Centamin Soars

December 18, 2012 at 10:20


Centamin has claimed its mining operation in Egypt will be restarted within the next few days after permission to restart gold exports was granted, sending its shares soaring by 22pc.

Centamin operates Sukari, Egypt’s only modern gold mine, which it was forced to close last week after disputes with government authorities over gold exports and fuel subsidies.

Management ceased mining after exports were stopped by customs officials, cutting off the company’s source of working capital. A dispute over petrol subsidies also left the mine low on diesel.

However, mining will now restart when the payment for the next gold shipment is received by Centamin’s operating company. “We expect both fuel supply and normal operations at Sukari to resume in the coming days,” Centamin said.

The fuel situation was resolved at the end of last week when Chevron, Centamin’s fuel supplier, received government notification that supplies to Sukari could be resumed and that “no retrospective payment” was due.

Centamin has been dogged by problems over the last year. In October, Egypt’s administrative court issued a preliminary ruling that said the terms of the original mining agreement with the company 18 years ago was invalid. An appeal was lodged two weeks ago.

Centamin shares have plunged by almost 80pc since the Arab Spring started in January last year. The shares rose 7.5 to 42.14p on Monday.