark Bankes
Hennie Faul
TECHNICAL
COMMITTEE
Hennie Faul (C)
Dr Sally Eyre
Mark Bankes
Dr C Farrow
REMUNERATION
COMMITTEE
Dr Sally Eyre (C)
Jim Rutherford
Marna Cloete
Iman Naguib
SUSTAINABILITY
COMMITTEE
Dr C Farrow (C)
Marna Cloete
Hennie Faul
Hoda Mansour
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KEY FOCUS IN 2024
1. Induction of the new
Non-Executive Directors
2. Assessment of committee
membership
3. Diversity across the senior
leadership team and Group’s
diversity and inclusion programmes
4. Assessment of the 2024 UK
Corporate Governance Code and
compliance with the amended
provisions
5. Target setting and assessment
of the talent management
and professional development
programmes
NOMINATION COMMITTEE REPORT
JIM RUTHERFORD
CHAIR OF THE NOMINATION COMMITTEE
INTRODUCTION
The Board and management team
remained largely unchanged through
2023, providing continuity and stability
following the transitional year in 2021.
The committee had the opportunity to
consider the skills and experience on
the Board and the requirements for the
business in the future.
The committee also assessed the tenure
of the Non-Executive Directors and taking
into account the need for continuity versus
freshness of approach, action was needed
to ensure orderly and timely succession.
Having considered the aggregate
competencies and skills across the Board,
the committee felt it was appropriate to
search for a Non-Executive Director to
provide experience across one or more of:
Egyptian, legal and/or financial experience
to support both the Board and particularly
the Audit and Risk Committee into the
future. Please refer to the case study ‘Non-
Executive Director Appointments’.
The committee assessed the Group’s
diversity, including female Board and senior
management representation taking into
consideration the FCA Listing Rules, FTSE
Woman Leader’s Review and shareholder
and proxy stewardship guidelines. The
committee also discussed the targets set
by the Parker Review on ethnic diversity.
Also, the committee oversaw the Executive-
led initiative, to undertake a corporate
structure review. Having completed the
reset plan, now was an opportune time to
take stock and ensure we have the right
resources in place to grow the business.
The review focused on identifying the
existing capabilities of the team and how
best to enhance our corporate functions
ensuring a clearer view of the activities,
reporting lines and strategy.
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 and targets to improve female
representation at Sukari, Egypt.
KEY ACTIVITIES IN 2023
1. Board succession planning and
Non-Executive Director recruitment
2. Diversity at the Board, senior
management and at an operational
level
3. Assessment of regulatory and
institutional diversity targets
4. Organisational review across the
Corporate team
5. Committee evaluation
Committee purpose
The committee continues to monitor
the make-up of the Board and other
committees ensuring the balance of skills
is maintained and where appropriate,
enhanced. 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/.
BOARD SUCCESSION
AND DIVERSITY ACROSS
THE BUSINESS
BOARD MEMBERS
(2)
11
2 Executive
1 Board Chair
8 Independent Non-Executives
5 Female
6 Male
FEMALE BOARD MEMBERS
2023: 33%
33
%
(1)
45
%
(2)
Overboarding and potential conflicts
of interest
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.
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. The next externally facilitated Board evaluation
will take place in 2024 (for reporting in the FY2024 ARA). Korn Ferry provide executive
remuneration services and human capital related services to the Company. For further
details on the controls to manage potential conflicts please see ‘Advice provided to the
committee’ in the Remuneration Report.
Nomination Committee membership
James Rutherford is the chair of the committee with three members, a majority of whom
are Independent Non-Executive Directors within the meaning of the Code. 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
5 of 5
Dr Sally Eyre
Appointed since 29 June 2020
5 of 5
Dr Ibrahim Fawzy
Appointed since 29 June 2020
5 of 5
Mark Bankes
Appointed since 24 April 2019
5 of 5
(1) On 31 December 2023
(2) On 21 March 2024
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NOMINATION COMMITTEE REPORT
CONTINUED
GROUP DIVERSITY
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 People Policy and Diversity and Inclusion Policy developed targets along with the Remuneration
Committee to improve diversity and inclusion across the business.
At Sukari, a gender diversity working group under the leadership of the General Manager advises 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 2023 has been below our stretched target but we are proud to have recruited 24 female employees in Egypt this
year. Our female employees work across HR, Administration, Finance, Health and Safety and in 2023, we broadened the roles
available to women initiating appointments within technical functions of the mine operation. We continue to identify and overcome
barriers for the recruitment of female employees within Mineral Resource Management, Processing and Mining. 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.
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
.
DIVERSITY TARGETS
The FTSE Women Leaders’ Review monitors
the representation of women among leaders
of FTSE 350 companies at board level and
senior leadership. The Company’s Diversity
Policy monitors female representation at
Board and senior management and targets
the overall commitment to developing a
diverse workforce. The People Policy and
Diversity and Inclusion Policy can be found
on the Company’s website.
The committee monitors ethnic diversity
and considers the targets set by the Parker
Review. The Board remains compliant with
the review recommendations. The Company
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.
The Company recognises the Parker
Review’s extension to the Board ethnic
diversity targets, with companies required
to set targets for the number of senior
managers that self-identify as being from an
ethnic minority. The Company provides the
relevant data to the Parker Review for the
senior management/executive committee
below Board level.
During the year, the committee assessed
the succession planning and approach
to diversity and inclusion at the Board
level, the senior management team and
their direct reports, giving consideration
to the progress towards the targets set
by the FTSE Women Leaders’ Review.
The FCA’s Listing Rules on gender and
ethnic diversity apply and during 2023
the Board met all requirements expect
meeting the 40% female representation
on the Board. Following the Board
appointments on 10 January 2024, the
Company met all the targets on Board
diversity for the FY2024. Gender diversity
on the Executive Committee is below the
target set by the FTSE Women Leaders’
Review. It is the Board’s responsibility to
oversee senior management succession
GENDER REPRESENTATION AT BOARD AND SENIOR MANAGEMENT
Number of
Board
members
(1)
% of
the Board
Number of
senior positions
on Board (CEO, CFO,
SID and Chair)
Number in
senior
management
% of
senior
management
Men
6
66%
3
10
84%
Women
3
33%
1
2
16%
ETHNICITY REPRESENTATION AT BOARD AND SENIOR MANAGEMENT
Number of
Board
members
(1)
% of
the Board
Number of
senior positions
on Board (CEO, CFO,
SID and Chair)
Number in
senior
management
% of
senior
management
White British or other White
(including minority-white groups)
8
89%
4
10
84%
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
1
11%
2
16%
Not specified/prefer not to say
(1) On 31 December 2023
planning for a pipeline of managers and
talent identified from national senior
management development programme.
The Board diversity related data is collated
directly from each Director either through
a questionnaire or on a self-identifying
basis. The Company’s pre-existing internal
records, where permitted by relevant laws,
provided the information required to make
these disclosures.
The Group reported that senior
management fell below the Investment
Association (“IA”) target recommended as
30% of female representation with 16%
female representation across the senior
management team (2022:16%) and 31%
female representation across their direct
reports (2022:29%). 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 including
the senior management development
programme which is designed to encourage
and develop nationals to senior positions
within the organisation.
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TECHNICAL COMMITTEE REPORT
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.
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 returned to a more
predictable pattern of periodic meetings
during 2023, however the agenda was
nonetheless full throughout the year.
The committee serves the Company
by overseeing the safety and wellbeing
standards across the operations, project
proposals through to commissioning as well
as plans to improve productivity resulting in
environmental benefits and cost saving.
The table shows the details of the members
and their attendance during the year:
MEETINGS HELD IN 2023
Member
Membership details
Number of
meetings
attended
Maximum
possible
meetings
Hennie Faul (C)
From establishment on 29 June 2020
6
6
Dr Sally Eyre
From establishment on 29 June 2020
6
6
Dr Catharine Farrow
From establishment on 29 June 2020
6
6
Mark Bankes
From establishment on 29 June 2020
6
6
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 2023
The committee oversaw the preparation of
the new Sukari Life of Mine Plan (“LOM”),
which was announced in October 2023,
alongside the accompanying Ni 43-101
technical report. The LOM Plan had been
developed by Centamin’s in-house technical
team with support by expert consultants
and delivers increased gold production,
lower operational costs, reduced operational
risk and significantly reduced carbon
emissions.
Alongside the Sustainability Committee,
the committee assessed the Doropo Gold
Project located in north-eastern Côte
d’Ivoire. This culminated in the publication
of the pre-feasibility study including the
maiden Mineral Reserves estimate, detailed
project parameters and economics.
The committee also assessed the updated
Group Mineral Resources and Reserves,
comprising Sukari in Egypt and Doropo
and ABC Projects in Côte d’Ivoire. The
dedicated Mineral Resource Management
(“MRM”) team have significantly improved
the geological understanding of the Sukari
orebody, demonstrated by transitioning
of the resource modelling from external
consultants to in-house, managed by
the MRM department. One of the most
noticeable benefits has been moving Sukari
from a sustained period of Mineral Reserve
depletion to growth, with almost 1.6 million
ounces of reserves added before depletion
since 2020. Combined with the maiden
1.9 million ounce reserve at Doropo this
has meant Group P&P Mineral Reserves
increased by 3.5 million ounces since
2020, before depletion, exceeding the
Company’s stated target of 3.0Moz.
KEY FOCUS IN 2024
• Completion of the waste mining
contract with Capital Mining mid
2024 will be a key milestone at Sukari
allowing improved mining flexibility in
the open pit and supporting our new
LOM Plan which delivers reduced
operational risk, increased ore mining
rates and improved open pit mining
schedule
• Assessment of the Doropo Project
definitive feasibility study and
environmental impact assessment
• Review of the DX work programmes
in Egypt
• Assessment of the carbon
abatement initiatives including
the installation of the secure grid
power connection in Egypt
• Overseeing the delivery of the Life
of Mine Plan and adhering to the
plan as part of our assessment of
the operational metrics
• Delivering on cost reduction initiatives
and agreed capital projects
For further information on the
Company’s operational activities see the
Strategic Report and the Reserve and
Resource Statement and the Additional
Information section.
The committee assessed the negotiations
with the Egyptian government on the
framework for the model mining exploitation
agreement (“MMEA”) between Centamin,
the Egyptian Ministry of Petroleum &
Natural Resources and EMRA ty. The
agreement sets out the legal and fiscal
framework that will apply to commercial
discoveries made on the highly prospective
c.3,000km
2
of ground awarded to Centamin
for exploration in the Eastern Desert of
Egypt (“EDX”). The results of the maiden
EDX drilling campaign were announced in
early 2024.
H1 2023
–
Review throughout the year of operational performance across the Group’s assets including
the safety, high potential incidents and related workplace safety
–
Alongside the Sustainability Committee, review of tailings management and conformance
with GISTM
–
Assessment of the tendering, cost estimates and proposed EPC and O&M proposal to connect
Sukari to the Egyptian national grid for the supply of 50MW
AC
of power supply
–
Oversight of the Côte d’Ivoire portfolio and preparations for the pre-feasibility and definitive
feasibility studies at Doropo
H2 2023
–
Oversight of the negotiations and agreed fiscal terms over the new exploration ground in
Egypt’s Eastern Desert as well as the maiden drill programme
–
Review of the geological models that underpin the new Life of Mine Plan
–
Review of the new Life of Mine Plan and NI 43-101 Technical Report
–
Review of the Sukari Reserve and Resource estimate
–
Assessment of the potential issue identified in the processing plant at Sukari on SAG mill 1
with the decision to undertake pre-emptive repairs – noting that the work was successfully
completed and SAG1 has been fully operational following the repairs
HENNIE FAUL
CHAIR OF THE TECHNICAL COMMITTEE
DELIVERING ON THE
LIFE OF MINE PLAN
The committee worked alongside the
Sustainability Committee on carbon
abatement projects and the Audit and
Risk Committee on the cost reduction
opportunities. The committee worked
alongside the Remuneration Committee in
the development of key operational metrics
helping ensure the right behaviours are
incentivised.
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SUSTAINABILITY COMMITTEE REPORT
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 worked
with the Remuneration Committee on the
assessment of ESG incentive targets.
MEETINGS HELD IN 2023
Member
Membership details
Number of
meetings
attended
Maximum
possible
meetings
Dr Catharine Farrow (C)
From establishment on 29 June 2020
6
6
Marna Cloete
From establishment on 29 June 2020
6
6
Hennie Faul
From establishment on 29 June 2020
6
6
Dr Ibrahim Fawzy
From establishment on 29 June 2020
6
6
Hoda Mansour joined the committee upon appointment on the 10 January 2024.
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.
KEY ACTIVITIES IN 2023
Environmental and social governance
Safety, health and wellbeing
People and transformation
Group
•
FY23 reporting in line with GRI, SASB and TCFD
• Group-level Tailings Management Disclosure
Statement
• Third-party due diligence of Centamin’s supply
chain
•
Review of safety incidents and identification of
continuous improvement measures across the
Group
• Development of safety, wellbeing and social
metrics to incentivise the right culture and
behaviours across the Group
•
Overseeing the delivery of Board and Group policy
training
• ESG Policy Review
•
Board attendance at Sukari and active engagement
with the key management workforce forums
Sukari
• Systematic review of tailings governance and
management framework against the requirements
of the GISTM
• In-line with the Decarbonisation Roadmap,
overseeing progress on the tendering to connect
to the national grid connection
•
Overseeing the delivery of a new site safety record
of 9.5 million hours worked without a Lost Time
Injury at Sukari
•
ISO 45001 Roadmap noting no major non
conformance and recommendation for
certification
• Assessment of the professional Employee
Development Pathway, leadership and supervisory
development programme and succession planning
at Sukari
• Reinforced community engagement
Doropo
•
Preparations to support the Doropo Project DFS
and ESIA
• Assessment of political stability, and regional
community safety as part of the project evaluation
•
Optimisation study at Doropo on the location and of
the process plant and mine design, with consideration
to the impact on the social, environmental and
community
DELIVERING ON
SUSTAINABLE TARGETS
AND COMMITMENTS
KEY FOCUS IN 2024
• Achieve the sustainability targets
in relation to safety, carbon
emissions, workforce development
and gender diversity
• Continue in line with the Group’s
Decarbonisation Roadmap
by connecting to the Egyptian
national electricity grid and
constructing a 50MW
AC
transmission line
• Assessment of the solar plant
expansion to add an additional
15MW
AC
to the existing solar plant
• Review and assessment of
additional decarbonisation
opportunities associated with our
mobile fleet
• At Doropo, publication of our
Definitive Feasibility Study
and approval of a formal
Environmental and Social Impact
Assessment with the government
of Côte d’Ivoire is expected in
mid-2024
• Completion of the waste mining
contract with Capital Mining mid
2024 will be a key milestone
at Sukari allowing improved
mining flexibility in the open pit
and supporting our new LOM
Plan which delivers reduced
operational risk, increased ore
mining rates and improved
open pit mining schedule all
contributing to reduced carbon
emissions
For further information on
the committee’s activities and
wider environmental, social and
governance initiatives please see the
Strategic Report and the separately
published Sustainability Report.
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SUSTAINABILITY COMMITTEE REPORT
CONTINUED
ACTIVITY IN 2023
H1 2023
•
Review throughout the year of operational performance across the Group’s assets including the safety, high potential incidents and related
workplace safety
•
Alongside the Technical Committee, review of tailings management and conformance with GISTM
•
Assessment of the tendering, cost estimates and proposed EPC and O&M proposal to connect Sukari to the Egyptian national grid for the supply of
50MW
AC
of power supply
•
Workforce engagement including a visit to Sukari to meet with the key engagement forums
H2 2023
•
Oversight of the Côte d’Ivoire portfolio and preparations for the definitive feasibility studies and ESIA at Doropo
•
Assessment of ESG key performance indicators across health, safety and wellbeing; people and transformation; social and economic partnership;
and environment
•
Committee evaluation and recommendations for membership to the Board
CATHARINE FARROW
CHAIR OF THE SUSTAINABILITY COMMITTEE
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.
The importance of climate change is
recognised by the committee who receive,
as a standing agenda item at each meeting,
updates on the analysis and mitigation of
climate-related risks and opportunities.
The committee assessed delivery against
the Decarbonisation Roadmap, noting
the reduction in our Scope 1 & 2 GHG
emissions by 7% in 2023 compared to
our 2021 base-year. A key contributor was
the 30MWAC solar plant which reached a
milestone of 12 months of full operation in
October 2023 and replaced 21.5 million
litres of diesel with a cost saving of $19m.
The Grid Connection Project, which is due
to commence development later in 2024
will provide significant cost savings and
environmental benefits by reducing our
reliance on diesel generated power.
The committee assessed the TCFD
requirements noting the scenario analysis
of climate-related transition risks and
opportunities. The assessment considers
the identified parameters such as internal
growth projections, diesel consumption,
electricity consumption and gold production
as well as external factors such as
projections of carbon price, diesel price,
gold price and grid electricity prices. A
specialist climate change consultancy was
engaged to assist with the analysis and
provide long-term views on the identified
risks and opportunities.
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
(“GISTM”).
During the year, SGM, with the support
of the Engineer of Record (“EoR”)
Resources, completed a systematic review
of the tailings framework set against the
requirements of GISTM and a roadmap
towards conformance. Centamin’s
commitment extends to the operation of its
two tailings storage facilities at the Sukari
Gold Mine in Egypt and a third proposed
TSF at the Doropo Project in Côte d’Ivoire
which is currently under design to feasibility
level.
DOROPO FEASIBILITY STUDY
The committee reviewed the development
of the ESIA for Doropo and noted that
the focus has been on optimisation of
the process plant and mine design, with
consideration to the impact on the social,
environmental and community. The full
ESIA work programme in support of the
formal mining licence application is due in
2024.
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/.
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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ANNUAL REPORT AND ACCOUNTS 2023
AUDIT & RISK COMMITTEE REPORT
MARNA CLOETE
CHAIR OF THE AUDIT AND RISK COMMITTEE
The committee continued to work closely
with the Sustainability Committee on
matters relating to TCFD disclosures.
The committee also supported the Board
on the capital allocation review covering
the ongoing cost control initiatives,
dividend policy and gold price protection
programme.
The revision to the UK Corporate
Governance Code was issued on 22
January 2024, after the proposed legislative
changes were significantly pared down,
and the committee will ensure that it takes
responsibility for oversight of the Company
meeting the revised principles and
provisions within the timescales proposed.
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 auditors. 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 2023
Accounting matters
• Going concern assessment, including
the severe but plausible scenario stress
testing as well as the Viability Statement
• Fair value and impairment trigger
assessment across the Company’s assets
• Asset retirement obligations review and
provisioning
• Contract review of the new refining
agreement under IFRS 15
Risk, assurance and controls
• Review of the principal and emerging
risks, informed by the risk management
framework and process to understand
the Company’s risk profile
• Progress on developing our assurance
mapping, as relevant to the UK Corporate
Governance Code, to understand the
activities across the business, the
controls and wider technical assurance
• Internal control environment and internal
control focus areas including the need for
inhouse internal audit
• Oversight of the implementation of the
SAP system
• Assessment of the external auditor and
review of the annual audit and half-year
review reports
FOCUS AREAS FOR 2024 AND BEYOND
Following the revised UK
Corporate Governance Code,
maintaining effective systems of risk
management and internal control
to meet the enhanced disclosure
requirements in relation to the risk
management and internal control
framework. The committee will
assess the requirements in 2024
and comply with the relevant
reporting periods:
• For financial periods beginning
on or after 1 January 2026, the
Board will be required to make a
declaration on the effectiveness of
material controls and describe the
process they have undertaken to
support this declaration.
• Revised Governance Code
applies to accounting periods
commencing on or after 1 January
2025 except for Provision 29
which will apply to accounting
periods commencing on or after
1 January 2026.
Finance, legal and governance
• Undertaking a formal tender process for
the appointment of the external auditor
• Review of the dividend policy, cash
flow forecasting and capital protection
programme
• Ongoing assessment of the cost recovery
model and financing of capital projects
under the terms of the Sukari Concession
Agreement
• Assessment of the Company’s legal
cases, regulatory updates, and policy
reviews
• Review and update of the Committee
Charter
FAIR, BALANCED AND
UNDERSTANDABLE
The committee is satisfied that the controls
over the accuracy and consistency of the
information in the 2023 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
2023 Annual Report is fair, balanced,
and understandable. In arriving at that
decision, the committee has been involved
in reviewing 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).
INTRODUCTION
The Audit and Risk Committee held
regular and periodic meetings this year,
consistent with the financial reporting cycle
to oversee the preparation of the annual
and half-yearly financial reports. Key areas
of focus in 2023 were on the process
and implementation of the SAP system,
undertaking the tender for the external
audit and oversight of the risk and internal
controls.
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.
Iman Naguib joined the committee on
10 January 2024. on appointment as a
Non Executive Director. The following data
relates to the full year, 2023:
MEETINGS HELD IN 2023
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
7
7
Dr Catharine Farrow
Geoscientist
Operational, technical services,
corporate development and
exploration expertise
7
7
Hennie Faul
Mining engineer
Qualified mining engineer
with over 30 years’ experience
with knowledge of various
commodities in multiple
jurisdictions
7
7
*
Has relevant and current financial experience in accordance with the 2018 Code.
EVOLVING OUR INTERNAL
CONTROLS ENVIRONMENT
When reviewing all aspects of the 2023
Annual Report, the committee was
conscious to reflect the performance of
management in delivering the operational
budget and cost initiatives, 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 2023
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 2023 Annual Report was ‘fair’,
‘balanced’ and ‘understandable’ having
considered the activity of the Company
during the period and that users of the
2023 Annual Report would be able to
understand our position, strategy, business
model and overall performance, which were
presented consistently throughout the 2023
Annual Report.
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EXTERNAL AUDITOR
During 2023, 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. The committee
took account of the final audit findings,
noting in particular the feedback on the
developing SAP system and review of
TCFD disclosures. The committee also
noted the approach taken by the new audit
partner, noting the process was thorough
and management had been sufficiently
challenged.
ANNUAL REPORT EVALUATION AND
BENCHMARKING
As part of the 2023 audit, the management
team met with PwC to critically assess the
previous 2022 Annual Report and discuss
ways to improve the report for shareholders.
The session provided useful insight into
areas which could be simplified and ideas
to develop further linkages between the
relevant sections. The inclusion of the TCFD
disclosures and their integration into the
relevant sections of the Strategic Report
were also noted for further development in
2023.
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 audit. This exercise was
undertaken alongside the External Audit
Tender Process which we cover in further
detail below. To assess auditor effectiveness
the following factors were considered by 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
auditors can approach verification and
performance of audit procedures
AUDIT & RISK COMMITTEE REPORT
CONTINUED
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).
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 period to be considered is at least the next twelve months
from the date of signing the consolidated financial statements
and is expected to cover a period of 15 to 18 months. The
assessment covers a period to 31 December 2025 and therefore
21 months from the date of signing the consolidated financial
statements. 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.
Consolidated Group budgets are prepared for each upcoming
financial period, the 2024 budget model which covers a period
of 24 months has been used as the base case for the going
concern analysis. Financial models over the life of mine are also
prepared which covers a period of twelve years and this model
has been used as the base case for the viability assessment.
Further detailed analyses and forecasts are then applied
to the base case models to assess the economic impact of
various downside scenarios from a going concern and viability
perspective to determine 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:
•
Availability to draw under the Group’s Revolving Credit
Facility
• 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
2023 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 of 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 US$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 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
2023 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, and that the disclosure in the 2023 Annual
Report, in respect of the Group’s ability to continue as a
going concern, was appropriate.
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.
Revenue recognition
under new refining
contract
Accounting for
transactions
IFSR 15 Revenue requires management to assess its point of
revenue recognition and when control is passed to the customer.
With the signing of the new refining contract, an assessment
was required as to whether this point of revenue recognition had
changed from the previous contract.
The committee reviewed the papers presented by
management in respect to IFRS 15 and were in
agreement with management’s conclusion that there is
no change to when revenue is recognised, which is at
the point it is collected at the gold room.
• 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 auditors 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 auditors as a whole
• Assessment of potential threats to
the auditors’ 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 auditors (apart from the
ordinary course of business)
• The qualifications, expertise and
resources of the auditors including a
report of the auditors’ 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 auditors’ planning report, half-year
review report and audit report on the full-
year accounts, challenging management
and the auditors on the conclusions drawn,
particularly where the presented proposals
or conclusions differed.
AUDIT PARTNER
The committee is pleased with the performance of the audit partner, Tim McAllister. The
audit partner was appointed to the audit in 2023 following the mandated five-year audit
rotation, and undertook the 2023 half-year audit review and 2023 full-year audit. The
committee commented on the smooth hand over and noted that during the first full-year
audit, Tim McAllister 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 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 this was the first full year of the new audit partner following the
mandated five-year rotation.
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 and asset verification 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 2023 was both effective and added value to the Group.
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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 alongside other
specialised technical providers as relevant.
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
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$1,015k; there were
non-audit services carried out by PwC
during the year of US$151k 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 and details of
the audit tender carried out in 2023 are set
out in this report.
AUDIT & RISK COMMITTEE REPORT
CONTINUED
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 new PwC audit partner, Tim McAllister,
carried out the half-year review and full-year
audit for 2023, following the mandatory
rotation of the previous audit partner who
had served on the audit for five years.
The committee noted that the external
audit team provided suitable challenge to
management’s assumptions, in particular
to the significant issues set out at the
beginning of the report and in relation to the
assessment of the new refining contract.
EXTERNAL AUDIT TENDER
The 2023 half-year audit review and 2023
full-year audit was PwC’s tenth year as
the Company’s external auditor, and in
line with best practice, the Audit and Risk
Committee, whose members were involved
throughout the entire process, undertook a
formal tender in 2023. Notwithstanding the
Company’s domicile in Jersey, the Company
is committed to undertaking an external
audit tender every ten years in line with UK
Audit Regulations and the CMA Order.
A formal invitation was sent to eight audit
firms with relevant sector experience,
with initial responses from six firms. An
assessment of the Audit Quality Inspection
Reports in respect to those who were
invited were considered by the committee.
Four firms declined the invitation to tender
and when challenged by the committee,
the reasons given included a lack of
audit team capacity or lack of sector or
team experience meaning the quality
standard requirements may not be met.
