ES in Egyptian gold miner Centamin regained some lost ground yesterday, as it said it was confident it would win an appeal to prove its right to mine in the country was valid.
Last week, an Egyptian administrative court said the company’s right to operate the flagship Sukari mine was invalid, sending the shares in a downward spin that knocked off almost a third of their value and sparked a temporary trading suspension.
However, the miner said that the concession agreement, which allows Centamin to explore gold from the Sukari mine, is part of law and the court did not have jurisdiction to cancel it.
Centamin said yesterday that it was “confident” the matter could be resolved during the appeal process, as it has the original lease documentation that shows approval from the Egyptian minster of petroleum and mineral resources to mine at Sukari. Centamin said the administrative court had not seen this document previously, and therefore had deemed its licence to mine invalid.
“The company continues to work in close co-operation with the Egyptian Mineral Resources Authority and both parties are currently in the process of initiating the necessary vigorous action to defend our rights to continue to extract gold from the Sukari mine and to appeal this decision,” Centamin said yesterday.
Normal mining operations are continuing in the interim until a final judgement from the appeal process has been made.
No date has yet been set for the appeal.
“This certainly provides clarity and appears to look like Centamin may be in good standing. We await the appeal process, which may drag on,” said Cailey Barker, mining analyst at Numis Securities.
“We expect the shares to bounce, but weakness to persist until a successful appeal is made,” he added.
Shares closed up 24.13 per cent yesterday at 75.2p, after closing 35 per cent down last Tuesday.