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Amen MrBond, I was just considering the same thyme.
I believe yesterday was gold momentum but today seems more a reflection of the company update.
We’ve held well, us lth.
Morning Razors ,whethe te Gold prce has change our diection or yesterdays news.
It makes a pleasant difference ,a the moment , for LTH here.
May it continue. Its about time,
GOOD luck all.
If there is one gold producer that is worth holding in your portfolio, its Centamin for me. Cheap sp and amazing 7% yield!
Major stock market indices in Europe rose in the premarket on Thursday, as the investors digested yesterday's inflation figures issued by statistical offices of the United Kingdom and Germany.
Germany will also release a report on producer prices before the open, while euro area's consumer price index reading is scheduled for release two hours into the session.
Germany's DAX increased 0.09% at 7:00 am CET, while FTSE 100 went up by 0.39% at the same time. In Paris, the CAC 40 concurrently added 0.16%. The euro was flat versus the dollar at 7:19 am CET, selling for 1.13510, while the pound rose 0.07% compared to the greenback a minute later, changing hands at 1.36280.
Baha Breaking the News (BBN) / BU
Tibbs, prior to the Capital contract Cey did all of their open pit haulage and suggest they are still doing all of their mining haulage both waste and ore, by this I mean the waste contact is outside of the existing and additional to the mining activity hence the low ore numbers. Reading between the lines the ore grades would be lower had they not moved back into phase 4 west wall.
Whilst utilisation of the fleet at the end of the waste contact isn't a decision that will need to be made soon it is possibly something that has already been discussed at the time of contract because the capital investment made by Capital for what is by the sound of it a short term contract is significant and ROI somewhat questionable.
Interesting times.
CEY's commitment to hold the FY21 divi at least flat YoY ($0.09/sh) supports a 7.4% yield at the current share price. CEY will report 2H21 financial results in mid-March.”
Slow and Steady
19 January 2022
Key Takeaway
Following the 4Q20 pit wall instability and subsequent operational overhaul in the
open pit, CEY has delivered four consecutive quarters of steady and slowly growing
gold production. Each quarter brings incremental evidence that additional flexibility
has been built into the mine plan. Reiterate Buy and 160p PT.
Underground Headwinds Alleviating. The 145kt of ore from the underground in 4Q21
(86kt from stoping / 59kt from development) was the lowest total since 3Q20. During
the quarter, CEY faced headwinds from COVID-19 travel restrictions which led to
lower availability of contractors. On the call it was clarified that these headwinds
have since reduced and CEY is seeing a return to normalised levels in January thus
far. CEY continues to assess the underground operating model including several
contractor proposals in an analysis of contractor-mining vs owner-operator mining.
Looking Ahead to 2H21 Results. We cut 2H21 EBITDA by -12% to $158m, leaving
us -9% below current cons. Beyond the higher-than-expected cash costs in 4Q21
which we noted (here) were driven by the weaker underground contribution and
larger drawdown of low-grade stockpiles, c$20m of unsold gold bullion was on hand
as of 31 Dec which will be recognised in 1Q22. CEY's commitment to hold the FY21
divi at least flat YoY ($0.09/sh) supports a 7.4% yield at the current share price. CEY
will report 2H21 financial results in mid-March.
Increasing 2022 Estimates. Considering the timing of gold sales mentioned above
and the confirmation that the cash cost guidance for 2022 is $900-1,000/oz,
underpinning the $1,275-1,425/oz AISC guidance provided in December, we increase
our 2022 EBITDA estimate by 13% to $448m ($2,000/oz gold). We now forecast 2022
gold production of 454koz (guidance 430-460koz) and cash costs of $959/oz (prev
JefE: $1,040/oz).
RATING BUY
PRICE 91.36p^
MARKET CAP £1.1B / $1.4B
PRICE TARGET (PT) 160.00p
UPSIDE SCENARIO PT 260.00p
DOWNSIDE SCENARIO PT 40.00p
^Prior trading day's closing price unless
otherwise noted.
Hi Dasut,
Re the stripping and the ore : waste ratio – that the higher the proportion of ore, the more ounces are produced.
So then that considered longer haulage distances are most likely negligible considering that the upside currently remains in the existing open-pit shell and the deeper prospects in the underground.
As to what happens post the stripping campaign with Capital’s fleet it must be impossible to know at the present time, although of course Centamin may want to buy these back off Capital as Centamin do a lot of their own stripping and haulage and as you point out having a younger fleet would reduce maintenance costs etc.
Also If there are discoveries within proximity to the Sukari plant (either in the Sukari license or in their new licenses) they will surely need to have a bigger mining fleet to cope?
But it would seem sensible to assume as things stand that any decision on this fleet is some way off considering is the possibility of 3-4 years of high stripping to do?
Gold price is pumping at the moment. If it carries on like this it will be a good day for CEY and other miners tomorrow.
Good post Mrtibbles the market has just closed with Centamin’s shares up 2.06p +2.25% although most of the credit today is due to the rise in the gold price which is currently $1840. +1.39% it’s time for Centamin to shine again which I believe will finally begin to become a reality.
Long suffering aren’t we all.
From a personal perspective I have every faith in Martin Horgans integrity, commitment, professional competence and indeed dogged determination to rise to and overcome the considerable challenges placed before him in order to turn Sukari into the mine that was envisaged at the outset outset and Centamin into the company that shines out from all the others!
Kees Dekker commented on today's update
"Good to see that things are slowly turning around as per guidance!"
"At an historical dividend yield of 10% this looks now very attractive.if they maintain the level."
