Business Profiles

Everything Centamin touches turns to gold

Following in the footsteps of the Pharaohs, Centamin is mining for gold in Egypt and it’s confident that the future is going to be phenomenal. Endeavour Magazine took a closer look at their day-to-day operations to find out why.

The ancient Pharaohs have inspired a number of trends throughout history, but gold mining? Whilst it isn’t the first thought that comes to mind when picturing the ancient civilization, it was a hefty industry, and it showed: the amount of gold needed to create the opulent jewellery, furniture and sarcophaguses of the day must have been immense. These ancient miners only targeted the country’s smoky quartz veins that contain large amounts of gold, but they left other areas untouched. Focusing on the Arabian-Nubian Shield, Centamin has a beady eye trained on the Egypt’s hidden precious metals and is enjoying enviable success.

Not an operation to shy away from a little well-deserved applause, Centamin is happy to reveal what makes it so successful: “Centamin’s principal asset, the Sukari Gold Mine, began production in 2009 and is the first large-scale modern gold mine in Egypt. Base case production is c. 500,000 ounces per annum, with the potential to exceed this level as optimisation of the mining and processing operations continues. Our solid financial position, strong cash flow and development and operating experience provides us with a significant advantage in acquiring and developing other gold projects.”

Look carefully and you’ll see a telltale sign of a company destined for outrageous success. Can you spot it? It’s the ever so casual and matter-of-fact acknowledgement that there is potential for growth, diversification and new projects. Companies that simply operate in the now and rely on current successes are always living on borrowed time, but by never failing to think about where things are going, Centamin is sealing its fate as an industry leader.

Of course, any prominent mining operation needs a slew of committed investors that are keen to explore new territories and want to take a calculated risk for a valuable return, and Centamin is cautious to not disappoint its partners. Although mineral and precious metals mining will always be considered a risky endeavor, by undertaking extensive research into the most prospective regions, Centamin is able to allay partner fears and bolster a spirit of positive investment. In particular, in-depth exploration works are taking place in Burkina Faso and Cote d’Ivoire.

Be that as it may, Centamin could have a fantastic exploration strategy in place (and is does), but if the gold market is failing to perform well, it could all be for nothing. We asked how the industry was performing and what the future looks set to hold: “The most important component of Centamin’s earnings is the market price of gold. We believe that its value as jewellery and as an investment vehicle will continue to increase.”

The reasons for this positive outlook are many, but it appears that Centamin has a hotline to the future, as the team is confident that gold is a financial safe haven that will prove a good bet against inflation, that it offsets a weak US dollar and is becoming a rarer commodity. If all of these predictions come true, gold will indeed become a fantastically valuable material, driving the price of any discoveries up to the benefit of exploration companies and the investors that placed their money and faith in them.

Centamin finds itself in an enviable position. With competition in the mining industry being so fierce, those that succeed normally do so because of a steady stream of investment and trust, both of which are in plentiful supply in this case. Great cash flow and open communication chains mean that if a promising prospect springs up, there is no delay in forging ahead, meaning that the competition is left far behind. However, Centamin hasn’t gotten ahead of itself, as there is a sensible and observable operating strategy in place.

Given that there is a constant flow of funding and a legacy of good finds bolstering Centamin, you’d be forgiven for assuming that a devil-may-care attitude could have crept into the day-to-day operations, but that couldn’t be further from the truth. Cautious consideration is the key, not to mention extensive industry experience and accurate future trend observations, which have led to the following strategy being created:

“Centamin’s strategy is to maximise the value of our asset base and promote further growth of the business by setting and delivering on challenging targets, maximising profitability and maintaining a strong balance sheet to enable growth, exploration and acquisitions and operating safely and in an environmentally and culturally sensitive manner.”

Culture meets proven fiscal stability and a never-ending desire to keep pushing limits. This might not sound like a magic recipe, but it has yielded exceptional results for Centamin. “One of our strategic focuses is on shareholder returns and a strong balance sheet that allows dividend returns to remain a priority. Another is on continued and steady growth through a well-balanced project pipeline. Finally, we make social responsibility not a focus, but a priority.”

You won’t be surprised to learn that behind the vision, leadership and courage that has seen Centamin rise to prominence is a team of deeply committed, experienced and most importantly, valued employees. As a company that has to know the value of its vital commodities, Centamin makes no bones about just how priceless a team of reliable professionals is:

“Our people are our most valuable resource. We are committed to attracting, energising, developing and retaining a highly skilled and experienced workforce. We value individuals with outstanding technical, professional and managerial skills who can contribute to a positive working environment and demonstrate willingness to lead, take responsibility and display initiative. We aim to foster a relation of trust and open dialogue between employees and management.”

A healthy dose of optimism, a firm grasp on industry trends and easy access to exploration funding means that Centamin is on the right track for staggering levels of future success. The Sukari mine will continue to be the main source of production, but with new exploration projects demonstrating serious yield potential, the future isn’t just sunny – it’s golden.