* Company to outline dividend policy later in year
* Confident of positive outcome in court cases
* Egypt operating environment improves
* Shares up 7.8 pct
(adds Centamin executive comments, details, background)
By Silvia Antonioli
LONDON, March 24 Egypt-focused gold miner
Centamin is on track to boost production further, it
said as it posted 1 percent rise in full-year core profit after
increased output offset a sharp fall in gold prices.
Many gold producers have been battered by last year's 28
percent dive in bullion prices, which caught them by surprise
and put balance sheets under pressure.
Centamin, however, was able to offset a 17 percent drop in
its average realised prices in 2013 with a 36 percent output
increase to 357,000 ounces, beating its production targets.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) were a little more than $234 million for the year to
Dec. 31, slightly below analysts' expectations of $239 million,
according to Reuters I/B/E/S.
The company said the expansion of its Sukari mine in Egypt
will help to boost output by 18 percent this year to 420,000
ounces, reaching 450,000 to 500,000 ounces a year from 2015.
Sukari, the first large-scale modern gold mine in Egypt,
emerged largely unscathed from political turmoil in Egypt over
the past two years and Centamin said the operating environment
in the country had improved greatly from 2012.
The company's reliance on Egypt is not without risk,
however, and it continues to seek resolution to legal battles
over its right to operate Sukari and the suspension of fuel
subsidies it received from the Egyptian government.
The company's head of business development, Andy Davidson,
said it has the support of the government in the Sukari case and
is confident of a positive outcome. It is hopeful of reaching a
compromise on fuel subsidies, he said, perhaps in the form of a
credit rather than cash payments.
Centamin is also awaiting a licence from the government to
allow it to use more ammonium nitrate as it steps up its mining
The market reacted positively to the earnings report, with
the shares climbing 7.8 percent by 1115 GMT - the biggest gainer
on the FTSE 250 index.
"In our view, Centamin remains a good-value exposure, albeit
higher-risk with the potential for tail outcomes from the legal
issues," Nomura analysts said in a note.
The company, which in December made an all-share takeover
offer for Burkina Faso-focused gold explorer Ampella Mining,
said it plans to continue to diversify through acquisitions in
the Middle East and Africa.
The miner said it will outline its dividend policy during
the course of the year as its expansion programme moves towards
"Centamin remains well placed to declare dividends in the
future, though our estimates are that this is likely to happen
in 2015," Peel Hunt analysts said.
(Editing by David Goodman)