Investors Strike Gold with Egypt's Centamin

Daily Mail (London), October 31, 2009 | Go to article overview

Investors Strike Gold with Egypt's Centamin


Byline: INVESTMENT EXTRA by Ian Lyall

IT has taken Sami El-Raghy a long, long time to become an overnight sensation.

Thirty-nine years to be precise. His gold mining company, Centamin Egypt, takes a full quote on the London Stock Exchange next week, but was first listed in Australia back in 1970.

Only in the past year has the group registered on investors' radar screens, the result mainly of a spectacular 425pc rise of the price of the shares in just 12 months.

Demand for the stock has been fuelled by a red-hot market for precious metals and the potential of the firm's major asset - the Sukari gold mine 600km south of Cairo.

El-Raghy's is an interesting story.

The geologist, who has spent most of his working life in Australia, was invited by the authorities in his native Egypt to consider the potential of a number of mines in the country.

He settled on Sukari, a prospect that had been raked over by the British many years earlier and may even have supplied the pharaohs.

What El-Raghy realised very early on, however, was that Sukari was ripe for exploitation using bulk mining techniques that had been pioneered in Australia. This involves digging out many tons of earth a day to extract minute traces of gold.

So since 1995 chairman Sami and his son Josef, a financier who is now chief executive, have devoted their working lives to turning this seemingly lowgrade desert deposit into the biggest independent gold field to come on stream this year.

Unable to raise debt funding, the El-Raghys have been forced to sell shares in the company to achieve their dream.

But what you now have in Centamin is a fully-fledged miner with the facilities to go into wholesale production by the year-end.

The first 12 months will see it churn out 200,000 ounces of gold, which will rise to 500,000 ounces by 2012.

Let me put that into perspective. Last year the output of Randgold, the largest producer listed on the LSE, was 650,000 ounces.

The sparkling prospects for the company have attracted investment from Paulson & Co, the worldrenowned hedge fund manager. It is the leading shareholder with around 11pc, followed by the El-Raghys with 8pc and the rest of the staff and management with a collective 4pc.

There are a number of blue-chip investors also on the share register including Baring Asset Management, Fidelity, Henderson and Aegon.

And more heavyweight backers will be clamouring to jump aboard after next Thursday, when the company joins the main list in London after eight years on Aim and nearly 40 on the ASX. …

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