The discontinuation of existing non-audit
services resulting from a successful tender
was also given as a reason. The committee
was comfortable with the rationale provided
by the audit firms who declined.
The Audit and Risk Committee was mindful
that a competitive tender would be required
to fulfil the requirements of a formal and
robust process. In setting the criteria and
having consideration to the nature of tender,
the committee did not feel the need to
enforce a price-blind tender.
Despite initial declines to the invitations,
the committee received positive responses
from both the incumbent and a second
audit firm. The committee carried out an
assessment of the capabilities of both firms
to tender for the audit. Having assessed
both the incumbent and the second audit
firm, a formal RFP was sent and a clear
timeline established for the tender process.
Both firms, in preparation for the tender,
had received a formal RFP, access to
a Company data-room and submitted
comprehensive and compelling propositions
for the role of external auditor. The
committee concluded that a formal tender
process could be followed, in line with the
FRC’s ‘Audit Committees and the External
Audit: Minimum Standards (2023)’.
Both firms submitted a formal proposal
document and were invited to present to the
committee. The committee held a meeting
following presentation of the propositions,
to consider both firms and to form a view
on the preferred firm who would take
forward the external audit in 2024 and
until such time as the committee agreed to
undertake a further tender. The committee’s
recommendation was tabled with the full
Board for approval.
The committee members and Board Chair
provided feedback on the two candidates.
It was noted that the evaluation was also
completed covering the audit approach,
the culture, capability and competence of
the team and their ability to deliver a robust
and effective audit. An assessment of the
proposed fees and appreciation of the fee
structure was also taken into consideration.
Conclusion
Following careful consideration of the
propositions, including review of the
comparative scoring of the evaluation
criteria, the committee agreed to
recommend to the Board to retain
PricewaterhouseCoopers LLP as the
Company’s external Auditors. The Board
agreed with the recommendation and
thanked the committee for their thorough
and diligent process. The Board also
extended their thanks to the competing
audit firm and for their time and dedication
in compiling a comprehensive proposition.
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, following
the outcome of the audit tender, the
reappointment of PwC as auditor at the
forthcoming AGM in 2024. The Board
supports the recommendation. PwC has
expressed its willingness to continue in
office as auditor.
INTERNAL CONTROLS
The committee worked with management
to progress the internal controls work
programmes and ensure the required
resources and information are available to
the Head of Risk to complete the scope
of work. We do not have an internal (in-
house) audit function, due to the assurance
provision we have across all three lines of
defence we believe that at present there
is no need to have a dedicated internal
audit function. However, due to the
activities which took place in 2023 with the
implementation of SAP and the subsequent
changes to the UK Corporate Governance
Code in January 2024, this is something
which the Audit and Risk Committee will
consider in 2024 and beyond.
BDO LLP assist the committee in
undertaken internal audit and assurance
functions. Over the course of 2023 BDO
LLP worked with management to scope
activities to identify areas for improvement
across the governance, risk and internal
control framework. It was recognised by
the committee that with the upcoming
changes to the UK Corporate Governance
Code supported by proposed regulatory
changes and having an appreciation of the
work involved in implementing the SAP
system, there would be limited internal
audit work completed in 2023 until the
wider environment was clearly defined.
BDO LLP and other specialist providers
undertook assurance activities connected
with reviewing the RCF metrics including
defining the methodology that supports
key people related metrics, support in the
development of our operational reporting
at SGM and completion of an initial cyber
security assessment with a roadmap for
improvement over the coming years.
The committee noted that following the
publication of the revised 2024 Corporate
Governance Code, several preparatory
activities we have started will assist in
meeting the provisions and principles
in addition to where we feel that we can
get additional value from this work. The
implementation of the SAP system will drive
a number of changes across our control
environment due to the work undertaken
as part of this. Below are examples of the
activities underway, with support from our
internal controls partners as required.
Assurance overview
To allow the Company to highlight the
effectiveness of risk and internal controls,
we are developing an assurance overview
with the purpose of understanding the
controls we have in place and the level of
assurance we receive that the controls are
operating effectively. This review covers the
i) Key Controls, ii) Control Reference and
Evidence and iii) Line of Defence and Level
of Assurance.
Initial work will verify the controls through
2024, with the implementation of SAP as
well as a number of other projects including
the mapping of key controls, we plan to look
at the design and operating effectiveness
of these controls, identify any potential
areas of improvement where applicable and
develop a roadmap as we work towards
the timing outlined in the UK Corporate
Governance Code.
Other areas in this space will include
coordinating through the ESG team, work
related to the Sustainability Linked Loan
Structure to have independent external
verification of three Key Performance
Indicators on Climate, People/Training and
People/Diversity. There are also a number
of wider areas where ESG and the wider
business receive assurance which we will
aim to capture through this process.
Cyber Security Review
A Cyber Security Review was carried out
in 2023 which identified several areas
to enhance our cyber security posture
ensuring alignment with industry best
practices. The review noted that while
we have established a strong foundation,
improvements can be made by delivering a
roadmap over 2024 and beyond.
Of note was the onboarding of training
modules throughout the business to
improve the awareness and responsibility
of each employee to protect their working
environment and the broader network
across the Group. Training sessions also
focused specifically on safeguarding our
assets with further training on cyber security
to be delivered in 2024.
The committee is comfortable with the
scope of work and levels of assurance
provided by internal controls, based on
the size and complexity of the business.
The committee continues to review the
opportunities 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,
business and operational risks across the
Group, including consideration of emerging
risks alongside the principal risks. Further
information on our Principal and Emerging
Risks section in the FY23 Annual Report
and the Risk Oversight and Accountability
section on our website (www.centamin.com).
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 2023, no significant internal control
failings were identified. The Risk Review on
page 41 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.
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
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 readiness to meet the
revisions to the 2024 Corporate Governance
Code. Given the requirements in the revised
Code for a new directors’ declaration on
the effectiveness of material controls, work
by the committee and the Board will be
undertaken ensuring a robust assessment
of financial and non-financial controls to
allow the Directors to make the required
statements in future financial periods.
Work is already underway towards these
requirements such as the assurance
overview and process controls (noted
above) alongside the implementation of the
SAP system and other activities to enhance
our control environment.
The current 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
section.
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 the relevant Canadian
governance requirements and a sound
system of risk management and internal
control was in place during 2023 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 reviews.
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 is considered
appropriate to continue to adopt the going
concern basis of accounting in preparing
the financial statements. The going
concern statement is detailed on page 145
in the Notes 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 41.
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 2024 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
AUDIT & RISK COMMITTEE REPORT
CONTINUED
CASE STUDY
The committee oversaw the tender process and steps for the
implementation of a new SAP ERP system in 2023.
Assisted by Birchman as the quality review partner for the project,
the development, implementation, training and go-live required
collaboration across the finance and operational teams in Egypt,
Côte d’Ivoire, Jersey and London.
The implementation presented a number of unique challenges
across our multinational Group including managing different local
accounting standards into one system. Birchman’s extensive
experience and numerous SAP implementations across the sector
played a crucial role, in particular their collaboration with the
Egyptian implementation team, DBS.
The Go Live phase, while challenging, was navigated successfully.
Training has been provided across the finance and operational
teams as required.
Ongoing improvements and modules will be implemented in 2024,
however the core system is operational, marking the achievement
of Stage 1.
SAP IMPLEMENTATION
Further information can be found
in the
Financial Review
section
of the
Strategic Report
.
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
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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
DR SALLY EYRE
CHAIR OF THE REMUNERATION COMMITTEE
INTRODUCTION
As chair of the Remuneration Committee,
I am pleased to present the 2023
Remuneration Report.
This report includes:
• The 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
2023 and how it is intended that the
shareholder approved policy will be
implemented for the forthcoming year
• A summary of the Directors’
Remuneration Policy that was put to a
shareholder vote at the 2022 AGM and
received over 95% approval
ADOPTING TARGETS
THAT INCENTIVISE
THE RIGHT BEHAVIOURS
COMMITTEE ACTIVITIES DURING
THE YEAR
The committee activities during the year
included:
• Assessing the FY 2022 executive bonus
and Performance Share Plan award
outturns
• Setting the Directors’ FY 2023 base
salaries
• Setting the FY 2023 incentive plan
targets and monitoring performance
against those targets
• Reviewing the application of the
Remuneration Policy for FY 2023
• Reviewing the remuneration packages
for the wider members of the senior
management team including the targets
set across the senior management team
and 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)
BACKGROUND TO REMUNERATION
DECISIONS
Centamin delivered another excellent
performance with improved safety results,
meeting production guidance for a third year
and outperforming AISC guidance for 2023.
Our Executive Directors have developed a
culture of continuous improvement with the
following key highlights:
• 9.5 million hours worked at the Sukari
Gold Mine with zero lost time injuries
• New Sukari Life of Mine Plan completed
• Systems upgrade – SAP implementation
• Delivering cost saving initiatives at Sukari
totalling circa US$185m savings as at
31 December 2023
• 500k/oz increase in reserves over the
5.3 million ounce reserve estimated as
published in the LOM Plan
• Ongoing decarbonisation initiatives
including progress towards the grid
connection at Sukari
INCENTIVE OUTCOMES FOR 2023
The remuneration outcomes for the
year reflected the excellent performance
delivered during FY 2023.
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 related to the delivery of exploration
programmes, assessment of growth
opportunities and effective stakeholder
management.
As explained further on pages 117 to 121,
based on performance against the targets
set, Martin Horgan was awarded a bonus
totalling 76.38% of the maximum bonus
opportunity of 150% of salary. Ross Jerrard
was awarded a bonus totalling 75.38% of
the maximum bonus opportunity of 125%
of salary.
The committee is comfortable that the
formulaic outcome of the bonus is fair
and balanced based on wider business
performance and so the committee did
not use discretion in relation to the bonus
outcomes. 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 2021 Performance Share Plan (“PSP”)
awards were granted in April 2021 and
were subject to relative TSR versus the
FTSE Gold Mines Index, free cash flow
(“FCF”) and production targets. As set
out in the 2020 Remuneration Report on
page 157, the Remuneration Committee is
required to add back any non-sustaining
capital expenditure that was not considered
at the time the targets were set for the
2021 PSP award. This ensures that
there are no unintended consequences
of setting cash targets (i.e. deferring any
unexpected necessary capital expenditure
to ensure the long-term sustainability of
the life of the mine). Following the end of
the performance period, the committee
reviewed the expenditure over the period
added back the non-sustaining capital
expenditure to ensure that the targets
were no more or less challenging when
tested than when originally set. This is
in line with the approach used last year
when determining the vesting level for
the 2020 Award. As a result, 100% of
the FCF element will vest. The committee
considered this to be a fair reflection of the
underlying FCF generated over the period.
Regarding the other performance metrics,
TSR performed slightly below threshold
and production targets met slightly above
threshold. Consequently, 31.29% of the
2021 PSP award will vest. A dividend
equivalent over the vesting period applies
to the portion of the award which will vest.
Full details of the targets and performance
against them are included on page 121.
The Remuneration Policy operated as
intended and 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 2024.
WIDER EMPLOYEE REMUNERATION
CONTEXT
Corporate salary reviews were undertaken in
2023 across the senior management team
with the typical rate of increase awarded
to UK and Jersey based employees who,
absent changes to roles or responsibilities,
received a 6% increase.
Egypt is experiencing a hyper inflationary
environment and efforts have been
made throughout 2023 to counter the
depreciating value of the EGP. The
workforce in Egypt were awarded two
sets of increases during 2023 with a 15%
increase in January 2023 and a further
30% increase in October 2023.
The bonus scheme at Sukari is paid
each quarter and includes KPIs such
as safety, gold production and certain
operating metrics. 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 key 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
works effectively. The Sustainability
Committee members who act as the Board
representatives for workforce engagement,
met with several working groups while
visiting Sukari in October 2023. As well
as speaking with senior leaders and team
members during the site visit, there was
specific engagement with several of the
Sukari Mine based working groups. The
members of the committee share our
approach to executive remuneration, how
it aligns with the wider workforce and
Company strategy. The views received
on remuneration are fed back to the
Remuneration Committee. The executive
remuneration policy and its implementation
were not raised as material issues during
the year. Therefore, no amendments were
required to the proposed implementation
of the policy in 2024 as a result of this
engagement.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
REMUNERATION COMMITTEE REPORT
CONTINUED
SHAREHOLDER ENGAGEMENT
The committee consults with its larger
shareholders on executive pay matters,
where considered appropriate. As
there are no significant changes in the
implementation of the Remuneration Policy
during the year, we have not carried out
a formal consultation with shareholders
in relation to the policy or its operation in
2024. However, we are always happy to
be available to shareholders to discuss any
concerns or feedback they may have. We
will consult with larger shareholders during
the Remuneration Policy review process
ahead of the AGM in 2025.
APPROACH TO REMUNERATION
IN 2024
The committee considered how
remuneration should be implemented for
2024. Part of this process was reviewing
current practice against both market
and best practice, pay across the Group
and the ongoing business strategy. The
outcome of the review was that our current
overall approach remains appropriate.
The Remuneration Committee intends to
adopt the following approach to Executive
Directors’ remuneration in 2024, in
compliance with the existing policy:
Base salaries and fees
Base salaries for the Executive Directors
will be increased by 5% with effect from
1 January 2024. In addition, the Non-
Executive Director base fee and the Board
Chair fee will also increase by 5%. This is
below the increase for the wider UK and
Jersey workforce who, absent changes to
roles or responsibilities, will receive a 6%
increase in 2024.
Pension
In 2023, a benchmarking exercise was
undertaken to assess whether the pension
opportunity, which enabled the relevant
workforce
(1)
employees 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),
remains appropriate. Following the review,
the pension opportunity was increased
so that relevant employees may receive
an employer contribution of up to 7% to
match an effective 7% of salary employee
contribution. The roll out of this opportunity
was received positively with a clear majority
of the workforce opting to receive the
7% employer / 7% employee pension
opportunity. Contributions on behalf of the
relevant workforce
(1)
have been made to the
pension plan under this revised approach
since 1 July 2023.
The committee agreed that the pension
opportunity (or a cash allowance in lieu
of pension where the lifetime or annual
pension allowances have been reached) for
the Executive Directors be brought in line
with that offered to the relevant workforce
(1)
effective 1 January 2024 in line with the
remuneration policy.
1)
Relevant workforce: UK and Jersey employees and/
or employees in other jurisdictions working directly
or indirectly for the corporate parent.
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 2024.
The FY 2024 bonus performance metrics
will be a similar structure to 2023 as follows:
• Structured corporate targets (55%).
These targets will relate to our financial
and operational performance
• ESG targets (20%). These targets relate
to health & safety, environment, social
and employee development targets
• Strategic targets (25%). These targets
relate to growth, exploration, and other
strategic priorities for the year ahead
which are tailored to each Executive’s
responsibilities
2024 Performance Share Plan awards
In line with Centamin’s historic approach,
both Executive Directors will receive a PSP
award over shares worth 150% of salary.
The 2024 PSP awards will vest subject to
three-year relative TSR, sustainability, free
cash flow and production targets, in line
with the approach for the 2023 award.
The sustainability targets relate to a key
initiative to drive market leading standards
of best practice compliance on tailings
management within Centamin through
improving our compliance with the Global
Industry Standard on Tailings Management
(“GISTM”). The targets relate to delivery
against key milestones, so the targets are
quantifiable and well defined. During the
year the committee reviewed the weightings
of each of the measures and have made
some minor adjustments to reflect the
strategic priorities of the business over the
longer term. Further details of the incentive
plan targets to operate in 2024 are included
on page 130.
CONCLUSION
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 policy.
DR SALLY EYRE
CHAIR OF THE REMUNERATION
COMMITTEE
EXECUTIVE DIRECTOR REMUNERATION AT A GLANCE
Key component
How implemented in 2023
Intended implementation for 2024
Base salary
CEO – £590,000
CFO – £471,050
CEO – £619,500
CFO – £494,603
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.
A pension opportunity based on full base salary of up to 7% employer
contribution to match an effective 7% employee contribution. The
pension opportunity will be offered to the CEO and CFO effective
1 January 2024, or a cash allowance in lieu of pension, where the
lifetime pension allowance or annual allowance has been reached.
The pension terms available to the Executive Directors mirror the
terms of the wider UK, Jersey and broader corporate parent
company employees.
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 including profit, cost controls,
production, reserve gains, development meters, efficient
deployment of capital projects
•
20% – ESG social and safety targets
•
25% – personal/strategic covering exploration and growth,
capital projects and stakeholder management
50% of the maximum is payable at the ‘target’ performance level
Targets are disclosed on pages 117 to 121
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.
There is also an 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 including profit, cost controls,
production, reserve gains, development meters, efficient deployment
of capital projects
•
20% – ESG social and safety targets
•
25% – personal/strategic targets covering 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 2024 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. There is also an
option to defer up to the full bonus into Company shares
PSP
CEO/CFO – 150% of salary
Targets:
•
50% – relative TSR vs GDXJ Index
• 15% – free cash flow generation
• 25% – production
• 10% – sustainability targets
CEO/CFO – 150% of salary
Targets:
•
40% – relative TSR vs GDXJ Index
• 15% – free cash flow generation
• 30% – production
• 15% – 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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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
REMUNERATION COMMITTEE REPORT
CONTINUED
TARGETS LINKED TO STRATEGY
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, strip ratio and process
plant optimisation
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 MRM exploration drilling meters
Identifying high-grade from the existing mineral resource with production targets used in the annual bonus.
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 Mining
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
Significant proportion of the 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 leadership development, diversity, environmental and social targets along with embedding the
workplace culture 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 a further year. 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).
A review of the policy and consultation with major shareholders will be undertaken ahead of seeking approval of the renewed policy at the
AGM in 2025.
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
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. From 2024 this
will be up to 7% of salary.
N/A
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ANNUAL REPORT AND ACCOUNTS 2023
REMUNERATION COMMITTEE REPORT
CONTINUED
Element of pay and
link to strategy
Operation
Opportunity
Performance conditions
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.
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.
Element of pay and
link to strategy
Operation
Opportunity
Performance conditions
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.
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
|
|
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
REMUNERATION COMMITTEE REPORT
CONTINUED
ILLUSTRATION OF APPLICATION OF REMUNERATION POLICY
The following charts illustrate the remuneration opportunity provided to the Executives:
£3,500
£1,500
CEO (£’000)
£2,500
£500
£3,000
£1,000
Fixed
£676k
£1,373k
£2,999k
Fixed pay
Annual Bonus
LTIP
LTIP value with 50% share price growth
On target
Maximum
£2,000
£0
100%
49%
34%
17%
27%
37%
37%
£2,534k
Fixed pay
Annual Bonus
LTIP
LTIP value with 50% share price growth
£2,500
£1,500
CFO (£’000)
£500
£1,000
Fixed
£559k
£1,053k
£2,290k
On target
Maximum
£2,000
£0
100%
53%
29%
18%
29%
32%
39%
£1,919k
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
2024 and benefits calculated using the GBP equivalent of the 2023 figure as set out in the single figure table on page 116.
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.
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 committees 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 three years) have formal letters of appointment which provide for three
months’ notice and those under existing service agreements (three years plus) have ‘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
Hoda Mansour
(1)
Non-Executive Director
10 January 2024
Iman Naguib
(1)
Non-Executive Director
10 January 2024
Mark Bankes
Non-Executive Director
14 December 2011
Ibrahim Fawzy
Non-Executive Director
14 August 2018
1.
Hoda Mansour and Iman Naguib were appointed to the Board of Directors on 10 January 2024.
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 are potentially receivable by our Executive Directors, under the incentive plan rules, 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 KPIs in the
Strategic Report. 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 6 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.
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
REMUNERATION COMMITTEE REPORT
CONTINUED
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 in which the Company operates 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.
CONSIDERATION OF SHAREHOLDER VIEWS
Feedback from shareholders and proxy advisors including meeting (if considered appropriate) 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.
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 fixed
remuneration
Total variable
remuneration
Executives
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Martin Horgan
739,080
675,056
16,260
17,606
859,487
720,113
269,971
542,796
1,655
1,616
1,886,453
1,957,187
756,995
694,278
1,129,458
1,262,909
Ross Jerrard
590,002
566,464
37,639
36,022
564,351
501,463
236,743
358,797
1,655
1,616
1,430,390
1,464,362
629,296
604,102
801,094
860,260
Total Executive
1,329,082
1,241,520
53,899
53,628
1,423,838
1,221,576
506,714
901,593
3,310
3,232
3,316,843
3,421,549
1,386,291
1,298,380
1,930,552
2,123,169
Non-Executives
Jim Rutherford
313,550
304,706
–
–
–
–
–
–
–
–
313,550
304,706
313,550
304,706
–
–
Sally Eyre
125,420
121,882
–
–
–
–
–
–
–
–
125,420
121,882
125,420
121,882
–
–
Marna Cloete
112,878
109,694
–
–
–
–
–
–
–
–
112,878
109,694
112,878
109,694
–
–
Catharine Farrow
112,878
109,694
–
–
–
–
–
–
–
–
112,878
109,694
112,878
109,694
–
–
Hennie Faul
112,878
109,694
–
–
–
–
–
–
–
–
112,878
109,694
112,878
109,694
–
–
Mark Bankes
132,372
126,282
–
–
–
–
–
–
–
–
132,372
126,282
132,372
126,282
–
–
Ibrahim Fawzy
100,336
97,506
–
–
–
–
–
–
–
–
100,336
97,506
100,336
97,506
–
–
Total
1,010,312
979,458
1,010,312
979,458
1,010,312
979,458
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 $1.2715/£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. Benefits relate to insurance, healthcare, consultancy & permitted
travel.
•
In both 2022 and 2023 the CEO participated 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. In both 2022 and 2023 the CFO participated 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).
•
The performance conditions relating to PSP (reflected in the LTI column) awards granted in 2021 have been partially met as at 31 December 2023. 31.29% of the PSP
Award granted in 2021 will vest in April 2024 as detailed on page 121.
•
None of the total PSP value (reflected in the LTI column) for the Executives is attributable to share price appreciation. The 2021 LTIP award was granted at a share price
of £1.14 and the vesting share price is estimated to be £0.8945 (based on the average share price for the last three months of 2023). The value is converted to USD
based on the year-end exchange rate of $1.2715/£1. The value of the 2020 LTI, reflected in the table in 2022, was granted at a share price of £1.64 and the share price
at the time of vesting was £0.98. The value shown in the table is based on an exchange rate of $1.2436/£1. The LTI reflected in 2022 includes the value of dividend
equivalents accrued over the vesting period.
•
Mark Bankes received an additional fee totalling £30,000 in 2023 (£30,000 in 2022) as a result of the additional time commitment in providing Non-Executive Director
oversight in respect to the final MMEA negotiations. This included time spent travelling to and from Cairo and time spent supporting the Company providing oversight to
the active working committee.
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. In line with the increase in Executive
Director base salaries for 2024, the Non-Executive Director base fee and the Board Chair fee will increase by 5% effective from 1 January
2024. This is below the increase for wider UK and Jersey based employees of 6%.
Following this year’s review, the current annual fee rate for Non-Executive Directors are as follows:
Fee structure in 2024
As at 31 December 2023
Annual Board Chair fee
£262,500 (US$333,769)
£250,000 (US$317,875)
Annual base fee
£68,250 (US$86,780)
£65,000 (US$85,648)
Chair of a Board committee
£15,000 (US$19,073)
£15,000 (US$19,073)
Member of a Board committee
£5,000 (US$6,358)
£5,000 (US$6,358)
Senior Independent Director
£10,000 (US$12,715)
£10,000 (US$12,715)
Notes to table:
•
The Non-Executive Directors do not participate in any of the Company’s share plans or incentive plans.
•
The US$ figures in the table reflects year-end exchange rate of $1.2715/£1.
2023 ANNUAL BONUS (AUDITED)
The 2023 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 Executives 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) are applied to both the CEO and CFO during the year as detailed
below. The CEO’s maximum bonus opportunity is 150% of salary and the CFO’s maximum bonus opportunity is 125% of salary.
The performance delivered against the targets resulted in 53.38% out of the maximum 75% available as being achieved as detailed
overleaf.
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OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
REMUNERATION COMMITTEE REPORT
CONTINUED
OPERATIONAL (35% OF BONUS OPPORTUNITY)
Under the operational elements the committee determined that 21.82% 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
7
450,000
460,000
480,000
450,058
1.76%
2.6/2.2
Open pit material movement
‘Mt
4
120
123.33
130
129.2
3.76%
5.6/4.7
Strip ratio to ore mined (adjusted for
low-grade ore reclassified from waste)
w/o ratio
4
8
8.67
10
8.2
1.3%
1.9/1.6
UG total material mined
‘Mt
4
1.4
1.5
1.7
1.47
1.7%
2.5/2.1
Lateral development
metres
4
8,500
8,800
9,400
8,724
1.75%
2.6/2.2
MRM OP & UG Drilling
‘000 meters
4
210
230
270
307.6
4.0%
6.0/5.0
Pre-depletion reserve gain
Moz
4
0.2
0.23
0.3
0.5
4.0%
6.0/5.0
Plant recovery
%
4
87.0
87.7
89.0
88.7
3.55%
5.3/4.4
TOTAL
35%
21.82%
32.5/27.2
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
•
The strip ratio targets are restated to reflect actual production versus the budgeted production numbers
•
Pre-Depletion reserve gain (NPV outcome) results from the depletion gain against the new LOM Plan as published on 19 December 2023
FINANCIAL (20% OF BONUS OPPORTUNITY)
Under the financial target element, the committee determined that 18.25% 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
990
940
840
875
4.12%
6.2/5.2
AISC per ounce sold
(2)
US$/ounce
5
1,400
1,350
1,250
1,205
5.0%
7.5/6.2
EBITDA
(3)
US$ million
5
245.7
273
300
393
5.0%
7.5/6.2
Capex (Paste-fill plant, Rebuilds,
Waste Mining Contract and TSF2 Lifts)
(4)
Budget/phase
of completion
5
Assessed by reference to stage of completion and remaining
within budgetary constraints
4.13%
6.2/5.2
TOTAL
20
18.25%
27.2/22.6
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 2023, the committee assessed the impact of the Egyptian fuel price on the cost base of the business applying
the commodity assumption of 90 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 US1,900 although this didn’t result in a material change.
(3)
When testing the sustaining and direct operating costs and non-sustaining and capital projects targets the committee takes account of the actual expenditure against the
original target.
(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.
ESG (20% OF BONUS OPPORTUNITY)
