We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Inflation was below forecast, reducing pressure to increase interest rates.
Possibly because dollar dropped?
Gold price rose sharply on 1.30pm US inflation news. Explain?
Re recent 'Simply Wall Street' publication on Cey 2022 Q2 update?
https://simplywall.st/stocks/gb/materials/lse-cey/centamin-shares/news/centamin-plc-loncey-just-reported-half-year-earnings-have-an
This publication is not very impressive, going on about “revenue”.
Revenue is a product of ounces sold (approx. produced) times gold price received. The latter is not under control of management.
I did not carry out a detailed analys but did see that the financial were not terribly impressive after deducting the high levels of capex.
Even so, a dividend yield of 5% is more than decent placing Centamin in the top tier of precious metals company paying dividends.
The fact that they pay out so much indicates that management is confident about being able to afford it in the long run.
Looking at the large drop in capex in the near future, that is reasonable.
Working cost should also come down once things have bedded down the transition to owner mining.
Hopefully their strip ratio comes down as well.
In my mind, if you want exposure to precious metal companies, Centamin is a pretty decent choice!
Kees Dekker
The present methods of reporting by mining companies don't give investors the whole picture or indeed analysts enough of the most relevant information.
https://www.newcrest.com/sites/default/files/2022-07/220721_Newcrest%20Jun%202022%20Quarterly%20Report%20-%20Exploration.pdf
The example above is focused on exploration results.
If you have a technical report on reserves, a discussion of exploration results is part of it. However, the report would also include the overall geological model, the outline of the deposit, the resources and their level of confidence, how it would be mined, the conversion factors (mining recovery and dilution), processing, production schedule both for mining and processing, cost structure and a cash flow model, preferably on an annual basis.
For an “operating mine” the company is exempt from providing a cash flow model.
Why?
I have no idea as the whole purpose of the report is to prove these are reserves and by definition these have to be economic.
The marker regulatory authorities are not on the side of investors!
Kees Dekker
Opinion of Kees Dekker-
About Batie, it is non-core in my mind because the very low grade makes it unattractive given the risks associated with a project in Africa and a political high-risk country at that.
Doropo is better, but still not fantastic.
No wonder they downgraded Batie!
Quite so Mr Bond, it doesn't fit now and it didn't fit then!
But that said they BOD are paid handsome remuneration packages to safeguard the best interests of the company and as such they should have carried out the appropriate due diligence!
The region has always been a basket case place of political instability and coups, that surely must have excluded it from fitting he company core projects criteria, and as you rightly point out the other obvious questions are why was the sale being made by Ampella and how many other miners were interested in buying?
In the meantime over £100 million down the lavatory!
Any of the jersey BOD that were responsible for this crass deal and the near ruination of Sukari should be sent down the yellow brick road!
Fair comments 3Bear,
I was also once a Vodafone holder although I got out after an acquaintance who held as senior position there had been complaining that the company was haemorrhaging funds on ill thought through acquisitions and growth obsession , as it turned out he was right to be concerned!
As you say a coup in BK , part of the extra costs of mining in West Africa?
As Dasut mentioned it seems now apparent the the Jersey BOD were indeed sold a "Sows ear" rather than the "Silk Purse"!
But then it all comes back to a lack of due diligence before buying the permits on the part of the Jersey BOD and to some extent the behaviour of Andrew Pardey and others who were on the ground
That said I fail to see how there can be any excuse for the failures of the BOD with regard to Sukari, they were either ignorant of fit and proper mining practice, or complicit in the deceit of share holders by allowing the operation to be run on a wing and a prayer basis for short term gain!
3 Bear, wise words,, and great Horgan I appears to have a strategy to get it together on ounces and costs - hugely sensible to reduce the divi rather than pay it out of our cash savings - particularly in such a dangerous gold market. When I Posted that I rashly bought some more recently, when gold touched 1680 and Cey was 77, I said I expected it to bounce to near 1800 before continuing the fall and much further. Well we are there and US CPI comes out today which could be the catalyst. I very much hope I have got it wrong, as is so easy to do, and Cey and gold continue their rise, as said I am holding as gold is tremendously fickle, not I believe from wild conspiracy theories as many here believe alll of us do, but investors double guessing who will buy and sell with rising rates and inflation, but I still believe a tumble is in order before new highs. The key in mining remains that over time costs do not rise faster than gold, and over the last few decades costs have risen faster than inflation while gold has more or less tracked it. So good luck Horgan, and thus us.
