Centamin's Egyptian Mine Beats Full-Year Guidance

LONDON -- Centamin  (LSE: CEY  ) , the roller-coaster stock of mid-December, this morning announced its fourth-quarter preliminary production results from its Sukari gold mine -- and the news helped the share price put on a further 9.5% to reach 48.38 pence at the time of writing.

The Egyptian-focused gold miner revealed a 45% year on year increase in Q4 total gold production, a record 85,543 ounces, which was also a 40% increase on the third quarter. This brings full-year production to 262,958 ounces, a 30% increase on 2011 and above the previous guidance of 250,000.

Sukari saw quarterly throughput rise 25% on Q3 2012 to 1,250 karats. Additionally, at 1,916 karats, ore production was up 16% on the previous quarter as well. The underground mine delivered 111 karats, up 19% on Q3 2012, returning to budget productivity levels as the technical issues encountered in the previous quarter were resolved.

Centamin chairman Josef El-Raghy commented:

The team at Sukari has delivered a very strong set of operating results, with a record output for the quarter bringing full year production ahead of guidance. All areas performed well and the results are particularly pleasing given the challenges faced during the year. Sukari has now delivered production growth over three consecutive years and we look forward to a further increase in 2013. While 2012 presented us with a number of challenges, we exit the year as forecast with a robust financial and operating base with which to continue delivering on our growth strategy.

The news is another boost for Centamin, after a suspension was lifted that had caused its fuel supplier Chevron to be unable to supply fuel to Sukari. The shutdown of the Egyptian mine caused the shares to plummet over 60% in one day, from 52 pence down to 30 pence. Once the suspension was lifted, however, the shares rebounded 25% as fuel supply was resumed, and rose a further 25% as shipment resumed.

So, more good news for investors who bought into Centamin at the bottom of the recent price crash. However, the share price has yet to regain all of its value prior to the plunge, 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.

Anyway, if Centamin is tempting you today, please click here to read the Fool's exclusive "millionaire" report before you hit the buy button.


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