Andrew Pardey - CEO

Nick Hatch - Canaccord Genuity

Okay, Good morning. Ladies and gentlemen, welcome to the Centamin 2015 Annual Results Presentation. Just, the summary, 2015 summary; gold production guidance was revised in midyear from 420,000 to 430,000 to 440,000 ounces. We came in at the top-end of the guidance range at just over 439,000 ounces. Cash cost of production of $713 per ounce was down from a $729 per ounce in 2014. Importantly our Q4 cash costs were $667 per ounce. All-in sustaining costs were significantly below our initial guidance of $950 per ounce, principally due to rescheduling of some of the sustaining capital items. EBITDA, gross operating margin reduced the gold price, higher costs associated with inventory movement compared with 2014. Cash and liquid assets of $230.7 million up from $162.8 million at the end of 2014, upfront and with that a final declared dividend of US$1.97 per share, so a full year dividend to be approved at $2.09 per share which is approximately $33.7 million and at the top-end of our policy payout of 15% to 30% of the net cash flows. Earnings per share of US$4.07 down from US$7.21 per share in 2014, contributing to this was a $6.3 million write-off in exploration from Ethiopia, we're really withdrawing from doing further exploration in Ethiopia and a $6.8 million tax charge in relation to foreign exchange gains on cash holdings held within Australia. Importantly during the year Sukari's reserves increased to 8.8 million ounces, up 7% principally from positive results from ongoing underground drilling. And exploration at Burkina Faso and Côte d’Ivoire progressed we’re looking at targeted resource price coming through later this year in 2016. Operational view, full year production was at the top-end of the guidance range, Q4 production of 450,000 to 500,000 per annum ounce range as we've used as our base case. Record production from the open pit, total tonnes mined up 28% on 2014. Grade was slightly below average to what we forecasted at the start of the year, but pit development is progressing as per the plan and grades are -- have returned to what we reported in our initial capital market stake in May last year. Record production from the underground, tonnes up 20% on 2014 and underground grades have remained stable at about importantly about six grams per tonne. Processing we continue to ramp-up and reached the base case target of 11 million tonnes per annum in the fourth quarter and recovery has improved and is now just under 89%. Processing, we've seen, there's a strong ramp-up in the productivity, in the tonnes milled, you can see historical the ramp-up stays full coming online and importantly 2015 had a significant ramp-up with stage four and fully coming online. Head grades have obviously reduced with the increased tonnes, as the operation have scaled up and now the work for the processing plant is to get that potential up towards the 12 million tonne per annum rate and the recoveries up to around 90% and focus on that long-term goal of lifting Sukari to produce well in excess of 500,000 ounces per annum. The open pit, the performance we had a fatality in Q4, in late November in Q4 where we had a drill rig open up pulled down into a cavity convergence of two geological structures, so that did have an impact on our Q4 production rates from the open pit. And an impact on the grades, and we had a period, where we had four days, we had no production from the open pit and then we reached out of production in the higher as the open pit was 10 day period in late November, early December where we were not mining high grade ore from the bottom of the open pit while we did the full investigation, and remedial actions before we linked it appropriately that they can start mining in that part of the pit. We had record total material movement up 28% on 2014, increased fleet utilization and blasting following back in 2014, October 2014 when we put a increased ammonium nitrate to 40 tonnes per day delivered and we continue to receive that, and we have no issues with ammonium nitrate accessories et cetera, everything now is functioning normal and has for all of 2015. So that’s the question we always get asked. And importantly now we have got development back on-track for the open pit, the open pit grades are returning to the reserve average grade which we presented in the capital market stay and we'll see going forward for 2016-'17-'18 onwards. Underground. Productivity has been above our base case of 