Centamin shares jump on Sukari gold mine results

Centamin shares jump on Sukari gold mine results

Sukari gold mine, located 700 km from Cairo.

Shares in gold producer Centamin (LON:CEY) (TSX:CEE) took off Thursday, climbing as much as 5.5% in early trading to close 1.13% higher as the Egypt-focused miner reported a 10.5% increase in third-quarter output thanks to higher-grade ore mined at its flagship Sukari mine.

The company also maintained its full-year production forecast of 420,000 ounces of gold.

The firm mined 93,624 ounces of the yellow metal in the three months to end September — compared to 81,281 in the second quarter this year.

Centamin shares jump on Sukari gold mine results

Total output from Sukari, the company's only producing mine, stood at 249,146 ounces in the nine months to September. This is about 170,800 ounces short of the full-year target.

"Underground mining rates remain strong and ore grades have returned to expected levels,” said chairman Josef El-Raghy.

He added the firm expected further increases in plant throughput during the coming quarters, as well as better average grades.

The company also said it was in the final stage of talks with the Egyptian government, seeking an approval to increase the amount of ammonium nitrate it uses as explosives for open pit mining.

Centamin problems in Egypt go back to 2012, when a court cancelled its mining license for Sukari, the firm’s only producing mine, and the country’s first large-scale modern gold operation.

Last year, a 400 kg gold shipment from Sukari was prevented from leaving Egypt as authorities claimed Centamin needed a permit from the national petroleum ministry to do so.

Both the Egyptian General Petroleum Corporation (EGPC) and Egypt's Mineral Resources Authority (EMRA) said in mid-December 2012 that their dispute with Centamin had been settled and that they would authorize the firm’s gold shipments.

Fast-forward almost two years and the company is still dealing with the issue. However Centamin’s shares have doubled over the past year as it has insisted its rights will be protected and as it has held out the prospect of a dividend.

Images courtesy of Centamin.