Under the sustainability part of the bonus, the committee determined that 13.31% 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 TRIFR
Per 1 million hours
5
3.71
3.15
2.78
2.83
4.66%
7/5.8
Reportable incidents
(level 4 & 5)
4
Zero Reportable Incidents None Reported
ESIFR
(level 1 to 5)
2.35
2.0
1.76
1.65
4.0%
6/5
Employee training
Ratio expressed as a %
3
70
73
80
74
1.65%
2.5/2
Leadership training
Ratio expressed as a %
3
Achieve majority progress through
employee development pathway
66%
3.0%
4.5/3.7
Gender diversity
Gender balance
5
3.8
4.1
4.7
3.4
0%
0/0
TOTAL
20
13.31%
20/16.5
Notes to table:
•
The structure of the threshold, target and maximum pay out schedules are as for the operational targets above.
•
Environmental incidents related to minor spills due mainly in the handling of materials during offload and transportation.
•
Employee training: Ratio of the number of employees that have been trained and assessed under the EDP framework and assessed as a proportion of in-scope
employees.
•
Leadership training: Ratio of the number of employees that have progressed along their development pathway as a proportion of the number of in-scope employees with a
ratio of 66% representing significant progress through the pathway.
•
Gender: Defined as the percentage of the total number of women employees to the total number of employees globally in the Group.
PERSONAL/STRATEGIC TARGETS (25% OF BONUS OPPORTUNITY)
Martin Horgan
Achieved (audited)
The targets applicable to Martin Horgan’s non-financial bonus for FY 2023 and his performance against them are detailed below. In total,
he achieved 23% of the 25% available:
Topic/Target:
Achieved:
Weighting
(% of bonus
opportunity)
Achieved (% of
maximum)
Outturn as %
of maximum
bonus
opportunity
Outturn as %
of salary
Fully optimised mine plan
to be delivered
New LOM Plan issued to market on 12 October 2023 followed
by the publication of the NI 43-101 Technical Report. The
LOM Plan revealed significant improvement with Tier 1 status
re-confirmed for Sukari.
5
100%
5%
7.5
SGM infrastructure
Delivery of Paste-fill plant in 2023 which was operational from
May 2023.
Deliver grid connection tender completed in the year.
Deliver Gravity Circuit design and engineering – PFS
completed with DFS for 2024.
4
80%
Targets achieved with
timing between target
and max
3.2%
4.8
Exploration (Sukari
Underground)
Assessed and delivered results of the Reserve and Resource
update published on 19 December 2023 with extensions
across Bast, Osiris and Horus Deeps.
3
100%
3%
4.5
Exploration (West Africa)
Delivered the Board’s target for progress on the Doropo ESIA
and DFS including assessment of government engagement
and progress against the permitting roadmap.
3
90%
Targets achieved
2.7%
4.05
Greenfields Exploration
(including EDX)
Delivered Board’s targets of commercial assessment of:
• SGM concession exploration
•
EDX Nugrus priority targets and activity in Um Rus and
Nadj
• EDX MMEA negotiations
3
100%
3%
4.5
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REMUNERATION COMMITTEE REPORT
CONTINUED
Topic/Target:
Achieved:
Weighting
(% of bonus
opportunity)
Achieved (% of
maximum)
Outturn as %
of maximum
bonus
opportunity
Outturn as %
of salary
Growth opportunities
M&A opportunities and corporate action preparedness
reviewed in line with the Board’s plan.
3
90%
Targets achieved with
timing between target
and max
2.7%
4.05
Egyptian stakeholder planning
Undertook Egyptian in-country stakeholder mapping
including engagement, developing in-country relations
and sponsorship.
2
90%
Targets achieved
subject to in-country
completion in 2024
1.8%
2.7
Corporate structure review
Completed the corporate structuring review including roles,
reporting lines and cost assessment. Assessed by roll out and
completion.
2
80%
Targets achieved
between target and
max
1.6%
2.4
TOTAL
25%
23%
34.5%
Total outturn: 23% 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 76.38% of his maximum bonus opportunity. As a result, Martin received a bonus of £675,963 or 115% 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.
Ross Jerrard
Achieved (audited)
The targets applicable to Ross Jerrard’s non-financial bonus for FY 2023 and his performance against them are detailed below. In total,
he achieved 22% 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 & RCF
roll out
Delivered roll out of capital structure review across
investments, debt and dividend returns including gold price
protection instruments in place, RCF compliance and treasury
management. All delivered on time in relation to the Board’s
plans.
5
100%
5%
6.25
Cost management and
continuous improvement
programme to meet $150m
cost saving target
Delivery of full target of $150m cost savings initiatives.
Cost metrics on track and in line with guidance and
assessment of management of key contracts.
5
100%
5%
6.25
Government relations and
stakeholder management/legal
and regulatory compliance/
Internal & external audit
management
Ensuring tax and regulatory compliance across the Group’s
jurisdictions.
Ensured tax and regulatory compliance across the Group’s
jurisdictions.
External audit tender process completed with selection of PwC
to be retained.
Delivered assessment of ongoing work with EMRA including
cost recovery, budget preparations and periodic reporting.
5
80%
Targets achieved with
milestone activities
completed between
target and max
4%
5
Tax Exemption Renewal
(Concession compliance)
Delivered progress towards further fifteen year Tax Exemption
Renewal under the Sukari Concession Agreement. Workstreams
underway with exploration report drafted and tax position
verification near final.
4
75%
Targets achieved with
milestone activities
completed between
target and max
3%
3.75
Topic/Target:
Achieved:
Weighting
(% of bonus
opportunity)
Achieved (% of
maximum)
Outturn as %
of maximum
bonus
opportunity
Outturn as %
of salary
Transaction preparedness
Manage involvement in the successful MMEA negotiations
(EDX). Completed first phase review of M&A opportunities.
4
80%
3.2%
4
IT implementation
Delivery of SAP project with a ‘go live’ date of 1 November 2023.
Programme delivered over a period of ten months across 21
entities within the Group.
2
90%
Targets achieved with
timings between target
and max
1.8%
2.25
TOTAL
25%
22%
27.5%
Total outturn: 22% 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 75.38% of his maximum bonus opportunity. As a result, Ross received a bonus of £443,847 or 94% 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)
The performance conditions for the grants made in April 2021 covered the period from 31 December 2020 to 31 December 2023.
Performance against the targets is set out below:
Targets
Outturn
Category
Weighting
Threshold (25% of
maximum)
Maximum (100% of
maximum)
Actual
As a % of
the Category
As a % of
the Award
Relative TSR vs FTSE Gold Mines Index
50%
Performance equal
to the index
Annual out-
performance of the
index by 10% p.a.
TSR performance
below the Index
0%
0%
‘Adjusted’ free cash flow (Note below)
25%
$45m
$70m
$132.1m
100%
25%
Gold production
25%
450,000
480,000
450,058
25.15%
6.29%
Total
31.29%
Notes to table:
As set out in the Chair’s Statement on page 107, consistent with the original intent included in the 2021 LTIP targets and disclosed in the 2021 Directors’ Remuneration
Report, the committee added back the non-sustaining capex that had not been built into the business plan used as the basis of setting the performance targets.
The unadjusted FCF was $42.8m. The committee added back non-sustaining capex relating to the Capital Drilling Contract ($89.2m), as a result the adjusted FCF for the
purposes of testing the performance condition was $132.1m. Furthermore, while the gold price in 2023 was more than 5% above the original estimation of $1,650/oz, the
committee assessed the targets at current rates noting this and related factors did not impact the vesting result.
Vesting outcome results as follows:
Executive
Vest date
Number of
shares at grant
Number of
shares to vest
Number of
shares to lapse
Total value of the
dividend equivalents
on shares to vest $
Total estimated value
of the award $
Martin Horgan
30-Apr-24
650,000
203,385
446,615
38,643
269,971
Ross Jerrard
30-Apr-24
570,000
178,353
391,647
33,887
236,743
Notes to table:
•
The estimated total value of the award is based on the average share price for the last three months of 2023 (£0.8945). The value is converted to USD based on the
year-end exchange rate of $1.2715/£1
•
Shares to vest (net of tax) are required to be held until at least 30 April 2026 and retained towards the Company’s in and post-employment share ownership guidelines
The committee is comfortable that the above process delivers the original intent of the awards and achieves a fair balance between
performance and reward.
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REMUNERATION COMMITTEE REPORT
CONTINUED
PSP award table (conditional awards) – Martin Horgan (audited)
Award date and basis
Face value of
award at grant
date US$
Fair value of
award at grant
date in US$
End of
performance
period
Shares
granted
Total
outcome
of vest
Total lapsed
awards based
on performance
to end 2023
Balance of awards
vested / unvested as
at 31 December 2023
PSP 30 April 2021 (150% of salary)
1,021,324
653,250
31 Dec 2023
650,000
203,385
446,615
203,385
PSP 20 May 2022 (150% of salary)
997,307
660,825
31 Dec 2024
979,000
–
–
979,000
PSP 26 April 2023 (150% of salary)
1,111,237
848,337
31 Dec 2025
835,800
–
–
835,800
Notes to table:
•
There is nil cost for conditional awards which are subject to performance conditions
•
The performance conditions of the grant made on 25 April 2023 are set out in the FY2022 ARA and summarised below
•
The face value of the 2023 awards have been determined using the five day average share price up to the grant date (£1.04) and using an FX rate of $1.27:£1
•
The fair values of the awards in the table are based on IFRS 2 valuation methodology as set out in note 6.3 of the financial statements
PSP award table (conditional awards) – Ross Jerrard (audited)
Award date and basis
Face value of
award at grant
date US$
Fair value of
award at grant
date in US$
End of
performance
period
Shares
granted
Total
outcome
of vest
Total lapsed
awards based
on performance
to end 2023
Balance of awards
vested / unvested as
at 31 December 2023
PSP 30 April 2021 (150% of salary)
895,623
504,451
31 Dec 2023
570,000
178,353
391,647
178,353
PSP 20 May 2022 (150% of salary)
836,353
554,175
31 Dec 2024
821,000
–
–
821,000
PSP 25 April 2023 (150% of salary)
887,208
677,310
31 Dec 2025
667,300
–
–
667,300
Notes to table:
•
There is nil cost for conditional awards which are subject to performance conditions
•
The performance conditions of the grant made on 25 April 2023 are set out in the FY2022 ARA and summarised on the next page
•
The face value of the 2023 awards have been determined using the five day average share price up to the grant date (£1.04) and using an FX rate of $1.27:£1
•
The fair values of the awards in the table are based on IFRS 2 valuation methodology as set out in note 6.3 of the financial statements
25 APRIL 2023 PSP AWARD (AUDITED):
Executive Directors received a PSP award over shares worth 150% of salary.
Awards will vest based upon independent three-year relative TSR, cash flow and production targets. Also, reflecting the Remuneration
Policy, these awards will be subject to a full two-year post vesting holding period.
More particularly, the targets to be applied to this award are expected to be as follows:
Metric
Weighting
Threshold
(25% vesting)
Stretch
(100% vesting)
Relative TSR vs The VanEck Junior Gold Miners ETF (“GDXj”)
See notes
50%
Performance equal
to the Index
Annual out-performance
of the Index by 10% p.a.
2025 Gold production
‘000 ounces
25%
450
500
2025 free cash flow
US$m
15%
35
70
2025 decarbonisation targets
See notes
10%
Set out below
Set out below
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 Agreement
•
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.
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REMUNERATION COMMITTEE REPORT
CONTINUED
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 2023:
Name
As at
31 December 2023
(1)
Unvested conditional
awards (subject
to performance
conditions)
(5)(6)
Balance (not subject
to performance
conditions)
(1)
Percentage
of base salary
(4)
Executive Directors
Martin Horgan
(2)
2,868,270
2,464,800
403,470
61%
Ross Jerrard
(2)
2,924,390
2,058,300
866,090
164%
Non-Executive Directors
(3)
Jim Rutherford
250,000
–
250,000
89%
Sally Eyre
15,000
–
15,000
13%
Marna Cloete
15,000
–
15,000
15%
Catharine Farrow
30,000
–
30,000
30%
Hennie Faul
–
–
–
0%
Mark Bankes
319,000
–
319,000
270%
Ibrahim Fawzy
140,000
–
140,000
156%
(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 Martin Horgan, the balance includes 196,963 shares which are subject to a two year holding period under the terms of the PSP. For Ross Jerrard, the balance
includes 191,950 shares which 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 2023 of £0.89.
(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.
(7) The table above includes holdings of persons connected with each of the Directors.
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 graph shows 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.
0
50
100
150
200
250
300
350
400
2013
2014
2016
2017
2018
2019
2020
2021
2022
2015
2023
Centamin
FTSE Gold Mines
FTSE 250
The Remuneration Committee considers that these indices are appropriate comparators of the Company for this purpose. We have
reflected details of the CEO pay for the last ten years:
Chairman – Josef El-Raghy
(1)
Single figure
remuneration
Annual bonus as
% of maximum
Long-term incentives
vesting in year as
% of maximum
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 for 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%
(3)
Ross Jerrard was appointed Interim CEO on 13 December 2019 until 6 April 2020 when Martin Horgan was appointed.
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REMUNERATION COMMITTEE REPORT
CONTINUED
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$1,363,754
74.7%
N/A
2022
US$ 1,957,186
72%
63.1%
2023
US$ 1,886,453
76.38%
31.29%
(3) Ross Jerrard was appointed Interim CEO on 13 December 2019 until 6 April 2020 when Martin Horgan was appointed.
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
Average percentage change
2022–2023
Salary/
Fee
Benefits
Annual
bonus
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%
9%
-8%
19%
Ross Jerrard
(2)
8%
-55%
4%
2%
179%
15%
-6%
-63%
-5%
4%
4%
13%
Jim Rutherford
(4)
N/C
N/A
N/A
40%
N/A
N/A
-11%
N/A
N/A
3%
N/A
N/A
Sally Eyre
(3)
N/C
N/A
N/A
22%
N/A
N/A
-16%
N/A
N/A
3%
N/A
N/A
Marna Cloete
(3)
N/C
N/A
N/A
16%
N/A
N/A
-6%
N/A
N/A
3%
N/A
N/A
Catharine Farrow
(3)
N/C
N/A
N/A
20%
N/A
N/A
-6%
N/A
N/A
3%
N/A
N/A
Hennie Faul
(3)
N/C
N/A
N/A
105%
N/A
N/A
-6%
N/A
N/A
3%
N/A
N/A
Mark Bankes
(3)
-11%
N/A
N/A
27%
N/A
N/A
-3%
N/A
N/A
3%
N/A
N/A
Ibrahim Fawzy
(3)
7%
N/A
N/A
19%
N/A
N/A
-15%
N/A
N/A
5%
N/A
N/A
All employees
(1)
15%
-1%
-15%
-5%
10%
25%
-4%
-9%
3%
2%
-5%
13%
(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 2023: 29
employees (2022: 28 employees).
(2)
The percentage reflects the year-on-year change recorded in US$ in the single figure table. The CEO’s salary was increased from £545,000 to £590,000 in 1 January
2023 consistent with proposals set out in the 2022 Remuneration report.
(3) Any increase in Non-Executive Director fees reflects an exchange rate between the reporting currency US$ and payments made in GB£.
(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 whether the individual does not receive benefits of pension or an annual bonus. Explanations for large increases in prior years
are provided in previous annual reports.
RELATIVE SPEND ON PAY (UNAUDITED)
The following table provides an illustration of the relative spend on pay in the context of distributions to shareholders:
% change comparing the spend in 2022 and 2023
% change
2022
$’million
2023
$’million
Comparator group
(1)
-28%
58.2
43.2
Remuneration of Centamin’s Executive Directors
(2)
-3%
3.4
3.3
Remuneration of Centamin’s Non-Executive Directors
(2)
4.5%
0.98
1.0
Distributions to Centamin shareholders
(3)
-20%
58
46
(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: 2023: 2,260 (2022:
2,194 employees). The total remuneration paid to all employees in the Group in 2023 was US$63.5m (2022: US$77.8m). The percentage difference against the
comparator group reflects the devaluation of EGP to the reporting currency of US$, 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. 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.
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.
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).
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 2023
Dr Sally Eyre (chair of the committee)
2019
5/5
Jim Rutherford
2020
5/5
Marna Cloete
2020
5/5
Dr Ibrahim Fawzy
2021
5/5
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 2023
Assessing the FY 2022 bonus and Performance Share Plan award outturns
Preparing the 2022 Directors’ Remuneration Report
Finalising consultation with shareholders in respect to the restatement of the FY 2020 PSP outturn
Setting the 2023 incentive plan targets
Reviewing the Executive Directors’ base salary and 2023 incentive plan performance targets
Q2 2023
Approving awards under the Company’s shareholder approved Incentive Share Plan
Review of shareholder, proxy and stewardship feedback from the Annual General Meeting
Q3 2023
Engagement onsite with employee working groups at Sukari (Board site visit)
Q4 2023
Reviewing the application of Remuneration Policy for 2023
Preparing the executive performance conditions for the Executive Directors for 2024
Undertaking the committee evaluation (note a formal charter review will be undertaken following publication of the 2024 Corporate Governance Code)
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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 2023 totalled £41,527.
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 a
barrier between these services and those of the wider Korn Ferry organisation. Korn Ferry provided other human capital related services
including non-executive director recruitment services during the year by a separate part of the business, but these services were carried
out by a team wholly separate to the remuneration advisory team. Korn Ferry also completed the externally facilitated evaluation in
February 2022. 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)
The following table summarises the details of the votes cast for and against the Remuneration Report and the Remuneration Policy at the
2023 AGM and 2022 AGM respectively, along with the number of votes withheld.
For
Against
Withheld
Approval of the Remuneration Report (2023 AGM)
769,490,172 (98.13%)
14,648,533 (1.87%)
291,852
Approval of the Remuneration Policy (2022 AGM)
735,236,754 (95.84%)
31,894,529 (4.16%)
251,168
POLICY IMPLEMENTATION IN 2024 (UNAUDITED)
The section below sets out the implementation of the Remuneration Policy in 2024. There are no significant changes in the
implementation of the policy proposed in 2024.
Base salary
The Executive Directors’ base salary will be increased by 5%. In addition, the Non-Executive Director base fee and the Board Chair
fee will also increase by 5%. This is below the increase for the wider UK and Jersey workforce who, absent changes to roles or
responsibilities, will receive a 6% increase in 2024.
Pension
As detailed in the Chair’s Statement on page 108, the Executive Directors will have a 7% of salary employer and 7% of salary employee
pension opportunity (or a cash allowance in lieu of pension where the lifetime pension allowance or annual allowance has has been
reached). This is in line with the relevant workforce and the remuneration policy.
Annual bonus
The CEO’s maximum bonus opportunity for 2024 is 150% of salary. The CFO’s bonus opportunity is 125% of salary.
The proportion of the bonus payable at ‘target’ performance level for 2024 is 50% of maximum which is consistent with 2023 and reflects
‘best practice’ expectations and our internal focus on creating a Group-wide high-performance culture.
The bonus metrics to apply in FY 2024 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 Mining Concession.
Mine Call Factor (MCF) / OP and UG material
movement / Mill feed and recoveries
21%
Operational targets across the Sukari open pit and underground operations.
MRM development drilling metres /
pre-depletion reserve gains
8%
Mineral Resource Management inc. development drill metres and pre-
depletion reserve gain over the Sukari Mining 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 delivery of exploration activities,
further develop the Egyptian stakeholder plan and review growth
opportunities.
For the CFO, the key objectives relate to systems development, capital
allocation, Concession Agreement tax Exemption 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
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 2024 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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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 the 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
40%
Performance equal
to the Index
Annual out-performance
of the Index by 10% p.a.
2026 free cash flow
US$m
15%
70
100
2026 gold production
‘000 ounces
30%
470
510
2026 sustainability targets
See notes
15%
See Notes
See Notes
Notes:
•
The Company’s TSR performance will be assessed against The VanEck Junior Gold Miners ETF (“GDXj”)
•
The Remuneration Committee will assess performance based on gold produced in 2026 over the Sukari Concession Agreement
•
The Remuneration Committee will assess performance based on free cash flow generated over the Sukari Concession Agreement in 2026. 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. Project financing and associated costs have not been considered as part of the estimate. The Remuneration
Committee will consider an adjustment at the time of the vested award if the average annual gold price in 2026 is outside a 5% range of the budgeted estimate of $1,700/
oz in the calculation of the estimated free cash flow in 2026
•
Conformance to the GISTM. Following a detailed independent review and inspection of Sukari’s tailings facilities in Q4 2023, the Engineer of Record, EPOCH, prepared a
detailed action list which would align Centamin with industry leading best practice through full conformance with all aspects of GISTM.
The sustainability target relates to achieving gold standard industry compliance on tailings management which focuses on mitigating potential extreme consequences
to people and the environment from catastrophic tailings facilities failures (i.e. ensuring that post-mining sites are safe and do not pose an environmental risk). The
sustainability performance target that applies to the 2024 LTIP is to achieve conformance with the industry gold standard as determined by GISTM. The Remuneration
Committee, with input from the Technical and Sustainability Committees will assess performance against the action list, by achieving ‘A’ ratings (or equivalent) against
those recommendations, providing an evidence-based assessment in relation to conformance with GISTM over the vesting period.
100% of the Vesting Proportion shall Vest upon the achievement of gold standard best practice:
–
All 14 recommendations completed to the satisfaction of the Engineer of Record meaning full conformances with GISTM (i.e. achieve industry best practice in relation
to climate change impact, dam breaches, record keeping and response protocols).
25% of the Vesting Proportion shall Vest upon the achievement of general best practice:
–
Achieve conformance with a threshold of five of the recommendations completed to the satisfaction of the Engineer of Record.
Should the Company complete between five and 14 of the items in the action list, Vesting will take place using straight line apportionment
of the Vesting Proportion. A final review of the quantum and targets will be undertaken prior to granting the awards.
NON-EXECUTIVE DIRECTORS
Details of the Non-Executive Directors’ fees are set out on page 117.
This report was approved by the Board of Directors and signed on its behalf by:
DR SALLY EYRE
CHAIR OF THE REMUNERATION COMMITTEE
21 March 2024
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FINANCIAL
STATEMENTS
IN THIS SECTION
Directors’ Responsibilities
134
Independent Auditors’ Report
135
Consolidated Statement of
Comprehensive Income
141
Consolidated Statement of Financial Position
142
Consolidated Statement of Changes in Equity
143
Consolidated Statement of Cash Flows
144
Notes to the Consolidated
Financial Statements
145
Additional Information
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
DIRECTORS’ RESPONSIBILITIES
INDEPENDENT AUDITORS’ REPORT
for the year ended 31 December 2023
to the members of Centamin plc
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN
RESPECT OF THE 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.
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 2023 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 2023 (the “Annual Report”), which comprise:
the Consolidated statement of financial position as at 31 December 2023; 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 two other components in the Group, which are based in two other locations, namely
Côte d’Ivoire and Jersey. This enabled us to obtain coverage over 100% of Group consolidated revenue and 99% of Group
consolidated total assets.
Key audit matters
• Amounts due to the government with respect to the Sukari operation
• The implementation of the SAP S/4HANA system
Materiality
• Overall materiality: US$9.2m (2022: US$11.2m) based on 5% of three-year average of profit before tax, adjusted to exclude one-off
items.
• Performance materiality: US$6.9m (2022: US$8.4m).
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.
Key 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 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
Côte d’Ivoire. 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
21 March 2024
21 March 2024
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INDEPENDENT AUDITORS’ REPORT
CONTINUED
to the members of Centamin plc
The implementation of the SAP S/4HANA system is a new key audit matter this year. The ongoing legal actions, which was a key audit
matter last year, is no longer included because of the favourable rulings that were received from the Egyptian courts during 2023 in
relation to the Concession Agreement case, as dis-closed within the Annual Report & Accounts 2022. Otherwise, the key audit matters
below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Amounts due to the government with respect to the Sukari operation
Refer to note 1.2.1.2 to the financial statements, note 2.5 to the financial statements,
note 2.13 to the financial statements, note 5.1 to the financial statements, and to the
principal risks disclosed within the “Managing Risk” section of the Annual Report.
The nature of the Concession Agreement with the Egyptian Mineral Resource Authority
(‘EMRA’), through which the Group is able to explore, develop, mine and sell gold and
associated minerals at the Sukari Gold Mine Site, means that there are items that can
be open to interpretation. As a result, the Group is subject to periodic challenges by
EMRA on amounts owed to EMRA 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 2023, the Group has paid dividends to the non-
controlling interest in Sukari Gold Mine of $112 million under the profit sharing and
cost recovery mechanisms of the Concession Agreement, which we considered merited
our focus due to the inherent uncertainties that may arise in the determination of
amounts due to EMRA.
The Group has recognised a liability of $9.7m as at 31 December 2023, 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 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 1.2.1.2, 2.5, 2.13 and 5.1 of the financial
statements, as well as the principal risks disclosed within the “Managing Risk”
section of the Annual Report, to check they were consistent with our knowledge
and understanding of the matter obtained in the course of the audit, with no
issues noted.
The implementation of the SAP S/4HANA system
During 2023, a new Enterprise Resource Planning (“ERP”) system, SAP S/4HANA, was
implemented across the Group to replace the previous ERP system which contained
the general ledgers of the Group. Following the system implementation, and before
the go-live date of 1 November 2023, all master transaction records were migrated
from the legacy SUN system into the new ERP.
We have determined this to be a key audit matter as the implementation of a new ERP
system, specifically, the transfer of master data to the new system and subsequent
implementation of robust IT general controls, could lead to material errors in data
integrity, accounting or financial reporting.
We obtained an understanding of the implementation of the SAP S/4HANA system,
including confirming our understanding of the relevant processes pre- and
post-implementation. Our procedures were designed to address the risk that the
implementation of the SAP S/4HANA system could lead to errors in data integrity,
accounting or financial reporting.
Working together with our IT Audit specialists, we focussed on the completeness
and accuracy of the data migration as well as the overall project implementation
and governance process and the system implementation testing.
We assessed the following areas of the migration project:
• Project implementation and governance;
• Functional and User Acceptance Testing;
• Data cleansing and migration; and
• Walkthrough of IT General Controls.
We performed the following audit procedures:
•
We inspected the chart of accounts and validated the mapping from the legacy
SUN system to SAP S/4HANA, as well as from SAP S/4HANA to the legacy ERP
system for the purposes of the Group consolidation;
•
We performed a full reconciliation of the opening trial balance, as well as
of the underlying schedules, within the SUN system, to ensure they were
completely and accurately migrated;
•
We performed walkthroughs of the key business processes to assess the design
and implementation of the relevant controls in SAP S/4HANA and to identify
the relevant IT dependencies;
•
Where necessary, relevant IT dependencies were tested substantively
confirming that these produce complete and accurate information;
•
We performed a full reconciliation of the year-end financial information
transferred from the SAP S/4HANA system to the legacy SUN system for
the purposes of performing the Group consolidation, including performing
substantive analytical procedures over this financial information; and
• We reviewed the key period-end reconciliations.
Based on the results of our audit work, we are satisfied with the completeness
and accuracy of the data migration from the legacy SUN system, into the new ERP
system, and that, as a result, the Group’s accounting and financial reporting is
free from material error.
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 had projects in Burkina Faso, which it is in the process of exiting, 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 the mining and exploration operations with
local management.
In addition, specific audit procedures were performed by the Group audit team over significant balances for two 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.
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 set its target to reduce Scope 1 and 2 GHG
emissions by 30% by 2030. In 2024, further decarbonisation progress is expected to be made through reduction in waste mining
volumes associated with the completion of the waste mining contract. The Group is also planning to connect to the national power grid,
and to expand its solar plant capacity. 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 1.2.2 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 future emissions scenarios. 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 from physical and transition risks 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$9.2m (2022: US$11.2m).
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 $4.1m and $8.2m.
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% (2022: 75%) of overall materiality, amounting to US$6.9m (2022: US$8.4m) for the Group
financial statements.
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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 $460,000
(2022: $560,000) 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, which form the basis of management’s base case 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 inputs back to the board approved
budget, and testing the model for mathematical accuracy; and
• reviewing the Group’s cashflow forecasts under the severe but plausible downside scenarios, evaluating the assumptions used, and
assessing that the Group is able to maintain liquidity within the going concern period under these scenarios.
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, included within the Compliance 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;