1 million tonnes per annum we have mined just under 1.2 million tonnes, a 20% increase on 2014 and importantly the average mine grade head grade of 6.5 grams per tonne. Earlier in 2014, we have seen some volatility in the grades in the underground that is all now steady state and we are continuing to deliver grades around 6, 6.5 grams per tonne. The tight decline in ore grade, ore development is progressing as per the plans and our underground drilling continues to support further reserve growth. Production forecast et cetera. We have put out guidance for 2016 of 470,000 ounces at a $619 per ounce cash cost and all-in sustaining cost of $900 per ounce. The table provides the outlook for 500,000 ounce grade going through to the remaining is 470,000 for this year, ’17, 497,000 ounces, 2018, 488,000 ounces and 2019 507,000 ounces. Importantly that is based on the base case through the processing plant of 11 million tonnes per annum and the underground delivery at 1 million tonnes per annum. There is the opportunity to lift up processing further to around 12 million tonnes per annum, the underground on an annualized basis from a Q4 numbers is operating in the vicinity of a 1.2 million tonne per annum rate and it is capable of handling up to 1.12 million tonnes per annum with the existing structure. So there is a lot of opportunities further for the growth we’ve called out Sukari. Basically just talked about those now and the other everyone is also get that recovery up to 90% currently sitting at just under 89%. Financial review, okay. Our earnings were impacted by the exploration write-off in Ethiopia and the tax charges from a foreign exchange gain in Australia. Ahead of these exceptional items, the business is still generating substantial cash, cash flows. There was an 8% drop in gold prices it was the main factors on the drop. However our cash flows are still very healthy and allow an increased dividend payout to the top-end of the 15% to 30% free cash flow, a US$5 million prepayment against profit share, which we expect with current gold prices to come into play in 2017. There was also a $34 million exploration spend outside of Egypt and net of these it was around a 40%, $70 million increase in cash and liquid assets to over $230 million. And importantly Centamin remains debt free and unhedged and is therefore fully exposed to the gold price. Breakdown of the unit cost per ounce. Production cash costs were $730 an ounce it was down from the $729 an ounce in 2014. There was a positive impact on the cash costs principally due to a big reduction in the fuel price, the international fuel price. Although, the costs were above the guidance of $700 an ounce, and the higher production of 439,000 ounces, the original forecast of 700 was based at $420 per ounce. Sukari, we have really been focusing on getting the operation up to its nameplate capacity and importantly what we really have to focus on this year is driving those operating costs down so that we can get further gains and further margins, these further efficiencies that we can still gain from Sukari, but we need to really pushing and drive hard for this year and moving forward. Cost per ounce the overall trend of the increased throughput is falling and all-in sustaining costs are continuing to come down and a big focus for this year is continuing to drive those operating costs down further. Comp has again on total -- this year is a big year for us to really focus on this operational costs and really driving down and increase and really improve on our costs basis. Free cash flow importantly on the base case model, the operational free cash flow can see coming through including exploration efforts, dividend payments, we’re still in a very strong position with cash and liquid assets going for each of the $458 million in 2019. All the major expenditure and capital at Sukari is complete and with this projected cash build after dividends and exploration it provides finance for the next stage of growth at Centamin. So again you can see over the years the cash build, opening cash balances in 2015 really closing cash balances at the end of 2019. As cash flow from the operations, you have the dividend payments that is all factored in there the dividend payments, exploration costs, maintaining those and then in 2017 with profit share kicking in with the government of Egypt, you can still see this significant cash flows moving forward. And this as I've said before this cash flow will fund the next