Centamin’s production rises in first quarter but lawsuit looms

Suzie Neuwirth
GOLD miner Centamin yesterday posted solid first quarter results, with earnings per share up 66 per cent year-on-year.

Production rose to 87,016 ounces, up two per cent quarter-on-quarter and 77 per cent year-on-year.

However, while analysts said that the results were in line with expectations, legal issues surrounding a mining licence will continue to overshadow the company.

“The key to Centamin’s rerating remains a successful finalisation of the court case regarding the validity of the Sukari mining licence,” said Cannacord. “In the meantime, this remains an overhang and will likely limit the share price response to operational delivery”.

Numis Securities affirmed the view that the results were “distracted by the ongoing legal issues.”

Centamin reported revenues of $138.2m (£90.8m) for the quarter, a slight decrease from $138.5m in the last quarter of 2012 but up from $87.8m in the first quarter of 2012. The company has maintained its full-year production guidance.

“Following on from record 2012 financial results, the team…have delivered a second successive quarter of record gold production, with further improvements across all areas of the operation,” said chairman Josef El-Raghy.

“This marks a solid start to the year and output remains on target to achieve the 2013 guidance of 320,000 ounces.”