Centamin strikes gold with Egyptian law change

Suzie Neuwirth

Centamin might have finally seen the light at the end of the tunnel, after an extremely long and arduous court dispute over the validity of an exploration licence.

Shares surged around 10 per cent in early trading and have edged up even higher this afternoon, after the Egypt-focused gold miner noted a change to a law in the country that came into effect yesterday.

The new ruling will restrict third parties from challenging contractual agreements between the Egyptian government and investors, which appears to encompass pending lawsuits.

Centamin continues to discuss with its advisers the process by which the original claim in relation to the Sukari Concession Agreement, which was brought by a third party and is subject to an ongoing court appeal, may be dismissed under the provisions of this new law,” said the FTSE 250-listed firm in a statement to the stock exchange.

Shakarwy & Sarhan in Egypt are advising Centamin.

“It is not clear yet if [the law] also covers those under appeal, such as in Centamin's case. Regardless, it is obviously positive news for the company, and reinforces our belief that the company is likely to win its appeal,” said Rob Broke, analyst at Westhouse Securities.

It is now up to the lawyers to thrash out a concrete decision on the case.