(Alliance News) - Centamin PLC said on Tuesday it is "highly confident" in its strategy, and boosted its dividend, as Endeavour Mining Corp dropped its interest in the gold miner.
Earlier on Tuesday, Endeavour said talks with Centamin over a merger have ended amid a lack of information. The offer deadline was Tuesday.
Endeavour in December had proposed a deal in which Centamin shareholders would get 0.0846 of an Endeavour share per Centamin share held, giving Centamin's shareholders a 47% stake in a combined company. The proposal valued Centamin at GBP1.47 billion.
Centamin shares were 2.9% lower on Tuesday at midday in London at 123.50 pence each, giving a market capitalisation of GBP1.43 billion.
The two criticised each other's behaviour during merger talks, with Endeavour accusing Centamin of being unwilling to properly look into a combination.
On Tuesday, Centamin noted Endeavour has withdrawn its bid, saying an extension to the offer deadline would not have resulted in an acceptable offer.
Centamin also provided an operational update, and has declared a 6 US cent final dividend for 2019. It paid a 4 cent dividend for the first half, meaning a 10 cent total for the year, compared to a 5.5 cent payout in 2018.
The return in 2018 had been cut from 12.5 cents the year before that.
Centamin said the higher dividend comes after improved performance from the Sukari mine in Egypt, which has been experiencing operational problems.
Centamin last week reported production figures for 2019, showing production for the year was 480,529 ounces of gold. This was 2% higher than the year before, but short of guidance of 510,000 ounces to 540,000 ounces.
However, the fourth quarter improved significantly, being 51% higher than the third quarter of the year. Centamin said this is one of the best quarters the mine has ever had.
For 2020, Centamin has issued guidance of between 510,000 ounces and 540,000 ounces of gold.
Centamin has also experienced a change of leadership over the past few months, with Chief Financial Officer Ross Jerrard replacing Andrew Pardey as chief executive.
"Centamin has taken significant steps to reshape its leadership team to improve operational performance. Our robust operating performance in fourth-quarter 2019 and the work this new team has undertaken in a short period of time gives us great confidence in our direction, underlined by an increased final dividend for 2019," said deputy Non-Executive Chair Jim Rutherford, who was appointed in December.
"After a period of constructive engagement, Centamin and Endeavour have not reached agreement on value and have therefore terminated discussions. We are highly confident in our growth strategy, which includes but is not limited to value-accretive diversification. The company continues to assess opportunities and we look forward to continued proactive engagement with our stakeholders," he added.
By George Collard; georgecollard@alliancenews.com
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Centamin PLC (CEY)