Centamin confident appeal will resolve Egypt issue

Reuters, Monday 5 Nov 2012

Egypt's biggest gold explorer Centamin will provide documents to show the court its mining licence was valid and it expected that mining at Sukari, which has been unaffected by the court's ruling, will continue

Centamin confident appeal will resolve Egypt issue
File photo: Centamin (Photo: Reuters)

London-listed Centamin said it was confident a court case which questioned its right to mine gold in Egypt will be resolved through an appeal process.

Centamin said on Monday it will be able to provide documents to show the court its mining licence was valid and it expected that mining at Sukari, which has been unaffected by the court's ruling, will continue while its appeal is heard.

Its shares were up 12 per cent to 67.85 pence at 0835 GMT, recovering around a quarter of the loss suffered last week when an Egyptian administrative court was reported to have ruled the rights to operate the Sukari mine, its only producing asset, were invalid.

Centamin said it was clear from the written judgment that the court had rejected the idea the agreement between the company and the state was invalid and needed further documentation to be able to rule in its favour.

"This certainly provides clarity and appears to look like Centamin may be in good standing. We await the appeal process, which may drag on," Numis analyst Cailey Barker said.

Shares in Centamin tumbled last week on concerns the company was the latest investor to fall foul of signing a deal with Egypt's previous regime.

Courts in Egypt have challenged a number of commercial deals reached during the rule of Hosni Mubarak, who was ousted as leader last year, adding to investor worries at a time when the government is trying to revive confidence in the economy.

In the wake of the court ruling, Centamin said it had the support of the relevant government body, the Egyptian Mineral Resources Authority, adding that the court did not have jurisdiction over its mining rights.

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