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Centamin directors buy after shares slide

Gold miner cut its guidance after an unstable pit area forced it to change mine plan for December quarter
Centamin directors buy after shares slide

Centamin (CEY) announced at the start of October its expected production for 2020 would drop by around 50,000 ounces (oz) because an unstable section of the Sukari mine openpit had to be avoided. This is worth around $96m (£75m) at Wednesday’s gold price of $1,913/oz.

IC TIP: Buy at 154p

Centamin’s share price fell by a quarter on the news, and has stayed at this level. The gold in the pit zone that had seen “movement in a localised area” is not going anywhere, and the company said it was looking at ways to stabilise the rock so it can be mined. 

Guidance has been dropped to around 445,000oz for the year, down from 510,000-525,000oz. The company said mining from the unstable high-grade area would be replaced with stockpile ore, which contains much less gold. 

Chairman James Rutherford seems confident the company - which has had major operational issues in the past – will get beyond this, buying 100,000 shares after the guidance cut, at 152p apiece. So does finance chief Ross Jerrard, who bought 15,000 shares at 148p. Mr Rutherford – also an Anglo American (AAL) and Anglo Pacific Group (APF) director – is in his first year in the top board seat, after taking over from Josef El-Raghy in January, who ran the company for almost 20 years. 

The company has said many times it has turned a corner since its issues of 2017-18, when guidance was regularly cut and pit grades were highly variable. Sukari is both an underground and open-pit mine, with the majority of production coming from the pit. Centamin – also under a new chief executive, who started during the pandemic – is currently running a life of mine review for the Egyptian asset, which should give investors a clearer picture of what has gone wrong in the past and where the mine is going.

Buys     
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)Comments
Ninety OneHendrik du Toit/Kim McFarland30 Sep 20203.11573,098

Purchased by PCA

CentaminJames Rutherford5 Oct 20151.68151,680 
Micro Focus InternationalSander Van 't Noordende2 Oct 20248.77111,865

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MidwichStephen Fenby5 Oct 2032080,000 
Georgia CapitalKim Bradley30 Sep 2036554,813

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Amigo HoldingsGary Jennison (ceo)1 Oct 209.5547,750 
PlaytechAnna Massion2 Oct 20355.2742,633

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Topps TilesDarren Shapland1 Oct 2049.529,700

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RotalaBob Dunn5 Oct 202527,500 
Diversified Gas & OilDavid Johnson5 Oct 2010526,249 
Topps TilesRobert Parker (ceo)2 Oct 204824,000 
MidwichAndrew Herbert6 Oct 2032022,400

Purchased by PCA

Go-Ahead GroupElodie Brian (cfo)2 Oct 2058519,893 
FirstGroupDavid Martin (ch)30 Sep 2038.219,100

Purchased by PCA

 

Sells     
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)Comments
Pets at HomeLouise Stonier29 Sep 20406.232,213 
Pets at HomeLouise Stonier29 Sep 20402.231,915Sold by PCA