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Gold and silver miners shine after positve results from Centamin

Discussion in 'Market News' started by Lily, Aug 10, 2016.

  1. Lily

    Lily Forum Member

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    Egyptian gold miner raises production forecasts for the full year

    Precious metal miners are attracting attention and not jus because of a continuing rise in the gold and silver prices as investors seek havens for their cash.

    The sector has also been lifted by positive results from Egyptian gold miner Centamin. The company lifted its production guidance for the year from 470,000 ounces to between 520,000 and 540,000 ounces thanks to increased output from its Sukari mine. It also reported a jump in second quarter profits from $37.3m to $101.6m. Analysts at Canaccord Genuity said:

    Centamin reported seocond quarter and first half earnings that exceeded our forecasts – this was a strong set of results. The company had already recently reported second quarter gold production of 140,300 ounces from the Sukari mine, up 12% on the first quarter, making 265,600 ounces for the first half, up 23% from 216,000 ounces in the first half of 2015. Gold sales for the first half were 265,500 ounces. The key stand out, however, was a very strong performance in cost control, with the benefit from operational cost efficiencies and lower fuel costs exceeding our forecasts.

    This is an extremely strong result, and management is clearly managing to successfully optimise the operations at Sukari. We had expected production and costs to beat guidance for the year, but not to the extent that the company is now guiding to. This is likely to result in positive revisions to both our forecasts and those in the market.

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