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I am starting to take a look at HOC where I know you and a number of the others on the CEY board are also invested.
I was interested to see that forecast for this year was 422k gold equivalent oz after producing 477k in 2019. I appreciate that in light of COVID and the resulting production halts earlier in the year the forecast is now 280-290 which was reconfirmed last week in Q3 prod results. I also note that HOC is approx 20% less market than CEY at current share prices.
Looking only at the next year, it seems CEY and HOC could be producing broadly similar gold/ gold equivalent oz. Have HOC given any insight as to what they expect to produce? HOC have traditionally paid a very low dividend which I get while they have been paying down debt. Given their debt is almost repaid is there any indication whether profit will now go to dividend or exploration/ CAPEX? Finally what do you make of the medium to longer term prospect of the two companies?
Would appreciate you informed thoughts. (Have posted on both boards as relevant to both companies and not sure where you look more).
European stocks dropped during premarket trading on Monday as more countries tightened their coronavirus restrictions amid a surge in new cases on the continent.
Over the weekend, the Spanish government declared a state of emergency that could last for six months and ordered a nationwide curfew. In Italy, the new measures include limited working hours for restaurants and bars and the closure of gyms, cinemas, and theaters.
The DAX dropped 1.50%, while the FTSE 100 was down 0.72% at 7:45 am CET. Meanwhile, the CAC 40 sank 1.08% in Paris. The euro declined 0.23% against the dollar at 7:46 am CET, buying 1.18350. A minute later, the pound was 0.14% lower compared to the US currency, going for 1.30244.
Breaking the News / JC
I'm glad your enthusiasm isn't as fickle as the open pit walls.
Always good to hear from you.
RNS window: Looking for a management share purchase to help kickstart the trading for the week.
IMO, all the bad news should be out and "in the price" now. The last RNS was the famous "kitchen sinking."
My guess is that the presentation on December 2nd is designed to show how Centamin are going to tackle their current problems and improve their operations. As such, it should be a "good news" event.
Or so I hope!
But I'll get over it.
Since everything has been said regarding our collective disappointment I won't add to the misery except to pose a question — what's up with the CEO/management choosing December 2nd as the 'reveal' date. Surely we've gotten the gist already. Why pick a random day to elaborate on bad news...
Perhaps there will be comments on Centamin tomorrow.
Meanwhile Mrtibbles, Cowichan Goldgnome etc all gone quiet. I hope everyone is okay.
Thanks for the thoughts. Didn't get in quite as low as you. I think my lowest were 40p.
Tedious to be so far back in so little time although I do keep putting that in the context we went up very fast in Q220.
Your previous message and suggestions understood.
You are probably aware of the split sentiment's here, which points to possible interference, in my opinion.
I have and will take any steps necessary. As I am sure many other LTH will also.
Sorry for sounding cryptic.
Sawiris: Centamin: After being down 20% 2 weeks ago as they revised downward production for Q4, they are now down another 20% as announcing guidance for 2021 significantly down and very high costs...Thank God Endevour’s offer was not accepted by their board.
El-Raghy: Sorry Naguib, despite all what you have mentioned, which is a true, Centamin is still much better Company than Endevour. A world class mine, nearly 400 million Us$ in the bank, no debt, and a market cap, Endevour can not afford.
Sawiris:I think you are out of touch ! Endevour has double the market cap of Centamin that would have done better if managed transparently and without to conflict of interests of your Family !
El-Raghy: I might be out of touch Naguib, but sure I know a good mine when I see one. compare the quality of the assets, The resources and reserves, the strength of the balance sheet and the return on investment, I need not mention the quality of the Sukari people they are the best.
Ok Elprof , I still have confidence in Cey .
I would be more happy if Youseph GM had a sideways promotion to tea boy and money lender, but that will not happen yet, politics.
Ultimately he was the cause of all this.
Thank you prof like you I first joined this company at 20 p , when times were much different.
It galls me and I am sure other real investors to witness what has happened here in this last month or so.
The short term opportunists ,twisting facts.
This company has come such a long way from those very uncertain 20 p days ,through a revolution change of government ,change of world financial and political policies and has not just survived ,but now on the cusp of a rapid multi mine expansion.
Whether West Africa will be expanded with merger or solitary I do not know yet but suspect with equitable merger for more rapid expansion.
Sukari I feel will stay as it is. With probably another satellite mine in the centre of the possibly three new prospects ,if indeed they re awarded to Centamin.
Though I see no reason with EMRA they are not.
So for the time being we have to wait for EMRAs decision.
As for further management buying ,that will probably come to pass should another hostile takeover appear.
Keeping powder dry, so too speak.
All the best.
Thanks for getting back to me. I agree with your point ref what is the alternative for dividends. If you take my most optimistic case below and say investors would be OK with 3%, which is still superb relative to banks or even most other companies, then you get a share price of 300p. I was, up until the past fortnight, confident we would see this beautiful number next year, now I would be grateful to claw our way back to 200p.