stage of growth for Centamin. Okay, exploration review; our total reserves at Sukari increased by 7% to 8.8 million ounces, principally as I said the reduction of fuel prices from what we had used before. The underground reserves have increased for further drilling and development as we go on and with results that we're seeing we expect to see further growth in the reserves at Sukari. Again, just a reminder, most of you are very familiar with this, the whole slide but this is the final open pit shale coming through here, you've got the Amun decline, which comes down through here. This black area is what's being stopped up until the end of 2015, the Amun area, the future stopping to come online, the Ptah decline driving to the north and the Ptah resources in this area and importantly since that reserve to the underground was released, these are the drill intercepts that we're seeing, examples five meters at 39 grams, 21 meters at 46 grams, 13 meters at 48, and that's still in the Amun area and then heading out to Ptah five meters at 50 grams, 18 meters at 17.9 grams per tonne, 31 meters at 6.8, 38 meters at 9.1, so again the drilling is really giving more strengths to the underground and showing that the underground is going to be a long-term part of Sukari and has a lot more still to deliver. Again, we've -- looking at the Ptah and these ones in red, this is at 10950 north, these results pertain at 9.9, pertain at 8.8 for 6.9, so these are all again outside, the currently reported underground results and importantly you step just 450 meters further to the north and again you can see that you are seeing continuity as the development and the drilling is coming through these areas, we're seeing a continuation of those grades and importantly that's starkly over the plus 400 meters, so again giving us the support to show that the Sukari underground is an important and a long-term part of Centamin's growth strategy at Sukari. West Africa, last year we really lifted our exploration case in West Africa, predominantly in Burkina Faso where we had just over 2,200 square kilometers of tenements and in Côte D’Ivoire where we have more of a Greenfields exploration phase, we had a 1,500 square kilometers of tenements approved and another 1,800 square kilometers under application. There is an existing resource in Burkina Faso of approximately 3.2 million ounces which is basically on this Konkera area. We have focused our exploration during the year across the entire belt doing a lot of geophysics type of anomalies, so further sort of transforming and geochemistry and we've really focused in on Wadaradoo to the north and Napelapera down to the south. So, we currently have full multi-purpose rigs drilling in that area and that's a further one rig drilling down in this area in the Napelapera. And again Wadaradoo to the north is starting to see some very consistent intercepts coming through, you can see about 26 at 1.6, 39 at 1.2, 16 at 6.5, 18 at 5.8, 38 meters at 3.3 and again that's on the 320 structure. We have a major structure coming running down through hill which we call the 020 structure and then we have plays running off that obviously 320 structures and so we're finding mineralization all the way along this structure, which we're currently drilling and then we have displays that come off to the 320 structure, approximately we've seen 150 meters out from the intersection of those structures which we -- this is where we start to see this dilation, a little dilation and we start to see these grades coming through in the 320 structures. So, the team is systematically drilling along these two structures to identify further resources. And with the way they are drilling is going at the moment we expect it will later this year we'll be coming out with a resource uptake for Burkina Faso. So, in summary, we've got a track-record of project delivery, Sukari is generating significant free cash flow, optimizing production at Sukari, reducing the costs and this will lead to that free cash flow, shareholder returns, $231 million in cash and liquid assets, no debt, no hedging, we're just continuing on just we'll fund our next stage of growth which at this stage our growth strategy is growth for exploration both at Sukari and in West Africa. Okay, we'll hand over for any questions now. Thank you. Q - Nick Hatch: Hi, it's Nick Hatch from Canaccord. Can you talk a bit about the recent devaluation of the Egyptian currency and how you expect that to impact costs?