• 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 Annual Report and 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,
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 the
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, noting the favourable developments that occurred within 2023;
• 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;
• 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;
• 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.
138
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STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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OVERVIEW
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
INDEPENDENT AUDITORS’ REPORT
CONTINUED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
to the members of Centamin plc
for the year ended 31 December 2023
Note
31 December 2023
US$’000
31 December 2022
US$’000
Revenue
2.2
891,262
788,424
Cost of sales
2.3
(596,836)
(544,075)
Gross profit
294,426
244,349
Exploration and evaluation expenditure
2.1
(31,653)
(29,723)
Other operating costs
2.3
(68,542)
(49,003)
Other income
2.3
5,817
6,623
Finance income
2.3
4,127
1,214
Finance costs
2.3
(3,526)
(2,459)
Fair value loss on derivative financial instruments
2.4
(5,509)
–
Profit for the year before tax
195,140
171,001
Tax
2.6
(255)
(226)
Profit for the year after tax
194,885
170,775
Profit for the year after tax attributable to:
– the owners of the parent
92,284
72,490
– non-controlling interest in SGM
2.5
102,601
98,285
Total comprehensive income for the year
194,885
170,775
Total comprehensive income for the year attributable to:
– the owners of the parent
92,284
72,490
– non-controlling interest in SGM
2.5
102,601
98,285
Earnings per share attributable to owners of the parent:
Basic (US cents per share)
6.4
7.970
6.287
Diluted (US cents per share)
6.4
7.817
6.203
The above audited consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
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 10 years, covering the years ended 31 December 2014 to 31 December 2023.
OTHER MATTER
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements will 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 will be prepared using the single electronic format specified in the ESEF RTS.
TIMOTHY MCALLISTER (SENIOR STATUTORY AUDITOR)
FOR AND ON BEHALF OF PRICEWATERHOUSECOOPERS LLP
CHARTERED ACCOUNTANTS AND RECOGNIZED AUDITOR
LONDON
21 March 2024
140
141
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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OVERVIEW
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the year ended 31 December 2023
as at 31 December 2023
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$’000
Balance as at 1 January 2023
670,994
6,082
641,794
1,318,870
22,537
1,341,407
Profit for the year after tax
–
–
92,284
92,284
102,601
194,885
Total comprehensive income for the year
–
–
92,284
92,284
102,601
194,885
Own shares acquired
2.15
(245)
–
–
(245)
–
(245)
Net recognition of share-based payments
2.16
–
6,725
–
6,725
–
6,725
Transfer of share-based payments
2.16
2,683
(2,683)
–
–
–
–
Dividend paid – non-controlling interest
in SGM
2.5
–
–
–
–
(112,000)
(112,000)
Dividend paid – owners of the parent
–
–
(52,166)
(52,166)
–
(52,166)
Balance as at 31 December 2023
673,432
10,124
681,912
1,365,468
13,138
1,378,606
Note
Issued capital
US$’000
Share option
reserve
US$’000
Accumulated
profits
US$’000
Total
US$’000
Non-controlling
interests
US$’000
Total equity
US$’000
Balance as at 1 January 2022
669,531
4,975
655,508
1,330,014
(40,256)
1,289,758
Profit for the year after tax
–
–
72,490
72,490
98,285
170,775
Total comprehensive income for the year
–
–
72,490
72,490
98,285
170,775
Net recognition of share-based payments
2.16
–
2,570
–
2,570
–
2,570
Transfer of share-based payments
2.16
1,463
(1,463)
–
–
–
–
Dividend paid – non-controlling interest
in SGM
2.5
–
–
–
–
(35,492)
(35,492)
Dividend paid – owners of the parent
–
–
(86,204)
(86,204)
–
(86,204)
Balance as at 31 December 2022
670,994
6,082
641,794
1,318,870
22,537
1,341,407
The above audited consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Note
31 December 2023
US$’000
31 December 2022
US$’000
Non-current assets
Property, plant and equipment
2.10
1,084,019
1,086,649
Exploration and evaluation asset
2.11
24,809
24,809
Inventories
2.12
103,121
94,773
Other receivables
2.8
1,014
1,372
Total non-current assets
1,212,963
1,207,603
Current assets
Inventories
2.12
149,457
134,065
Trade and other receivables
2.8
49,443
35,628
Prepayments
2.9
17,404
13,864
Derivative financial instruments
2.4
654
–
Cash and cash equivalents
2.17(a)
93,322
102,373
Total current assets
310,280
285,930
Total assets
1,523,243
1,493,533
Non-current liabilities
Other payables
2.13
8,264
11,801
Provisions
2.14
40,039
37,425
Total non-current liabilities
48,303
49,226
Current liabilities
Trade and other payables
2.13
94,248
99,395
Tax liabilities
2.6
102
249
Provisions
2.14
1,984
3,256
Total current liabilities
96,334
102,900
Total liabilities
144,637
152,126
Net assets
1,378,606
1,341,407
Equity
Issued capital
2.15
673,432
670,994
Share option reserve
2.16
10,124
6,082
Accumulated profits
681,912
641,794
Total equity attributable to owners of the parent
1,365,468
1,318,870
Non-controlling interest in SGM
2.5
13,138
22,537
Total equity
1,378,606
1,341,407
The above audited consolidated statement of financial position should be read in conjunction with the accompanying notes.
The audited consolidated financial statements were authorised by the Board of Directors for issue on 21 March 2024 and signed on its
behalf by:
MARTIN HORGAN
ROSS JERRARD
CHIEF EXECUTIVE OFFICER
CHIEF FINANCIAL OFFICER
DIRECTOR
DIRECTOR
21 March 2024
21 March 2024
142
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STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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OVERVIEW
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2023
31 December 2023
31 December 2022*
Note
US$’000
US$’000 (restated)
Cash flows from operating activities
Cash generated from operating activities
2.17(b)
356,195
294,625
Income tax paid
(402)
(230)
Interest paid
(2,193)
(1,871)
Net cash generated from operating activities
353,600
292,524
Cash flows from investing activities
Acquisition of property, plant, and equipment
(190,723)
(263,622)
Brownfield exploration and evaluation expenditure
(12,172)
(12,175)
Finance income
2.3
4,127
1,214
Net cash used in investing activities
(198,768)
(274,583)
Cash flows from financing activities
Cash element of share-based payments
(583)
(523)
Own shares acquired
(245)
–
Dividend paid – non-controlling interest in SGM
2.5
(112,000)
(35,492)
Dividend paid – owners of the parent
3.2.2
(52,166)
(86,204)
Net cash used in financing activities
(164,994)
(122,219)
Net decrease in cash and cash equivalents
(10,163)
(104,278)
Cash and cash equivalents at the beginning of the year
102,373
207,821
Effect of foreign exchange rate changes on cash and cash equivalents
1,112
(1,170)
Cash and cash equivalents at the end of the year
2.17(a)
93,322
102,373
*
The comparatives in the Consolidated Statement of Cash Flows for the year ended 31 December 2022 have been restated to reflect an increase of cash generated from
operating activities of $2.5m, interest paid of $1.9m and a reduction of the effect of foreign exchange rate changes of $0.6m.
The above audited consolidated statement of cash flows should be read in conjunction with the accompanying notes.
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
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FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2023
BASIS OF PREPARATION
These financial statements are denominated in US dollars (“US$”), 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 consolidated 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 2023 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 2023 were authorised by the Board of Directors of the Company
for issue on 21 March 2024.
GOING CONCERN
The Directors have assessed the going concern status of the Group, considering the period to 31 December 2025.
Management prepares consolidated group budgets for each upcoming financial period, the 2024 budget model has been used as
the base case for the going concern analysis. Management also prepares a financial model over the life of mine which covers a period
of twelve years and this model has been used as the base case for the viability assessment for the years beyond the going concern
assessment period. Further detailed analyses and forecasts are then applied to the base case models 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 a large cash balance and no debt. At 31 December 2023 the Group
had cash and cash equivalents of US$93 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 the assessment period, as well as assuming that the US$150 million revolving credit facility
which was available as of 13 March 2023, will not be drawn down. An example of mitigating actions would involve assessing capital
expenditures and focussing on critical items only. The assessment covers a period of 24 months from 1 January 2024 and therefore
21 months from the date of signing the consolidated financial statements.
Key assumptions underpinning the base case forecast include:
• A consistently applied fuel price of US$0.90/litre;
• A consistently applied processing plant recovery rate of 88.4%;
• A consistently applied gold price of US$1,900/oz.; and
• Production volumes and grades in line with 2024 guidance and in-line with the 2025 forecast.
Management considered the potential impact of climate-related physical and transition risks including modelling potential carbon pricing
scenarios, in the context of the disclosures included in the Strategic Report. Based on this current assessment modelling plausible
scenarios, climate-related risks are not assessed to have a material financial impact on the going concern assessment.
The base case and downside scenarios for the going concern assessment are as follows:
• Base case: 2024 budget/24-month forward plan run against the opening cash balance at 1 January 2024;
• Gold price reduced to US$1,600 per ounce consistently applied through the assessment period;
• Fuel price increase to US$1.25/litre;
• Open pit ore mined reduction by 10%;
• Open pit ore mined grade reduction by 15%;
• Underground ore mined reduction by 10%;
• Underground ore mined grade reduction by 15%;
• Processing capacity reduction by 20%; and
• Processing plant recovery rate reduction to 85.0%.
In all the above scenarios, liquidity was maintained throughout the going concern period. We also note that a scenario run with a
combination of all the above factors consistently applied for a full 24-month period would still maintain liquidity after mitigating measures
within management’s control are applied.
144
145
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
146
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
BASIS OF PREPARATION
CONTINUED
The sensitivities applied were informed by internal and external data sources, were identified as scenarios that could have the most
significant impact on the Group’s available liquidity and are the primary drivers of the Group’s profitability.
The ability of the Company to continue as a going concern is contingent on the ongoing viability of the Group, principally the Sukari
operations. The Group meets its day-to-day working capital requirements through its available cash balances. The Group continues to
closely monitor its major cost drivers e.g., fuel and other key consumables and reagents as well as key operational KPIs that may have an
impact on going concern and take mitigating actions where necessary. The Group continues to benefit from a strong ungeared balance
sheet and a gold price protection programme with put option contracts in place until 30 June 2024, refer to note 2.4. The Group also
has US$150 million of liquidity through the undrawn RCF which can be accessed at any time.
The Group’s forecasts and projections, taking account of reasonably possible changes in performance, show that the Group should
be able to operate within the level of its available cash balances and will have adequate resources to continue in operational existence
throughout the assessment period and that currently there are no material uncertainties regarding going concern.
Therefore, having assessed the Group’s principal risks, a detailed cash flow forecast prepared by management and the various downside
scenarios outlined above, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing its
consolidated financial statements for the year ended 31 December 2023, which contemplate the realisation of assets and settlement
of liabilities during the normal course of operations.
ACCOUNTING POLICIES
This note provides a list of the other potentially material accounting policies adopted in the preparation of these consolidated financial
statements to the extent that they have not already been disclosed above. These policies have been consistently applied to all the years
presented, unless otherwise stated.
1. CURRENT REPORTING PERIOD AMENDMENTS
1.1 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 2023 reporting periods and have not been early adopted by the Group.
New or amended accounting standards
a. Adoption of new accounting standards
The following accounting standards, amendments and interpretations became effective in the current year:
• IFRS 17, Insurance Contracts
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
• Definition of Accounting Estimates – Amendments to IAS 8
• International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12)
The application of these standards and interpretations effective for the first time in the current year has had no significant impact on the
amounts reported in these financial statements.
b. Accounting standards issued but not yet effective
At the date of authorisation of these financial statements, the following standards and interpretations, which have not been applied in
these financial statements, were in issue but not yet effective. It is expected that where applicable, these standards and amendments
will be adopted on each respec-tive effective date. None of these standards are expected to have a significant impact on the Group.
Amendments to IFRSs
Effective date
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
Annual periods beginning on or after January 1, 2024
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
Annual periods beginning on or after January 1, 2024
Non-current Liabilities with Covenants (Amendments to IAS 1)
Annual periods beginning on or after January 1, 2024
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
Annual periods beginning on or after January 1, 2024
Lack of Exchangeability (Amendments to IAS 21)
Annual periods beginning on or after January 1, 2025
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
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FINANCIAL STATEMENTS
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ADDITIONAL INFORMATION
1.2 CRITICAL JUDGEMENTS AND ESTIMATES IN APPLYING THE ENTITY’S ACCOUNTING POLICIES
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:
1.2.1 Judgement: Control
1.2.1.1 Judgement: Accounting treatment of the Sukari Gold Mining Company (“SGM”)
Pharaoh Gold Mines NL (“PGM”) (the holder of an Egyptian branch) 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 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:
• power over the investee;
• exposure, or rights, to variable returns from its involvement with the investee; and
• 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; and
• 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.
147
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
1. CURRENT REPORTING PERIOD AMENDMENTS
CONTINUED
c) The duties, role, and function of the board of SGM:
• The board of SGM has six board members:
–
three of whom are appointed by the Company, through PGM; and
–
three of whom 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.
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 final and binding arbitration
• 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 their 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.
1.2.1.2 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.
OVERVIEW
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ADDITIONAL INFORMATION
149
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) as
governed by the CA; but:
–
distributions are not mandatory, they are entirely discretionary and are only done 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 the 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 due from EMRA due to timing differences of the cash sweep.
SGM and Centamin have non-coterminous year ends and the audit of the profit share and cost recovery mechanism and numbers is
performed by EMRA for each half year period ended 30 June and 31 December. There are inherent uncertainties that may arise in the
determination of amounts due to EMRA from profit share and therefore, in some periods, additional amounts than would have been paid
to EMRA may become due and payable, creating additional liabilities. The process may also determine that more profit share than was
due to EMRA was paid in which case this will create a receivable from EMRA which will be offset against future profit share amounts.
Please refer to note 2.5 for further information.
1.2.2 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
• share price; sustained decline in share price which is not consistent with industry peers.
148
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
1. CURRENT REPORTING PERIOD AMENDMENTS
CONTINUED
Management has considered a number of factors as listed above when concluding on whether an impairment trigger existed as at
31 December 2023. Notwithstanding the fact that the carrying value of the Group’s net assets exceeded its market capitalisation at some
points during 2023, management noted that both the fall in the share price at those points and the general movement in the Company’s
share price was consistent with an industry-wide trend, and that there have not been significant Group specific operational issues at any
of its locations in the year that may have a bearing on the share price movement.
The Group achieved its annual production guidance, with costs in line with forecasts.
On review, management concluded that there were no impairment triggers affecting the Group’s fixed assets as at 31 December 2023.
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’s operating assets, in the context of the TCFD disclosures. The Directors recognise that climate-related risks have the
potential to impact the carrying value of assets through their effect on future cash flow projections and impairments on the useful life of
assets. The financial statements also consider the opportunities arising from our transition to a low carbon future and achievement of our
target for reducing Greenhouse Gas (GHG) emissions.
In particular, the Directors have applied qualitative and quantitative methods to stress test the financial and strategic viability of the
business for various climate scenarios (including ‘Net Zero by 2050’), to the likely impact of climate-related transitional and physical risks
in respect of the following areas and as described in the Sustainability Report pages 84 and 85:
• Cash flow forecasts considering carbon, diesel and utility pricing increases on operating and procurement costs;
• Effects on property, plant and equipment, arising from acute extreme weather events and chronic shifts in climate patterns including
precipitation, temperature and sea-level rise;
• Capital expenditure over the short, medium and long term, arising from the adoption/deployment of low carbon technology; and
• Going concern and viability of the Group to decreases in gold price arising from market and investor uncertainty.
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 and 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 the case of climate-related transition risks under a Net Zero by 2050 scenario, preliminary modelling indicated that the introduction
of carbon pricing on our Scope 1 and 2 GHG emissions in Egypt and domestic supply chain predicted that it could have an impact on
the Group during the Sukari life of mine, however this is still being assessed. A review of the regulatory landscape relevant to our assets
noted that Egypt does not have any carbon mechanisms in place and there is no indication of when one may be implemented. As a
consequence, carbon pricing is not expected to have a material impact on the carrying values of assets or liability of the Group in the
short term. If we conservatively assume that Egypt was to start developing ambitious (i.e. ‘Net Zero by 2050’) climate policies over the
short term, these are not predicted to impact the business until the medium term and beyond. We will regularly review the development
of climate policy and the timing of its potential impact on the business.
In the case of gold price, the nature and extent of impact arising from climate-related risk is uncertain taking into consideration the role
of gold in low-carbon technologies, gold as a traditional investment asset or downstream consumption patterns. We have been unable to
reference any credible data sources of gold price for future climate scenarios and therefore have not performed a quantitative assessment
of climate-related impacts. Separately the impact of fluctuations in gold to the business is assessed in note 3.1.1(d).
Under the scope of our existing target for GHG emissions reductions, capital expenditure related to the adoption/deployment of low
carbon technology is assessed to be financially material in the short term, however the technology is commercially available and the
expenditure is value accretive in the medium term and beyond. At Sukari, our planned extension to the solar plant and grid connection
are forecast to provide a positive return on investment within the life of the 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.
The Group will monitor and routinely test climate-related risk against judgements and estimates made in preparation of the Group’s
financial statements. Climate-related transitional and physical risks as well as carbon pricing is not expected to have a material impact
on the carrying values of assets or liability of the Group during the Sukari life of mine and there is no expectation that climate change
will impact any of the useful economic lives of the Sukari fixed assets.
OVERVIEW
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STRATEGIC REPORT
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FINANCIAL STATEMENTS
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ADDITIONAL INFORMATION
The Group’s critical estimates and assumptions are as follows:
1.2.3 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’s Mineral Reserve and Resource statement for SGM with an effective date of 30 June 2023 is
contained in the supplementary section of the 2023 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, changes to ore reserves 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).
1.2.4 Estimate: Restoration and rehabilitation provision
Management performed a reassessment of the restoration and rehabilitation plan for Sukari to determine the Company’s obligation as at
31 December 2023. This follows an extensive review process of the plan and provision in the prior year’s assessment which involved an
external third party to verify the assumptions and methodology used in the restoration and rehabilitation plan. On the financial side, the
restoration and rehabilitation plan and provision assessment resulted in an increase of the provision by US$1.3 million (2022: US$5.8
million decrease) to US$40 million as at 31 December 2023, see note 2.14.
The marginal US$1.3 million increase in the provision from the December 2023 reassessment, other than the unwinding of interest was
due to a number of factors and assumptions affecting the inputs to the model e.g. a small increase in the inflation rate to 2.40% in 2023
from 2.37% in 2022 and an increase in the undiscounted provision amount by US$6.2 million, partially offset by the increase in the
discount rate from 3.63% in 2022 to 4.01% in 2023. The undiscounted cost base for various components of the expected rehabilitation
activities also increased by a net amount of US$6.2 million. The key drivers for the cost base increase were mainly due to the following
changes:
• Waste Rock Dumps – a US$1.3 million increase (2022: Nil) in the rehabilitation cost of the surface area requiring regrading of slopes
and batters;
• Mine services area – a US$1.4 million increase (2022: Nil), in the costs related to the dismantling, grading of surfaces and restoration
of contours within the mine services area;
• North and West Dump Leach – a US$0.9 million increase (2022: US$0.4 million increase) in the cost of loading and hauling waste
rock to create a cover over the tailings surface;
• TSF2 – a US$2.1 million increase (US$3 million decrease) in the cost of loading and hauling and spreading the waste rock over the
tailings surface and regrading of embankments. Increase was mainly due to a revision of the unit cost of the closure activities; and
• US$0.8 million increase (2022: US$1.5 million increase) in 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. Management has assessed the compliance costs relating to Global Industry Standard on Tailings Management (“GISTM”)
and this was concluded to be immaterial.
150
151
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
152
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
1. CURRENT REPORTING PERIOD AMENDMENTS
CONTINUED
For rehabilitation activities measured in tonnes, the unit costs range between US$0.30/t to US$0.77/t and for 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)
US$0.30/t
• Load and haul waste rock by mass (average haul distance of 6km)
US$0.75/t
• Load and haul waste rock by volume (average haul distance of 2km)
US$0.64/m
3
• Spread waste rock to create cover
US$2.70/m
3
• Load and haul demolition waste for on-site landfill
US$1.92/m
3
• Demolish concrete foundations (medium reinforced)
US$53.00/m
3
• Regrade slopes and batters
US$1.35/m
2
• Rip and grade compacted surfaces
US$0.71/m
2
• Demolish buildings (mix of prefabricated, steel and blockwork)
US$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 2034 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.
Some of the unit rates have changed from prior year, with a few of them having only a marginal change and there are also other unit rates
with no movement from prior year. 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 over the last two
years and concluded that maintaining the unit rates largely 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:
• A 10% increase in these estimated unit and fixed costs elements would result in a US$3.3 million increase (2022:US$3.1 million)
in the provision and corresponding asset amounts, while a 10% decrease would result in a US$3.3 million decrease- (2022:US$3.1
million).
• A 10% increase in the discount rate would result in a US$1.8 million decrease (2022: US$1.4 million) in the provision and
corresponding asset amounts, while a 10% decrease would result in a US$1.9 million increase (2022: US$1.4 million).
• A 10% increase in the inflation rate would result in a US$1.1 million increase (2022: US$0.9 million) in the provision and
corresponding asset amounts, while a 10% decrease would result in a US$1.1 million decrease (2022: US$0.9 million).
The above scenarios resulted in increases of the restoration and rehabilitation provision ranging from US$1.1 million (2022: US$0.7 million)
to US$3.3 million (2022: US$3.1 million) and decreases of the similar ranges. 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 2.14 for additional information on the restoration and rehabilitation provision
movements.
The sensitivities analysed above reflect reasonably possible changes in the provisions in response to changes in the underlying
assumptions.
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GOVERNANCE
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FINANCIAL STATEMENTS
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ADDITIONAL INFORMATION
153
1.3 OTHER SIGNIFICANT ACCOUNTING POLICIES
1.3.1 Principles of consolidation
The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the
consolidated group, being the Company (the parent entity) and its subsidiaries. Subsidiaries are all 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
consolidated group, are eliminated in full.
2. HOW NUMBERS ARE CALCULATED
2.1 SEGMENT REPORTING
The Group is engaged in the business of exploration for and mining of precious metals, which represents three operating segments, two
in the business of exploration and one in the mining of precious metals. The Board is the Group’s chief operating decision-maker within
the 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. 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 been identified as the Board of Directors.
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 Côte d’Ivoire exploration
for precious metals in these geographies. The Egyptian mining operations derive revenue from the sale of gold while Côte d’Ivoire 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.
The Burkina Faso incorporated legal entities are currently at an advanced stage of being formally wound-up and costs incurred in
the year relate to various aspects of that process. Costs incurred up to the time the Burkina Faso entities’ wind-up process is formally
concluded will continue to be disclosed within exploration costs and under Burkina Faso in the segment reporting disclosures.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
154
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
Non-current assets, including financial instruments by country:
Total
Egypt
Burkina Faso
Côte d’Ivoire
Corporate
31 December 2023
US$’000
US$’000
US$’000
US$’000
US$’000
Non-current assets (excl. financial assets)
1,211,949
1,210,391
–
537
1,021
Non-current assets (financial instruments)
1,014
927
2
85
–
Total non-current assets
1,212,963
1,211,318
2
622
1,021
Total
Egypt
Burkina Faso
Côte d’Ivoire
Corporate
31 December 2022
US$’000
US$’000
US$’000
US$’000
US$’000
Non-current assets (excl. financial assets)
1,206,231
1,204,956
–
826
449
Non-current assets (financial instruments)
1,372
1,270
20
82
–
Total non-current assets
1,207,603
1,206,226
20
908
449
Additions to non-current assets mainly relate to Egypt and are disclosed in note 2.10.
Statement of financial position by operating segment:
Egypt
Total
Egypt Mining
Exploration
Burkina Faso
Côte d’Ivoire
Corporate
31 December 2023
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Total assets
1,523,243
1,434,074
4,391
30
6,149
78,600
Total liabilities
(144,637)
(133,177)
(787)
–
(2,596)
(8,077)
Net assets
1,378,606
1,300,897
3,604
30
3,553
70,523
Egypt
Total
Egypt Mining
Exploration
Burkina Faso
Côte d’Ivoire
Corporate
31 December 2022
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Total assets
1,493,533
1,413,266
4,057
40
4,074
72,096
Total liabilities
(152,126)
(142,556)
(533)
(470)
(3,421)
(5,146)
Net assets/(liabilities)
1,341,407
1,270,710
3,524
(430)
653
66,950
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
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FINANCIAL STATEMENTS
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ADDITIONAL INFORMATION
155
Statement of comprehensive income by operating segment:
Egypt
Total
Egypt Mining
Exploration
Burkina Faso
Côte d’Ivoire
Corporate
For the year ended 31 December 2023
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Revenue
891,262
891,262
–
–
–
–
Cost of sales
(596,836)
(596,836)
–
–
–
–
Gross profit
294,426
294,426
–
–
–
–
Exploration and evaluation costs
(31,653)
–
(5,558)
(869)
(25,226)
–
Other operating costs
(1)
(68,542)
(39,069)
(377)
1,221
(127)
(30,190)
Other income
5,817
6,058
99
102
1,686
(2,128)
Finance income
4,127
1,475
–
–
–
2,652
Finance costs
(3,526)
(1,681)
(42)
2
(75)
(1,730)
Net fair value loss on derivatives
(5,509)
–
–
–
–
(5,509)
Profit/(loss) for the year before tax
195,140
261,209
(5,878)
456
(23,742)
(36,905)
Tax
(255)
(220)
–
–
(21)
(14)
Profit/(loss) for the year after tax
194,885
260,989
(5,878)
456
(23,763)
(36,919)
Profit/(loss) for the year after tax attributable to:
– the owners of the parent
(2)
92,284
158,388
(5,878)
456
(23,763)
(36,919)
– non-controlling interest in SGM
(2)
102,601
102,601
–
–
–
–
(1)
The US$1.2m gain in the Burkina Faso segment relates to intercompany loans due to Centamin West Africa Holdings Limited (included as an expense within the
Corporate segment) that were written off in the year. These amounts are fully eliminated on consolidation, therefore do not impact the overall Group results.
(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.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
156
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
Statement of comprehensive income by operating segment:
   