There is also the key question of confidence. Investor don't like surprises (well not the bad ones) so companies get punished through their SP for this. Now in CEY's case we have a new CEO at the helm so he will get some grace for that. There is also almost inevitably the usual going on here of a new CEO kitchen sinking it up front when we can blame it on his predecessor. Get all the skeletons out and then there is no danger of them coming out to get you later. Like you I would really like to see Horgan buying a very significant chunk at this price.
Hi Mr Bond,
No I don't expect CEY to make a loss but they will make less than they would have before. I expect that there will be a dividend but worry that even with the increased POG it will be less than the year just gone. Take next year with AISC at 1250 and say gold at 1900 that means profits will be 650 per ounce. Take the mid-point of forecast of 415k and we get $270M of revenue. That means c$135M left for shareholders after EMRA's share. There are 1.15bn shares in circulation so 11.7c per share. As CEY dividend policy is to pay out a minimum of 30% as dividend that would be 3.5c for the year. They can pay more and last year paid around 68% which would see 8c. Last year with the 68% they paid out 10c. It is therefore not impossible that they maintain the dividend at last year's level but that use nearly all free cash-flow. Hence my question.
I would also point out that the cable is currently at $1.3 to £1 so the 11.7c equates to 9p. With the pay out at 30% that would give 3p and at 68% that would give 6.1p. With the share at the current price of 133p we are therefore getting a yield of between 2.25% and 5.11% so not bad. I would also add that CEY has in the past paid out all the free cash flow as dividend so if they did that we could be seeing 9p per share so 6.77%. This of course is where you get the key question of what will they do with the money if they don't give it to shareholders. Theoretically they should only be using it for other purposes if it will give a higher return to us later. Unfortunately therein lies one of the key worries that all this investment in prospecting over the past years has little to show for it. If you want the positive case then if all free cash flow was paid out i.e 9p and a yield of 4.5% was considered acceptable and sustainable then you get a share price of 200p. If you want the negative case then set average POG a lot lower than at present, after all it was just over $1500 at the turn of the year and went below that back in March. At $1500 POG and AISC of $1250 we get 250 per ounce so with 415k used above we get $104M profit so $52M after EMRA share which is 4.5c per share. If the minimum, as per CEY dividend policy was paid out we would get just under 1.35c per share so just over 1p. If investor felt they needed a 5% yield for the level of risk then that would mean they would pay just 20p per share. Again I am not for a minute suggesting that is a reasonable share price, not least because I have ignored in all of the above CEY's significant cash in the bank.
Please be aware I have not double checked my calculations and am going by memory for some of the figures. This is therefore only for illustrating my thought process and should not be taken as accurate. I am also just trying to illustrate, having come up with a price per share of between 20p and 200p, the extent to which how you value CEY depends on what you assume.
Hope this helps.
Hi Elprof, as Mr Bond says the company will be making huge profits on gold. The last dividend was based on gold around 1600/1700. It really is a cash cow. Also I can only see gold going one way in current climate. Now look at the alternatives for dividends. Not much really. This is still a world class asset. But I would also hope and expect the management to start buying at this ridiculous price!!!!
Well at least you had the good grace to clear that up, as it was not at all apparent, from your original post.
My point of quoting Berenbergs analyst Laurent Kimmals $1500 and $1350 gold price prediction was two fold.
1 To show how wrong Berenberg were in Jan 2020
2 If Berenbergs gold price assumption is still $1500 or lower they just priced CEY at 142 !
Elprof, are you under the impression the company will make a loss this year, the divi will come out of a still substantial profits, and the cash pile will still increase .
Or something else?
What is giving you the confidence the dividend will be maintained? Is that based on gold price rise off setting production dealing or CEY using their cash pile?
The last person I would give data too is you, as you and your acquaintance's would simply twist the figures and facts to suit your agenda of demoralising holders , and pushing the shares lower for selfish means.
For you to say continuous De- Ramping cannot sink a share price is ridiculous and untrue , as has clearly been seen here in the last few days.
Dividend will be maintained and the price of gold is only going up. Just look at the financial ####storm brewing. We haven't seen the worst yet.
I am just telling you what management of Cey has already told you. My thinking and comments can not sink or bring higher company like Cey. They have already done it without me several times in last couple of years. If you believe that this price of shares is excellent and it will go only up from this point than buy it. You do not have to read reports from Cey, or comments and opinions here, but it would be very nice to share your
information and data why you believe in that. However if you have some insider information please shear with us.
I am waiting for an answer on my questions. Why the price of stock has fallen last year to 88GBx? Why company does not buy back shares on this price?
However conversation here should help us to find out if the company is in good shape and is the current price good enough to buy more shares. So any good data about that issue are more than welcome.
I wonder is Gep75 and his buddies are on Sawiris ,END ,payroll, to put the boot into Centamin in order to drive the price lower for another attempt at piracy.
Sawiris drooling over the thought of all that cash and juicy assets ,for a bargain price.
Thanks Siko, I got the same feeling at the last attempted T/O.
Naguib Sawiris does not seem to be popular with either the banking sector or mining sector, having been rejected by CEY, by Shaloween and an attempt with breaking into Banking, (Not quite literally breaking) ,but others may see him that way, lol.