Centamin shares on the rise as gold production grows
Centamin’s shares rose over five per cent today as the gold miner’s fourth quarter results vindicated its decision to resist a takeover offer from mining giant Endeavour.
Gold production from the firm’s flagship Sukari mine rose eight per cent year on year to 148,387 ounces for the last quarter.
Full year gold production rose two per cent, from 472,418 ounces to 480,528 ounces.
Revenue for the full year hit $658.1m (£505.5m) in 2019 at a price of $1399 per ounce, a 9.1 per cent increase on 2018.
In its guidance for 2020, Centamin said that it expected to produce 510,000 to 540,000 ounces of gold, with the majority of output to fall in the second half.
In December Canadian mining corporation Endeavour went public with a proposed £1.47bn all-share takeover of the FTSE-listed company.
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After wrangling about due diligence deadlines for much of the rest of the month, Endeavour called off its pursuit earlier this month, which it has been conducting since October 2018.
At the time, Centamin issued a statement saying that Endeavour’s offer “materially undervalued” the firm and its prospects, a stance that it reaffirmed in today’s results.
Jim Rutherford, the firm’s deputy chairman, said: “After a period of constructive engagement, Centamin and Endeavour have not reached agreement on value and have therefore terminated discussions.”
The company declared a final dividend of 6.0 cents, taking its total payout to 10.0 cents, an 81% jump from 5.5 US cents in 2018.
Interim chief executive Ross Jerrard said: “Centamin has undertaken a number of initiatives in 2019 to improve the consistency at, and increase cash flow from, the Sukari mine, which have contributed to a strong fourth quarter performance.
“Consistent operational delivery against the mine plan remains the key objective.”