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SP will go through 100p in the next few sessions as momentum is increasing, sp is now above 50 MA and going towards 100 MA.
The extraordinary high number of 100 AT share buys today
The US market just waking up ;-)
A lot depends later when the actual interest rise is published, .25% will push Gold higher, how much unfortunatly depends on Futures traders.
But thats the hold they have, paper traders ,good for commissions !
10 minutes ago it was flat after being + 4% earlier
Right now it’s + 3% @ $1970
The cost per ounce for the puts is $25 per ounce ($6M) and is set at 20,000 per month over the following 12 months. If gold fell back to $1800 average for 4 months the hedge is at breakeven.
70% of the waste stripping is resolved. The remainder completes over the following 12 months for $48M.
The company is on course to hit mid range on the production ounces between the high and lower range quoted at the present time.
The $1900/oz hedging cost $6.1m for 240,000oz so $25.41 per oz or %1.33 if I understand it correctly. That seems to be a relatively low cost to give an element of security.
The dividend policy for H2 seems sensible especially for those seeking long term growth. The declared Dividend exceeds the Group Free Cash Flow from normal operations by $10m and represents 56% of Cashflow pre Growth Capex.
Looking deeper into the figures shows that $108m of CAPEX was incurred in H1 with another $165m forecast for H2.
Gold Production needs to increase by 5% in H2 to meet the lowest forecast and 19% to hit the upper level.
The additional $57m of CAPEX will require an additional production of 81koz of gold to fund the CAPEX from production (ie $1936 - $1228 = $702 cash produced per oz - $57m/702 = approx 81Koz)
The top end of Forecast of 480koz will give a production uplift of just 42koz so half of the additional CAPEX will come from reserves/debt at the top level and most of it at the lower end. Martin Horgan states that CEY is on track for the mid point of the production range. This suggests that significant CAPEX will be funded from reserves so any additional dividend would further deplete reserves/shareholder value.
The good news is that CAPEX is forecast to reduce significantly in 2024 with a number of projects nearing completion that will also result in cost savings.
Hi all, very pleased with these results and the market reaction to them. The hedging seems very sensible - guarantee a certain level of revenue with open upside during a period of heavy investment - Doropo in particular but also more solar, grid power etc. Just want to say to Steve, you have done us a service, because as any fule kno... Option2.
Hi Paul, I concur entirely with your summing up, however after the years of less than reliable and unsustainable performance of so many rungs up the ladder it will take more than one quarters improvement to convince the market that this time things are different.
Good news on the AISC, however improvements still needed in communicating news to the market and investors between quarterly announcements.
The dividend is disappointing to say the least, but then in the past it was the El Raghy family who where big fans of a more generous dividend, it seems now that the BOD are less reluctant to reward shareholders, but as you say with interest rates rising elsewhere they may well be forced to increase it t keep institutional investors interested!
So at last some good progress made, lets hope it continues!
Plenty more to come and the market is just realising.
Still on course, that's the main thing. - Avoided a kick in the crutch - always welcome. - Agree with Sotolo's take. -an interesting management strategy in putting a $1900 floor under the price covering the next 12 months. - Clearly, a thought out chess move for planning/insurance. - Grades disappointing I thought, an upgrade here would make a difference going forward. - All eyes on Q3 now, the truth quarter, the quarter where they run out of road for bending facts/forecasts. The quarter where if there has been skullduggery, they have to create/invent a cover. - A quarter where all sorts of unexpected and undesirable circumstances can suddenly manifest, affecting all the well laid plans. - However, let's not be too cynical, let's rejoice and welcome a black-eye free quarterly report. :)
Well so far the market seems to like the figures. I'm a bit disappointed in the dividend announced as a good dividend makes me happier (I do reinvest them) -------and you can get similar percentage in savings now.
I don't really understand all the figures like some of you do, but the AISC are down compared to last quarter?
I would have liked to have seen the production figure a bit higher, so they were over half of the lower figure of guidance, but I think Q1 was the low one and production is weighted to H2?
