Gold miner Centamin glistens with strong second quarter production growth

Jessica Morris
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Gold bars are displayed at Shinhan Bank
Centamin shares jumped nearly 13 per cent yesterday (Source: Getty)

Gold miner Centamin said today that second quarter gold production was significantly ahead of the last quarter and the previous year.

The FTSE 250-listed firm reported quarterly gold production at its mine in Egypt jumped 12 per cent to 140,306 ounces in the three months ended 30 June. It rose 30 per cent from the same period a year ago, when output totaled 107,871 ounces.

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Gold miners have been a safe harbour for equities investors in a sea of red recently. Bullion hit a more than two-year high yesterday, while investment bank UBS said that the precious metal has entered a new bull market.

"The Sukari operation has continued to build on the strong start to the year ... full year production and cost guidance will be updated with the second quarter financial report," Andrew Pardey, the company's chief executive, said.

But Centamin shares closed down 3.68 per cent to 159.7p. This snapped a six-day winning streak, with the stock swelling 12.79 per cent yesterday.

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Kieron Hodgson, commodity and mining analyst at Panmure Gordon, said yesterday's performance meant that Centamin shares could be weaker today, but the group's longer-term fundamentals were still positive.

"We anticipate gold to be well supported in the near term and along with weaker sterling, we believe further strength is likely along with stable growth in production, an improving cost profile, a solid balance sheet and attractive free cash flow yields, which serve to provide us with longer term optimism."

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