iNVEZZ.com, Wednesday, July 10th: London and Toronto-listed gold miner Centamin (LON:CEY, TSE:CEE) has increased production from its Sukari operation in Egypt amid bureaucratic and legal problems it faces in the country. Despite the rise in output, Centamin’s share price closed 4.17 percent lower in London and 3.33 percent lower in Toronto yesterday. The stock was marginally up in morning trading in London today.
Centamin Reports Record Q2 Output
The Egypt-focused gold producer yesterday announced preliminary production results for the second quarter of 2013. Total gold output for the quarter ended June 30, 2013 was a record 93,624 ounces, a 39 percent increase as compared with the corresponding quarter of 2012 and eight percent higher than the previous quarter. Year-to-date production totalled 180,640 ounces.
The gold producer affirmed its full-year guidance at 320,000 ounces at a cash operating cost of $700 (£470) per ounce.
“The second quarter saw continued improvements in mining and processing productivity at the Sukari operation which, combined with average grades in line with the mine plan, delivered a third successive quarter of record output,” Centamin’s Chairman Josef El-Raghy noted in a statement.
In May, the gold producer reported record earnings for the quarter ended March 31, 2013, with 6.60 cents
of basic earnings per share, up six percent as compared with the last quarter of 2012 and 66 percent year-on-year, before exceptional charges.
Despite the rise in gold output in the second quarter, Centamin faces increased uncertainty following the military coup in Egypt that ousted President Mohamed Morsi. Sukari mine, located about 700 kilometres from Cairo, is the company’s only producing operation. The Financial Times quoted analysts at SP Angel
Corporate Finance as saying that while operationally things were going well for the company, Centamin’s share price was being driven by perceptions of risk in Egypt. “Some of the factors affecting the company may be outside their control,” the analysts added.
!m[Gold Producer Facing Court Battle over Licence ](/uploads/story/3826/thumbs/pic1_inline.PNG)
Last week, shares in the gold producer jumped 17 percent after the army ousted President Morsi, with investors hoping that the legal challenges to Centamin might be reduced under a new government. The company is appealing against a decision of the Egyptian Administrative Court which sought to revoke Centamin’s exploitation lease for the Sukari operation. Bloomberg has reported that an appeal is scheduled for September.
“Centamin’s legal troubles started only since the current government was in power, and its removal from office could ultimately turn out to be a positive,” Bloomberg quoted analyst Maurice Mason at Peel Hunt LLP as saying in a note to investors last week.
The FT quoted analysts at Peel Hunt as pointing out that there was no guarantee that the next government would be “any more or less sympathetic to Centamin”.
**Centamin’s share price was 0.65 percent up at 37.00p in London as of 08:51 BST on 10 July 2013. In Toronto, Centamin’s share price closed 3.33 percent down at C$0.580 on July 9.**