An estimate of the end to the waste clearing is something we have been waiting for and that should save us some money and reduce costs. I would have thought that the closer we get to the completion, the more the market will like it.
I also noticed that the average price realised was $1936 which was $86 above what they had been working on, which is partly why I'm disappointed with the dividend.
Hopefully gold will stay above $1930 and even better go higher.
While it is nice to hear about updates in other areas, getting gold out of the ground at Sukari is the main thing and they should be able to go at the full 160km now and not just the 3km.
After the rough ride we have had here over the last few years, lets hop that there are more ladders and less snakes and if there are any, that they are very small ones.
I'm not getting any younger and the gold toecaps for my gardening boots would be very nice.
Hi Sotolo and good morning. I see the hedging as a risk management action and a good one. It derisks annual income and locks in profits. Perhaps my view is influenced by the fact I am now 67 and retire at the end of this month. The last thing Martin Horgan wants is for income to fall. In saying that I have no idea how much the hedging cost.
Number 1)s from my yesterday’s post are remarkably quiet today …
What good newsto start the day, better days to come.
Oh thank you Siko for your support.
The Company will host a webcast presentation today, Wednesday, 26 July 2023, at 08.30 BST to discuss the results, followed by an opportunity to ask questions.
Webcast link:
https://www.investis-live.com/centamin/64632d444170900d004d0607/lubo
Tornado, it means they can sell 240,000 oz or just over half their output at $1900 in 12 months time and the counterparty can buy 240000 oz in 12 months at $1900. If price stays above $1900 it is worthless to us, if it falls below $1900 we can sell those ounces at that price, however far gold falls. bBeing a paper option it means we can sell gold at whatever price over the next year and then on the last day claim the difference between $1900 and the lower gold price if that is the way gold goes. The option will also rise in value as gold falls towards $1900 and could be sold early. It will not have been that expensive. However it is slightly surprising for miners to spend money hedging unless needed to enable them to continue paying losses and of course if they continue doing it is an extra cost. I wonder why Centamin thinks it worth the money or if they are really gloomy on the gold price. It is quite surprising how bad miners are at predicting the gold price though not as bad as analysts. At least it doesn’t reduce the upside other than the cost of doing it, unlike Hochschild who yesterday said they had hedged to sell around 2100/$2200, guaranteeing them this price,, a very different and more expensive view, and necessary to them with big debts.
Protects to downside, leaves upside open
Everything as i hoped for and they answered my questions that reserves and resources to be updated in H2 and the progress on Nubris drilling. I hope he explains the put option in the presentation on how it all works. Unless someone here can tell us in a couple of lines.
And an answer to the waste removal question:
The Centamin fleet mined 36Mt of waste in H1 2023. The waste mining contractor mined an additional 22Mt, resulting in the total contracted 120Mt programme being approximately 70% complete, with scheduled completion mid-2024.
Adding... dividend news as expected ... results stellar.
IMPROVED RESULTS DRIVEN BY STRONG OPERATING PERFORMANCE
AND STRINGENT COST MANAGEMENT
MARTIN HORGAN, CEO, COMMENTED: "This marks Centamin's third consecutive six month period of improved EBITDA, driven by our focus on operating performance and cost management, whilst also benefiting from an improved gold price. This has enabled us both to continue investing in our portfolio and to distribute returns to our stakeholders. Our operational track record and strong balance sheet put Centamin in a robust position to deliver the next stage of growth including further optimisation at Sukari and continued development of the Doropo project."
Of course the financial situation in Egypt is bad.. very bad indeed.. and the main problem is the lack of foreign currencies.. especially the dollar.. but if you think about it, this is due to the lack of foreign investments and exports.. so the last thing the government wants to do in order help the situation is doing anything that would deter investments, and foreign investments in particular..
a) and b).. inflation and pound devaluation are problems, but inflation in Egypt is mainly linked to the pound devaluation.. so for Centamin it's not a problem, because the company's income is in US dollars, so for example, while the value of the Egyptian pounds nearly halved in the last few months, Centamin pays employees in Egyptian pound, has the company doubled the wages in Egyptian pound? Of course not.. so it costs less to pay in dollars.. and most other increases in expenses, linked to the pound devaluation, are protected by the company's income in dollars.. Of course there is a percentage increase in expenses, but that would be the normal international inflation like the rest of the world ..