As Kees pointed out, Centamin is “getting there”, and that is shown by the confidence in guidance for this year being 430-460,000oz, though with higher costs because of inflation and the need for more investment (solar plant, paste plant, underground development, etc etc).
That said Centamin has already reduced significantly the volatility of production levels in the last 18 months in particular, whilst investing in Sukari’s ability to produce sustainable and low cost ounces for the next decade or so!
As we know there was no mention of dividend today, although that's normal as production updates do not disclose such matters anyway.
That said the question was asked on the Q&A call, and there is no change in dividend policy!
What the payout will look like will be decided nearer the time when Centamin announce the FY financials on 10 March.
We can as usual take Dasut's summing up of the present situation as spot on !
So lot's to feel very positive about after today's update!
Have halved the holding after viewing a small loss for too long.
The small percentage loss has accordingly been halved.
Sotolo might be one to approve, having written on that forum last night.
One difficulty has been lack of understanding the west wall, having never visited Sukari.
. . . can add to CEY when Au finally crosses the $2,000 barrier and stays above it.
Whereas I know Rustenburg and the Great Dyke, having been through them many times.
Prof, Too optimistic maybe but the way I look at it Capital have been on the job for approaching 10 months and they will have already moved a considerable tonnage of waste material, already opening up areas to enable the mine to become more flexible.
So whilst this coming year we won't see all of the fruits the foundations of a far more reliable and consistent cost effective production rate should be the eventual result.
phew this move has been a long time coming, let’s hope it holds and makes a new base for a renewed assault back on 1900, here is hoping as we are so often caught out
oops with should be without
The penny has finally dropped. The only way they can save global stock markets is to revalue host currencies against gold. FIAT essentially devalues against gold and this allows the stock prices to sail along with an almighty crash. Finally the gold miners should at last be invited to the investment party. Bring your own shares!
$1830 gone. Next stop $1865?
Here's hoping... 1836 as I type...
Well Mr T. I agree with a lot of that. Its seems that Martin Horgan is looking at playing a long innings, rather than a cameo roll.
He could probably have got stuck into the wall and then give some more Bull along the lines of the previous crew and got the share price up around the 135 or 140 mark before moving on to somewhere else with a golden handshake. BUT he does seem to be playing this with a straight bat. I suppose most of us long term holders will suffer this for longer and take the divis and hope that things will fall into place sooner rather than later.
The extra costs because more waste was moved , we cannot really complain about as the sooner the waste is shifted the sooner more normal operations can resume. Also as it is costed on tonnes moved, its not like someone is upping a price for a job just that they are ahead of schedule.
You never know, they might hit a rich seam or a giant nugget and then things will seem a bit more jolly.
Hi Tony,
Sorry presume I was not clear. Meant AISC is horrible next year (2022) and was referring to thereafter when I wrote 'reasonable' (2023-onwards).
Does that make sense?
Best wishes,
Prof
I'd just like to commend most is not all participants on a good sensible thorough analysis of today's news. Whilst some have put some figures to their arguments they're all based on some (necessarily) heroic assumptions.
Soloto I feel your pain. We were well and truly stitched up by the previous management and sorting out the mess is a thankless task. Still I think the management are going about it in a workmanlike way and just like any supertanker once they succeed in turning round the ship it will all remarkably obvious that this is what would happen. In hindsight of course. I'm also increasingly optimistic that a rotation is occurring from intangible assets like crypto back to physical assets like metals that you can actually make use of. Just look at BHP's share price in the last 2 weeks or the performance of the FTSE 100 beginning against all expectations to outperform other indices.
We'll see...
Prof correction the AISC is higher for 2022. (Although very much in line with the real inflation rate with a USD falling in value). We just have to wait for the gold price to reflect that AISC change along with the costs in all of the sectors and services listed on the stock markets.
Dasut,
'When they get back to mining Sukari rather than restructuring Sukari'.
Beautifully put and in my mind the cornerstone of the investment case in CEY.
Yes we know that the previous regime maximised the today at the expense of investment for tomorrow.
Yes we know the current regime is addressing that.
Yes we know it is expensive to do that.
Yes we know CEY are ahead of plan with the restructuring.
Yes we know CEY have aspirations to get back to 500k oz per year.
We know next year will have horrible AISC as a result of the restructure and that if gold falls substantially we will be generating little or no positive cash-flow.
To me the outlook for gold, with inflation where it is, is excellent and I would expect it to move up not down. As such I am another one who will sit here and draw the dividend, keeping my fingers crossed that they can afford to keep it close to current levels, and wait for the restructure to be complete. We should then have a mine with great reserves, a company with no debt and an infrastructure that will enable sustainable mining at c500 oz per year with reasonable AISC.
Hope I am not being too optimistic.
Best wishes to all,
Prof
Hi Tibbs
As always a concise and cohesive post covering issue and views posted here. It would appear that my Rose tinted specs are somewhat supported by Peel Hunt and Berenburg on their broker ratings this morning. Berenburg uplift especially after their earlier lesser rating in December.
Bob
Thankyou Dasut, your concise thoughts are of immense help to us more mining naïve investors.
Am I wrongly assessing that given a base fixed costs for the gold mining industry Centamin has more positive than negative position going forward. I do have a habit of wearing rose tinted specs but
1) Rising wage inflation benefitted by Centamin home bred mining education programme.
2) Exponentially rising energy costs offset by solar and battery storage . Crude Jan 2021 53 dollars a barrel ,as of this morning WTI crude 88 dollars a barrel. Futures off the scale.
3)Benefits as you say from plant freed for production from the waste stripping exercise in 2022.
Happy to be shot down by others expertise.
Bob