Centamin PLC Share Chat (CEY)

European stocks fell in premarket trading on Monday amid rising tensions in the Middle East. After the United States killed top Iranian military official Qassem Soleimani, Iran announced it is further scaling back its nuclear deal obligations and vowed to attack American targets in the region.

The FTSE 100 lost 0.59% at 7:35 am CET, the DAX dropped 0.97% and the CAC 40 slid 0.92% at the same time.

The euro and the pound both traded flat against the dollar to sell for 1.11589 and 1.30762, respectively, at 7:43 am CET.

Breaking the News / NP

Stockhouse.com. Is the board and t.edv the share, they don’t seem very keen on their management either, and lamenting their share price is not reflecting soaring gold either.

Thanks Gnome, as a beancounter I should know these things, but your cheat sheet link is very clear & precise, much appreciated.
Hopefully the new year & market flight to perceived safety will prove rewarding to we long hoping & anticipating Centamin shareholders :)
Happy & prosperous new year to all.

Thanks Goldgnome, I have always wondered how much aisc actually includes all costs including replacement costs of gold mined, and everything else, ie what else needs to be added to the equation profits = ounces minded x (gold price - aisc) and how much to believe aisc.
Gosh if our price doesn’t shoot up today when will it.......? Which of us would have believed god near 1600 and our price a third below a couple of years ago

Thanks Goldgnome.

For those watching World events. Gold price up tonight so far 3% to Usd1570. Hope we will follow price.

Sorry, very helpful link on AISC - dont get caught cheating !!!
https://www.gold.org/news-and-events/press-releases/world-gold-council-guidance-note-non-gaap-metrics-all-sustaining

the Gnome

The Royalty Companies are nearly all domiciled in North America, and the royalties are largely written for the US and Canadian companies (Australians hate them with a passion! for good reasons), like Endeavour, who have at least 2 royalties eating away. The World Gold Council set up the measure of AISC, to try and standardise the financial reporting of costs and profit (etc) of gold mining companies, as a LOT was hiddern in the fine detail. If you look at this link below, ...
Guidance note on non-gaap metrics – all-in sustaining costs and all-in costs there is a clear table and calculation methodolgoy for calculatinig AISC. Very clearly royalty costs/payments are meant to be IN the AISC. The fact that Endeavour choses not to apply this is, and hence makes their AISC non standard by this definition, ...then one must add the cost of the royalties back in, to get the TRUE AISC and a true comparison with others.

This does make me very suspicious of Endeavours transparency and their reporting, and I would be very circumspect of any figures produced by them.

Endeavour hence has
>large debt
>large royalty payments above and beyond those payable to government
and I have not read the fine print in detail, but I would if I was considering a merger with them!

In contrast CEY has
>No debt
>No hedging
>No gold loans
>No gold streams

My money is on CEY, but they need to improve their management. This starts with getting the CEY remuneration committee to better align (and generally improve their own perfromance!!!) remunaration with shareholder outcomes, which means alignment with the key operational performance metrics, as I have commented on before. Its easier to improve managment than to get sucked into a value destructive MandA! Although the gold industry and Mining Industry in general is famous for wealth destruction through MandA.

We have seen a recent rash of miraculous MandA with 4 deals at the end of 2019,
"It's the year for risky acquisitions in Australia's gold sector, and not just because everyone is buying at historically high gold prices. The common thread between the four biggest gold deals on the ASX this year is the acquirers' belief they can turn underperforming assets into something much better in a few years."
Is the belief well dounded? The track record of the mining idustry?
"Citi notes in 2015, for example, that the big five miners have written off 90 per cent of the M&A they have managed since 2007. As a collective, BHP Billiton, Rio Tinto, Glencore, Vale and Anglo American has impaired $US85 billion ($109.5 billion) of assets acquired through that seven-year stretch."
Last (not least), the case of a disappearing $500m and reputational damage ....in the early 1990's...
"The judgement - WMC was found guilty by a Nova Scotian court of conspiracy and negligence. In awarding costs and damages of $11.3 million,.... came five years after WMC spent $500 million buying an array of useless North American minin

Bob management has very little to do with the ability to perform miracles in the pit, it is machine operators working the face, truck drivers, in pit foremen, haul road maintenance and the guys in the workshop maintaining the equipment. Problems are that cross fertilisation is difficult at this level with the need for visas, work permits etc. END also use Mining Contractors but not sure which project (s) have contractors so maybe not even Endeavour people working the miracles.

150 !!
Cheapskate price lol..
Joseph did not sell till 170.

Dasut

Your sage advice appreciated . Much encouraged that you feel Centamin will have on their radar under disclosure /due diligence arrangements. If END can maintain near production ounces with 900 mm of rain (4 times average ) then perhaps an injection of their management into Centamin would be no bad thing. Not below 150 of course.

Bob

Who are Centamins major shareholders.
Just in case some missed it.