Yes the -- we have -- it has only been 10% of our overall operating cost as far as the Egyptian and most of these Egyptian salaries over the large focus of that plus a few consumables, so there is a positive impact from the devaluation and it's relatively minor in terms of the overall impact. And I think in any case you will see some inflation in prices overtime offset that with being inflation in the double-digits, low double-digits sort of level so I don't think there is any really meaningful impact on us.

And then could you talk a bit about with all these really good underground oversees you're considering more the idea of perhaps of laying off the underground or investing within the mine today is your Burkina while your West African exploration doesn't return results?

Well I mean realistically I mean the obvious choice that would give us the best returns further grade with Sukari as the drilling and the development progresses and we still got capacity from the existing infrastructure of up to 1.5 million tonnes per annum, there is opportunity there that will increase as an underground effort. The important things is having -- when we did the big ramp-up in 2014, we saw that unstableness in the grade the important thing is to consistently deliver the grade more focusing on quality over quantity, but yes there is opportunity there and that is part of the underground exploration and development to maximize productivity, but most importantly at the right grade. And with the Ptah grade line getting further out to the north now as well getting more access to that part of the ore bodies are drilling out in the exploration since they do it and so you get more information and more confidence to make that decision over the coming quarters really year-to-year sort of period.

So we take out with the slow ramp-up if it works out on the great partnership you would say building?

Yes correct, yes we're not going to -- we wouldn't rush in and do anything drastic as I said, it's important to maintain the quality ounces coming out.

Any other opportunities in Egypt that you are looking at especially to recovering further in simple terms can you?

Egypt has a lot of opportunity and exploration potential in Egypt is huge. Egypt they improve a series of parliamentary elections et cetera. There is now a parliament in the county. They're settling in and they're seemed to be settling in very well, so it is the ideal time this year is to go and really approach that trying to bring in a modern day mining co-tax royalty rental type arrangements.

Would that affect Sukari or?

No Sukari is probably above a concession agreement a little 222 of 1994 so they have no impact on Sukari. So as you have had this processes of tender based concession block system to really port it across the oil and gas industry, so the conversation and as we’d like to so certainly we do lobby for would be to adapt and modify the mining codes with more standard granularity and tax system if we find something like another successful mining jurisdiction so hopefully that will progress in that direction we will see.

Have you got your eyes on anything yet?

There is various targets across Egypt and it would Sukari it is still 160 square kilometers we have, all that exploration has really focused on the main Sukari ore body and the underground we also at some point we need to really go back and look at what else we have in our existing 160 square kilometers. Back in 90s when Centamin started out in Egypt here we had 5,500 plus square kilometers of eastern desert under exploration license which would gradually relinquish on overtime and focus on the commercial discovery of Sukari and we have done work on other parts of the region. We know Sukari will is your hope from that perspective it isn’t.

Andrew if you haven't reached otherwise on the ground that 6.5 grams, how that would be achieved and therefore as you look towards expand production how could you get these retired?

We basically -- we manned our own team when we did the initial ramp-up we had the same team that's really all it was and then we had more underground mining engineers, underground geologists when we did the ramp-up initially we did it with the same team of basically four people. Now we've travelled with a number of people we have in the underground from outside so there is most strength in the engineering and the geological side than what we had previously.

[Indiscernible]?

Correct, correct yes.

And so increasing production we would see manning of the teams further?

Basically that's right.

In CapEx given quite a bit of than [indiscernible] to say [indiscernible]?

It's all -- most of it’s being deferred most of that was equipment rebuilds and when it now is becoming up the equipment rebuilt the equipment didn’t get to that the required hours where needed those rebuilds and thus we both so introduced on oil sample testing so rather than scheduling a rebuild on the hours of operation were the oil testing you can then stop for long further take a look in the oil and gives you an indication in what sort of way you think in your engines and your major components and you can then delay that further or in some cases you may have to bring forward, because it’s getting smarter and how we search and when we do complete our rebuilds. I mean in Sukari, it’s going to, so in Sukari come for rapid expansion phase, now it’s really a case of the teams on site knuckling down and then focusing, we’ve got the ramp-up done there is still incremental increase in the ramp-up, but really focusing on cost side and driving that down and I believe there is significant gains that we can still make from that.

Those process maintenance costs haven’t been deferred in the sense that you would expect to see a lot of cost dividend spend in 2015 then coming in, in this year or next year it’s smooth and scheduled is sort of a more optimum use of the equipment we have got?

So at least in these deals happening and let’s have probably this [indiscernible] looking more opportunity. What is [indiscernible] not seen in this new [indiscernible].

You have got Sukari I mean Sukari a significant deposit. So our gold prices are very because whatever we do, whatever we add, we do wants to attract Sukari. I’m not going to take Centamin be a million ounce a year producer if it is going to cost me $1,200 an ounce. So you can sort of work out the baseline with Sukari, so it’s quite a high hurdle rate.

[Multiple Speakers] it’s not in production ounces.

