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Sukari gold mine, located 700 km from Cairo.
Shares in gold miner Centamin (LON:CEY) (TSX:CEE) closed down over 6% in London Thursday as the company said its long-dragged dispute with Egyptian authorities over its flagship Sukari gold mine might drag into 2015.
Delivering its second quarter results, the Alexandria-based company — Egypt’s largest bullion producer— also logged lower production and higher costs during the first half of the year. It, however, kept its annual forecasts unchanged, suggesting it would deliver more output at better grades over the rest of the year.
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.
Centamin problems in Egypt go back to 2012, when a court nulled its license for its flagship gold operation.
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 waiting for a court hearing, scheduled for October. 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.
Investors will receive a maiden interim payout of $10m, or 0.87 cents per share, Centamin said.
Source: Yahoo Finance.
The miner had an important win in May, when the country’s interim government granted it permission to expand its mining activities through increasing production capacity and the necessary energy levels for operation.
The following month, Centamin’s executives appeared optimistic and said the long-running battle over Sukari was likely to settle before the end of the year.
Sukari, which began commercial production in 2010, is jointly owned by Centamin and the Egyptian Mineral Resources Authority (EMRA) on a 50:50 basis.
Analysts didn’t seem concerned about the case running into 2015, Reuters reported, particularly as enforcement of the original 2012 ruling has been suspended pending resolution of the appeal hearing.
Images courtesy of Centamin.
2 Comments
fred
The legal fight is NOT with the authorities, its with an individual. Please do more research.
Steve Treloar
From the Centamin Egypt Home Page:
“….. Egyptian Administrative Court upheld the lawsuit of former Egyptian MP Hamdi Al-Fakharani, who sought to have the contract with the Australian company terminated, as he believed that it infringed upon the rights of the Egyptian people. Al-Fakharani said that by executing the contract with Centamin Egypt, Egypt loses several million dollars a day.”
That took me all of two minutes to find. Hope they don’t get paid by the hour.