One way of bucking the market slump appears to be to host an analyst trip and hope for positive feedback.
That appears to have worked for Egyptian-focused gold miner Centamin, whose shares have added 1.5% to 57.85p after a visit to its Sukari mine. Panmure Gordon's Alison Turner issued a buy recommendation on the company, saying:
Following an excellent site visit to Centamin's Sukari Mine yesterday we reiterate our positive stance on the company. We had been concerned that Centamin could miss this year's guidance; however, following the visit we think the miss (if any) is likely to be small. On the other hand that does not necessarily imply upgrades to next year's figures as the fourth quarter will benefit from some particularly high grades with grade reverting to the reserve average longer term.
Ramp up of the expansion is going particularly well. Whilst the new plant started production marginally later in the first half than the company had planned, the ramp up to capacity has been more rapid than expected and attention is already turning to optimisations to take the plant beyond 10m tonnes per annum.
Following the expansion the company requires a 60% increase in the quantity of explosives (and a further increase beyond that as the stripping ratio increases). Whilst there appear to be no particular problems, given the political situation explosives are particularly tightly controlled and it is not clear how long the process may take. Whilst this is unlikely to impact this year's production, or next, insufficient stripping could build up to a constraint longer term if the permit is not in place by mid next year.
Prior to yesterday's site visit to Centamin's Sukari Mine we had been slightly fence- sitting between two alternatives: either the company will miss this year's production guidance or an astonishing fourth quarter run rate will suggest upside to longer term forecasts. Following the site visit our conclusion is that there is probably an outcome between the two.
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