Centamin Egypt Limited 20 Jan 10

Centamin is delisting from the ASX on 29 January 2010 – time to exit is now.

After January 29, 2010, the company’s shares will only be quoted on the LSE and TSX. The move to the London Main Board lit a small fire under the share price. In getting to the Main Board, the company had to make cash flow forecasts and on this measure Centamin is expensive. The Main Board fire is out and its back to fundamentals.

Centamin’s share price ran up too quickly moving to the London Main Board and since then the gloss has worn off.

By any standards Sukari is a world class deposit with a mineral reserve of 142Mt grading 1.4 g/t gold. The mineral resource is 210Mt, grading 1.52 g/t for 10.29M ounces.

Construction of the mine and plant went smoothly and the company recently recorded another milestone with the commencement of gold exports to Johnson Matthey.

Share Price Charts and Comments:

Fat Prophets initially recommended buying Centamin Egypt at $1.01 in March 2007 (Fat Mining 69). Our last review of this stock was in November (Fat Mining 200).

From a charting perspective, Centamin Egypt touched a recent low in mid December 2009 at $1.985 from the mid November 2009 high of $2.50. The formation currently in place is otherwise known as a wedge as evident on the daily chart. This indicates a squeeze in price, however the price could break in either direction.

Consolidation remains the main theme with a possibility of the price falling further. In addition, there is added downside risk given the wedge formation currently in place adding to further uncertainty on Centamin Egypt’s future direction.


Centamin applied to the ASX to have the company removed from the official list.

This happens on 29 January 2010.

After 29 January, any Members that have not sold their shares will have their electronic holdings on the ASX register converted to certificated holdings on the Australian register which will be maintained by Computershare. Members will receive a share certificate representing their holding. This certificate must be kept in a very safe place because it is evidence of the shareholding.

For 3 months following delisting, Australian stockbroker Southern Cross Securities Limited has agreed to facilitate trading in Centamin shares.

One of the key risks in converting shareholdings to certificated holdings relates to liquidity. If liquidity is poor, certificate holders will find that the price they receive for their holdings will be at a discount to market. Moreover, the discount might rise significantly towards the end of the 3 months facilitation period provided by Southern Cross Securities Limited.

Fat Prophets recommends SELL (ASX listed holdings) for all Members.

We recommend Members consider switching into Chalice Gold Mines (ASX: CHN) also reviewed in this FAT-MIN-208.


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