One to Watch

CENTAMIN is a miner with substantial gold reserves. Its principal asset is an interest in the Sukari gold project, in the eastern desert of Egypt. The mine is under development, but Centamin reported good progress in the first quarter, with a reserves upgrade. After some delays in commissioning plant, production is on track. The firm is achieving recoveries of 90 per cent and has resolved its start-up problems.

Gold production of 75,000 ounces is achievable during the current financial year. Drilling should reach target by the end of this year, and could add 100,000 ounces per year to production. Cash costs also remain low, at around $400 per ounce, which means sales will be very profitable given a current gold price of more than $1,100.

The shares are valued at a significant discount to the average rating in the mining sector, relative to present value of expected cash flows. We believe this is an excessive discount for the political and regulatory risks in Egypt. Centamin has a world-class resource, good management and strong growth profile, making it an attractive way to participate in appreciation in the gold price.

This article is for information and discussion purposes and does not form a recommendation by the manager to invest or otherwise.

British Airways

184.2p -6p

Broker says BUY

DESPITE threats from strikes and volcanic ash, British Airways is "making progress towards profitability" according to RBS Equities. The broker said: "The strategic changes of Iberia and American are tantalisingly close, but remain subject to risk. Industrial relations are a challenge, but the potential cost benefits of structural change are material."

Mothercare

507p -13p

Broker says HOLD

EXECUTION Noble remains "cautious" on Mothercare following the retailer's full-year results last week. Analyst Sanjay Vidyarthi said: "While many will focus on the driver of growth – international – we are more cautious, seeing the risk of further earnings downside in the UK."