Centamin has mountain to climb to hit target, says Peel Hunt

9th Oct 2014 12:46

Centamin has a "mountain to climb" towards the end of the year, according to analysts at Peel Hunt, after production rates for the third quarter came in short of hopes.The broker maintained its 'buy' rating and 75p target price for the gold miner after Thursday's output update, but has downgraded its forecasts for 2014.Production in the three months to 30 September totalled 93,624 ounces, up 15% on the preceding quarter and 10% higher than the same period last year as the stage-four expansion at Centamin's Sukari mine gathers momentum."However, production remains well short of the run rate required to hit the company's full year production guidance of 420,000 ounces with the company needing to produce 170,000 ounces at over 30% above nameplate capacity in the final quarter of 2014 in order to achieve target," said Peel Hunt's Maurice Mason and Michael Stoner.Despite their "long-term faith" in prospects for the Sukari asset, the "very significant production requirement" for the fourth quarter means that the broker has cut its estimates for current-year production and earnings.The analysts said that the fourth quarter "will require both excellent operating performance and good fortune in the grade profile".Centamin's shares were up 4.3% at 60.25p by 13:14.