Egypt
   
 
Total
Egypt Mining
Exploration
Burkina Faso
Côte d’Ivoire
Corporate
For the year ended 31 December 2022
US$’000
US$’000
US$’000
US$’000
US$’000
US$’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
(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
(1)
72,490
125,579
(1,614)
137,019
(26,170)
(162,324)
– non-controlling interest in SGM
(1)
98,285
98,285
–
–
–
–
(1)
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:
     
Egypt
     
 
Total
Egypt Mining
Exploration
Burkina Faso
Côte d’Ivoire
Corporate
For the year ended 31 December 2023
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Statement of cash flows
           
Net cash generated from/(used in) operating activities
353,600
419,210
(395)
54
(1,384)
(63,885)
Net cash (used in)/generated from investing activities
(198,768)
(200,631)
(512)
–
(276)
2,651
Net cash used in financing activities
(164,994)
(232,994)
–
–
–
68,000
Own shares acquired
(245)
–
–
–
–
(245)
Cash component of share-based payments
(583)
–
–
–
–
(583)
Dividend paid – non-controlling interest in SGM
(112,000)
(112,000)
–
–
–
–
Dividend paid – intercompany
–
(120,994)
–
–
–
120,994
Dividend paid – owners of the parent
(52,166)
–
–
–
–
(52,166)
Net increase/(decrease) in cash and cash equivalents
(10,163)
(14,416)
(907)
54
(1,660)
6,766
Cash and cash equivalents at the beginning of the year
102,373
27,373
1,971
1
1,422
71,606
Effect of foreign exchange rate changes
1,112
729
100
(25)
1,782
(1,474)
Cash and cash equivalents at the end of the year
93,322
13,686
1,164
30
1,544
76,898
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
157
 
Total
Egypt
   
 
US$’000
Egypt Mining
(1)
Exploration
Burkina Faso
Côte d’Ivoire
Corporate
(1)
For the year ended 31 December 2022
(restated)
US$’000
US$’000
US$’000
US$’000
US$’000
Statement of cash flows
      
Net cash generated from/(used in) operating activities
292,524
321,542
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)
Cash element of share-based payments
(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
(104,278)
11,930
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
(1,170)
1,834
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)
The comparatives in the Consolidated Statement of Cash Flows for the year ended 31 December 2022 have been restated to reflect an increase of cash generated from
operating activities of $2.5m, interest paid of $1.9m and a reduction of the effect of foreign exchange rate changes of $0.6m.
2.2 REVENUE
An analysis of the Group’s revenue for the year, is as follows:
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Gold sales
889,384
786,921
Silver sales
1,878
1,503
 
891,262
788,424
All gold and silver sales up to 30 June 2023 were made to a single customer in North America, Asahi Refining Canada Ltd (“Asahi”).
Asahi’s contract expired on 30 June 2023 and effective 1 July 2023, all gold and silver sales were made to another single customer in
Switzerland, MKS Pamp SA (“MKS”).
ACCOUNTING POLICY: REVENUE
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.
Up to 30 June 2023, with the Asahi contract, the performance obligation was satisfied when the doré bars were packaged and collected
by the approved carrier with the appropriate required documentation at the gold room and the approved carrier accepted control of the
shipment by signature. After receipt of the shipment at the refinery, 98% of the amounts due are paid within five working days, with
the balance being paid within four working days thereafter. Effective 1 July 2023, a new contract was signed with MKS and based on
management’s assessment of the contract, SGM’s performance obligations for the determination of timing of revenue recognition have
not changed, and revenue continues to be recognised on satisfaction of the performance obligations as outlined above.
Where an adjustment to the sales price based on a survey of the mineral production by the buyer (for instance an assay for gold content)
is done, 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 other operating costs.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
2.3 PROFIT BEFORE TAX
Profit for the year before tax has been arrived at after crediting/(charging) the following gains/(losses) and income/(expenses):
   
For the year ended
For the year ended
   
31 December 2023
31 December 2022
 
Note
US$’000
US$’000
Other income
     
Net foreign exchange gains
 
5,641
6,559
Other income
 
176
64
   
5,817
6,623
Finance cost – net
     
Finance income
 
4,127
1,214
Finance costs
 
(3,526)
(2,459)
   
601
(1,245)
Net fair value loss on derivative financial instruments
 
(5,509)
–
Expenses
     
Cost of sales*
     
Mine production costs
 
(412,827)
(408,543)
Movement in inventory
 
13,319
10,659
Depreciation and amortisation
 
(197,328)
(146,191)
   
(596,836)
(544,075)
Other operating costs
     
Corporate compliance
 
(3,961)
(2,869)
Fees payable to the external auditors
6.5
(1,080)
(895)
Corporate consultants fees
 
(4,301)
(2,697)
Salaries and wages
 
(12,434)
(11,979)
Other administration expenses
 
(4,026)
(3,272)
Employee equity settled share-based payments
 
(7,308)
(2,570)
Corporate costs (sub-total)
 
(33,110)
(24,282)
Other provisions
 
1,182
1,180
Inventory written-off
 
(3,721)
(1)
Net movement on provision for stock obsolescence
 
4,004
(579)
Other non-corporate operating expenses
 
(10,215)
(1,479)
Royalty – attributable to the ARE government
 
(26,682)
(23,842)
Other operating costs (total)
 
(68,542)
(49,003)
*
Inventories recognised as an expense in the Consolidated Statement of Comprehensive Income during the year ended 31 December 2023 amounted to US$ 597 million
(2022: US$544 million) and these were included in ‘cost of sales’.
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
ACCOUNTING POLICY: FINANCE INCOME, OTHER INCOME AND FOREIGN CURRENCIES
Finance income
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.
Foreign currencies
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
currency for the consolidated financial statements.
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
recognised in profit or loss in the period in which they arise.
ACCOUNTING POLICY: FINANCE COSTS
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.
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
comprehensive income in the period in which they are incurred.
ACCOUNTING POLICY: EMPLOYEE BENEFITS
Employee benefits
Salary costs are absorbed within cost of sales and other operating costs. Short term employee benefits are recognised when an employee
has rendered service to the Group in the accounting period, and bonus plans are recognised when the Group has a present legal or
constructive obligation as a result of past events and the obligation can be reliably measured.
159
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
160
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
2.4 DERIVATIVE FINANCIAL INSTRUMENTS
On 14 June 2023, the Company entered into put option contracts whereby it purchased a series of gold put option contracts (the
“commodity contracts”). A total of US$2.5 million, was paid to BMO, the counterparty as a premium on entering into six put option
contracts for a total of 120,000 ounces representing, 20,000 ounces for each month beginning 1 July 2023 to 31 December 2023 at
a strike price of US$1,900/oz as part of the Gold Price Protection Programme. As part of the same programme, on 20 July 2023, the
Company entered into a second series of six put option contracts for a total of 120,000 ounces representing, 20,000 ounces for each
month beginning 1 January 2024 to 30 June 2024 at a strike price of US$1,900/oz and a total of US$3.6 million, was paid to HSBC,
the counterparty as a premium on entering into the contracts. By entering into these contracts, the Company was able to ensure it can
reasonably protect the Group’s cash flows by initiating a gold price protection program for the contracted ounces at these prices over the
six-month period to year end.
The details of the commodity contracts opened and expired during the year and those outstanding as at 31 December 2023, are as
follows:
      
Unrealised loss
Realised loss
      
recognised
recognised
   
Strike price
 
Mark-to-
(Open
(Settled
Commodity contract
Quantity
(1)
 
per Oz
(1)(2)
Premium Paid
Market (MtM)
Contracts)
Contracts)
Type purchased
(Oz)
Contract Term
$US
$US’000
$US’000
$US’000
$US’000
Gold put options
120,000
1 Jul 23 to 31 Dec 23
1,900
2,538
–
–
(2,538)
Gold put option
20,000
1 Jan 24 to 31 Jan 24
1,900
604
–
(604)
–
Gold put option
20,000
1 Feb 24 to 29 Feb 24
1,900
604
22
(582)
–
Gold put option
20,000
1 Mar 24 to 31 Mar 24
1,900
604
76
(528)
–
Gold put option
20,000
1 Apr 24 to 30 Apr 24
1,900
604
123
(481)
–
Gold put option
20,000
1 May 24 to 31 May 24
1,900
604
185
(419)
–
Gold put option
20,000
1 Jun 24 to 30 Jun 24
1,900
604
248
(357)
–
Total
240,000
  
