Broker snap: Ambrian optimistic despite disappointment at Centamin

2nd Aug 2011 11:06

Ambrian has maintained its buy rating on gold miner Centamin Egypt despite the group slashing its full-year output estimates on Tuesday.While analyst Adam Kiley does indeed call the downgrade in forecasts "disappointing", he notes that in Ambrian's recent research note on Centamin, the broker highlighted short-term concerns over production output at the Sukari mine and uncertainty on the timing of underground production."Consequently, much of this production shortfall and the increase in the cash cost forecast for 2011 was factored into our financial model. We also highlighted some short-term uncertainty due to the Egyptian national elections in September," Kiley said.Nevertheless, the broker says that despite the production shortfall, the group continues to make an operating profit of $48.2m, and Sukari is still a "high quality asset with over 9Moz of gold reserves.""We believe that short-term share price weakness over the coming months will offer a discounted opportunity to buy into a world-class asset," Kiley said.Shares took a tumble and were trading 25.8% lower at 102.30p at 11:10.BC