I have today sold the remainder of my holding in Centamin at 96.9p per share, realising a 59% profit. Gold bulls may question the sale, but 39% of the Contrarian Miner portfolio was in gold, I have been looking to reduce that.

Centamin is a solid enough company with a strong balance sheet and Sukari is a low cost producer.However, I’m not convinced there is significant value upside here, and hence am taking profit.

At today’s gold price the Sukari mine generates approximately US$160m in cash flow after tax (AISC of $900/oz and target production rate of 500koz per annum). Of that, 50-60% is attributable to Centamin (once the Government profit share kicks in) thus giving them c$83m in attributable free cash flow from Sukari. And then Centamin spends just over US$30m a year in exploration outside Sukari and other costs leaving c$50m a year in free cash flow for the group. On the current EV of US$1270m that is just under 4% FCF yield which to my mind is not enough to justify investment. Particularly given the unresolved legal issues relating to the mining licence (at small risk but nevertheless one that cannot be entirely ignored in my view).

The Contrarian portfolio stands at £108,758 currently – little changed on yesterday.