BofA backs Centamin with 'buy' rating

Bank of America has upgraded Centamin to ‘buy’ after new chief executive Martin Horgan outlined his three-year outlook for the gold miner.

The bank, which previously had a ‘neutral’ rating on the London-listed stock, said the firm was now targeted to produce 405-500,000 ounces at all-in sustaining costs below $900/oz. from 2024.

It continued: “Production should ramp up from the 2022 full year, costs reduce thanks to economies of scale and cost savings initiatives. Capex to increase in the short term, as a result of higher waste stripping; this should provide greater flexibility in the mine plan.”

BofA also pointed to Centamin’s strong, debt-free balance sheet, and to a management focus on stabilising both production profile and cash flow generation.

It has therefore reduced its forecasts for earnings before interest, tax, depreciation and amortisation for the current year by 3%, but increased them by 3% for the 2021 full-year, to $448m.

Centamin, which has hosted a Capital Markets Day for analysts, is focused on the Arabian-Nubian Shield, and operates the Sukari gold mine Egypt. Horgan, the former head of Toro Gold, was named chief executive in April.

As at 1415 GMT, shares in the FTSE 250 miner were ahead 3% at 122.76p.