It’s all about I’d rather be producing 700,000 ounces at a very low cost in the new ounces of $1,400 ounces. Again let’s call it the add quantity that’s the important thing. And we had done a lot of DD over the last 12, 18 months and when you start looking into a lot of basis and we looking into a lot of places you see issues. And so it doesn’t work and that’s probably really adopted strategy growth by exploration, we can control it et cetera and we know we can deliver, I mean we build Sukari, we have expanded Sukari, Sukari is generating cash flow so we can use that cash flow to still the next operation. And again whatever we do is at the end of similar model Sukari so relatively small. So he can generate some cash flow and net cash flow can move into funding at operations taking further cash flows from Sukari, so we maintain our dividend policies going forward.

So it growing to [indiscernible]?

Yes, yes.

However it’s already coming through this quarter. so yes [indiscernible] this quarter.

So far we’re going, where we’re put that going to start of the year, we’ve seen our reasonable we have to certainly going so the open pit is the backbone of Sukari.

$1,200 gold see meaningful contribution government installing 2016.

Yes.

There is no reason why that shouldn’t happen done in better.

No reason why that shouldn’t happen, is simply a question now of working through the residual as a cost recovery this year and early next year. And then we start paying profit share it is pretty straight forward, obviously we’ve started prepaid switching $629 million now cumulatively. So that will help and those numbers that you’ve seen in the presentation pro forma further in terms of the concession agreement without taking into account those prepayment, so now the idea there was to smooth out the schedule rather than going from zero, zero, zero and then a bigger impact. So I think that has the effect that we were intending and creating a goodwill so the relationships are strong and good, so fully additive take from [indiscernible] side they are aware of the process and the cost recovery and the accounting goes into it. So this is transparent and well understood I think.

[Indiscernible]?

Well, it’s more a modification of the cost recovery, so we’ve essentially to further that our own election some of the recoveries, some of those line items. So it will come at various points in time when we’ll come out the frontend of the cost recovery. Again it will smooth out the payment, so instead of saying [indiscernible] $48 million in the first year that will be slightly less than going to $28 less in that.

Okay. But mainly again with the size of this sales acceleration amounted?

It’s presumably [indiscernible] 200 million there. But there is 208 million is the pro forma prepayment that we’ve recognize to makes sense and that’s not something we carry on the balance sheet both, that is just breakout the value of the subsidy essentially that we’ve expense and not received since the beginning of 2012. And we had discussions with the government in the context are ongoing. We do have a strong planning in the core and our case for the past we believe in terms of right that was paid unnecessarily and the decision to remove the subsidy in the first place was made incorrectly but in reality we're not going to receive that quantum of payment from the government since we've currently assume the [indiscernible] that's the point of negotiation going forward, how that it results -- we don't provide any guidance but equally we don't provide any carrying value on the balance sheet for that, we fully expensed the full international price on a profit and a cash flow basis since beginning of 2012.

There's a scheduled hearing on that?

Yes, but they're ongoing I mean we have series of hearings and that part of the price is actually waiting for State Commissioner's report, normally in these processes you get an advisory report from the State Commissioner's office and all appeals or in all hearings, so that's the part of the process there that we're waiting for in that case, but look I mean it's really the point at this is that it will most likely be able to [indiscernible] results through negotiation with the company, the new government understand our position and there's still [indiscernible].

And the exploration budget for Burkina and Côte D’Ivoire?

We've set $25 million, outside of Sukari that predominantly most of that will be $18 million to $19 million of Burkina Faso and $6 million in Côte D’Ivoire. Burkina Faso is much more advanced exploration than Côte D’Ivoire. At Côte D’Ivoire I mean we have started -- we've done some drilling last year, we now have a multipurpose drilling in there and we'll have second multipurpose [indiscernible] commencing drilling there as well. So, it's in early stage but [indiscernible] encouraging as well.

Is there like unlike other [indiscernible] that are looking at further panels, [indiscernible] zero cash down, incentives to [indiscernible] higher order price or why is [indiscernible]?

We constantly looking at -- we've looked at solar power, we continue to look solar power, we're looking at gas, potentially a lot of this-- some of the oil fields now that gas is clearing off, we're starting to capture that, that is another opportunity as well. It's the capital cost I mean like sell the power is basically when you do all the detailed work, it's around $2 million in [indiscernible] in Egypt get it all installed, it's if [indiscernible] power it's a significant capital outlay.

