The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Hi Sotolo,
Yes I loved every word of his post but particular that 'dissenters are welcome' (hello Sotolo) and that gold has to stay high for long enough for CEY to get its costs under control.
Thought about buying some more THS today but actually bought more CEY. Can't help but think, provided gold doesn't do anything silly, that CEY is going to rise and rise from here as Horgan delivers and the market regains faith. My biggest fear for CEY, other than the price of gold falling, is that in the H1 update, they announce a reduced dividend and that all the investors who here for the juicy yield, decided to exist hence driving the price down.
My biggest fear for my heavy miner centric portfolio (CEY, FRES, JLP, RMM, THS, SLP) is that the overall market that I consider to be stupidly valued, crashes and drags them down too.
Tomorrow is another day (GWTW) !
Best wishes,
Prof
Let’s see if we have any new broker estimates after the analyst’s have had chance to digest the update. F
Lukee the SAG MILL of which their are two needed the teeth that rotate the large drum repairing.
The SAG mill is primary crusher before entering the Ball Mills which crush it to a finer recoverable dust for separation of gold from the material.
In Cornwall in history the crushing was done by women with hammers called Bal Maidens.
So yes there may be an improvement in production, as the Ball Mills (Fine crushing) were refurbished last year.
A horrible hard life, nothing glamourous there, poor souls.
Prof wasn't Adamsmith's post great. I nearly sold some more Cey on the results and bought more THS, (now have same of each), wish I had as THS is way undervalued on a PE of around 3, while Cey will I guess be around 30 this year, I might tomorrow even though THS up and Cey down, as from what Horgan said about delayed Capex next half will be worse and it is painful hanging on till (if) it gets better, and as AdamSmith points out our recovery depends on getting costs back down and gold recovering. And how about you...
Listening to the presentation, during Q2 they had a 10 day shut down which was going to happen in Q3 . Hopefully we see a better Q3 than expected because of this.
Looking at the SP I would think Traders were selling off today. Having bough in the last week, hoping for a quick profit. But it didn't rise enough for them, so they got out quickly.
I may be wrong but traders are only interested in quick trades, no patience and not interested in divi's
Some of the important Q on Q comparison metrics were in negative territory. - This might have had an effect. - Q3 is the vitally important one now. Make ground-up and it will be well received. - Q3 will tell us if there's any bulls**t being spread. - The markets are wise to Centamin's tricks. - Old habits and all that. Difficult to erase the memories. However, pull one out of the Q3 hat and a new perspective may come into play.
Disgusting reaction by the market to what is a solid and expected update, against the background of a rising POG.
Centamin
I notice some vicious selling going on for CEY, or is it shorters .
Yes MrT .
I clearly remember all of that tragic fiasco.
And remember the Contractor mainly responsible for the emergency , the emergency shut off valve not functioning.
Who made it ,Halliburton.
There fine for them was minuscule , because of links and friends in US Government and being a military contractor.
The American way.
Hi Mr Bond, I well remember being invested in BP, utter pants of a company , very poorly managed, they too failed to managed their contractors properly and it led to the Gulf of Mexico Deep Water Horizon disaster The oil spill response plan that BP submitted for all of its offshore operations in the Gulf of Mexico would be laughable if it hadn't led to an environmental and economic disaster.
The plan talks about protecting walruses, sea otters, seals, and other Arctic wildlife that don't live in the Gulf but contains no information about currents, prevailing winds, or other oceanographic or meteorological conditions.
The plan also listed a Japanese home shopping website as a primary equipment provider. Yet BP claimed its plan would enable the company to handle an oil spill of 250,000 barrels a day—far larger than the one it so clearly couldn't handle after the Deep water Horizon explosion.
https://www.liveabout.com/deepwater-horizon-facts-1203711
BP also had its pants pulled down by Putin and co , they didn't like good old Bob Dudley, well he was a Yank and an utter Toss Pot!, so BP and got kicked out of Russia!
There will not be any Buyback.
It does not fit this Business Plan.
The money will be better used in expansion. Much expansion and prospecting.
I Remember BP Oil doing it. All it did was to artificially raise the SP, for a while, take a look at where they are now, back down.
I heard Martin in a presentation that they would look to see what is best at the time in future Im sure
Buy backs have been banded by this board for 6 years and never happened...!
Thoughts on dividends vs buybacks at this level? I would prefer buybacks right now!
Pleasure prof - I felt like I needed to get it off my chest!!!
Adamsmith,
Love your post which echoes my thinking exactly - just put more succinctly than I ever could!
Best wishes,
Prof
This is going to be a big deal. - I wonder if Centamin will own this asset or will it pass to EMRA as other assets have.
