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Hi Spoonigton,
Thank you for giving us the benefit of your professional experience on this issue, certainly the appointment of FTI seems to be all part of the BOD and managements strategy of giving the impression a new era of openness with share holders but is in reality quite the opposite.
The reality now is slick presentations promising much, but so far delivering shareholders far less at greater cost, whilst entering into huge debt agreements and hedging future gold production whilst eroding the company cash pile
I see your point about the unsustainable CAPEX, to be fair Dasut also made reference to this on the inception of the Capital waste clearance contract, but now you have further confirmed the detrimental impact this is having on the share price,profits and indeed dividends!
Share holders who are less experienced in all the various aspects of mining, including corporate accountancy may not always know the best places to look in the quarterly reports, or the most appropriate/pertinent questions to ask and this is why in many respects its easy for the company to hide the most important or details by distracting the majority of trusting shareholders with slick presentations promising more sometime in the future in order to keep them on the hook whilst the management fill their boots with bonuses for just doing what they are already paid handsomely for anyway!
You are right I have been critical of Andrew Pardey and the previous management, also I agree that they did reward share holders more than this new management, although that said we are paying for it now, but even allowing for the waste clearance the new managements strategy so far has meant that we are are paying what seems to be excessive to say the least and over and above what may be regarded as justifiable.
When Martin Horgan took over I had great hopes,but 3 years in feel that the new management aren't delivering as much as they promised and even worse are not being open or entirely honest with share holders!
Tibbs
Thank you for the information Cowichan,
This seems like yet another job for the "Old Toro Boys", rather like the appointment of FTI Consultancy !
European stock indexes traded mixed premarket on Friday with new German data reports in focus. The second report on the country's growth for the second quarter confirmed the preliminary figures released last month. Meanwhile, the business climate report for Germany is forecast to show a decline in August. ECB President Christine Lagarde will also speak at the Jackson Hole symposium later in the day.
The DAX dropped 0.21% at 8:00 am CET, the FTSE 100 added 0.24% the Euro Stoxx 50 was flat, and the CAC 40 fell by 0.09% a minute later.
The euro traded 0.20% lower compared to the dollar, selling for 1.07888 at 8:02 am CET. The pound was down by 0.23% against the dollar and went for 1.25716 at the same time.
Baha Breaking News (BBN) / DJ
You get better by showing up consistently! 🫠🫠🫠🫠🫠
Happy Friday y’al
Enjoy your weekend.
Agree Spoony- factor on waste is key contributor, along with industry ones.
Thanks Razor- useful in further demonstrating industy context for SP here. Mostly mirrors what I've been saying that CEY recent performance is simply broadly mirroring.
Spoonington, I think what you write is spot on in every respect including about Cowichan, your knowledge and clear explanations are much appreciated. I quite agree about the managements. Also I used to bang on about rising AISC when others were obsessed by ounces. However it is now actually falling in real terms and as you say is more like others as they have risen, so no longer the problem. It is a shame there is so much less for dividends that under Pardy with such high capex and less of remaining profit paid out. Plus the weird $6m just in this half on the weird $1900 hedge, another sizeable chunk of dividend gone. He was not as bad as some make out and Horgan not as good. Our dividend just coming is sadly lower
Berenberg: BHP between a rock and a hard place
BHP (BHP) is between ‘a rock and a hard place’ of inflationary costs and the need to invest more capital, says Berenberg.
Analyst Richard Hatch retained his ‘hold’ recommendation and reduced the target price from £24 to £22 on the Citywire Elite Company, which fell 1.6%, or 36.5p, to £21.94 on Thursday.
First-half results ‘missed market expectations due to a lower dividend’ as a result of cost pressure and weaker prices and delivered disappointing cost and capex guidance, explained Hatch.
He said it is ‘not a major surprise that capex will be elevated over the coming years.’
‘This seems to be a constant negative theme in the sector – the last time that we saw this was following Covid when decarbonisation spend started to creep in and surprise the market negatively, and the catch-up capex started to work its way back following a period of under-investment due to weak prices from 2013-16,’ said Hatch.
He argued that mining was a cyclical sector and ‘we are now going through a period where costs are elevated due to inflation and higher energy input costs, while capex is rising because of the need to build more supply for longer-term demand growth, while prices are weak because the demand growth is not yet pulling through and we are relying on an underperforming China to drive demand and this does not yet seem to be forthcoming’.
Unfortunately for shareholders, Hatch said ‘this will likely keep a lid on the shares’.
I think we are all getting distracted from the real problem CEY has that is causing the atrocious share price performance.
AISC is not a big issue, it is in line with what the entire gold industry is experiencing (the link Gnome provided before provides a concise analysis of this issue).
