UPDATE 1-Centamin second-quarter gold output falls 13 pct

Wed Jul 9, 2014 4:14am EDT

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July 9 (Reuters) - Gold miner Centamin Plc reported a 13 percent fall in second-quarter output, even as it continues to ramp-up the expansion of its only producing mine in Egypt.

The miner produced 81,281 ounces of gold in the second quarter, up 9 percent from the first quarter but down from a year ago, as it fights off legal disputes and operational issues at the Sukari mine, its flagship property.

Shares in Centamin fell nearly 3 percent to 66.70 pence in early trade on Wednesday on the London Stock Exchange.

Centamin maintained its full-year production estimate of 420,000 ounces of gold at the Sukari mine in Egypt.

"We should have a better idea in Q3 ... we reserve judgement for now. Overall a weaker quarter but indications are for an upward trend with a risk on delivery," Numis analysts said in a note to clients.

Citigroup analyst Jon Bergtheil said that Centamin would have to produce about 133,000 ounces of gold on average per quarter in the second half of the year to reach its target.

"If there are any slip-ups in the ramp up, it is unlikely to make this target," Bergtheil said in a note to clients.

Output was affected at Sukari in the first quarter due to operational problems, causing a temporary reduction in the average grade of ore.

A legal dispute that has jeopardised the mine is also expected to be resolved before the end of this year, Centamin Chairman Josef El-Raghy said last month.

Centamin shares were trading down 1.5 percent at 67.65 pence at 0807 GMT. (Reporting by Abhiram Nandakumar and Karen Rebelo in Bangalore; Editing by Gopakumar Warrier)

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