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LONDON -- Centamin (LSE: CEY ) has announced that its fuel supplier Chevron is able to resume supplying fuel to its Sukari mine in Egypt. Shares in the company promptly rose over 25% on the news this morning, after crashing 61% yesterday when the mine was placed "on care and maintenance" until the issues were resolved.
The gold miner received the notification from the Egyptian General Petroleum Corporation and lifted the suspension on Sukari, which was implemented yesterday due to an "illegal retrospective claim" from the Egyptian General Petroleum Corporation for fuel supplied between December 2009 and January 2012. The claim had amounted to $65 million but, as things stand, no retrospective payment is currently due.
The shutdown had been blamed on a lack of diesel supplies and "unforeseen and arbitrary" red tape halting sales. The hike in diesel pricing that Centamin experienced from local to international in January 2012 is currently before the courts, and the case will also deal with any retrospective claim.
Rebounding to 34.67 pence at the time of writing, the share price has yet to regain all of its value prior to the plunge following the initial suspension, and the question whether the potential for recovery makes Centamin a buy remains your decision.
Indeed, you may wish to consult this free Motley Fool report, which explains how betting on battered shares can provide wonderful gains... if the underlying company recovers. To put a possible turnaround into perspective, Centamin's shares reached a peak of 197 pence before the Egyptian troubles erupted.
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