Excellent discussion here. Dissenters are essential to get people thinking and debating. I'm not interested in a cult or share fan club. Investing is not easy otherwise we'd all be millionaires but here are 3 big points I'd like to make:
1. commodities ex Iron Ore are all out of favour and the smaller the company and more obscure the production site(s) the more out of favour. Gold is particularly neglected pretty much every junior goldy has bee caned! I note Sotolo has sold some CEY for THS. An excellent idea in theory but as a fellow THS holder he has my sympathy for recent falls.
2. The previous CEY management were as best incompetent at worst crooks. They basically trashed the mine to keep the big lie of effortless profits going for as long as possible. The new management seem to be doing the hard yards i.e. shifting dirt at a great pace. New practices workstreams etc appear to be making an impact in all aspects of the business but it takes time. Mr Market is behaving like a jilted lover and will take time to come round.
3. Gold must stay high whilst management of CEY wrestle the costs down. Keep a weather eye of 10 year US treasuries. The inverse relationship between yield and POG is pretty eerie. The other thing that could sink gold - that barbarous relic - are modern virtual alternatives Bitcoin, NFTs etc. There's a generational war going on with millennials shunning the physical and buying the virtual. There is no law that says gold maintains its role in finance even with thousands of year's of history behind it. If Dogecoin is treated as a serious financial asset despite it being originally invented as a joke, the under 30s could screw us all, so long as they don't run out of pocket money with which to speculate...
Sotolo,
I find it hard to disagree with any of the numbers you predict there, all sounds very logical and reasonable view on things. I am still hoping for a sustained rally in Gold and Silver. The world is addicted to QE and low interest rates. The value of Classic cars, first edition books, whiskey, wine, art has rocketed. I was looking recently at the M3, M4 money supply increase and noticed how it matched house price increases rather well. Just need the PMs to follow.
Thanks Sotolo. I think I put up last week that if the price remains around this level until after the next dividend, I wont be too bothered as it willl mean more shares for the reinvested dividend. After than I'll probably take the dividends in cash as I need to live! You would think that with all the money printing and the actual, rather than reported inflation figures that gold would be on the up. I'm crossing my fingers for a decent dividend this time and better news and higher gold prices along the way. There seems to be a bit more of the getting the basics right since Martin Horgan took over. Again, fingers crossed that the new areas work out and either the other assets come on line or get sold for a decent price/ AND/OR some sort of partnership with them.
Hi Prof - A reasonable summary I think. - The markets are very wary when it comes to Centamin. - Q3 will be the test as it usually is. Q3 results is when it all comes out in the wash. It's truth time, the time when we discover how misleading or otherwis, the forecast has been. - A steady as she goes or better Q3 and it'll help steady the ship I feel . - Not sure whether W Africa is good news or not. - I'll wait for Cowichans appraisal.
Why I think this report is great:
I will compare quarters as comparing with last year would not be meaningful. (The table in the RNS is where I get my information)
Q2 2021 Q1 2021 %
Processing
Ore processed kt 2,804 3,018 (7%) We are 7% down on ore processed (Fact) )
Feed grade g/t Au 1.19 1.16 3% Our feed grade is 3% better (+ve)
Gold recovery % 89.3 88.6 1% Gold recovery is 1% better (+ve)
Gold production oz 100,228 104,047 (4%) Production down 4% but ore processed was 7% down. This means gold production is up by 3-4% (&% down , but feed 3% beter and recovery is 1% better )
Cost & Sales
Gold sold oz 97,229 106,573 (9%) Analyze closely. This period (Q2) we sold less gold than we produced =2999 ozs in stock. But Q1 sold 2526 more ozs than they produced. So when looking at financials we must be recognized that there is a discrepancy like for like of 5525 ozs, in favour of previous quarter.
Cash costs US$/oz produced 883 733 20% It is what it is , dont know why.
AISC US$/oz sold 1,290 1,091 18% Yes, ASCI appears to include capex and we have been spending capex
Realised gold price US$/oz 1,822 1,778 2% Great- that's the market, CEY can influence this by not selling if the price is unfavourable, they dont need to,
Revenue US$m 177.5 189.9 (7%) Down 7 %, but we sold 9% less gold, and Q1 had the extra 2526 in the sales figures (selling more than mined so Q1 was artificially high) ALSO, We have mined 2999 ozs more in Q2 than sold.
CAPEX US$m 41.3 37 12% Makes a difference to AISC as capex included.
Free Cash Flow US$m 6.9 9.4 (27%) And we have 2999 ozs unsold in Q2, and Q1 sold 2526 ozs more than produced in period. (That 5525 oz discrepancy should be considered here .. e.g 5525ozs at $1822 = $10M difference (+ve)
Now read the top line again, we are 7% down on ore processed which should have depressed everything by 7%. Now what exactly is there in here that makes one think this is not good.