6,162
654
(2,971)
(2,538)
1.
Quantities and strike prices do not fluctuate by month within each calendar year.
2.
Contracts are exercisable based on the average price for the month being below the strike price of the put.
The resulting fair values of the outstanding commodity contracts at 31 December 2023 as shown in the table above, have been
recognised, in de-rivative financial instruments on the consolidated statement of financial position. These derivative financial instruments
were not designated as hedges by the Company and are marked-to-market at the end of each reporting period with the mark-to-market
adjustment recorded in the con-solidated profit or loss.
The commodity contracts are marked-to-market using a valuation model which uses quoted observable inputs and are classified as Level
2 in the fair value hierarchy. During the year ended 31 December 2023, a total of US$5.5m, made up of US$2.5m realised fair value loss
and US$3.0m unrealised fair value loss on the put options was recognised in the consolidated profit or loss.
2.5 NON-CONTROLLING INTEREST IN SGM
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’s financial
statements for the year ended 30 June 2023 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.
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
161
(a) Statement of comprehensive income and statement of financial position impact
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Statement of comprehensive income
  
Profit for the year after tax attributable to the non-controlling interest in SGM
(1)
102,601
98,285
Statement of financial position
  
Total equity attributable to non-controlling interest in SGM
(1)
(opening)
22,537
(40,256)
Profit for the year after tax attributable to the non-controlling interest in SGM
(1)
102,601
98,285
Dividend paid – non-controlling interest in SGM
(112,000)
(35,492)
Total equity attributable to non-controlling interest in SGM
(1)
(closing)
13,138
22,537
(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 and included within
the non-controlling interest in SGM balance on the statement of financial position and statement of changes in equity.
(b) Statement of cash flows impact
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Statement of cash flows
  
   
Dividend paid – non-controlling interest in SGM
(1)
(112,000)
(35,492)
(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
current and future periods.
2.6 TAX
The Group operates in several countries and, accordingly, it is subject to the various tax regimes applicable in such countries. From time
to time the Group is subject to changes in tax laws and/or a review of its related tax regime and filings. Disputes can arise with the tax
authorities over the interpretation or application of applicable tax laws, regulations and/or rules to the Group’s business. 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.
Tax exemptions
In Egypt, Pharaoh Gold Mines NL (“PGM”) has entered into a Concession Agreement (“CA”) with EMRA and the Government of Egypt
represented by the Ministry of Petroleum & Natural Resources. The CA was issued under special law no. 222 of 1994. Under the CA,
income generated by SGM’s activities is granted a tax exemption (as described below) from all taxes imposed in Egypt (as at the date of
the CA and any new taxes imposed under a different name since such date), other than the fixed 3% royalty attributable to the Egyptian
government, rental income on property and interest income on cash and cash equivalents. PGM and SGM have further tax exemptions
for the duration of the CA from certain other taxes.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
The CA grants certain tax exemptions, including the following:
• Article III(e) of the CA provides for a 15-year exemption from any taxes imposed by the Egyptian government on the revenues
generated from SGM for the period 10 March 2010 (being the date of commencement of commercial production) to 9 March 2025.
SGM will in due course have to file an application with the Ministry of Petroleum & Natural Resources to extend the tax-free period for
a further 15 years to 9 March 2040. (“Tax Exemption Renewal”) Under the CA, EMRA is obliged to support the application for the Tax
Exemption Renewal so long as (i) there is no tax dispute with Government at SGM level or its equity holders (PGM & EMRA) and (ii)
exploration activities in the licence areas have been planned and agreed by all parties. Preparatory works have already commenced
on the application for the Tax Exemption Renewal and the Group intends for SGM to submit the application in the near future but no
later than Q3 2024. If granted, the extension should be on the same terms (as it is an extension). Albeit there is no guarantee that
the Government will agree to grant the renewal or on the same basis, the Group believes that all requisite requirements are and will
have been complied with for such renewal. Should the Tax Exemption renewal not be granted, then SGM will be subject to previously
exempted taxes, such as, for example, the prevailing 22.5% corporate income tax rate applicable in Egypt.
• Article XI of the CA provides for PGM and SGM to be exempt – for the duration of the CA – 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. To this end, PGM’s
contractors and subcontractors are – under the same provision – also entitled to import machinery, equipment, and consumable items
under the ‘Temporary Release System’ which provides exemption from Egyptian customs duty.
• Under Article XIX of the CA, PGM, EMRA and SGM and their respective buyers will for the duration of the CA be exempt from any
duties or taxes on the export of gold and associated minerals produced from SGM. PGM is – at all times – 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.
• Under Article VIII of the CA legal title of all operating assets of PGM will pass to EMRA when cost recovery is completed at the end
of the life of mine. PGM is exempted from all custom, duties, excise, stamps and sale taxes on the transfer of such assets to EMRA.
The right of use of all fixed and movable assets, however, 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 (in Liquidation) 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
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Current tax
  
Current tax expense in respect of the current year
(255)
(226)
Deferred tax
–
–
Total tax expense
(255)
(226)
OVERVIEW
|
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|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
163
The tax expense for the year can be reconciled to the profit per the consolidated statement of comprehensive income as follows:
   
For the year ended
For the year ended
   
31 December 2023
31 December 2022
   
US$’000
US$’000
Profit for the year before tax
  
195,140
171,001
Tax expense calculated at 0%
(1)
(2022: 0%)
(1)
of profit for the year before tax
–
–
Tax effect of:
    
Other
  
(255)
(226)
Tax expense
  
(255)
(226)
(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 (2022: 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
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Current tax liabilities
102
249
Global implementation of OECD Pillar Two model rules
In December 2021, the Organisation for Economic Co-operation and Development (“OECD”) published Tax Challenges Arising from the
Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two): Inclusive Framework on BEPS, hereafter referred to
as the ‘OECD Pillar Two model rules’ or ‘the rules’. The rules are designed to ensure that large multinational enterprises within the scope
of the rules pay a minimum level of tax on the income arising in a specific period in each jurisdiction where they operate. In general,
the rules apply a system of top-up taxes that brings the total amount of taxes paid on an entity’s excess profit in a jurisdiction up to the
minimum rate of 15%.
The rules need to be passed into national legislation based on each country’s approach. The Pillar Two legislation has not yet been
enacted in Jersey, however, the treasury minister of Jersey, the Company’s country of incorporation, announced the intentions in relation
to Pillar Two implementation, they intend to implement an Income Inclusion Rule (“IIR”) and domestic minimum tax from 2025, while
continuing to monitor global implementation. The rules will impact current income tax when the legislation comes into effect.
When enacted, applying the OECD Pillar Two model rules and determining their impact on the Group’s financial statements is complex
and poses a number of practical challenges. However, since the Pillar Two legislation was not effective at the reporting date, the Group
has no related current tax exposure.
The Group could be in scope of the OECD Pillar Two model rules from 2025 onwards in either Jersey or Australia based on current
forecasts of revenue and is currently in the process of performing an assessment of the potential impact of this on the Group. The
Group currently has an effective tax rate of approximately 0%, albeit it makes substantial profit share payments to EMRA, an Egyptian
government body, refer to note 2.5 for further information on the profit attributable to the NCI. There is uncertainty around how the OECD
Pillar Two model rules will be applied to the Group, and the position is currently being worked through with the relevant tax advisors.
ACCOUNTING POLICY: TAXATION
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
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
business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
162
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
164
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
2.7 FINANCIAL INSTRUMENTS
Interest bearing loans and borrowings
US$150 million Revolving Credit Facility (“RCF”)
On 22 December 2022, the Company entered into an agreement for a US$150 million RCF with a syndicate of 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 2023, there were no drawdowns on the facility and therefore no interest expense on borrowings was recognised
in the period, however, in accordance with the RCF, commitment fees are charged on the US$150 million undrawn commitment
and the total commitment fees charged on this undrawn commitment during the year ended 31 December 2023 was US$1.6 million
(2022: US$ Nil) and this was recognised in the consolidated statements of comprehensive income in period. The commitment fee is
charged and paid on a quarterly basis at an annual rate of 1.4%.
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 2023, although there was no drawdown on the facility, the Company was in full compliance with all the requirements
and obligations in respect of financial covenants and financial conditions as stipulated in the agreement.
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 twelve months ending on or about the last day of each Financial Quarter.
ACCOUNTING POLICY: FINANCIAL INSTRUMENTS
Financial liabilities and equity
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
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and are subsequently
measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
Financial assets
Classification
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
account for the equity investment at Fair Value through other Comprehensive Income (“FVOCI”).
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
165
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.
Measurement
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 and trade receivables are
initially recognised at transaction price unless they have a significant financing component. 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
classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
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
The Group classifies its financial assets as at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.
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.
Impairment of financial assets
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 paragraph 5.5.1 of IFRS 9 Financial Instruments, with respect to recognition of expected credit losses, a loss allowance
shall be recognised for expected credit losses on a financial asset that is measured 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
increase 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.
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.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
166
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
2.8 TRADE AND OTHER RECEIVABLES
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Non-current
  
Other receivables – deposits
1,014
1,372
Current
  
Gold and silver sales debtor
44,917
29,832
Other receivables
4,526
5,796
 
49,443
35,628
Trade and other receivables are classified as financial assets subsequently measured at amortised cost.
All gold and silver sales during the first half of the year were made to a single customer in North America, Asahi Refining Canada Ltd, and
there is no recognised receivable balance from this customer as at year end. In the second half of the year, all gold and silver sales were
made to a single customer in Switzerland, MKS PAMP SA, and there were no receivables past due from this customer.
The average age of the total receivables is 20 days (2022: 16 days) while that of gold and silver sales only which make up the significant
part of the debtors is an average of nine days (2022: nine days), see not 2.2 above and expected credit losses (“ECL”) are considered
immaterial and therefore, no ECL have been recognised in these financial statements. No interest is charged on the receivables. Of the
trade receivables balance, the gold and silver sales debtor is all receivable from MKS PAMP SA. The amount due has been received in
full after year end. Other receivables represent GST and VAT owing from various jurisdictions in which the Group operates.
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value, therefore no
expected credit loss is recognised within this note, see note 3.1.1 for the risk assessment related to trade receivables.
2.9 PREPAYMENTS
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Current
  
Prepayments
(1)
17,404
13,864
 
17,404
13,864
(1) The prepayments balance above mainly consists of warehouse inventories paid for in advance.
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
2.10 PROPERTY, PLANT, AND EQUIPMENT
         
Mine
   
 
Office
 
Plant and
Mining
development
Capital work
 
 
equipment
Buildings
equipment
equipment
properties
in progress
Total
 
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Year ended 31 December 2023 cost
             
Balance at 1 January 2023
8,151
21,701
635,376
383,521
1,009,754
78,804
2,137,307
Additions
76
290
44
402
–
189,911
190,723
Additions: IFRS 16 right of use assets
–
1,150
66
–
–
–
1,216
Increase in rehabilitation asset
–
–
–
–
1,310
–
1,310
Transfers from capital work in progress
890
3,216
74,033
29,233
123,599
(230,971)
–
Transfers from exploration and evaluation
             
asset
–
–
–
–
12,172
–
12,172
Transfers between categories
515
31,782
(26,266)
(6,031)
–
–
–
Disposals
(1,464)
(52)
(9,373)
(87,350)
–
–
(98,239)
Disposals: IFRS 16 right of use assets
–
(1,311)
(279)
–
–
–
(1,590)
Balance at 31 December 2023
8,168
56,776
673,601
319,775
1,146,835
37,744
2,242,899
Accumulated depreciation and amortisation
             
Balance at 1 January 2023
(6,634)
(3,573)
(308,034)
(288,521)
(443,896)
–
(1,050,658)
Depreciation and amortisation
(1,387)
(3,001)
(63,511)
(43,986)
(86,242)
–
(198,127)
Transfers between categories
(522)
(19,412)
15,589
4,345
–
–
–
Disposals
1,467
1,018
9,620
77,800
–
–
89,905
Balance at 31 December 2023
(7,076)
(24,968)
(346,336)
(250,362)
(530,138)
–
(1,158,880)
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 2023
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)
Net book value
             
As at 31 December 2023
1,092
31,808
327,265
69,413
616,697
37,744
1,084,019
As at 31 December 2022
1,517
18,128
327,342
95,000
565,858
78,804
1,086,649
Included within the depreciation charge in relation to depreciation of ROU assets is US$1.0 million within the buildings asset class
(2022: US$1 million), US$0.3 million within plant and equipment (2022: US$0.3 million) and US$0.8 million related to mining
equipment (2022: US$ 0.9 million).
The net book value of the assets in the note above includes the following amounts relating to ROU assets on leases; US$2.1 million
(2022: US$1.8 million) within buildings, US$0.9 million (2022: US$1.1 million) within plant and equipment and US$2.4 million
(2022: US$3.2 million) within mining equipment.
167
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
An impairment trigger assessment was performed in 2023 on all Cash Generating Units (“CGUs”) including the Sukari Mine, refer to
note 1.2.2, however no impairment triggers on property, plant and equipment were identified in the assessment.
Deferred stripping assets of US$90 million (2022: $141 million) were recognised in the year ended 31 December 2023 and have been
included within mine development properties. An amortisation charge of US$35 million (2022: US$26 million) has been recognised in
the year relating to the deferred stripping assets.
Assets that have been cost recovered under the terms of the Concession Agreement (“CA”) in Egypt are included on the statement of
financial position under property, plant and equipment as the Company will use them until the expiration of the CA.
None of the Group’s property, plant and equipment items is pledged as security and the Group had US$54 million capital expenditure
commitments as at 31 December 2023 (2022: US$19 million).
The Group implemented a new enterprise resource planning (ERP) software system, SAP (S4 HANA) during the year. As part of the
implementation and migration from the legacy system, an extensive review process of the fixed assets was performed as part of the
fixed asset register and operational record clean up and consequently assets that were identified as not being in use and/or had been
previously replaced by other assets (e.g. mobile equipment rebuilds) had their carrying values derecognised from the statement of
financial position. The fixed assets derecognised as part of this process, which are included within disposals in table 2.10, had a total
cost of US$61million, accumulated depreciation of US$53 million and a carrying value of US$8 million which was recognised as a loss in
the profit or loss statement within the other operating costs line. In addition, where assets were identified as being classified in incorrect
asset categories, reclassification adjustments were made to correct this in the current year, see the PPE note above. The Directors have
concluded that these adjustments are qualitatively immaterial to these financial statements given the small proportion of the overall
property, plant and equipment balance impacted, and the quantum of the impact in the profit or loss statement.
ACCOUNTING POLICY: PROPERTY, PLANT AND EQUIPMENT (“PPE”)
PPE is stated at cost less accumulated depreciation and impairment. PPE includes 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.
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
169
Right of use assets
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the
Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.
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.
The costs of stripping activity are required 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.
Based on the calculations performed the amount capitalised to the balance sheet for 2023 is US$90 million (2022: US$141 million).
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
170
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
Impairment of assets (other than exploration and evaluation and financial assets)
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 such an 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 which case the reversal of an impairment loss is treated as a revaluation increase.
2.11 EXPLORATION AND EVALUATION ASSET
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Balance at the beginning of the year
24,809
25,261
Expenditure for the year
12,172
12,175
Transfer to property, plant, and equipment
(12,172)
(12,627)
Balance at the end of the year
24,809
24,809
The exploration and evaluation asset relates to the drilling, geological exploration and sampling of potential ore reserves and can all be
attributed to Egypt, within the brownfield site at Sukari (US$24.8 million (2022: US$24.8 million)).
In accordance with the requirements of IAS 36 Impairment of assets (“IAS 36”) and IFRS 6 Exploration for and evaluation of mineral
resources (“IFRS 6”) 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 on the SGM’s exploration and evaluation assets, and no impairment triggers were
noted and therefore no formal impairment test has been performed.
ACCOUNTING POLICY: EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE
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 are expensed as incurred and are not capitalised to the balance sheet until definitive feasibility studies have
been completed for the project that would allow for the application and successful receipt of a mining license. Brownfield exploration
costs 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:
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
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FINANCIAL STATEMENTS
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ADDITIONAL INFORMATION
171
• 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) 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.
In accordance with IFRS 6, the full balance of the Group’s 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.
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 1.2.3. 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 the 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.
All revenues recognised after the commencement of commercial production are recognised in accordance with the Revenue Policy
stated in note 2.2.
The commencement date of commercial production is determined when stable and sustained production capacity has been achieved.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
172
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
2.12 INVENTORIES
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 an 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$1,475 per ounce for the net realisable value to fall below carrying value.
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Non-current
  
Mining stockpiles
103,121
94,773
Current
  
Mining stockpiles, ore in circuit, doré supplies
45,807
40,836
Stores inventory
106,150
99,733
Provision for obsolete stores inventory
(2,500)
(6,504)
 
149,457
134,065
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 run-of-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 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): 15.2Mt at an average grade of 0.45g/t
ACCOUNTING POLICY: INVENTORIES
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.
The cost of mining stockpiles includes costs incurred up to the point of stockpiling, such as mining and grade control costs, but
excludes 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 excludes transport costs, refining costs and royalties. NRV is determined with
reference to estimated contained gold and market gold prices, less estimated refining and transport costs.
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
the statement of financial position as current assets.
OVERVIEW
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GOVERNANCE
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FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
173
2.13 TRADE AND OTHER PAYABLES
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Non-current
  
Other creditors
(1)(2)
8,264
11,801
Current
  
Trade payables
27,637
43,493
Other creditors and accruals
(2)(3)
66,611
55,902
 
94,248
99,395
(1)
Included within non-current other creditors is US$4.8m (2022: US$7.3m) in relation to the remaining instalments of a US$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 2023, and therefore no additional provisions have been recognised within these financial statements,
therefore, this has been disclosed under contingent liabilities, refer to note 5.1.
(2)
Lease liabilities – finance lease liabilities relating to some of the Group’s property, plant and equipment of US$1.7m (2022: US$1.9m) are included in the current portion
of other creditors and accruals balance and US$3.4m (2022: US$4.5m) is included in the non-current other creditors balance.
(3)
The current portion of the EMRA settlement agreement referred to in (1) above of US$4.9m (2022: US$4.9m) is included in the current other creditors and accruals
balance above. Also included within the current other creditors and accruals are stock accruals of US$35m (2022: US$17m) and non-stock items accruals of US$25m
(2022: US$32m).
Trade payables principally comprise the amounts outstanding for trade purchases and ongoing costs. The average credit period taken for
trade purchases is 17 days (2022: 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.
ACCOUNTING POLICY: TRADE AND OTHER PAYABLES
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.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
174
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2. HOW NUMBERS ARE CALCULATED
CONTINUED
2.14 PROVISIONS
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Current
  
Employee benefits
(1)
1,054
2,276
Other current provisions
(2)
930
980
 
1,984
3,256
Non-current
  
Restoration and rehabilitation
(3)
40,039
37,396
Other non-current provisions
–
29
 
40,039
37,425
Movement in restoration and rehabilitation provision
  
Balance at beginning of the year
37,396
42,647
Increase/(decrease) in provision
1,310
(5,839)
Interest expense – unwinding of discount
1,333
588
Balance at end of the year
40,039
37,396
(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 4.01% (2022: 3.63%) using a US$ applicable rate and inflation applied at 2.40% (2022: 2.37%).
The annual review undertaken as at 31 December 2023 has resulted in a US$1.3 million increase in the provision (2022: US$5.8 million decrease). The key
assumptions used to determine the provision are disclosed in note 1.2.4.
The Group recognises the Global Industry Standard on Tailings Management (GISTM) and is committed to full implementation of
the GISTM at all its tailings storage facilities (TSFs). The standard sets a high bar and contains 77 requirements integrating social,
environmental, local economic and technical considerations; with the aim to eliminate harm to people and the environment.
The Group manages two TSFs at Sukari, both of which are active. The TSFs are designed, constructed and operated to a rigorous set
of standards and are carefully managed and monitored through a layered assurance system by internal specialists and independent
external third-party reviews, with mechanisms in place for reporting risk and tracking mitigation measures. The GISTM guides and
supports the Group’s tailings management framework.
In 2023, the Group made significant progress to align its tailings management framework to the GISTM and is able to report its level of
conformance against each principle of the standard. This did not have a material impact on the provision recognised during the year.
Overall, the Group’s tailings management and governance system was assessed to be in conformance with approximately 80 to 85%
of the GISTM requirements. The Group has put in place a clear action plan and roadmap to fully conform with the GISTM by end-2025.
We will monitor and report on our progress towards full conformance, refer to page 19 of the Strategic Report.
The Group publishes an annual disclosure report on its tailings facilities on its website. In 2024, the content of this disclosure will be
updated to align with Principle 15 of the GISTM.
ACCOUNTING POLICY: RESTORATION AND REHABILITATION
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.
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
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FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
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
discounting on the provision is recognised as a finance cost within the income statement rather than capitalised to the related asset.
2.15 ISSUED CAPITAL
 
31 December 2023
31 December 2022
 
Number
US$’000
Number
US$’000
Fully paid ordinary shares
    
Balance at beginning of the year
1,156,450,695
670,994
1,156,450,695
669,531
Own shares acquired during the year
(1)
–
(245)
–
–
Employee share option scheme – newly issued shares
1,982,000
–
–
–
Transfer from share option reserve
–
2,683
–
1,463
Balance at end of the year
1,158,432,695
673,432
1,156,450,695
670,994
(1)
The US$ 0.2 million (2022: US$ Nil) represents the cost of shares in Centamin plc purchased on 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 2023, the trustee of the deferred bonus share plan and Centamin incentive plan held
656,764 ordinary shares (2022: 1,187,779 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.
ACCOUNTING POLICY: ISSUED CAPITAL
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 the
Company.
2.16 SHARE OPTION RESERVE
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Share option reserve
  
Balance at beginning of the year
6,082
4,975
Share-based payments expense
6,725
2,570
Transfer to issued capital
(2,683)
(1,463)
Balance at the end of the year
10,124
6,082
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
the reserve into accumulated profits when the options and warrants are forfeited.
175
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
2.17 CASH FLOW INFORMATION
(a) Reconciliation of cash and cash equivalents
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
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Cash and cash equivalents
93,322
102,373
Most funds have been invested in international rolling short-term fixed interest money market deposits.
The Company secured an RCF on 22 December 2022 and the facility is secured by certain financial covenants on the Company
(see note 2.7). The covenant specific to the Company’s cash assets states that:
• Liquidity shall at all times exceed US$50 million and as 31 December 2023, the Company was in compliance with this financial
covenant requirement.
The carrying amounts of financial assets pledged as security for the facility, being the cash is included in 2.17 above.
ACCOUNTING POLICY: CASH AND CASH EQUIVALENTS
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Investments normally only
qualify as cash equivalent if they have a short maturity of three months or less from the date of acquisition.
(b) Reconciliation of profit before tax for the year to cash flows from operating activities
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
(1)
 