Equities in Europe traded lower in the premarket on Wednesday ahead of the newest update on inflation in Germany. Several countries on the Old Continent, such as Italy, will also release the same report throughout the day. The United States is also expected to reveal its numbers concerning consumer prices in July.
The DAX declined by 0.15% at 7:39 am CET. At the same time, the FTSE 100 dropped by 0.21%. Meanwhile, the CAC 40 decreased by 0.24%.
Both the euro and the pound sterling stood flat against the dollar at 7:47 am CET to sell for $1.0213 and $1.2081, respectively.
Baha Breaking News (BBN) / JR
Happy hump y’al
There's been a coup in BK so the quality or otherwise of the site is irrelevant. If you don't have political stability, you don't have a mine.
I have not seen other companies interested ,so far, in crappie Batie with its geology.
It did not fit with criteria of CEY, which makes sense.
Time to move on, I think.
The $40m paid for 4 m ozs resource (they never bothered to update the resource to my knowledge is about $10/ozs which is basically a very good grass roots discovery cost.
To be very clear they bought the Batie West Permits AND the Doropo permits. Doropo stands at about 5 m ozs, and probably will grow
So the $40m investment has given them access to the ground which contains at least 9 m ozs, which is not too bad.
I have not seen anything that would pass for a DFS on Batie, and the mina questions were
1. the high stripping ratio
2 the refractory nature which required a fine grind to acheive gold liberation (sub 10 micron). What I dont know is how many samples and what volume of earth was used to decide the entire volume of the ore was all refractory?? Or how was the Geomet model constructed? and/or How many Geo met samples were actually measured. The Batie affair smells sub -standard professionalism, at least in disclosure to their share holders.
best
the gnome
Tibbs sorry didn't answer your mention of lack of technical detail . If you go to the Centamin web site and look at Doropo there is a good deal of detail both technical and management summary albeit 2021 and 2019.
We are promised an update I believe in the next qtr which will be interesting as the more exploration/drilling they do the larger the reserve. I appreciate that grades aren't anything special but an additional 200,000 ounces a year for a minimum of 13 years providing costs kept in check isn't too shabby.
Tibbs When Batie West was bought from Ampella it came with other properties and Batie West was the one that had pretty much all of the work done by Ampella so was basically seen as the jewel in the crown. However the type of ore needed larger volumes of oxide ores to become viable. Were they sold a pup maybe but must reserve judgement without seeing what was on offer and hindsight is a precise science.
OK considerable holes drilled but I don't have access to the number of holes drilled at BW against Doropo and ABC basically was the exploration fund spread across all resources and what percentage allocated to each and others.
What I will say is that if they bring in Doropo and ABC we are going in the right direction, but maybe a question worth asking is what is the total cost over and above the 40 million Australian dollars that was paid for Ampella's resources.
Tibbs yes the money has to be paid back to the bank and it will be a cost but how does a company grow if it doesn't invest and this is one of the ways the majors grow.
Not that long ago Sukari had over $300 million in cash in the bank and the balance is currently $175 million so to be honest if Centamin are to grow they need to borrow.
Ah Mr T our posts crossed - thanks no prob. The frustration with the way this company was mismanaged is all too evident reading the posts on here. Let us hope things are really on the up from here on at least.
Hi Mr T, I fully get your aversion to debt, too much can devastate, or kill, a company - as a former investor in Vodafone I'm lucky to have avoided a massive haircut on that stock and its debt levels still give me the creeps. Cey's unbelievable balance sheet was one of the things that persuaded me to invest in the first place. But as Dasut explains so neatly it would be nuts to try to build Doropo off organic cash flow and some debt in a company of this size is desirable as long as it is kept at sensible levels. Also its going to be unavoidable if you consider Horgan's to-do list:
1. Transform operations at Sukari
2. Build Doropo
3. Fully explore Eastern Desert
4. Mergers & Acquisitions. Yep they want to buy another gold operation on top of all this lot and they'll have to borrow all of the cash to do it.
