Home » Posts tagged 'egyptian mineral resource authority'

Tag Archives: egyptian mineral resource authority

Buy Centamin (CEY) – VectorVest sees a compelling fundamental and technical investment proposition

Centamin plc (CEY.L) is a mineral exploration, development and mining company, and operates in Australia, Jersey, Egypt, Burkina Faso and Cote d’Ivoire. Its principal asset, the Sukari Gold Mine (SGM), is located in the Eastern Desert, approximately 900 kilometers from Cairo and 25 kilometers from the Red Sea. SGM is jointly owned by Pharaoh Gold Mines NL (PGM) and Egyptian Mineral Resource Authority (EMRA). It has a license holding over an area of approximately 100-kilometer trend of gold mineralization in Burkina Faso. CEY holds a tenement package over an approximately 2,200 square kilometer area in southern Burkina Faso, adjacent to the border with Cote d’Ivoire. It has seven permits in Cote d’Ivoire covering an area of over 2,330 square kilometers. Six of these are part of the Doropo Project across the border from Batie West in Burkina Faso and the other is in the west of the country.

On Feb 1st 2017, CEY published results for year ending Dec 31st 2016. Gold production of 551,036 ounces marked a 26% increase on 2015 and was above the revised guidance range, while the cash cost of production of $513 per ounce was down from $713 per ounce in 2015 and below the revised guidance range. EBITDA grew by 145% to $373m, due to higher gold prices, increased production and lower costs. As a result, basic earnings per share grew by 313% to 18.61 US cents. Chairman Josef El-Raghy said that the seventh successive year of production growth and reductions “has allowed Centamin to maintain its strategic focus on generating shareholder returns and value-accretive growth.” “A significant milestone was achieved during the year, as the capital investment in the Sukari operation by Centamin’s wholly-owned subsidiary Pharaoh Gold Mines was recovered from cash flows to the extent that profit share commenced with the Egyptian Government during Q3. Centamin ended the year with $428m in cash, bullion on hand, gold sales receivables and available-for-sale financial assets, an increase of $197m during the year. “ He added; “I am pleased to announce that a final dividend for 2016 of 13.5 US cents per share has been proposed, representing a full year pay-out of $178m, equivalent to approximately 70% of our net free cash flow in 2016.”

While CEY has long been a favourite stock among gold investors, the latent potential among the company projects, and the flagship Sukari gold mine have resulted in the stock consistently flagging up value across VectorVest financial metrics. The stock scores highly on GRT (Earnings Growth Rate), RT (Relative Timing) and RV (Relative Value), and shows a fair rating on RS (Relative Safety) and DS (Dividend Safety). The key metrics of VST, the master indicator for ranking every stock in the VectorVest database, sees CEY score 1.37, which is very good on a scale of 0.00 to 2.00. And in terms of value, CEY scores 267.23p, meaning at the current 173p, the stock is undervalued.

The chart of CEY.L is shown below using the normal VectorVest notation. The price is in candlestick format while the VectorVest valuation is shown by the green line study. Earnings per share (EPS) is shown in the window below the price by the blue line study. EPS has more than doubled over the last year.


While the gold price has been falling over the past few days CEY has risen. The share has broken and kissed a down sloping trendline and is in the process of breaking out of an inverted head and shoulders reversal. The head and shoulders break out will be confirmed by a close above 180p.

The technical target from such a move would be a repeat of the upmove that occurred from January to September 2016. This would compute a technical target of around 250 which is similar to the present VectorVest valuation.

There is risk in mining stocks and the opportunity is for those who can size positions correctly and manage risk aggressively.

Summary: Current global uncertainties should ensure that gold remains a popular safe haven asset for the foreseeable future, and this will no doubt be reflected in investor demand for shares of cornerstone producers such as Centamin. The high score CEY delivers across key VectorVest metrics, coupled with a promising charting configuration add up to a compelling investment case for this long established gold miner. Buy.

March 15th 2017

Readers can examine trading opportunities on CEY and a host of other similar stocks for a single payment of £5.95. This gives access to the VectorVest Risk Free 5-week trial, where members enjoy unlimited access to VectorVest UK & U.S., plus VectorVest University for on-demand strategies and training. Link here to view.

FREE! For free VectorVest analysis on any stock, go to this link here

VectorVest Unisearch

On VectorVest a simple search using the Unisearch tool will quickly find shares that are undervalued with good fundamentals that have just issued a Buy recommendation. This will give the active trader a short list of many high probability trading opportunities each week. Traders now have the opportunity to spend five weeks discovering VectorVest’s unique simplicity, automation and independent guidance. Just £5.95 buys a 5 week trial to enable deep exploration, or how the system can assist in smarter trading in as little as 10 minutes a day. Powerful tools. Proven strategies. Unique Perspectives.

Link here for more info and to set up a trial. 

European Financial Publishing Limited T/A VectorVest UK (VectorVest) is authorised and regulated by the Financial Conduct Authority under register number 543038. You should remember that the value of investments and the income derived therefrom may fall as well as rise and you may not get back the amount that you invest. Past performance is not a reliable guide to the future. This material is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. If investors are in any doubt of the suitability of an investment given their individual circumstances, they are recommended to contact an investment manager or independent financial adviser who may be able to provide tailored advice. Opinions expressed whether in general or both on the performance of individual securities and in a wider economic context represent the views of VectorVest at the time of preparation. They are subject to change and should not be interpreted as investment advice. VectorVest and connected companies, clients, directors, employees and other associates, may have a position in any security, or related financial instrument, issued by a company or organisation mentioned on this site. European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC357322 with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. Email: support@VectorVest.com
I would like to receive Brand Communications updates and news...
Free Stock Updates & News
I agree to have my personal information transfered to MailChimp ( more information )
Join over 3.000 visitors who are receiving our newsletter and learn how to optimize your blog for search engines, find free traffic, and monetize your website.
We hate spam. Your email address will not be sold or shared with anyone else.