Many reasons for the move up and potentially a lot more to come:

  1. Price of Gold has been recovering of late and will hopefully be in line for a decent spike up when the first US / French cruise missile hits Syria. All the political lobbying seems to be indicating a yes vote in America on Monday and the Obama regime seem mind set on action.
  2. Chinese economy is on the mend as is UK and US – and this has led to a recovery in mining stock shareprices.

Avocet and Amara Mining seem highly correlated with each other and with the price of gold; a 1% move in the price of gold translates to over a 5% moving in the underlying company share prices.
On the other hand, Centamin’s price movements have littl to do with the price of gold, nothing to do with the world situation outside of Egypt.
CEY share price was heading towards 200p when the Egyptian revolution kicked in. It should really be at least 200p by now.  Any move towards Egyptian stability, even if that may be control by the army releases enough of that downward pressure to allow the price to rise to closer to its political environmental friendly level.

  1. Sinopec (despite the geopolitical uncertainties) has just taken a 33% stake in an Egyptian Oil and Gas company (Apache Oil).
  2. Realisation that CEY is one of the lowest cost gold producers worldwide and is expanding production and on target to meet FY targets. Additionally lots of cash on the balance sheet.
  3. Back in Court circa the 29th Sept when there should be a realistic chance of an outcome. More realistic chance than any of the other dates.
  4. Was way oversold. (and still is).  I feel that the share price has been so strongly suppressed that the overall controlling factor is confidence that the company is secure and able to do business in an improving environment.   Centamin in itself is an exceptional company, well run with excellent growth and great results.

Nice to see the recovery in share price playing out and I expect more to come.

September 4, 2013 by Harry
Category: blog