Jim Rutherford, Deputy Non-Executive Chairman commented: 'Centamin has taken significant steps to reshape its leadership team to improve operational performance.
Our robust operating performance in Q4 2019 and the work this new team has undertaken in a short period of time gives us great confidence in our direction, underlined by an increased final dividend for 2019.
After a period of constructive engagement, Centamin and Endeavour have not reached agreement on value and have therefore terminated discussions. We are highly confident in our growth strategy, which includes but is not limited to value-accretive diversification. The Company continues to assess opportunities and we look forward to continued proactive engagement with our stakeholders.'
Strategic and Operational Progress
The Board is highly confident in Centamin's strategy of maximising the value of its asset base and promoting further growth both organically and through accretive mergers and acquisitions which create value for shareholders. This strategy is supported by: The Sukari Gold Mine ('Sukari') is a world-class asset with a long-life orebody and has a strong track record of resource conversion to reserves. The Company's management continues to undertake considerable exploration to extend its 11.0 million ounce resource base[4], maximising the full potential across the 160km2 tenement area. Centamin's West Africa projects offer further potential diversification and growth with the Doropo, ABC and Batie West projects having combined Measured and Indicated resources of over 5 million ounces[5].
The recently announced Board and senior management changes represent further steps in reshaping and strengthening the Company's leadership team, with a focus on operational performance and driving value creation opportunities. In Q4 2019, Ross Jerrard assumed the role of interim CEO; while Jim Rutherford joined the Board as Deputy Non-Executive Chairman. Additionally, Centamin has made a number of changes to senior operational personnel at Sukari and in senior corporate positions, including the appointment of Jeremy Langford as Chief Operating Officer in Q2 2019 and more recently the appointment of the Sukari General Manager, Operations Director and numerous heads of department. The external recruitment process for a permanent CEO is progressing well with a shortlist of candidates being interviewed by the Nomination Committee.
The new operational leadership team has initiated a comprehensive mine review at Sukari to identify further opportunities to maximise value. Initiatives in progress include mining optimisation, implementing processing cost control opportunities, and design approval of a second tailings facility.
The changes in operational leadership are beginning to be reflected in improved operating performance at Sukari. On 9 January 2020, the Company announced preliminary production results from Sukari for the three months ended 31 December 2019 ('Q4') of 148,387 ounces (a 51% improvement on the previous quarter) resulting in full year 2019 production of 480,529 ounces.
The Q4 production result represents one of the strongest quarterly results from Sukari and demonstrates the operational improvement made to date. The Board's expectation for 2020 production is unchanged at 510,000-540,000 ounces. Centamin will provide a further update in its Q4 2019 release on 30 January 2020.
Final Dividend
Reflecting improved operating performance, the Board is today recommending a final dividend for the year ended 31 December 2019 of 6.0 US cents per share (US$69.4 million), bringing the proposed total dividend for 2019 to 10.0 US cents per share (US$115.6 million) and the cumulative dividend returned to shareholders since 2014 to US$568 million[6]. This dividend will be subject to shareholder approval at the 2020 Annual General Meeting, which will be held prior to the ex-div date and record date.
The amount to be returned has been determined by the Board based on the dividend policy, current financial strength of the Company, confidence in meaningful future cash flow generation and a review of near and medium-term capital allocation.
Centamin continues to maintain a robust financial strategy, with cash and liquid assets of US$348.9 million as at 31 December 2019[2],[3] (increased from US$289 million as at 30 September 2019[7]), with no debt, hedging or streaming in place. This strong financial discipline provides the flexibility to drive long term organic growth and pursue strategic M&A that meets our corporate strategy. The Board fully recognises the value of diversification and scale, and will continue to actively explore value-accretive strategic opportunities which are in the interests of its stakeholders.
Termination of Discussions with Endeavour
On 23 December 2019, Centamin sought approval from the Panel on Takeovers and Mergers to extend the deadline for Endeavour to either announce a firm intention to make an offer for Centamin under Rule 2.7 of the City Code on Takeovers and Mergers or announce that it did not intend to make an offer for Centamin by 5.00pm GMT on 14 January 2020 (the 'PUSU Deadline').
In the period since the PUSU Deadline extension, both parties have completed a thorough and extensive value-focused due diligence exercise. This included reciprocal Q&A, expert sessions and in-person meetings involving board members and senior management from both companies.
Notwithstanding the committed engagement from both sides, the Board has unanimously concluded that the possible offer materially undervalued Centamin and its prospects. The Board also considered that a further extension of the PUSU Deadline would not result in any realistic prospect of an offer that would be in the best interests of Centamin stakeholders as a whole. The Board notes that Endeavour has withdrawn its possible offer.
The person responsible for the release of this announcement on behalf of Centamin is Josef El-Raghy, Chairman.
Contact:
Ross Jerrard
Tel: +44 (0) 7700 713 738
Email: Alexandra.carse@centamin.je
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 relating to the possible offer. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as 'believes', 'expects', 'expected', 'budgeted', 'forecasts' and 'anticipates'. 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. 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. 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.
CENTAMIN PLC 