US$’000
US$’000 (restated)
Profit for the year before tax
195,140
171,001
Adjusted for:
  
Depreciation/amortisation of property, plant, and equipment
198,127
146,769
Inventory written off
3,721
2
Inventory obsolescence provision
(4,004)
579
Net fair value movements on derivative financial instruments
5,509
–
Foreign exchange gains, net
(5,682)
(6,559)
Share-based payments expense
7,306
2,570
Finance income
(4,127)
(1,214)
Finance costs
3,526
2,459
Loss on disposal of property, plant, and equipment
9,415
899
Changes in working capital during the year:
  
Increase in trade and other receivables
(13,815)
(3,049)
Increase in inventories
(19,737)
(35,940)
Increase in prepayments
(3,181)
(7,172)
Purchase of derivative financial instruments
(6,163)
–
(Decrease)/increase in trade and other payables
(9,901)
25,053
Increase/(decrease) in provisions
61
(773)
Cash flows generated from operating activities
356,195
294,625
(1) The comparatives as at 31 December 2022 have been restated to reflect finance costs of US$2.5m, now added back to cash flows from operating activities.
(c) Non-cash financing and investing activities
During the year there have been no non-cash financing and investing activities other than in relation to leases accounted for under
IFRS16
Leases
.
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
3. GROUP FINANCIAL RISK AND CAPITAL MANAGEMENT
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 balances. The Group’s overall strategy remains unchanged from
the previous financial year.
The Group has no debt and thus is 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 2023, there were no draw downs on the facility and there were also
no drawdowns during the year.
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 2.15 and 2.16. The Group operates in Australia, Jersey, United Kingdom, Egypt and
Côte d’Ivoire and is currently winding down its project in Burkina Faso. None of the Group’s entities are subject to externally imposed
capital requirements.
The Group utilises inflows of funds towards the ongoing exploration and development of SGM in Egypt and the exploration projects in
both Côte d’Ivoire and Egypt.
Categories of financial assets and liabilities
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Financial assets
  
Non-current
  
Other receivables – deposits
1,014
1,372
Current
  
Cash and cash equivalents
93,322
102,373
Trade and other receivables
(1)
45,214
33,848
Derivative financial instruments
654
–
 
140,204
137,593
Financial liabilities
  
Non-current
  
Other payables
8,264
11,801
Current
  
Trade and other payables
94,248
99,395
 
102,512
111,196
1.
The prior year amount for Trade and other receivables has been restated to exclude an amount relating to taxes receivable.
(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.
176
177
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
3. GROUP FINANCIAL RISK AND CAPITAL MANAGEMENT
CONTINUED
(c) Market risk
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.
Financial instruments denominated in Great British pounds, Australian dollars and Egyptian pounds are as follows:
 
Great British pound
Australian dollar
Egyptian pound
 
31 December
31 December
31 December
31 December
31 December
31 December
 
2023
2022
2023
2022
2023
2022
 
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Financial assets
           
Cash and cash equivalents
728
622
261
343
1,486
837
 
728
622
261
343
1,486
837
Financial liabilities
           
Trade and other payables
3,464
2,084
13,139
11,751
15,383
37,218
 
3,464
2,084
13,139
11,751
15,383
37,218
Net exposure
(2,736)
(1,462)
(12,878)
(11,408)
(13,897)
(36,381)
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
31 December
31 December
31 December
 
2023
2022
2023
2022
 
US$’000
US$’000
US$’000
US$’000
US$/GBP increase by 10%
389
482
–
–
US$/GBP decrease by 10%
(476)
(590)
–
–
US$/AUD increase by 10%
(342)
98
–
–
US$/AUD decrease by 10%
417
(119)
–
–
US$/EGP increase by 20% (2022:10%)
833
(2,816)
–
–
US$/EGP decrease by 20% (2022:10%)
(1,249)
3,443
–
–
The amounts shown above are the main currencies to which the Group is exposed. The Group also has small deposits in Euro
US$443,522 (2022: US$335,586) and West African Franc US$1,496,766 (2022: US$1,422,704), and net payables in Euro
US$4,285,177 (2022: US$5,277,783) and in West African Franc US$3,024,139 (2022: US$3,064,019). 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
with underlying requirements and commitments.
The 20% used for the EGP in the current year is in line with the average devaluation of the EGP against the USD during the year.
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
(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 market 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, it has however, entered into a series of gold put option contracts during the
year, refer to note 2.4 for further details.
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 of US$1,948/oz (2022: US$1,794/oz) had increased/
decreased by 10% with other variables held constant.
Impact on after tax profit
31 December 2023
31 December 2022
US$’000
US$’000
After tax profit
194,885
170,775
After tax profit with impact of increase by 10% US$/oz
281,155
247,106
After tax profit with impact of decrease by 10% US$/oz
108,615
94,444
The table above is considered before factoring in the impact of the Group’s gold price protection programme. Should the gold price per
ounce drop to below US$1,900/oz, the gold put option contracts will pay out to the Group the difference between the realised average
price per ounce and US$1,900/oz. Therefore, a 10% decrease on the average realised gold price during the year would result in all the
six contracts for the 2023 financial year with a total of 120,000 ounces paying out approximately US$18 million. Refer to note 2.4 for
further details on the gold price protection programme.
Fuel price
Any variation in the fuel price has an impact on the mine production costs and the table below summarises the impact of increases/
decreases of the average fuel price on the Group’s mine production costs. The analysis assumes that the average fuel price of US$ 0.80
per litre (2022: US$ 0.88 per litre) had increased/decreased by 10% per litre with all other variables held constant.
Impact on mine production costs
31 December 2023
31 December 2022
US$’000
US$’000
Mine production costs
(412,827)
(408,543)
Mine production costs with impact of increase by 10% US$/litre
14,910
16,943
Mine production costs with impact of decrease by 10% US$/litre
(14,910)
(16,943)
178
179
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
180
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
3. GROUP FINANCIAL RISK AND CAPITAL MANAGEMENT
CONTINUED
(e) Interest rate risk and liquidity risk
The Group’s main interest rate risk arises from cash and short-term deposits. Given the size of these balances and that the Group does
not have any debt instruments, interest rate risk is not considered to be material. 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. The RCF requires a minimum liquidity level at all times of US$50 million.
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 flows. 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.
 
Weighted
           
 
average
           
 
effective
Less than one
Between 1 and
Between 1 and
Between 2 and
   
 
interest rate
month
12 months
2 years
5 years
Over 5 years
Total
 
%
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
31 December 2023
             
Financial assets
             
Fixed interest rate instruments
3.99%
31,868
33,775
–
–
–
65,643
Non-interest bearing
 
77,775
–
–
–
–
77,775
   
109,643
33,775
–
–
–
143,418
Financial liabilities
             
Non-interest bearing
0%
95,112
2,500
2,500
2,500
–
102,612
Lease liabilities
 
165
1,629
1,662
1,962
378
5,795
   
95,277
4,129
4,162
4,462
378
108,407
 
Weighted
      
 
average
      
 
effective
Less than one
Between 1 and
Between 1 and
Between 2 and
  
 
interest rate
month
12 months
2 years
5 years
Over 5 years
Total
 
%
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
31 December 2022
       
Financial assets
       
Fixed 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
2,587
549
7,049
  
97,950
4,429
4,250
7,587
549
114,765
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
(f) Credit risk
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 in one entity, the refiner Asahi Refining Canada Ltd, up to 30 June 2023 and thereafter MKS PAMP
SA, but the Group has a good credit control on its customer and none of the trade receivables from the customer have 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
risk without taking account of the value of collateral or other security obtained.
(g) Fair value
The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective fair values,
other than in relation to lease liabilities, 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 1.2.3 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 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%
31 December 2023
US$’000 Increase
US$’000
US$’000
by 25%
Amortisation of rehabilitation asset (within mine development properties)
(3,452)
(2,589)
(1,942)
Amortisation of mine development properties (remainder)
(111,537)
(83,653)
(62,740)
Mine development properties – net book value
587,950
616,697
638,258
Property, plant, and equipment – net book value*
1,055,272
1,084,019
1,105,580
*
Reflects the impact on the overall property, plant and equipment carrying amount at the reporting date from the movements in mine development amortisation above.
Decrease by 25%
31 December 2022
Increase by 25%
US$’000
US$’000
US$’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.
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 2.7).
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 2.7 for further information on the covenant requirements. As at 31 December 2023, the Company was in
compliance with all the RCF’s financial covenants requirements however, there were no drawdowns on the facility yet.
181
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
182
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
3. GROUP FINANCIAL RISK AND CAPITAL MANAGEMENT
CONTINUED
3.2 CAPITAL MANAGEMENT
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
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Ordinary shares
  
Final dividend for the year ended 31 December 2022 of 2.5 US cents per share (2022: Q1 Final dividend for the year
  
ended 31 December 2021 of 5.0 US cents per share)
29,100
57,740
Q2 Interim dividend for the year ended 31 December 2023 of 2.0 US cents per share (2022: Q2 Interim dividend for
  
the year ended 31 December 2022 of 2.5 US cents per share)
23,065
28,464
Total dividends provided for or paid
52,166
86,204
Dividends to owners of the parent:
  
Paid in cash
52,166
86,204
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
4. GROUP STRUCTURE
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:
   
Ownership interest
  
Country of
  
 
Nature of activity
incorporation
31 December 2023 %
31 December 2022 %
     
Centamin Egypt Limited
Holding company
Australia
(1)
100
100
     
Pharaoh Gold Mines NL (holder of an Egyptian branch)
Holding company
Australia
(1)
100
100
     
Sukari Gold Mining Company
(*)
Mining company
Egypt
(2)
50
50
     
Centamin Group Services UK Limited
Services company
UK
(3)
100
100
     
Centamin West Africa Holdings Limited
Holding company
UK
(3)
100
100
     
Centamin Group Services Limited
Services company
Jersey
(4)
100
100
     
Centamin Holdings Limited
Holding company
Jersey
(4)
100
100
     
MHA Limited
Holding company
Jersey
(4)
100
100
     
Ampella Mining Limited (in Liquidation)
Holding company
Australia
(1)
100
100
     
Ampella Mining Gold SARL (in Liquidation)
Exploration company
Burkina Faso
(5)
100
100
     
Ampella Mining SARL (in Liquidation)
Exploration company
Burkina Faso
(5)
100
100
     
Ampella Resources Burkina Faso (in Liquidation)
Exploration company
Burkina Faso
(5)
100
100
     
Konkera SA (in Liquidation)
Mining company
Burkina Faso
(5)
100
100
     
Ampella Mining Côte d’Ivoire
Exploration company
Côte d’Ivoire
(6)
100
100
     
Centamin Côte d’Ivoire
Exploration company
Côte d’Ivoire
(6)
100
100
     
Ampella Mining Exploration CDI
Exploration company
Côte d’Ivoire
(6)
100
100
     
Centamin Exploration CI
Exploration company
Côte d’Ivoire
(6)
100
100
     
Centamin Egypt Investments 1 (UK) Limited
Holding company
UK
(7)
100
100
     
Centamin Egypt Investments 2 (UK) Limited
Holding company
UK
(7)
100
100
     
Centamin Egypt Investments 3 (UK) Limited
Holding company
UK
(7)
100
100
     
Centamin Mining Services Egypt LLC
Services company
Egypt
(8)
100
100
     
Centamin Central Mining SAE
Exploration
Egypt
(8)
100
100
     
Centamin North Mining SAE
Exploration
Egypt
(8)
100
100
     
Centamin South Mining SAE
Exploration
Egypt
(8)
100
100
(*)
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 1.2.1).
(1) Address of all Australian entities: Suite 8, 7 The Esplanade, Mount Pleasant, WA 6153.
(2) Address of all Egypt entities (except the new exploration entities in (11) and (12): 361 El-Horreya Road, Sedi Gaber, Alexandria, Egypt.
(3) Address of all UK entities: Hill House, 1 Little New Street, London, EC4A 3TR.
(4) Address of all Jersey entities: 2 Mulcaster Street, St Helier, Jersey, JE2 3NJ.
(5)
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.
(6) Address of all Côte d’Ivoire entities: Cocody II Plateaux Les Vallons, En face de la Résidence Bertille Lot 1557, Ilot 149.
(7) Address of all the UK holding companies of the new Egypt exploration companies; Hill House, 1 Little New Street, London, EC4A 3TR.
(8) Address of the new Egypt exploration companies: F-1-5,Agora Mall, EL Nasr St., 5th settlement, Cairo.
183
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
184
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
4. GROUP STRUCTURE
CONTINUED
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 – through SGM as Operating Company – 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.
2
In 2005 PGM, together with EMRA, were granted an exploitation lease over 160 km
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). During 2016, payments to EMRA commenced as advance profit share distributions. Any
payment made to EMRA pursuant to these provisions of the CA are recognised as dividend paid to the non-controlling interest in SGM.
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
185
5. UNRECOGNISED ITEMS
5.1 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent liabilities
Refer to note 2.13 for additional information on the EMRA position with respect to provisions.
Other than as highlighted above, there were no contingent liabilities at year end.
Contingent assets
There were no contingent assets at year-end, and none in 2022.
5.2 DIVIDENDS PER SHARE
The dividends paid in 2023 were US$52 million and are reflected in the consolidated statement of changes in equity for the year
(2022: US$86 million).
A final dividend in respect of the year ended 31 December 2023 of 2.0 US cents per share, totalling approximately US$23 million has
been proposed by the Board of Directors and is subject to shareholder approval at the Annual General Meeting on 21 May 2024. 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
the payment of profit share due to the government of Egypt.
5.3 SUBSEQUENT EVENTS
As referred to in note 5.2, subsequent to the year end, the Board proposed a final dividend for 2023 of 2.0 US cents per share. Subject
to shareholder approval at the Annual General Meeting on 21 May 2024, the final dividend will be paid on 19 June 2024 to shareholders
on record date of 31 May 2024.
Other than as noted above, there were no other significant events occurring after the reporting date requiring disclosure in the financial
statements.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
6. OTHER INFORMATION
6.1 RELATED PARTY TRANSACTIONS
(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.
(b) Key management personnel and non-executive director compensation
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
For the year ended
 
31 December 2023
31 December 2022
 
US$
US$
Short-term employee benefits
9,212,369
10,261,960
Post-employment benefits
–
1,320
Share-based payments
3,352,786
1,949,569
 
12,565,155
12,212,849
OVERVIEW
|
STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
(c) Key management personnel and non-executive director 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 2023 are as follows:
Granted as
Granted as
Net other
Balance at
Balance at
remuneration
remuneration
change – share
Net other
31 December
For the year ended 31 December 2023
1 January 2023
(“DBSP”)
(“PSP”)
plan lapse
(1)
change
(2)
2023
(3)
M Horgan
2,326,193
–
835,800
(217,710)
(76,013)
2,868,270
R Jerrard
2,348,000
–
667,300
(143,910)
53,000
2,924,390
J Rutherford
250,000
–
–
–
–
250,000
S Eyre
15,000
–
–
–
–
15,000
M Bankes
319,000
–
–
–
–
319,000
M Cloete
15,000
–
–
–
–
15,000
C Farrow
30,000
–
–
–
–
30,000
I Fawzy
140,000
–
–
–
–
140,000
H Faul
–
–
–
–
–
–
G Du Toit
1,442,000
–
400,000
–
–
1,842,000
A Hassouna
697,931
–
400,000
–
–
1,097,931
C Barker
771,000
–
375,000
–
–
1,146,000
M Stoner
314,000
–
295,000
–
–
609,000
H Bills
980,000
–
375,000
(73,800)
(59,433)
1,221,767
P Cannon
627,000
–
295,000
–
–
922,000
C Murray
911,000
–
295,000
(73,800)
–
1,132,200
A Carse
856,688
–
295,000
(29,520)
(36,332)
1,085,836
D Le Masurier
677,300
–
250,000
(24,908)
(42,593)
859,799
R Nel
607,306
–
295,000
(18,450)
(48,216)
835,640
(1) ‘Net other change – share plan lapse’ relates to awards that have lapsed following partial vesting of the 2020 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 2023 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.
186
187
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
188
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
6. OTHER INFORMATION
CONTINUED
The details of the movement in key management personnel and non-executive director’s equity holdings of fully paid ordinary shares in
Centamin plc during the financial year ended 31 December 2022 are as follows:
  
Granted as
Granted as
Net other
 
Balance at
 
Balance at
remuneration
remuneration
change – share
(1)
Net other
(2)
31 December
(3)
For the year ended 31 December 2022
1 January 2022
(“DBSP”)
(“PSP”)
plan lapse
change
2022
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
–
–
–
–
–
–
G 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.
(d) Key management personnel and non-executive director 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 and non-executive director
The related party transactions for the year ended 31 December 2023 are summarised below:
• salaries, superannuation contributions, bonuses, LTIs, consulting and Directors’ fees paid to Directors during the year ended
31 December 2023 amounted to US$4,439,649 (31 December 2022: US$3,918,404), with pension contributions amounting
to US$51,753 (2022: US$16,670).
(f) Transactions with the government of Egypt
Royalty costs attributable to the government of Egypt of US$26,681,717 (2022: US$23,842,287) were incurred in 2023. Profit share
to EMRA of US$112,000,000 (2022: US$ 35,492,459) was incurred in 2023.
(g) Transactions with other related parties
Other related parties include the parent entity, subsidiaries, and other related parties as disclosed in 4.1 above.
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
statements of the Group.
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
189
6.2 CONTRIBUTIONS TO EGYPT
(a) Gold sales agreement
On 27 March 2023, SGM and the Central Bank of Egypt (“CBE”) amended their 20 December 2016 agreement with respect to SGM’s
facilitation of the purchase of refined gold bullion for the CBE from its refiner. The amended 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 EGP130 million (2022: EGP80 million). In return, SGM facilitates the purchase of refined gold bullion for the CBE from SGM’s refiner,
Asahi Refining Canada Ltd up to 30 June 2023 and thereafter, MKS PAMP SA. 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). The values related to these transactions are
as follows:
For the year ended
For the year ended
31 December 2023
31 December 2022
US$’000
US$’000
Gold purchased
34,124
50,497
Refining costs
17
28
Freight costs
43
56
34,184
50,581
For the year ended
For the year ended
31 December 2023
31 December 2022
Oz
Oz
Gold purchased
17,520
27,907
At 31 December 2023 the amount receivable from CBE is approximately US$25,045 (2022: US$23,681 net receivable).
(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 was accounted for
under donations expense in profit and loss and any interest earned on the deposit is also accounted for under donations expense.
6.3 SHARE-BASED PAYMENTS
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 April 2023 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 2020 awards
Of the 2,582,500 awards granted on 5 June 2020 under the PSP, 1,153,153 vested to eligible participants (nine in total)
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
190
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
6. OTHER INFORMATION
CONTINUED
April 2021 awards
Of the 5,945,000 awards granted on 30 April 2021 under the PSP, 5,330,000 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”), 8,982,000 awards remain
granted to eligible participants (33 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 Notice 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 with a two year restriction on trading.
April 2023 awards
Performance share plan awards granted during the year:
 
ISP 2023 25 April
Grant date
2023
Number of instruments
1,903,100
TSR: fair value at grant date GBP
(1)
0.59
TSR: fair value at grant date US$
(1)
0.74
Adjusted free cash flow, gold production and decarbonisation targets: fair value at grant date GBP
(1)
1.04
Adjusted free cash flow, gold production and decarbonisation targets: fair value at grant date US$
(1)
1.29
Vesting period (years)
3
Holding period applicable to the award (years)
2
Expected volatility (%)
41.52%
Expected dividend yield (%)
4.89%
Number of instruments
4,537,500
TSR: fair value at grant date GBP
(1)
0.59
TSR: fair value at grant date US$
(1)
0.74
Adjusted free cash flow, gold production and decarbonisation targets: fair value at grant date GBP
(1)
1.04
Adjusted free cash flow, gold production and decarbonisation targets: fair value at grant date US$
(1)
1.29
Vesting period (years)
3
Holding period applicable to the award (years)
0
Expected volatility (%)
41.52%
Expected dividend yield (%)
4.89%
(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, decarbonisation targets
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. The fair value calculated was then converted at the closing GBP:US$ foreign exchange rate on grant date.
OVERVIEW
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STRATEGIC REPORT
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GOVERNANCE
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FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
191
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:
 
RSA 2023
Grant date
25 April 2023
Number of instruments
3,069,000
  
Fair value at grant date – tranches 1 to 3 £
(1)
1.04
  
Fair value at grant date – tranches 1 to 3 US$
(1)
1.29
  
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 (%)
4.87%
Expected dividend yield Tranche 2 (%)
4.88%
Expected dividend yield Tranche 3 (%)
4.89%
(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.
ACCOUNTING POLICY: SHARE-BASED PAYMENTS
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 is measured using a Monte-Carlo simulation. 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 employee benefits reserve.
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
192
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
for the year ended 31 December 2023
6. OTHER INFORMATION
CONTINUED
6.4 EARNINGS PER SHARE (“EPS”) ATTRIBUTABLE TO OWNERS OF THE PARENT
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
US cents per share
US cents per share
Basic earnings per share
7.970
6.287
Diluted earnings per share
7.817
6.203
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
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Earnings used in the calculation of basic EPS
92,284
72,490
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
Number of shares
Number of Shares
Weighted average number of ordinary shares for the purpose of basic EPS
1,157,933,122
1,152,960,534
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
For the year ended
 
