This mining stock could be worth its weight in gold
If all goes to plan, shareholders could be in business. If New Luika sees a repeat of 2021’s troubles or Singida is late, or both, the shares could suffer, so the risks are clear even before potential gold price volatility is taken into account.
That said, there is some protection. The first-half results in August revealed net assets of $168m, or £140m at current exchange rates, so shares in the £105m company trade well below book value. Shanta could just be worth its weight in gold.
Questor says: buy
Share price at close: 10p
The gold price is firming and so is the share price of Centamin, which is benefiting not just from fresh interest in the precious metal but also from better news from its Sukari mine last month.
This is most welcome as three years of patience with the FTSE 250 stock is so far yielding a low single‑digit percentage capital return, thanks in part to subsidence at Sukari in summer 2020 and subsequent output disappointments.
An upgrade to measured and indicated resources at the Egyptian site represents the first such gain in excess of mine depletion in six years, extends the life of the mine and justifies the investment in additional drilling planned for this year.
The new exploration work and a pre‑feasibility study in the Doropo site in the Ivory Coast are potential catalysts for performance in 2023, alongside any further gains in gold prices. Centamin could yet shine after three years of dull performance. Hold.
The takeover of emerging markets power utility ContourGlobal by American private equity giant KKR is now complete. The deal became effective on Dec 20 and investors were due to receive their 251.4p per share in cash within 14 days of that date.
The final offer – adjusted downwards from the initial figure of 263.6p a share to reflect the subsequent payment of three quarterly dividends – leaves us with a capital gain of 100p per share, or 67pc, with 38.4p a share in dividends on top, for a total return north of 90pc.
This is most gratifying, although long-term investors may be a little frustrated that private equity has lifted the company from under their noses.
Russ Mould is investment director at AJ Bell, the stockbroker
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