This is why I think the dividend is going to be flat for the foreseeable future, they've got so many better things to spend it on than us. This is a good thing - divs are great but significant SP growth is better in my book - let us hope we get some. Good luck everyone.
hi MrGnome,
Sorry didn't mention the 22,000 people is those who have been waiting over two years for surgical procedure , there are still over 6 million people who have been waiting under 2 years for a surgical procedure to relieve the suffering and improve their quality of life!
in the meantime our PM has gone AWOL and the two contenders for the job are fighting like cat and dog and trying to outdo one anthers promises of a new beginning
https://nhswaitlist.lcp.uk.com/
hi 3bear,
Sorry I didn't mean to worry you, glad that Dasut has reassured you because he knows his stuff!
I remain angry/frustrated because Cey wouldn't be in this position if hose in the Jersey board room carried out their responsibilities with the appropriate due diligence!
But that said it has presented another opportunity for new investors like you to get in when the company is hopefully about to achieve a sustained recovery through the leadership of a CEO who knows what they are doing!
Hi Dasut,
Thank you for the reply and giving us the benefit of your industry experience, what annoys me is that the BOD approved so much expenditure on the other West African projects which they have now walked from Batie West because they now don't fit the comapny core project criteria
Shouldn't the BOD have carried out appropriate corporate risk assesses before spending so much time and money on them?
Surely its better not to have to borrow money from the bank, it is after ll debt which has to be paid back.
It was Kees Dekker who pointed out the African cost structure and he has great experience in the area, to be fair though he could never understand what Centamin ever started in Batie West and although he thinks Doropo is a safer option, although the grades data so far aren't anything extra special.
But that said possibly Martin Horgan probably has information that is'nt in the public domain because ICentamin don't release Technical reports which give far more relevant information than their present method of financial and/or MDA reporting does,
Haha, love it Goldgnome :-). Don't get me started on the few fires the other week when the temp hit 40degrees lol- I love the way the media keep banging on about cost of living crisis saying everyone's losing, when that's not true as they are making by keeping on and on and on about it all the time and getting paid for it lol
I think the use of Hyperbole has increased markedly in the post Trumpian world
Dasut thanks very much - excellent and encouraging response
Dasut I agree wholeheartedly.
DFS will tell us much more,.
3Bear
Just to add a little more to the contractor owner miner discussion.
At the start up stage of a mine there is a period of time relating to "Opening up the mine" this includes access roads, base camp, foundation work for the Process Plant, Power House, Workshops, Offices etc. There will be a need to expand the housing area, maybe relocating villages and the list goes on and involves construction works that has nothing to do with the expertise of the mining company. This is where you involve local contractors and mining contractors both of whom you will have been talking to in detail for a considerable length of time to ensure equipment is timed to arrive at pre planned times.
The early involvement of contractors is crucial to the overall mine plan to ensure on site facilities and systems are in place and planned for.
One of the difficult decisions is determining what size truck is applicable to the mine and equipment suppliers will have been discussing numerous scenarios. Contractors will also have their own ideas based on the practicalities of the mine location and their own local experience. Often start up trucks and all of the equipment related to the truck fleet is determined by what is available quickly from the contractor and will maybe be a smaller truck than the mine equipment study recommends but the recommendation and what is quickly available compromise can be backed up by getting into the ore quicker.
Some will say contract mining is more expensive than owner operator and yes I agree but not necessarily in the early years when learning the ore body and overall resource. It provides a valuable period to understand best fleet sizing and to develop personnel.
Sukari learned a lot during the underground years from a contractor which enables them now to go the owner route and I am sure they will also learn even more as they grow into the job, hopefully no costly errors.
Would Sukari have benefitted from going down the contractor route for the open pit, not sure? Difference here is that at start up there where no experienced mining contractors operating in Egypt, whereas in West Africa there are a few with the strength to do a very good job at Doropo.