31 December 2023
31 December 2022
 
US$’000
US$’000
Earnings used in the calculation of diluted EPS
92,284
72,490
 
For the year ended
For the year ended
 
31 December 2023
31 December 2022
 
Number of shares
Number of shares
Weighted average number of ordinary shares for the purpose of basic EPS
1,157,933,122
1,152,960,534
Shares deemed to be issued for no consideration in respect of employee options
22,654,848
15,597,563
Weighted average number of ordinary shares used in the calculation of diluted EPS
1,180,587,971
1,168,558,097
No potential ordinary shares were excluded from the calculation of weighted average number of ordinary shares for the purpose of diluted
earnings per share.
OVERVIEW
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STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
6.5 AUDITORS’ REMUNERATION
The analysis of the auditors’ remuneration is as follows:
For the year ended
For the year ended
31 December 2023
31 December 2022
US$’000
US$’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)
790
630
Fees payable to the Company’s auditors and their associates for other services to the Group
Audit fee of the Company’s subsidiaries
225
126
Total audit fees
1,015
756
Non-audit fees:
Audit related assurance services – interim review
151
139
Total non-audit fees
151
139
(1)
The audit fee amount disclosed in note 2.3 is for the Jersey, UK and Australian companies only, the note above is for all the Group entities.
The audit fees for the corporate entities are billed in GBP and were translated at an average foreign exchange rate for the year ended 31 December 2023 of
US$1.25:GB£1 (rate on 31 December 2022: US$1.23:GB£1). Not included within the above amounts are auditors’ expenses (recharged to the Company) of US$31k
(2022: US$19k).
6.6 GENERAL INFORMATION
Centamin plc (the “Company”) is a listed public company, incorporated and domiciled in Jersey and operating through subsidiaries and
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
Jersey
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
2023 Annual Report.
193
CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
194
MINERAL RESOURCE & RESERVE STATEMENTS
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.
SUMMARY GROUP MINERAL RESOURCE & RESERVE TABLE
Group Mineral Resources
(inclusive of Mineral Reserves and calculated using varying cut-off grades)
2023
2022
Tonnage
Grade
Gold Content
Tonnage
Grade
Gold Content
Category
(Mt)
(g/t)
(Moz)
(Mt)
(g/t)
(Moz)
Measured
199
1.07
6.8
267
1.04
8.9
Indicated
193
1.06
6.6
104
1.41
4.7
M+I
392
1.06
13.4
371
1.14
13.6
Inferred
99
1.06
3.4
104
1.08
3.6
Group Mineral Reserves
(calculated using varying cut-off grades)
2023
2022
Tonnage
Grade
Gold Content
Tonnage
Grade
Gold Content
Category
(Mt)
(g/t)
(Moz)
(Mt)
(g/t)
(Moz)
Proven
117.4
1.17
4.4
130
0.95
4.0
Probable
76.5
1.33
3.3
33
1.95
2.1
P&P
193.9
1.23
7.7
163
1.15
6.0
MINERAL RESOURCE & RESERVE STATEMENTS
The Mineral Resource and Reserve data presented in the tables included in this document comprise of summary extracts of the
respective technical reports. For comparative purposes, data for 2022 has been included. 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.
SUKARI GOLD MINE, EGYPT
Mineral Resource Estimate
As at 30 June 2023, the Sukari Mineral Resources (inclusive of Mineral Reserves) were 10.3Moz of contained gold, reflecting a
8% decrease in M&I resource ounces, compared with 2022 (“YoY”). The change in ounces YoY is the result of mining depletion, a
significantly improved open pit design as per the new LOM Plan, and transitioning of the resource modelling from external consultants
to in-house, managed by Centamin’s Mineral Resource Management department.
Our improved geological understanding has resulted in an in-house model which better reflects the known distribution of mineralisation
consequently improving its application for mine planning. Enhancements to the classification process have resulted in a redistribution
of the Mineral Resource estimate between the Measured and Indicated categories, primarily within the open pit. The goal remains to
continue improving our understanding of the orebody and increase the classification of Indicated to Measured. This will be done largely
through advanced grade control drilling to further support near-term mine planning.
Cut-off grades have been clearly stated, along with the gold price assumption of US$2,000/oz, both of which remain unchanged for the
Mineral Resource estimate. A total of 297,600 metres of drilling was completed between June 2022 and June 2023, divided between
open pit (67%) and underground (33%) with the open pit resource model externally audited by H&S Consultants Pty Ltd.
In 2024, the primary focus will be on expanding resources in the underground sector, concentrating on converting Inferred Resources to
Measured and Indicated categories to offset mining depletion. The strategy involves ongoing underground target generation, leveraging
geological interpretation and structural modelling. Furthermore, drilling will be conducted on identified targets from designated
exploration drives, aiming to augment Inferred Resources to the south of Horus and Horus Deeps where mineralisation remains open.
In the open pit, the drilling programme will prioritise grade control. Advanced grade control initiatives will specifically target Sukari Hill,
encompassing Stage 7, and Stage 8, which currently represents the ultimate pit shell.
OVERVIEW
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STRATEGIC REPORT
|
GOVERNANCE
|
FINANCIAL STATEMENTS
|
ADDITIONAL INFORMATION
195
June 2023
June 2022
Tonnage
Grade
Gold Content
Tonnage
Grade
Gold Content
Category
(Mt)
(g/t)
(Moz)
(Mt)
(g/t)
(Moz)
Measured (M)
197
1.06
6.8
267
1.04
8.9
Open pit 0.3g/t cut-off
Indicated (I)
118
0.93
3.5
53
1.30
2.2
Underground 1.0g/t cut-off
Stockpiles 0.4g/t cut-off
M+I
315
1.01
10.3
320
1.08
11.1
Inferred
20
1.5
1.0
18
1.6
1.0
Mineral Reserve Estimate
As at 30 June 2023, the Sukari Mineral Reserves were 5.8Moz of contained gold, reflecting a 4% decrease YoY driven by 0.52Moz of
mining depletion partially offset by 0.24Moz of Mineral Reserve growth. Reserve growth came from both the open pit and underground,
with the open pit increase resulting from the changes in modelling, and underground growth from improved continuity in Bast and Amun
and an increase in reserves in deeper sections of the orebody in Horus.
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 Sukari Mineral Reserve life is 13 years for the open pit operation, including stockpiles, and eight years for the
underground operation. As outlined in the Life of Mine Plan, we will continue to investigate various optimisation and upside opportunities
within the open pit around waste deposition strategy, slope angle optimisation and the potential for dump leaching sub grade ore as well
as processing recovery optimisation and expansion of the existing solar plant.
June 2023
June 2022
Tonnage
Grade
Gold Content
Tonnage
Grade
Gold Content
Category
(Mt)
(g/t)
(Moz)
(Mt)
(g/t)
(Moz)
OPEN PIT
Proven
93.7
1.2
3.6
108.9
0.9
3.3
0.4g/t cut-off
Probable
31.3
0.8
0.8
27.5
1.5
1.3
P & P
125.0
1.1
4.4
136.4
1.0
4.6
UNDERGROUND
Proven
4.0
3.8
0.5
4.0
3.6
0.5
2.2g/t cut-off
Probable
4.6
4.0
0.6
5.3
4.2
0.7
P & P
8.6
3.9
1.1
9.3
4.0
1.2
STOCKPILES
Proven
19.7
0.5
0.3
17.4
0.5
0.3
0.4g/t cut off
Probable
–
–
–
–
–
–
P & P
19.7
0.5
0.3
17.4
0.5
0.3
TOTAL SUKARI MINERAL RESERVE
P & P
153.3
1.2
5.8
163.1
1.1
6.0
DOROPO PROJECT, CÔTE D’IVOIRE
Mineral Resource Estimate
As at 31 October 2023, the Doropo Mineral Resource estimate (inclusive of Mineral Reserves) of 3.1Moz of contained gold, was a
23% increase in M&I Resource ounces, compared to 2022 (“YoY”). All Mineral Resources are contained within open pits.
The DFS drilling phase has been mostly concluded, with only a limited amount of sterilisation drilling left to complete. A total of 49,831
metres of drilling was completed between October 2022 and October 2023, and focused on converting Inferred to M&I Resources
within the resource pit shells, confirming reserve pit depths and initial grade control drilling. The grade control drilling was conducted
for planning and optimisation purposes. This programme resulted in a maiden Measured Resource classification at largely consistent
or higher grades than the deposits respective Indicated Resources. Cut-off grades were lowered from 0.5g/t to 0.3g/t to account for
the Mineral Reserves, as detailed below, in the oxide material which are approximately 0.4g/t. The gold price assumption for Mineral
Resource estimates was unchanged at US$2,000/oz.
Study work is ongoing with publication of the DFS expected in mid-2024.
October 2023
October 2022
Category
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
2023 0.3g/t cut-off
2022 0.5g/t cut-off
Measured (M)
1.5
1.60
0.1
–
–
–
Indicated (I)
75.3
1.25
3.0
51.5
1.52
2.5
M+I
76.9
1.26
3.1
51.5
1.52
2.5
Inferred
7.4
1.23
0.3
13.7
1.14
0.5
Mineral Reserve Estimate
The Mineral Reserve was published with the Pre-Feasibility Study (“PFS”) (available here) and is reported in accordance with the
CIM Definition Standards for Mineral Resources and Mineral Reserves (CIM, 2014). The Mineral Resource was converted by applying
Modifying Factors. The Probable Mineral Reserve estimate is based on the Mineral Resource classified as Indicated. The project has
a current Mineral Reserve life of ten years.
June 2023
June 2022
Category
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
OPEN PIT
Varied cut-offs 0.39 to 0.71g/t
Proven
–
–
–
–
–
–
Probable
40.6
1.44
1.9
–
–
–
TOTAL MINERAL RESERVE
P & P
40.6
1.44
1.9
–
–
–
ABC PROJECT, CÔTE D’IVOIRE
Mineral Resource Estimate
As at 31 October 2023, the ABC Mineral Resource estimate of 2.15Moz of contained gold, was unchanged from 2022 (“YoY”).
October 2023
October 2022
Category
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
Tonnage
(Mt)
Grade
(g/t)
Gold Content
(Moz)
2023 0.5g/t cut-off
Measured (M)
–
–
–
–
–
–
Indicated (I)
–
–
–
–
–
–
M+I
–
–
–
–
–
–
Inferred
72
0.9
2.15
72
0.9
2.15
MINERAL RESOURCE & RESERVE STATEMENTS
CONTINUED
QUALIFIED PERSONS
A ‘Qualified Person’ is as defined by the National Instrument 43-101 of the Canadian Securities Administrators. The below 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 Reserve and Mineral Resource
estimates, was prepared by and under the supervision of Qualified Person Craig Barker, who is the Group Mineral Resource Manager,
and in addition to the below internal and external Qualified Persons:
Sukari Gold Mine, Egypt
• Mineral Reserve (open pit)
Ozgur Zor of Centamin plc
• Mineral Reserve (underground)
Petre Florea of Centamin plc
• Mineral Resource (open pit)
Craig Barker of Centamin plc
• Mineral Resource (underground)
Craig Barker of Centamin plc
Doropo Gold Project, Côte d’Ivoire
• Mineral Reserve
Ross Cheyne of Orelogy Consulting
• Mineral Resource
Michael Millad and Flavie Isatelle of Cube Consulting Pty Ltd
ABC Project, Côte d’Ivoire
• Mineral Resource
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 and Mineral Reserve estimates contained in this document are based on available data as at 30 June 2023 for Sukari
and 31 October 2023 Doropo.
Varying cut-off grades have been used, and clearly marked, for estimating the Mineral Resource and Mineral Reserve estimates.
MINERAL RESOURCE AND RESERVE NOTES
All figures are rounded to reflect appropriate levels of confidence. Apparent differences may occur due to rounding.
SUKARI GOLD MINE, EGYPT
MINERAL RESOURCE NOTES
Open Pit
In respect of the Sukari open pit Mineral Resource, the estimate was performed by Centamin and audited by H&S Consultants Pty Ltd
(“H&SC”):
• Centamin depleted the 2023 open pit Multiple Indicator Kriging (“MIK”) Mineral Resource estimate for Sukari as at 30 June 2023,
within a whittle pit shell generated by Centamin at a gold price of US$2,000/oz
• The estimation methodology of MIK employed in preparing the Mineral Resource is consistent with the 2022 estimate, using the
reporting cut-off grade of 0.3g/t Au
• All open pit Mineral Resources are estimates of recoverable tonnes and grades using MIK with block support correction produced
in the Vulcan 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 approximately 25 x 50 metre spacing and Inferred Resources exist in areas of broader spaced drilling
• The open pit Mineral Resource estimate at a 0.3g/t Au cut-off grade extends over a strike length of approximately 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 diamond, reverse circulation, open pit and underground grade control and advanced
grade control drilling, while underground face samples were excluded with the dataset being closed off as at 30 June 2023.
The open-pit resource dataset comprised 1,325,028 two and a half metre drill hole composites
• The Mineral Resource estimates were adjusted to the mining surface and underground mining voids as at 30 June 2023,
and includes some material that could be mined by underground methods.
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ADDITIONAL INFORMATION
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Underground
In respect of the Sukari underground Mineral Resource, the estimate was performed by Centamin and audited by Cube Consulting
Pty Ltd:
• The model has been developed utilising additional drilling (90,201 metres) and geological information at a consistent domain cut-off
grade of 0.5g/t Au with a cut-off date of 30 June 2023
• The estimation methodology of Ordinary Kriging (“OK”) employed in preparing the updated underground Mineral Resource is
consistent with the 2022 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
• 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 1.0g/t Au cut-off grade is unconstrained and extends over a strike length of
approximately 2.5 kilometres, a width of approximately 500 metres and from current surface to a depth of approximately 1,200 metres
• All available surface drilling, channel and underground samples were used as at 30 June 2023. The resource dataset used in the
Mineral Resource estimate comprised a total of:
–
1,289,193 one metre down hole drilling composites;
–
320,007 one metre down hole channel sample composites, and
–
3,061,620 two and a half metre down hole drilling composites.
• The Mineral Resource estimates were adjusted for the mining of surface and underground voids as at 30 June 2023
• Open Pit, underground and course ore stockpile material have been reported at a cut-off of 0.4g/t Au.
MINERAL RESERVE NOTES
• Mineral Reserve estimates were calculated using a US$1,450/oz gold price
• A new LOM production schedule and cash flow was produced using only the P&P Mineral Reserves to demonstrate economic viability.
Open pit
• Open pit cut-off grade for reporting of 0.4g/t Au for mill processing with dump leach defined above 0.2g/t Au cut-off
• Open pit design is based on a cut-off of 0.4g/t Au for M&I Mineral Resources only
• M&I Mineral Resources inside the designed open pit was converted to P&P Mineral Reserves
• Open pit Mineral Reserve estimate includes 8.3Mt at 0.4g/t Au for 0.1Moz gold, using a 0.2g/t Au cut-off grade, for dump leach
material.
Underground
• Underground cut-off grade for reporting of 1.0g/t Au for development with stopes defined within a 2.2g/t Au cut-off.
DOROPO PROJECT, CÔTE D’IVOIRE
MINERAL RESOURCE NOTES
• Mineral Resource estimate is based on available data as at 31st October 2023
• The gold grade estimation method is OK with Localised Uniform Conditioning
• 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 Definition Standards for Mineral Resources and Mineral Reserves (CIM, 2014)
• A cut-off grade of 0.3 g/t gold is used to account for reserves in the oxide material which are around 0.4g/t
• The Mineral Resource cut-off grade of 0.5g/t was established prior to the PFS study, confirming the economic viability of a smaller
portion of lower-grade oxide resources. As Centamin proceeds with the DFS, a review and revision of the Mineral Resource cut-off
grades for oxide resources will be conducted
• 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
• This Updated Mineral Resource estimate was prepared by Michael Millad and Flavie Isatelle of Cube Consulting Pty Ltd who are the
Qualified Persons for the estimate
• This Updated Mineral Resources estimate is not expected to be materially affected by environmental, permitting, legal title, taxation,
socio-political, marketing or other relevant issues.
MINERAL RESOURCE & RESERVE STATEMENTS
CONTINUED
MINERAL RESERVE NOTES
• The Mineral Reserve is reported according to CIM Definition Standards for Mineral Resources and Mineral Reserves (CIM, 2014).
The NI 43-101 report is https://www.centamin.com/media/2989/2023-doropo-ni43-101-technical-report.pdf
• The mine design and associated Mineral Reserve estimate for the Doropo Gold Project is based on Mineral Resource classified
as Measured and Indicated from the Cube Mineral Resource Estimate (“MRE”) with an effective date of 25 October 2022
• Ore block grade and tonnage dilution was incorporated into the model
• The Mineral Reserve was evaluated using variable cut-off grades of 0.39 to 0.71g/t Au depending on mining area and
weathering profile.
ABC PROJECT, CÔTE D’IVOIRE
MINERAL RESOURCE NOTES
• Mineral Resource estimate was last updated 23 September 2021
• The ABC resource estimate comprises of two deposits – Kona South & Kona Central
• Drill spacing is a nominal 50 x 50 x 1 metre spacing
• Reverse circulation and diamond drilling only has been used for the estimation
• An OK and LUC estimation using Indicator Kriging at Kona Central to define ore and waste boundaries
• The grade estimate has been classified as Inferred in accordance with the CIM Definition Standards for Mineral Resources and Mineral
Reserves (CIM, 2014)
• The Mineral Resource has been reported at an economic cut-off grade of 0.5g/t, 250 metres below surface and within 100 metres
of the nearest sample
• The Mineral Resources Estimate was prepared by Mr. Patrick Adams of Cube Consulting who represents the Qualified Person for
the estimate
• The Mineral Resources Estimate is not expected to be materially affected by environmental, permitting, legal title, taxation,
socio-political, marketing or other relevant issues.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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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 2023 and those held by trustees pursuant to the Company’s DBSP.
As at
31 December 2023
Issued capital (including shares issued and held under the DBSP)
1,158,432,695
Total shares in issue under the share plans
656,674
The issued capital of the Company at the date of this report is 1,158,432,695 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 note 2.15 to the financial
statements.
The Company was authorised by shareholders at the 2023 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 2023. This standard authority is renewable annually and the Directors will seek to renew this authority at the 2024 AGM.
This current authority will expire on 30 June 2024.
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
117,854,387
10.17
Dimensional Fund Advisors
55,488,524
4.79
The Vanguard Group, Inc
42,278,285
3.65
BlackRock Investment Mgt
39,545,643
3.41
Interactive Investor
39,160,166
3.38
Aberforth Partners
38,671,175
3.34
Hargreaves Lansdown Asset Manager
38,244,685
3.30
Notes to table:
Information as at 31 December 2023 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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ANNUAL REPORT AND ACCOUNTS 2023
SHAREHOLDER COMMUNICATION
ANNUAL GENERAL MEETING
The 2024 Annual General Meeting (“2024 AGM”) will be held
at 10:00 AM BST on Tuesday, 21 May 2024 at The Royal Yacht,
Weighbridge, St. Helier, Jersey, Channel Islands, JE2 3NF.
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
Telephone: +44 (0) 370 707 4040
PUBLIC RELATIONS
FTI Consulting
London
200 Aldersgate
Aldersgate Street
London EC1A 4HD
United Kingdom
Tel: +44 20 3727 1000
BROKERS
Bank of America Securities
2 King Edward Street
London
EC1A 1HQ
Telephone: +44 (0)20 7628 1000
Berenberg
60 Threadneedle Street
Moorgate
EC2R 8HP
Telephone: +44 20 3207-7800
BMO Capital Markets
6th floor 100 Liverpool street
London
EC2M 2AT
Telephone: +44 (0)20 7236 1010
Peel Hunt
100 Liverpool Street
London
EC2M 2AT
Telephone +44 (0) 20 7418 8900
INDEPENDENT AUDITOR
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
Telephone: +44 (0)20 7583 5000
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 2023. Only the interim dividend and final dividend are attributable to the
2023 financial year’s performance, ending 31 December 2023.
2023 INTERIM DIVIDEND
An interim dividend of 2.0 US cents per share on Centamin plc ordinary shares (totalling approximately US$23 million) was declared on
26 July 2023. The interim dividend for the half-year period ending 30 June 2022 was paid on 29 September 2023 to shareholders on the
register on the record date of 01 September 2023.
2023 FINAL DIVIDEND
A final dividend of 2.0 US cents per share on Centamin plc ordinary shares (totalling approximately US$23 million) was proposed by
the Directors on 21 March 2023. The final dividend for the financial year ended 31 December 2023 will be paid on 19 June 2024 to
shareholders on the register on the record date of 31 May 2023. The final dividend is subject to approval at the AGM on 21 May 2024.
The ex-dividend date is 30 May 2024 for LSE and 31 May 2024 for the TSX shareholders.
Summary table of dividends declared by Centamin PLC
2023
2022
2021
INTERIM
Declared on:
26 July 2023
4 August 2022
5 August 2021
Amount:
2.0 US cents per share
2.5 US cents per share
4.0 US cents per share
Paid on:
29 September
7 October 2022
30 September 2021
Total
Approximately US$23 million
Approximately US$29 million
Approximately US$46 million
FINAL
Proposed:
21 March 2024
16 March 2023
16 March 2022
Declared:
21 May 2024
23 May 2023
10 May 2022
Amount:
2.0 US cents per share
2.5 US cents per share
5 US cents per share
Paid on:
19 June 2024
23 June 2023
10 June 2022
Total:
Approximately US$23 million
Approximately US$29 million
Approximately US$57.8 million
INDICATIVE FINANCIAL CALENDAR
Event
Date
Q1 2024 Report
18 April 2024
2024 Annual General Meeting
21 May 2024
Q2 2024 Report
25 July 2024
2024 Interim Financial Results
25 July 2024
Q3 2024 Report
17 October 2024
COMPANY DETAILS
CONTINUED
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ADDITIONAL INFORMATION
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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
assay
qualitative analysis of ore to determine its components
Au
chemical symbol for the element gold
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
EDX
Eastern Desert Exploration and areas obtained under the 2020 EMRA bid round for gold exploration areas
E&E
exploration and evaluation
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
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
MMEA
Model mining exploitation agreement agreed in principle with the EMRA and the Egyptian Government that is to be signed and ratified by the
Egyptian Parliament as a special law that will regulate the legal and fiscal framework for future commercial discoveries in the EDX blocks
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
Tax Exemption
SGM’s current tax exemption from taxes on income generated for the 15 year period from 10 March 2010, when commercial production
commenced until 9 March 2025, unless extended by a further 15 years following the Tax Exemption Renewal
Tax Exemption Renewal
The renewal of PGM and SGM’s tax exemption for a further 15 years from 10 March 2025 to 2040 from any taxes imposed on its income
generated by SGM’s business operations (as set out in more detail in footnote 2.6 to the Notes to the Consolidated Financial Statements
TRIFR
total recordable injury frequency rate
TSF1
first tailings storage facility
TSF2
second tailings storage facility
TSR
total shareholder return
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ADDITIONAL INFORMATION
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REGISTERED OFFICE
2 Mulcaster Street
St Helier
Jersey JE2 3NJ
Telephone: +44 (0)1534 828 700
Fax: +44 (0)1534 731 946
Email: info@centaminplc.com
Egypt
Pharoah Gold Mines (Egyptian Holding Company)
361 El Horreya Road
Sedi Gaber
Alexandria
Egypt
Telephone: +20 (0)3541 1259
Fax: +20 (0)3522 6350
Email: pgm@centamin.com
Eastern Desert Exploration
F-1-5, Agora Mall, EL Nasr St., 5th settlement
Cairo
Egypt
Telephone: +20 (0)3541 1259
Fax: +20 (0)3522 6350
London
9-10 Savile Row
W1S 3PF
London
Telephone: +44 (0)2081 766 261
Côte d’Ivoire
Cocody II Plateaux Les Vallons
Face Residence Bertille – Rue des Jardins
Po Box : 20 BP 945 – Abidjan 20
Abidjan
Telephone: +225 27 22 22 27 61
Website: www.centamin.com | Linkedin: @CentaminPLC | Twitter: @CentaminPlc
OFFICES
FORWARD-LOOKING STATEMENTS
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 news release 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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OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
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CENTAMIN
ANNUAL REPORT AND ACCOUNTS 2023
Registered office
2 Mulcaster Street
St Helier
Jersey JE2 3NJ
T: +44 (0)1534 828 700
F: +44 (0)1534 731 946
E: info@centaminplc.com
Egypt
361 EI-Horreya Road
Sedi Gaber
Egypt
T: +20 (0)3541 1259
F: +20 (0)3522 6350
E: pgm@centamin.com