The key issue is non-sustaining capex & in particular the waste stripping program.
The recent NSC reported is 2021 FY $132M, 2022 FY $115M & 2023 HY $56M, that is over $300M or in excess of 20% of CEY’s market cap in 2.5 years - this cannot continue!
The reason the market is giving our share price a thumping is not the NSC itself but the lack of explanation from management as to why they are making these expenditures and what benefits the expenditures will create for shareholders in the future - in the absence of explanation for the spending of over 20% of the entire value of a company simple prudence requires one to question whether the current management has a clue what they are doing.
At least the much maligned precious management dug gold out of the ground, paid hefty dividends & built up cash reserves that the current team are rapidly eroding - the level of animosity towards previous management is quite perplexing.
Until the current management explain in detail why they are spending the money or show the reasons for the expenditure in the form of significantly improving production metrics the share price will continue to languish.
Cowichan, I have a lot of respect for you & appreciate your efforts in holding CEY management to account. However, please do me a favour & hammer them on the capex issue rather than getting stuck on minor accounting issues - you made a mistake in your interpretation of the financial report, nothing wrong with making mistakes especially if you learn from them - move on and continue to fight for us retail shareholders in your most effective & amusing style. I for one appreciate what you do :)
That’s my two bobs worth, I am now going to make a big pot of beef burgundy and enjoy a special dinner with my doggie (the true Lady Spoonington Woofalot)!
Cheers
Spoon
Spoonington,
Thanks for confirming.
Best wishes,
Prof
Well said Siko, I share the sent5iment.
There seemed to be a higher level of comradery and tolerance for others.
I think you summed it up quite clearly Prof, just normal commercial operations on normal commercial terms :)
There was no RNS for this new Centamin Director appointment. It was done January 1, 2023
Total number of appointments 5
Company Name: CENTAMIN EGYPT INVESTMENTS 1 LIMITED (13472583)
CENTAMIN EGYPT INVESTMENTS 3 LIMITED (13474170)
CENTAMIN GROUP UK SERVICES LIMITED (12855548)
CENTAMIN EGYPT INVESTMENTS 2 LIMITED (13474165)
Received for filing in Electronic Format on the: 19/01/2023 XBVJ9DSI
Date of Appointment: 01/01/2023
Name: MR FRANCOIS JEAN DU PLESSIS
The company confirms that the person named has consented to act as a director.
https://find-and-update.company-information.service.gov.uk/officers/jkk2w0nlIo5Ynpr1k01V0IS0mVg/appointments
---------------------------------------->>>>
Employment History
Independent Consultant
Jan 2020 - Present · 3 yrs 8
Since the start of 2020 Francois acts as an independent legal consultant specialised in rendering in-house legal and transaction management support services in the mining sector, with particular focus recently in emerging markets, Egyptian and Francophone African mining projects. Francois has a varied client base ranging from FTSE 250 listed mining companies to privately held investment vehicles and funds with interests in exploration, development and/or operating mining projects.
Chief Legal Counsel -Toro Gold Limited
Nov 2018 - Jan 2020 · 1 yr 3 mos
London, United Kingdom
Between 2009 and 2019, Toro Gold Limited was a privately held gold production, development and exploration holding company with a West African investment portfolio. Its flagship asset was the Mako Gold Project in Eastern Senegal that commenced gold production in January 2018. In addition, the Toro Gold group held a 2000 square kms exploration portfolio over the highly prospective Birminian terranes of the Ivory Coast, Guinea and Senegal. Toro Gold was acquired by Resolute Mining in July 2019 following which Francois resigned as Toro Gold's in-house counsel to return to freelance consulting.
https://www.linkedin.com/in/fran%C3%A7ois-du-plessis-404b8a135/
------------------------------------->>>>
Anyone still think Mr Horgan is upfront and forthcoming with all his actions?
I miss our old bulletin board with its great posts and posters, even during the darkest times (revolution, court case, shares suspension, etc...)..
Until it's back, if that ever happens, I will just watch this new evolving board from far.. very far..
GLA,
Siko
"Suites you sir."
After all ,you unless you have sold out ,and that is more than probable. Sold out ,get it. Are you still ,invested in CEY. Everyone invested in a mine is potentially very wealthy,you just have to mine it.
Sorry could not resist it
Adoption of the Sango coin has thus far been lackluster, however, as the government only managed to sell 8 million of the 200 million tokens made available during the token's initial coin offering (ICO), with CAR citizens showing little interest in the token.
According to the Sango website, the tokenization of resources “means that they would be available to investors worldwide through the Sango Blockchain & Sango App, using SANGO coins. The direct impact of tokenization is the access to capital through the monetization of natural resources, being achieved in a transparent and democratic way, while enabling broader participation through fractionalization.”