It's an 80 megawatt, 75 megawatt power station and you need to run it at night as well so you need all the batteries that would [indiscernible] in that sense pretty big ask, convert Sukari fully?

Look we're not ignoring these things…

Yes, power is not fully, yes, yes.

We've -- it's not financed at the moment we're constantly reviewing alternative energy sources for Sukari and potentially [indiscernible] somewhere else, so West Africa and [indiscernible] partial use of solar power. With no more questions from the may be we will open it up to the line.

[Operator Instructions] Your line is open. Please…

[Indiscernible] couple of questions first the just on the potential agreement type, [indiscernible] powered by where there's a [indiscernible] through the constitution for of North [indiscernible]?

No, sorry I'm not sure, sorry we're not involved in that core process, so we don't know the timetables for the hearing, so [indiscernible] that law has been ratified by parliament, the new parliament, so that's progressed. That has happened and then also the other thing that has happened is the supreme constitutional court has to approve the needed law and so and hopefully now that we've got the new parliament, they've approved it, the constitutional course will follow suit, fairly seeing this, and we've got no insights into the timing of timetable for that, I'm afraid.

So, especially you can't guide us to whether you are expecting a final [indiscernible]?

Sorry, I didn't catch that last part of that.

Just whether you expect the final [indiscernible] or judgment especially EBITDA as it relates to as the potential for [indiscernible]?

Did anyone get it?

Final interim judgment.

Final interim judgment on…

[Indiscernible]

I think that it's pretty clear as far as our concession agreement case goes, we have the new law the final stage of approvals the new laws with the supreme [indiscernible] of course, if that happens the case should fall away very quickly. If for some reason that doesn't happen then the law is not approved and the process reversed as at the merit of the appeal which is in process as well. I think the appeal process as we've seen in a number of other cases in parallel as you know there are other appeal processes with other investors in the similar position to us, but would also the subject to this new or in those cases those hearings have also been adjourned pending, we think those lower courts waiting for the approval of the new law. If that new law is saved and approved and the appeal court rules on the management we believe we've got a very strong cash for that, I mean, I think the bottom line there always has been we've got the full support of the government, we're continuing to operate through the whole of this process. The third party individual that brought this case and first case is now credited, he is in jail, he has got his own issues to deal with. And the new law speaks for the government intent to stabilize on these existing contrasts and attract further foreign investment. This case will go away in time with where as certain as you being in that respect question of timing.

And then my last question, do you have any -- are able to dive on any production [indiscernible]?

Sorry, Richard, it's a really broken line you, can you speak again.

I'll follow up Elena [ph].

We will now take our next question. Your line is open. Please go ahead.

[Indiscernible] for Global Securities, few questions, the first one has to do with the [indiscernible] payment, could you give us some color how would you split those 29 billion within the next years, I mean you've said that you won't pay it back in one installment, but you will split it but how long it will stay?

Like I said we'll be moved over a period and I can't give you the exact details of when that will come out, it will have the effect as moving the payment towards that 50/50 steady state and that's being the idea that's the reason why we made those prepayments to progressively move up from zero something if you're modeling that for should look at it for those new periods rather than one lump.

Okay. And the second question with your exploration in West Africa and after you will finalize the Ivory Coast exploration as well either any plan considering if areas have economic answers to mine, are you considering building a plan in Ivory Coast and exploring both assets in order to get the better terms of dealer [indiscernible] other than Burkina Faso?

You break up a little bit but Burkina Faso and Côte D’Ivoire as far as exploration end of these, they're separate entities, if we went to construction phase in Burkina Faso that would be independent of Côte D’Ivoire, and Burkina Faso exploration is a more advanced stage than what Côte D’Ivoire, Côte D’Ivoire has more early stage, but initial results are encouraging. Again that would be a standard line operation and its own right.

There are no further questions over the telephone.

Great. There are no further questions from the floor then we'll wrap it up. Thanks everybody. Thank you very much.