Centamin announces big increase in Cote d'Ivoire mineral resources

Gold miner Centamin announced a significant Cote d'Ivoire resource increase on Friday.

The company said the 120,000 metre drill programme last year across its landholdings resulted in a more than doubling of its mineral resources.

A maiden resource has been declared at the ABC Project and the Doropo Project mineral resource has grown by 58%. Building on these results, a further 90,000 metres is budgeted and underway for 2019.

Chief executive officer Andrew Pardey said: "2018 saw a further increase in our investment and level of activity in Cote d'Ivoire across our 3,472km² land holding. We have only scratched the surface of the potential of these assets, and we are maintaining an intensive campaign in 2019 to define further quality gold ounces.

"The success and scale of the 2018 ABC discovery results and the reporting of the maiden Kona South resource in less than two years of active exploration, highlights the scale and quality of the Lolosso Gold Corridor and the regional generative potential of the ABC land package."

Pardey said the Doropo project continues to demonstrate the potential to be its next organic development project. He said ongoing exploration and concurrent viability studies will further unlock the potential future scale of the project as the group assesses the economics against its internal project value creation criteria.

"Centamin's core strategy remains on delivering returns using its highly cash generative business which not only delivers a high yield for its shareholders as per our sustainable dividend policy, but also delivering fully funded growth from our exciting exploration portfolio," Pardey said.

At 0920 GMT, the shares were up 4.3% to 123.95p.

RBC Capital Markets said: "Whilst the headline resource increase in the group’s West African exploration resources reads as impressive (more than 100% increase) we see little to get excited about today.

"The issue we have always had with CEY’s work in the region is that finding anything that stacks up to Sukari’s quality will be extremely difficult. We also think that diversification into what will likely be a smaller project in a new jurisdiction will not bring 'new' investor interest or reduce the reliance on the need for delivery at Sukari.

"We continue to rate CEY sector perform. Whilst we still see scope for a dividend beat with FY financial results...we think downgrade risk remains high for 2019 production and market expectations on ounces medium term. We also think three downgrades to production guidance in 2018 have negatively impacted the group’s credibility with investors and that this will take a number of quarters to reverse."