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I am hoping that the market and the algos will now start to look forward. A new Centamin offering hope and progress and an end of the barren years.
5 years of uncertainty and missed targets have weighed on the share price like an anchor. Having 1.2billion shares in issue doesn't help. We have a high volatility beta stock with big liquidity. Those attributes suit share punters of CFDs, the shorters and spreadbetters. Centamin management need to start nurturing and adding long term loyal shareholders. With the Sukari reset now in place management needs an action plan to build the share price and encourage shareholder loyalty.
To help build a large and loyal share register I would like to see:
1) The CEO and CFO buy at least 200k shares each to align their capital risk with long-suffering loyal shareholders. If not, what are our Executive Directors investing their own capital in as all other asset bubbles burst ?
2) End the Pardey started Executive Share Option Plan. Over 4 years he demonstrated his 3m share options were unmerited and extracted shareholder value at a time of declining production and rising costs.nual awards. N.B. our well compensated Executive Directors can still earn up to 125% of salary as an annual bonus.
I would argue that Centamin has too many shares in issue. Set a good example Executive Directors.
3) Consider a share consolidation plan to reduce the 1.2 bn shares in issue. Previous talk of using spare cash for share buy backs in the future would be better used to buy or develop new mines.
If the 1.2bn shares are all electronic nominee shares the costs consolidation should be minimal. I suggest a reduction to 600m shares total (a 1 for 2 shares held) or even better to 400m shares (1 for 3 shares held). That way you lift the share price out of poundland and it becomes rarer and there would be fewer available for lending to derivatives markets. In addition it would open the stock to more N.American institutional investors who have minimum prices for investments. Finally the underused TSX listing could bring in new investors.
Finally in all interviews going forward Horgan needs to promote the merits of gold vs depreciating fiat currencies as a store of value and talk up the share price. Its long overdue.
Marmot, my only question is will the journey back begin tomorrow or will the last lot of bad figures upset the market, ie will the market look back with the figures, or forward with the projections, also how bad will the oil and other inflation hit be to forward aisc. Roll on 2023 when Cey should really begin to motor unless gold collapses.
Cowichan I salute your relentless ferreting and demands for transparency. A company that is led by insecure people and a weak strategy generally has poor sentiment and a low settled state share price. Both have been confirmed with Centamin. However, I am now hopeful that with the new management we are finally moving on to a vigorous value added confident Centamin.
UPshunt by only getting in to Centamin in the last year you've cannily avoided years of angst that we have had to endure and you hopefully got a good price. Well done, I think your timing may turn out to be impeccable.
Yes thanks Mermot. I only really got into CEY last year. I used to be a sloppy trader with it though. Providing they maintain around 5% divi over the year I will be content.
Thanks for posting that brilliant analysis Marmot -
(please don't wait so long between posts !)
I haven't posted for a while as I (patiently) waited the 18 month gold price consolidation to end. Despite the large daily volatility in March I am now hopeful that gold now can hold support at the prior $1820-$1850 resistance. Both Centamin and the Fed have important updates tomorrow. Gold is already sensing that the Fed won't be able to raise interest rates in a meaningful way against inflation well above the official US CPI of 7.5%.
I believe that Centamin is now in a position to start to report real progress from each quarter going forward and finally offer its long suffering investors real progress after 4 barren years where the company has used the "strong" dividend as a fig leaf for the company's relative lack of progress.
With reference to Cowichan's question of 11/3 " how does everyone think about Centamin's super sized dividend policy?"
Firstly, I should define a dividend yield. The annual dividend per share divided by the share price. If a company's dividend yield has been steadily increasing this could be because they are increasing the dividend, because the share price is declining or both.
Centamin's dividend peaked in 2017-2018 and for 2019, 2020, 2021 has settled around 10c p.a. So the dividend yield rises because the 10c is divided into a relatively low share price. Centamin's dividend yield actually reflects a weak share price because of lack of added value to the business 2016-2022 to date. My research shows that since January 2016 all of the rival companies share prices have risen and held on to significant gains over the 6 year period. That reflects new mines being built, new investments, acquisitions and takeovers.
Centamin's dividend yield is the highest for negative reasons. Over 6 years the Centamin share price has risen 64% from 62.65p 22/1/16 to 102.68p on 11/3//22 when I analysed the competition. Over the same 6 year period :
CEY +64%
B2Gold +438%
Endeavour +356%
Newmont +285%
Kinross +280%
Agnico Eagle +125%
Barrick +109%
Consider if Centamin management in 2016 had invested the large 2017 dividend payment in emerging miners at the bottom of the cycle like B2Gold. Or if instead of sticking religiously to organic growth Centamin borrowed at the gold cycle low and with cheap credit like Endeavour. How might Centamin's comparatives look now ?
If Centamin had been able to make B2Gold's 2016-2022 progress the Centamin shareprice today would be around 276p. Match Endeavour's progress and Centamin could have a 223p price rather than being still stuck in pound land.
In conclusion, it is not the dividend that is too high it is that since 2016-17 production peak Centamin has reported no quantifiable progress that adds value for investors. The solar farm coming on stream at cost of $36m in June with resulting diesel cost savings of more than $1m p. month is the first real evidence of delivered added value and the share price will start to respond to such progress.
I took 25% off above 104p to avoid my CEY holding being overweight. The lift shaft drop has caught me out. I wonder how many took everything off to buy back in lower. The trouble is we have news coming in April and I am hoping CEY will go up much higher.
...this is a no brainer. Bought a lot more
I wish you a speedy recovery and return.
Thing is that there are plenty of numpties about out there do not realise this and will even argue that PM's go down during inflation probably because they've never known real inflation and are wet behind their ears.