The Sango website shows that the CAR is estimated to have iron deposits valued at $2.2 trillion, diamond deposits valued at $258 billion, gold deposits valued at $60 billion, graphite deposits valued at $7 billion, uranium deposits valued at $5 billion, and limestone deposits valued at $2 billion.
https://tinyurl.com/ss3h4t7h
There appears to be no good reason to enter into any hedging agreement at this stage and likely no good reason in the future.
Possibly the Martin Horgan and the BOD may have what they feel are valid reasons , if so then they should explain them to shareholders as soon as possible.
In regards to Centamin's cash in the bank:
1 Centamin has entered into costly gold hedging (which Mr Horgan is loathe to call hedging) through the use of buying puts (the right to sell gold at a minimum price monthly) now extended out to 12 months. We have been told there are no plans to spend Centamin's cash in the bank until mid 2024 ( the estimated date to approve the Doropo mine) and perhaps not even then (because funding will likely be thru project specific means)
Then WHY bother spending those millions to hedge now ? Surely Centamin could could have doubled the dividend, instead of giving lucrative hedging business to their banker friends ?
+
1 Centamin secured a $150 million line of credit - and to do so is paying millions in additional fees for that privilege while yet undrawn. Again, without the need for cash as they supposedly have plenty of cash in the bank - why waste the millions on banker's fees? It too could be given to shareholders as dividends.
=
2 Absent Mr Horgan providing some logical reasoning, one can assume other factors are behind the above decisions, one possible being management is actually worried about their available cash
In case some are unaware, Egypt to join Brics next year along with Saudi Arabia, Iran,Ethiopia,Argentina and UAE. Kitco.
Egypt another huge industrial estate in Tarbuel , 16 bn ,being organised by GV investments ,Sherif Hamuda .
Courtesy of Enterprise Egypt.
You could hardly say Egypt is broke , just looking for an alternative to the USD for trade.
Broke is when you can hold a deficit of close on 100 trillon.
But only in my humble opinion.
Tibbs I like questions (not accusations) and I agree that we have members on this board who are qualified to answer some of these questions but as I say I think it is the way they are asked that counts on a board such as ours.
Cowichan,
$34 million I would suggest is what is owed by the refinery processing the miners bricks which aren't pure and are made up of gold and silver plus I would suggest other less precious by - product minerals.
I don't see this as abnormal but worth asking for clarification.
All of this “detail” does zero to the SP. The only that changes the SP is economic data. All of this speculation is irrelevant to the SP- the only time any of this detail impacts the SP is when it’s released as an RNS from the offices source, Centamin.
Hi Cowichan,
$34 millions could well be sales invoiced but not yet due as it does not even equate to a month of revenue and I would not be surprised in payment terms were 30 days. I make it 27 days worth of sales so not something that is likely to be a cause for concern. Clearly if there are overdue debtors in that then it is a different situation but it does not refer anywhere to overdue debtors/ bad debts.
I have looked back at the equivalent presentation for the year end but there is not a similar breakdown in any slide as far as I can see. The good news with that is they are now providing us with more transparency. If you think there is a problem it may be worth an email to Ross there CFO however I don't see anything that concerns me.
Spooning ton, Do you have a view?
Best wishes,
Prof
Hi Dasut,
I agree , but then all the more reason all the more reason for for those who posses the relevant information and professional experience to take the opportunity to explain to those who are asking the question in order to eliminate any future misconceptions.
I feel sure that I am not alone in being very grateful for your help and explanations on so may mining related issues that have indeed taught me a great deal
Thank you Prof, for your thoughts on this, I think that it can only be to the good that all questions are answered as fully as possible.
It would be good if the amounts owing to Centamin were indeed in the tens of thousands not millions. But if that were so , how does one explain the chart on page 10 here: https://www.centamin.com/media/2982/cey-1h23-results_presentation_final.pdf
It says "gold & silver sales debtor $34 million"
I take this to mean an outstanding 'accounts receivable' as it's listed as part of Centamin's liquidity - who is the debtor , other than the CBE ?
Thanks in advance for the replies.
And for the record - I'm not claiming to know any of the answers - I am asking the questions
I remember a time when none of us Centamin investors (former included) thought hedging or borrowing was never going to be part of the plan - but here we are immersed deep in both - what else, unexpected, will arise ?
Better to know in advance than be caught unaware. And yes, I agree with DASUT's warning a little bit of knowledge being dangerous - so let's not be stuck with only a little bit of knowledge. Whoever has the definitive numbers - please inform us all.
( obviously the $34 million above doesn't match any of the CBE related footnotes - and as I understand it 'accounts receivable' aren't included in 'cash or cash equivalents' - so I'm at a loss to reconcile ANY of the amounts )