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Centamin Share Price Slumps Despite Increase in Sales Volumes: Here’s Why

Gold Prices
Gold Price

Centamin share price is trading lower even though the company announced a 43% increase in revenues in gold sales year over year on the back of higher gold prices and larger sales volumes. Quarterly production from its Sukari gold mine located in Egypt rose 31% from the same quarter a year earlier to 128.240 tonnes. The company also said its gold sales volume was up by 9%, reiterating its previously provided gold production guidance of between 445k and 455K ounces for the year, with a projection of 400K to 430K ounces in 2021.

Despite these stellar numbers, Centamin plunged 18% in today’s trading. So the question is: why is the Centamin share price down by so much today?

The answer resides in its production guidance for 2020, which actually dropped from the data provided three months ago. The 2021 guidance figure is even lower than that of 2020. This is due to a pending geotechnical assessment of risk at its major production site in Egypt. 

A look at the latest 2020 production guidance reveals a reduction of production guidance from 510K – 525K ounces given on August 4 to the current figures, representing an 18% reduction. This is what precipitated the slump in Centamin share price this Wednesday. 

Technical Outlook for Centamin

Today’s drop in the Centamin share price completes the evolution of the bearish pennant pattern on the daily chart. Price touched the support at 127.55 but is now off intraday lows. Extension of the decline below 127.55 is required to bring 116.80 into view. 

On the other hand, recovery from present levels tests 138.65, with 145.00 and 154.75 lining up as potential targets to the north. 

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Centamin Share Price Chart (daily)

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