The US dollar has been the world’s reserve currency since the Bretton Woods Agreement in July 1944, with the dollar pegged to gold and other allied currencies pegged to the dollar. This wasn’t some bureaucratic pronouncement. The U.S. was in a position of strength after funding the allied effort in World War II (they did not do a lot more despite Hollywood). America almost lost this privileged status in 1971 when deficits from war and welfare led President Richard Nixon to drop the gold standard.
Today countries still keep America’s virtual Benjamins in their virtual bank vaults—modern banking’s gold. China has more than $1 trillion in Treasurys. Russia has about $100 billion in dollars of about $500 billion in their increasingly frozen foreign exchange.
But why do these countries keep dollars? What backs the currency? The conventional answer is the “full faith and credit” of the U.S. government. Ha, that and $3.65 will get you a Starbucks grande latte, though not in Moscow anymore. What really backs the dollar is the future tax-generating ability of America’s growing productive economy and a defense structure to defend that economy’s strength. Without that, there’s no horizontal-binding duct tape.
The future tax-generating ability of America is built on the endless propaganda (sorry Sales and Marketing) of one (and all) buying a more endless parade of things that add nothing to one's quality of life..pedalled endlessly by the new social media companies...
Got that off my chest, so now to other things ...
goodnight and good luck!
the gnome
I am sure policies can be changed, quickly, in the light of extenutating circumstances, that happen quickly?...at least one would hope. ...
US Federal Reserve chairman Jerome Powell is widely expected to raise interest rates for the first time in three years in the early hours of Thursday ... Sydney time. But that’s unlikely to ease the supply squeeze and could damage business and consumer confidence..... Short-term borrowing costs could become more expensive than their long-term costs..... That points to what Pimco says is a rising risk of recession.
During a recession everything falls in value, from currencies and stock markets, to real estate and property. In times of recession, money is typically withdrawn from investments like stocks and shares, but despite this, money itself also loses value. A lot of value ...
The supply of gold is limited, but money is paper and paper can be printed. The problem is that this rapidly inflates the value of every product and service, known as hyperinflation. Many countries - in particularly Germany - learned this the hard way; with too much money-printing resulting in hyperinflation, and an inability to afford even basic goods ravaging the country in the mid 1920s.
This is why gold performs well in a crisis. Unlike cash, gold maintains its value. Scarcity and its precious metal nature have an enduring appeal, and provide a more baanced supply/demand. Fiat supply is on call and infinite. At the end of a recession, the person who bought gold is likely have reduced their losses, or even made money.
Recessions lasting a year or more are reclassified as depressions. World depressions occurred in 1640, 1837, the long depression of 1873-1896, and the Great Depression in the 1930s. This was possibly the most severe, running from 1929 to 1939 and culminating in the Second World War.
Is that some form of guidance ...?
Recession -> depression -> Significant war.
"Almost there Dad!"
best
the gnome
It is probably worth making the distinction that the fuel cost WAS $23m, as after my question at the last shareholders meeting we know that Centamin don't and had no plans to fuel hedge (slightly annoying personally as this was entirely foreseeable even without the Ukraine situation).
The Fuel costs could be much higher now, as should be the savings from the solar plant, but we could still be net worse off than before in terms of AISC for production.
RE....Do you not think that a number of people will already know the results due to be published tomorrow and have acted accordingly ?
European shares stood in the red territory in premarket trade on Tuesday as investors awaited the Russia-Ukraine talks to resume, with United States President Joe Biden stating that the US will make sure Kiev has enough weapons to continue defending and with Ukrainian presidential advisor noting that it will be possible to reach a peace agreement by May at the latest.
On the economic front, investors looked forward to the latest data on the United Kingdom unemployment rate and the industrial production in the eurozone.
The DAX went down by 1.19% at 8:01 am CET, while at the same time, the FTSE 100 fell by 0.86%. Meanwhile, the CAC 40 also declined by 0.78%.
The euro gained 0.28% to the dollar to sell for $1.09714 at 8:00 am CET. At that moment, the pound sterling rose 0.22% against the greenback to go for $1.30308.
Baha Breaking the News (BBN) / SP
... And the fight will only increase in the next few years between the fiat money system and hard assets in general. And if we look at the monetary side, there’s a huge fight between Bitcoin as the most successful form of private money one could say. So there’s a huge fight between Bitcoin and the fiat money system.
Central bankers are really scared because of the success of Bitcoin being a private form of money. And they hope to bring their own central bank digital currency so they can take some of the market share of Bitcoin and other cryptocurrencies. But the more central bank digital currencies will be created by central bankers, the more people will start to flee to Bitcoin and other private forms of currency. Because the central bank digital currency is just another layer on top of the fiat money system.
So I think central bankers are trapped. Central bankers will need to fight Bitcoin. But they will fail because investors understand what’s going on, and more people are beginning to understand the fundamentals of this monetary system. That’s why Bitcoin is so successful.
The question for us, is where will gold sit?
The verdict for the fiat currency system looks very poor. The system has operated in an opaque and distrustful way for so long, its social license has essentially vaporised. Possibly related is the complete lack of trust na dlack of leadership int he political system.
https://www.theassay.com/articles/investor-insight/gold-metals-digital-assets-and-private-money/
good luck, get out of fiats
best
the gnome
Most likely same as Sotolo and I posted recently.
What is a reasonable share price in the event of a TO?
Costs for fuel highs are temporarily high
With gold prices at aN historical high anD fuel costs halving when the new solar power farm starts operating, how much would a reaonable price be for CEY?
I note at the end in response to a question on a possible takeover approach. - "If somebody comes and taps us on the shoulder then we'll have to see" - something like that. - So, IMO, it's on the cards.
Thanks!
April 20th (am I on the ball or what…)
Sorry meant to say the Q1 (increased production) is due to be reported on April 22nd