Shares in London and Toronto-listed Centamin (LON, TSX:CEE) fell by as much as 64% on Thursday after it suspended operations at its flagship Sukari gold mine in Egypt.
More than 95 million shares in Centamin changed hands – that is a staggering 15 times usual volumes for the stock. Worth more than ₤1 billion before its troubles began, the company is now worth a shade over ₤300 million.
In early afternoon trade in Toronto the counter had recovered somewhat, but still down 49% on the day.
Centamin is locked in dispute with Egyptian state oil company over a $65 million payment demand for diesel fuel supplied from December 2009 until January 2012. Fuel levels at Sukari are at "critical levels," the company said in a statement.
On top of that Centamin's gold exports have been halted over "an unforeseen and arbitrary request from customs officials for prior approval by the Minister of Finance."
The Alexandria-based company first fell foul of Egyptian bureaucracy when a lower court annulled its licence to operate the mine in October.
Since the fall of the Mubarak regime in Egypt, foreign investor uncertainty has increased greatly and many fear that contracts signed before the transition to democracy would now not always be honoured.
Centamin in August reported record output up 40% over last year at Sukari and the company said it was on track to produce 250,000 ounces this year at a cost of $565 an ounce. Sukari commenced production in 2009.