Cairo - Shares of Egypt-focused gold miner Centamin Plc fell
as much as 21% after the company said an advisory body had made unfavourable
recommendations to the court that will decide the fate of its only operating
Centamin is appealing to the Supreme Administrative Court of
Egypt to overturn a decision by another court to revoke its lease for the
Sukari gold mine in Egypt's Eastern Desert.
The mine, which produced 262 958 ounces of gold last year,
is continuing to operate normally pending the final outcome of the court
process, Centamin said in a statement.
Centamin, which has a market capitalization of about $780m,
said the first appeal hearing would be on June 19. It added that the Egyptian
State Commissioner's Office had produced a report containing non-binding
recommendations for the court.
These recommendations were "not positive",
Centamin said. The company's stock was the biggest percentage loser on the
FTSE-350 index on Friday morning.
Speaking to Reuters by telephone, Centamin Chairman Josef
El-Raghy said: "We see (the recommendations) as having no bearing on how
we'll progress our appeal process."
He declined to reveal details of the recommendations in the
report. The State Commissioner's Office was not available for comment on
Friday, a holiday in Egypt.
"The office's recommendations are advisory only and
non-binding, but the apparent negative undertone has potential to make the
appeal more challenging," said Numis Securities analyst Cailey Barker.
Egypt has experienced more than two years of political and
economic turmoil since the overthrow of President Hosni Mubarak, hammering
foreign investment and prompting budget and currency crises.
Centamin has been hounded by a string of bureaucratic
difficulties in Egypt in recent months. Customs officials have held up exports
and the country's petroleum ministry has disrupted fuel supplies to the mine.
The company is appealing a decision by the Egyptian
Administrative Court last October that declared its right to operate the Sukari
mine invalid. The ruling was suspended in March pending the outcome of the
"The whole Egyptian situation with Centamin has been a
rollercoaster ride," said Carole Ferguson, senior research analyst at SP
Angel. "The fact that they can't have clarity at this stage ... will just
make investors very nervous."
Centamin, also listed on the Toronto Stock Exchange , said
in March that it expected the Sukari mine to produce 320 000 ounces of gold in
2013, 22% more than last year. The mine is located 700km from Cairo.
Centamin also holds exploration licences in Ethiopia.
The company's shares were down 14.5% at 39.00 pence at 10:40