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Berenberg raises Centamin to 'buy'
4th Dec 2020 16:19
(Sharecast News) - Analysts at Berenberg upgraded mining firm Centamin to 'buy' from 'hold' on Friday, stating the group's new mine had rebased their expectations.
With Centamin releasing a new mine plan for its Sukari mine in Egypt, Berenberg now expects production of 452,000 ounces for 2020 versus guidance of 445,000-455,000 ounces.
Berenberg noted that capex was "materially above" its previous expectations of $225.0m in 2021, $195.0m in 2022 and $175.0m in 2023, due to higher than forecast expenditure on waste stripping after a prolonged period of understripping.
"We have updated our estimates for revised guidance and believe that this should draw a line under a difficult period for the company," said Berenberg.
"We believe the shares will be driven by results and executing to plan, and we move to a price target of 146.0p based on an unchanged blend of 1.2x NAV and 6x EV/EBITDA."
The German bank also highlighted that Centamin's Cleopatra orebody would now be mined as an open pit rather than from an underground mine, ultimately forming part of the main pit.
With Centamin releasing a new mine plan for its Sukari mine in Egypt, Berenberg now expects production of 452,000 ounces for 2020 versus guidance of 445,000-455,000 ounces.
Berenberg noted that capex was "materially above" its previous expectations of $225.0m in 2021, $195.0m in 2022 and $175.0m in 2023, due to higher than forecast expenditure on waste stripping after a prolonged period of understripping.
"We have updated our estimates for revised guidance and believe that this should draw a line under a difficult period for the company," said Berenberg.
"We believe the shares will be driven by results and executing to plan, and we move to a price target of 146.0p based on an unchanged blend of 1.2x NAV and 6x EV/EBITDA."
The German bank also highlighted that Centamin's Cleopatra orebody would now be mined as an open pit rather than from an underground mine, ultimately forming part of the main pit.