Broker snap: Canaccord still cautious over Centamin despite strong production

9th Apr 2013 10:52

Canaccord Genuity has kept its 'sell' rating and 38p target price for Egyptian gold miner Centamin despite the strong first-quarter production figures announced on Tuesday morning, saying that legal issues still remain.The company produce 87,016 ounces of gold in the first three months of the year, up 77% year-on-year and 2.0% quarter-on-quarter. Canaccord, which was expecting a figure closer to 82,000, said that the results were "encouraging" and position the company well to meet its guidance of 320,000 ounces this year.The broker said: "Although we would expect shares to be stronger today we think that the legal appeal on the validity of the Sukari's mining license remains the key overhang, which is likely to limit upside and leaves the stock vulnerable to negative news flow from deteriorating economic environment and social instability in Egypt."Canaccord reckons that a final ruling on the appeal from the Supreme Court of Egypt is unlikely before the end of the year, given that it took the court three months just to acknowledge the appeal application.The stock was down 2.84% at 44.5p by 10:58.BC