In a milestone for Centamin Egypt shareholders and for Egypt, first gold has been poured from the Sukari Gold Project in Egypt.
Commercial ramp up of production is anticipated over the coming months. Sukari is the first modern commercial gold mine to be operated in Egypt, and has a current mineral reserve of 142Mt @ 1.4g/t Au for 6.4Moz.
Josef El-Raghy, Managing Director/CEO of Centamin said "the first gold pour from Sukari marks the beginning of production from the largest gold mine to come on-stream this year. The initial production of gold doré came from ore mined in the Amun Zone of the Sukari hill and represents Egypt’s first modern day gold production."
The 4mtpa capacity plant will attain production rates of around 200,000 oz Au per annum by year end. Centamin is currently stockpiling ore in anticipation of a ramp up in production later this year.
Broker Ambrian issued a note following the news. It said given the milestone Centamin has now reached, it lifts its NPV multiple from 1.25x to 1.5x. It is maintaining its ‘buy’ recommendation but raises the target price to 98p from 88p, which also incorporates the weakening US dollar.
“Importantly, the company is trading on around 10-12x future earnings. As most non-South African) gold majors trade at 15-20x earnings, Centamin represents good value as a takeover target, even at a share price well above current levels, given that post-acquisition Sukari would immediately be re-rated to any acquirer’s earnings multiple,” Ambrian added.www.proactiveinvestors.com
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