We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Finish of Peel Hunt until further updates
Centamin
22 July 2021
2
Recommendation structure and distribution
Recommendation distribution at 22 July 2021 All research published in the last 90 days
Corporate No Corporate % No % Corporate % %
Buy 126 93 256 63 95 66
Add 5 4 63 16 3 15
Hold 3 2 63 16 2 15
Reduce 0 0 11 3 0 3
Sell 0 0 7 2 0 1
Under Review 2 1 6 1 0 1
Peel Hunt’s Recommendation Structure is as follows:
Buy, > +15% expected absolute price performance over 12 months
Add, +5-15% range expected absolute price performance over 12 months
Hold, +/-5% range expected absolute price performance over 12 months
Reduce, -5-15% range expected absolute price performance over 12 months
Sell, > -15% expected absolute price performance over 12 months
Under Review (UR), Recommendation, Target Price and/or Forecasts suspended pending market events/regulation
NB The recommendation is the primary driver for analyst views. The target price may vary from the structure due to market conditions, risk profile of
the company and capital returns
Research Disclosures Number Disclosure
1 Company is a corporate client of Peel Hunt
2 The Analyst has a shareholding in this Company
3 The Company holds >3% in Peel Hunt
4 Peel Hunt makes a market in this Company
5 Peel Hunt is Broker to this Company and therefore provides investment services to the Company
6 During the last 12 months Peel Hunt has received compensation from this company for the provision of investment banking
services
7 During the last 12 months Peel Hunt has acted as a sponsor/broker/ NOMAD/ financial advisor for an offer of securities from
this company
8 Peel Hunt holds >5% in Company (calculated under Market Abuse Regulation (EU) 596/2014)
9 1% beneficial ownership (calculated for purposes of FINRA under Section 13(d)/(g) of the Securities Exchange Act of 1934
and IIROC Rule 3400)
10 Peel Hunt holds a net long position that exceeds 0.5% in the Company (calculated under Market Abuse Regulation (EU)
596/2014).
11 Peel Hunt holds a net short position that exceeds 0.5% in the Company (calculated under Market Abuse Regulation (EU)
596/2014).
Recommendation history
Company Disclosures Date Rec Price Target Price
Centamin 4 26 Apr 21 Buy 117p 150p
19 Mar 21 Buy 105p 145p
17 Dec 20 Buy 121p 160p
02 Nov 20 Buy 124p 170p
09 Oct 20 Add 157p 218p
21 Sep 20 Add 214p 243p
13 Jul 20 Buy 188p 185p
This document must be treated as a marketing communication for the purposes of Directive 2014/65/EU (as enacted into the laws of England and Wales, Scotland and Northern Ireland by regulations made under the European Union Withdrawal Act 2018) as it has not been prepared in accordance with legal requirements designed to promote the independence of research; and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
A solid 2Q21 for production
Overall, CEY reported good production results for 2Q21 with
both production and sales beating by 5% and 2% respectively.
The beat at the revenue line was offset by a higher cost line and
potentially some cash outflows we had not forecast. Overall cash
at mid-year was reported at a still strong US$312m, just 2%
below our forecast. Production, cost and capex guidance for
2021 have all been maintained.
Production and gold sold beats PHe in 2Q
Centamin reported a good set of 2Q production results overall, but with mixed
financial highlights. Production in 2Q was strong at 100k oz, some 5% ahead of
our 95k oz forecast and in line with consensus at 100k oz. Underground ore
mined came in 17% ahead of our forecast while the open pit ore production came
in 13% below PHe. CEY processed 2,804kt of ore (7% below PHe at 3,000kt),
but with a higher grade of 1.19g/t (6% above PHe at 1.12g/t) and slightly higher
recoveries of 89% (PHe 88%). The company sold 97k oz in the quarter, above
our 95k oz forecast.
Revenue in 2Q21 beats by 9%
CEY also reported a good realised price of US$1,822/oz, some 4% ahead of PHe
forecasts for the period. Revenue for 2Q therefore came in better at US$177.5m,
some 9% above our US$163m. Costs for the period were reported slightly higher
than expected at AISC of US$1,290/oz vs PHe at US$1,277/oz.
Cash a bit lower than forecast, guidance for 2021 maintained
With capex coming in lower at US$41m (PHe at US$59m), it was slightly
surprising to see FCF at just US$7m (vs PHe at US$12m), even though
management commented that this was higher than they had budgeted. It implies
maybe some higher one-off costs during 1H21 and potentially a working capital
unwind from 2H20. Overall cash was therefore reported slightly lower than
forecast at US$312m vs PHe at US$317m. The company maintained
production, cost and capex guidance for 2021E, but increased the exploration
budget to US$17m (from US$5m) to include additional work on the West
African portfolio. The Sukari Phase 2 LOM review is still scheduled for 4Q21E.
CONT