Bobliz35 I may need to take a look at the END web site because as far as I am aware they don't have any underground mines theirs are all open pit above ground mines.
Underground mines can have problems when there are heavy rains if they have open fissures but this isn't normally a problem. However they still have to move the ore from the deeps to the plant and this does mean the smaller underground trucks have to negotiate haul roads. However as I say don't think this is an issue as pretty sure that they don't have underground mines.
Worth pointing out the High Grading to Cey for due diligence exercise but pretty sure these are the issues that Cey will be very much aware of and they will also have Jeremy's experience to call upon.
No such thing as a one off in in mining if there is one thing guaranteed in mining it is that nothing is guaranteed.
Also West Africa weather is unpredictable and nothing unusual to have very heavy rains it is after all tropical.
As END say in the report the stock piles are lower grade and these would normally be blended with other ore as it is processed to minimise dilution.

Hi goldnome.
Many thanks for your insight and advice, much appreciated and adding to my less than adequate education in these matters.
I suppose I have been searching for what if any off balance sheet liabilities END may have under the carpet. Would be interesting to know what financial contractual arrangement END have with Franco- Nevada and Sandstor

Both Companies have an impressive record and now listed on NYSE.

Bob

Hi Dasut,
Very many thanks for your experienced asessment as to my less than expert analysis of END financials and especially their Quarter 3 report. Would I be correct that in underground mine planning and implementation in a notably wet climate pump resource would be at or about the 200% level and that 400% would lead to extensive flooding and production halt at most levels. In that END guidance for the full year is 650,000 . To that end I append below the figures and explanation from their qtr 3 report.
Q Production and AISC 3-2019 vs Q2-2019 INSIGHTS
› Severe rainy season mitigated by utilization of
lower-grade stockpiles and mining the highergrade Bouéré deposit, resulting in throughput
and average grade milled remaining stable,
resulting in slight production decrease.
› Average grade milled remained stable despite
low-grade stockpiles utilized to supplement
plant feed due to the scheduled mining of
higher-grade ore.
› AISC increased mainly due to the scheduled
increase in sustaining waste capitalization,
slightly higher mining unit costs and royalty
costs, which were partially offset by lower
G&A unit costs.
OUTLOOK
› On track to meet lower-end of 2019
production guidance of 230-250koz and
expected to finish above AISC guidance of
$720-790/oz due to higher royalty costs and
the slower than planned ramp-up of the highgrade Bouéré deposit due to impact of the
severe rainy season in Q3-2019.
In that your explanation advised re utilising the rainy day resource I presume this would be a one off. and In that the Burkina Faso Hounde mine represent at circa 228000 ozs eg approx 60000 ozs reqired in the 4th quarter to meet the bottom end of guidance what a recovery operation that would be.!!!

I am emailing Centamin asking that in any due diligence that a visit to the Hounde mine to view operational conditions be of paramount importance to measure END full year performance.

The END report says that the "lady doth protest too much"to me.

Bob

5

Interactive Investors have one I think.
Tornadotony is on ii.
Otherwise no I could not find one either anywhere else

To look at CEY Board holdings o to Ann Report, page 137
https://www.centamin.com/~/media/Files/C/Centamin/documents/reports/2019/01cSECURE_Smart_Centamin_AR18.pdf

Look at how they got their shares...and how they are getting them in the future

best

Re missing banter if BB split up (died). End of banter. I've been searching for Endeavour chat boards, but haven't found any yet.
Endeavour used to be on Australia ASX but no longer listed.
EDVMF on US OTCQX but no chat anywhere I can find.
Company engagement with investors - zero as far as I can see.

Royalties are part of financing that some (not all !) companies undertake. Advantage is that it lessens dilution (equity raising) and does not load a company with interest bearing debt, with interest payable at the time of the loan being taken out, which maynot be when production or free cash flow happens. However, it does load the company with future obligations to pay cash or gold, and if latter at some agreed price.

A gold operations AISC should include the costs of financing, and these costs include royalty payments to Royalty Companies. One could argue about Royalty payments to governments, but to me this is a cost of the mining operation.

https://www.franco-nevada.com/our-assets/assets-list/rest-of-world/karma/default.aspx
https://www.franco-nevada.com/our-assets/assets-list/rest-of-world/ity/default.aspx

Definitions of AISC and useful discussion is at

https://www.gold.org/about-gold/gold-supply/responsible-gold/all-in-costs

Suffice to say, royaties can seriosuly dent a mines profitability, and one does have to watch these carefully.

best
the gnome

Cheers philand Lyme, yes looks like some positives await sometime

Hopefully,you have got the inside track Gibbs.

Great to see tornadotony view

Heard from others that PI's hold about 30% of shares. Wondering what % CEY board holds?

Mikefreedom, Thanks for sharing your reply. It is nice to know that they do actually respond - sometimes!!!
Improved drill results would help prop up the shsreprice. Shame they did not explain this as the cause of delay. It would still be positive news to the market that we really need right now.

I am informed that far as EMRA are concerned all they want is mining to continue , it will, no matter what!
I am informed that though more than an irritation, this whole process will shine a light on the true value of Sukari!

Don't forget that Mr Sawisis is involved and his contacts and influence within the Egyptian hierarchy are no doubt considerable and not to be underestimated.

last bit
Centamin will ensure that all shareholders and other stakeholders are informed by way of publicly issued announcements as and when appropriate.

also email contact etc

bit surprised to get email