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INTERVIEW-Gold miner Centamin expects court case to be resolved before year-end
June 16, 2014 / 11:01 AM / 3 years ago

INTERVIEW-Gold miner Centamin expects court case to be resolved before year-end

June 16 (Reuters) - 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. (

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 interview.

“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.


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 the country.

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 Randgold Resources.

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)

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