Analysts at Liberum started coverage of Centamin shares at ‘sell’, arguing that while its “strong” balance sheet gave it the resources to finance the turnaround of its flagship gold mine at Sukari, the shares were overvalued at present.
Said balance sheet strength would also allow the miner to maintain its dividend throughout the process, they judged.
Yet the 450,000-500,000/oz. target for annual production assumed underground resource upgrades to reserves and “sizeable” satellite ore bodies had to be found in order to materially prolong Sukari’s life into the 2030s.
In any case, using an 8% discount rate and assuming $46/oz. of resource at its West Africa assets, then at the current market price of $1,800/oz. of gold, the outfit’s estimated net asset value was 85.0p per share, for 30% potential downside.
Liberum set a 82.0p target price on the stock.