C) Sisi is going no where as people understand that the country can't afford another revolution.. this is very clear to everyone.. and people understand now that (the grass is always greener..)
Sisi needs the IMF loans and relies on them, so he is following the IMF conditions to cut subsidies.. of course people suffer more, but they totally understand that any move trying to get rid of him thinking this would make things better, it would make things financially worse for them.. so they are angry as suffer, but are getting on with it..
By the way, life goes on in Egypt by people helping each other.. you have not seen anything like it.. everyone with money helps everyone without.. you won't understand it until you see it.. my mum's door bell never stops.. genuine people come asking for financial help, and my mum is constantly handing out money.. me and my brothers give my mum money every month just for this purpose.. we have families who get monthly allowances from us.. and believe me nearly all Egyptians, who could afford , are doing the same.. it's our nature.. I talked here before about what me and my friends do in Egypt, and this was the main reason for me getting out of the stock market, which was only Centamin for me. Making money is good, but it's much better to spend it in a way that makes you feel better, and nothing is better than knowing that you are making a difference in people's lives..
I see they have hedged about half of their production?
Gold price protection programme implemented for the twelve months to June 2024, with the purchase of put options for 240,000 ounces of gold at a strike price of US$1,900/oz
RNS Number : 1625H
Centamin PLC
26 July 2023
26 July 2023
Centamin plc
("Centamin" or "the Company" or "the Group")
(LSE:CEY, TSX:CEE)
INTERIM DIVIDEND DECLARATION
for the six months ended 30 June 2023 ("H1 2023")
Consistent with the Company's stated commitment to shareholder returns, the Centamin Board of Directors are pleased to declare an interim dividend of 2.0 US cents per share (US$23 million), for the six months ended 30 June 2023.
As per the dividend policy, this distribution is in line with the commitment to return a minimum of 30% of Group free cash flow before growth capital expenditure1 to shareholders in cash dividends. In consideration of the below factors, and reflecting the Board's confidence, a total of 56% of H1 2023 Group free cash flow before growth capex will be distributed to shareholders on 29 September 2023:
· Centamin is in a financially robust position with US$161 million in cash and liquid assets
· The US$150 million sustainability linked revolving credit facility remains undrawn as a result of H1 2023 growth capex being funded from cash flow
· The gold price protection programme limits the revenue downside risk below US$1,900/oz gold price
· The Company is operationally and financially well positioned for a stronger H2 2023, in line with plan
The interim dividend is calculated by the following:
30 June 2023
US$'000
Group free cash flow
19,362
Add back:
Growth capex financed from treasury[1]
21,818
Cash flow available for dividends
41,180
30% minimum distribution as per dividend policy
(12,354)
Surplus cash flow for discretionary capital allocation[2]
28,826
Board interim dividend supplement
(10,814)
Total interim dividend declared
23,168
DIVIDEND TIMETABLE[3]
Below is the final dividend timetable for the London Stock Exchange and Toronto Stock Exchange:
· Ex-Dividend Date: 31 August 2023
· Record Date: 1 September 2023
· Last Date for Currency Elections: 4 September 2023
· Payment Date: 29 September 2023
Dividend Currency Elections
The dividend will be paid on 29 September 2023, in US Dollars ("USD") with an option for shareholders to elect to receive the dividend in Pounds Sterling ("GBP"). Currency elections should be made no later than 4 September 2023 as per the instructions detailed on the Company website (www.centamin.com). Payments in GBP will be based on the USD/GBP exchange rate on 5 September 2023 and the rate applied will be published on the website thereafter.
As a Jersey incorporated company, there is no requirement for Centamin plc to make any withholding or deduction on account of Jersey tax in respect of the dividend.
ABOUT CENTAMIN
Centamin is an established gold producer, with
Not bad results, decent output and nice aisc, but dividend down another 20% much as expected and half what it used to be so no longer a high yield share (at least at this share price) as we know.