| June 16
June 16 A legal dispute that has jeopardised
Egypt-focused gold miner Centamin Plc's only
producing mine is likely to be resolved before the end of this
year, Chairman Josef El-Raghy said.
El-Raghy said he was expecting a new investor-friendly law
to render void the legal case against Centamin, and betting on
the new Egyptian government to revive the economy and woo
investors after years of civil unrest.
An Egyptian court in 2012 held that Centamin's right to
operate Sukari, its flagship mine, was invalid, hearing one of
several legal challenges against commercial deals reached during
the rule of Hosni Mubarak, who was ousted the year before. (r.reuters.com/kyh99v)
Centamin's appeal will come up for hearing in October.
"My expectation is certainly you'll see a resolution of that
case before the end of the year," El-Raghy told Reuters in an
"Our expectations are that the new government does what it
has already started to do ... that it continues to adhere to the
agreements that have been signed with investors."
Investors spooked by the long political turmoil in Egypt and
the legal threats against commercial deals will be watching the
outcome of Centamin's appeal for clues into whether the business
climate in the country is improving.
Egypt's previous administration, looking to revive
investment, approved a law in April that prevents third parties
from challenging contracts made with the government.
Investors are also counting on Abdel Fattah al-Sisi, elected
Egypt's President earlier this month, to put the country's
finances in order and attract foreign investment.
El-Raghy said Centamin, which has a market value of about
$1.2 billion, was open to buying more assets in Egypt. The
company has so far invested $1 billion in the country.
"When the government turns its attention to making more
ground available, we will continue to signal that we would like
to be there," El-Raghy said.
SUKARI SUCCESS STORY
Located 700 km (435 miles) from Cairo, Sukari - Egypt's
first large-scale modern gold mine that began commercial
production in 2010 - has been largely unscathed by the unrest in
In 2013, production at the mine jumped 36 percent to 356,943
ounces of gold.
Centamin announced in May plans to pay a dividend this year,
joining competitors such as African Barrick Gold and
Centamin's London-listed stock has jumped 40 percent since
January, while gold prices have risen 6 percent during
the same period.
Of the 15 analysts covering Centamin's stock, nine have
either a 'strong buy' or 'buy' rating on it, according to
Thomson Reuters data.
"From an investor's point of view (Centamin) has become a
relatively binary story. Either you buy into Egypt or not,"
Numis Securities analyst Cailey Barker told Reuters.
(Editing by Feroze Jamal)