Centamin Share Price Forecast March 2022 – Time to Buy CEY?
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Shares of gold mining company Centamin (LSE: CEY) are in the red today, after closing at £ 101.10 as of March 14th (18:00 GMT). Centamin shares have grown from being a penny stock to something more. In March, the shares breached those levels, as a result of the uncertainty regarding the Ukraine-Russia conflict. This has been further helped by the fact that gold’s value has risen by 15% since the conflict broke out.
Centamin – Technical Analysis
Centamin’s financial statement indicates a market cap of £1.167 billion with total assets worth £1.028 billion. Revenue for 2020 was at £646.26 million with a profit margin of 18.82% compared to £511.35 million in 2019.
Moving averages such as Exponential Moving Average (20)(100.07), Simple Moving Average (20)( 99.41), Exponential Moving Average (30)(98.30), Simple Moving Average (30)(96.78) and Exponential Moving Average (50)(96.31) are indicating a buy action. Oscillators such as Relative Strength Index (14)(52.95), Stochastic %K (14, 3, 3)(56.65), Commodity Channel Index (20)(27.23), Average Directional Index (14)(19.40) and Awesome Oscillator(7.83) are neutral.
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Recent Developments
Centamin was established as a gold mining company focused on the Arabian-Nubian Shield. With offices in London, UK; Mount Pleasant, Western Australia; and Alexandria, Egypt, it is now an LSE listed company. The company currently operates the Sukari Gold Mine in the Eastern Desert of Egypt, situated some 700 km from Cairo and 25 km from the Red Sea. It began commercial production on April 1st 2010, which made it the first modern gold mine in the country.
The current price of Centamin shares is related to the price of the precious metal. Investors are anticipating a positive impact on its share performance as the demand for the company’s product and its value is rising. But this depends on whether demand and the price rise can be sustained. The company is scheduled to release its full-year 2021 earnings on the morning of Wednesday, March 16.
The company’s gold production declined from 452,320 ounces in 2020 to 415,370 ounces of gold in 2021. It sold 407,252 ounces of gold in the year at an average price of $1,797 per ounce compared to 468,681 ounces in 2020. As a result, Centamin could not fully capitalise on higher prices resulting in declined revenue of $733 million from $828.7 million in 2020. According to Centamin’s outlook for 2022, the company can return to growth. It has announced plans to produce 430,000 to 460,000 ounces. Centamin also doesn’t have any hedging, making it fully exposed to the spot market.
Should You Buy CEY Shares?
The current circumstances offer a chance for Centamin’s profits to rebound in 2022. However, the big concern is Centamin controlling costs this year after warnings its all-in sustaining cash cost will rise to the region of $1,275 to $1,425 per ounce. Centamin’s price to earnings ratio is around 11 times. This may make it higher than peers such as precious metals miner Polymetal International. However, Centamin has Russian interests, which explains the high number.
Investors can consider Centamin shares as a good inflation hedge and can expect its price to rise. This will also create more uncertainty. While recent performances have been underwhelming, various factors will change that. Based on this, now is a good time to buy Centamin shares even if it has moved out from the penny stock category.
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