Centamin Plc (CEY), a producer of gold in Egypt, fell the most in almost than five months in London as it said a report by the State Commissioner’s Office was “not positive” as it appeals the annulment of its mine lease.
Centamin tumbled as much as 21 percent, the biggest intraday decline since Dec. 13, and traded 6.1 pence lower at 39.55 pence by 10:20 a.m. in London. Centamin said its appeal will be held on June 19.
“The Egyptian State Commissioner’s Office has produced a report containing non-binding recommendations,” Centamin said in a statement. “Whilst these recommendations are not positive, the company does not believe that they address the substantive merits of Centamin’s appeal and as such the company’s grounds of appeal remain unchanged.”
Centamin is appealing against an Oct. 30 preliminary ruling by Egypt’s administrative court to annul its 18-year-old concession agreement with the government for the Sukari gold mine. The company has fallen more than 50 percent in London in each of the past two years. It has been dogged by operational and political delays since the uprising that led to the ousting of former President Hosni Mubarak.
“The Office’s recommendations are advisory only and non-binding, but the apparent negative undertone has potential to make the appeal more challenging,” Numis Securities Ltd. said in a note. Centamin “stock is likely to remain under pressure until a full resolution is reached.”
Centamin said it’s preparing for the appeal hearing and will “vigorously defend its rights” to the Sukari mine.
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