Centamin PLC Share Chat (CEY)

For those wondering if/why our company is pursuing the 3-D technology across the entire concession in Egypt

“We used the 3-D seismic before, we used it at Long back in 2007 and that was key in some of the understanding of the geology towards Macleay and Moran, and with AngloGold Ashanti (IGO’s joint-venture partner) we have used it at Tropicana, so we have internal success stories we’re aware of there. We’re also aware of some of the external success stories else-where in the industry, like the work Northern Star has done at Jundee.”

That work included identifying “reflectors” at Zodiac, a new gold discovery 800m east of the Jundee mine near Wiluna where Northern Star sunk the deepest drill hole in Australian mining exploration history earlier this year. “In order to explore the vast areas of the earth that are undercover, you need the technology that can image under that cover and seismic is the best at the moment,” Mr Dwyer said.

“We did the 3-D seismic survey over Jundee for Northern Star and the process to get there is a good 18 months to two years to do the proper science,” Mr Dwyer said.

“The proof is in the pudding for Northern Star in that they’ve got enough information over a cubic kilometre volume of rock that they can drill to 3km depth at that rock.”

HiSeis’ model received a vote of confidence yesterday, with Ausdrill announcing it had taken a majority stake in the business...

HiSeis, a 3-D surveying company spun out of research by Curtin University, has been contracted by diversified miner Independence Group to undertake a 60sqkm digital map on the Fraser Range, 160km east of Norseman.

The survey will illuminate the geology around IGO’s new Nova Nickel Mine to a depth of about 5km, producing a 300cukm 3-D image containing around 800 million individual units of information, or voxels.

https://thewest.com.au/news/goldfields/3-d-seismic-survey-key-to-discoveries-at-depth-ng-b88823293z

I think this prediction by Decker old and out of date.
I saw this years ago.
Very thorough but the times change.
Too revive this as of now is not right,in fact negative.
Look to the reallity.
New laws ,so cey apply for exploration outside the disputed area but close enough for transportation, by belt or machine, or even ready crushed at source thro crushers and ball mill ,If necessary upgraded plant.
The new law rules are not 50 percent ,so there are 2 different mines ,but different taxation systems.
Everyone is happy.
Is it that simple.
Possible not but worth thinking about.
GLA, think positive but of cause ,not without caution.,

"Management has put a gloss over this in their latest 5-year production plan, artificially holding down the strip ratio and assuming continuation of underground mining at a very high level,"

1) there is no 'assumption' necessary regarding the underground mining at a very high level - in fact, the underground is set to increase substantially (at least in regards to volume) with grade varying quite widely - no secrets here

'artificially holding down strip ratio'

2) again, the alarmist choice of words is unfortunate as it is managements job to tweak where and when appropriate, with the idea of being most efficient in the process. I mean it's not like a child eating a bowl of ice cream, sticking their spoon in where they find a piece of chocolate. The layers will all be stripped back eventually - the trick is to keep the head grade consistent - balancing underground with open pit - for the sake of the processing equipment and ratios of chemicals, etc.

Still I think we are well advised to be as informed as possible and I thank Tibbs for bringing these issues into the light where we can all debate and learn and spur management on to better results in the future

Tibbs thanks and whilst an excellent report in many ways there are too many assumptions from an outsider looking in. The results predicted in the 5 year plan forecast 2018 achieving 488,000 ounces and 507,000 for 2019.
As I said production isn't necessarily the issue more the subsequent over the top forecasting maybe based on some over confidence at end of 2017 start of 2018.
I am not a mining analyst or an accountant but based on the findings of the report by now the mine would be looking at some bottom line red numbers and this hasn't been the case as they are still funding exploration and capital expenditure without borrowing.
Agreed however that profitability of open pit mining or surface mining is really grade and efficiency dependant as any grades below 1.5 are marginal.

This would seem to highlight just how vital the LHDR is to the financial viability of Sukari.

• Should this 5-year plan be implemented, the life of the operation will be curtailed to only these five years, unless there is a major increase in the gold price.
The open-pit ore is uneconomical at current mined grade at the required strip ratio and a price of US$1,200/oz. The current good financial performance of Sukari can almost fully be attributed to underground mining.

re where do you get the information on the high grading on the surface

Kees picked up a number of issues that made conclude that the best times were over in 2015.
Centamin managed to put a gloss on their results for another 18 months or so, mostly by mining less waste than planned and high-grading the open pit.

Now in 2018 it would seem that the 2015 article is surprisingly accurate and predicted the very situation in which the company and share holders find themselves now.

Another major issue is outside management control: they are now having to share the net free cash flow with the Egyptean parastatal company

The report of Kees Decker
Management has put a gloss over this in their latest 5-year production plan, artificially holding down the strip ratio and assuming continuation of underground mining at a very high level,

https://seekingalpha.com/article/3695246-centamin-get-going-good
Summary
The positive factors supporting the historical performance will soon come to an end.
Management's 5-year plan sacrifices long-term future.
Open-pit reserves need a much better gold price to be economical.
Executive Summary
This valuation is based on a cash flow model which uses the latest 5-year production plan of Centamin (LSE: CEY) (OTCPK:CELTF), combined with the long-term schedule in the 2015 feasibility study, to deplete the reserves of material destined to be treated in the Carbon-in-Leach (CIL) plant of the Sukari mine at a rate of approximately 11 million tonnes per annum. Using the gold price as per 17 November 2015 of US$1,070/oz, a net present value at a discount rate of 5% of minus US$89.2 million was arrived at, far more than the Enterprise Value of US$881.9 million for Centamin on that day.
The review of the technical and financial information comes to the following general conclusions:
• Centamin's value is essentially determined by its 50% interest in the Sukari operation.
• The mine is cash-generative even at the current gold price, allowing for return of funds to shareholders as dividends and share buy-backs as capital expenditure has dropped considerably.
• The good cash performance is due to a combination of underground production with very good margins, open-pit mining at low stripping ratios, income tax exemption and profit sharing deferred until investments having been recovered and the mine coming into operation when the gold price was at US$1,000/oz rising to above US$1,600/oz for the period mid-2011 until end-2012.
• The historical performance is as good as it gets as all the positive factors mentioned in the previous bullet point come to an end within the next few years.
• Management has put a gloss over this in their latest 5-year production plan, artificially holding down the strip ratio and assuming continuation of underground mining at a very high level, without having the mineral reserves to sustain this.
• Should this 5-year plan be implemented, the life of the operation will be curt

Close period: - Typically 1 month preceding quarterly results. 2 months preceding annual results.. - So there we are, annual results subject to 2 months close period. - No conspiracy. :-)

One further point - Close period applies preceding financial reporting. - Q.- Does the annual report fall into the category of financial reporting? - If it does then the close-period is in play. If it doesn't, then the directors will have knowledge of guidance and it's affects for a period of approx. 6 weeks between the Jan. prelims and the Feb. annual. where they can exploit said fore-knowledge. - It's a bit long-winded so I hope my point makes sense.

Annual results in Feb. as per previous years. However, guidance for the year ahead has usually been announced in the Jan. prelims. - This time, delayed until Feb. annual. - I believe close period (2 months preceding) will still be in play right up to Feb. annual report, thus restricting directors dealings - Not sure If directors/management can get around this through the use of other financial instruments. Puts/calls, shorts, spread-betting etc. - I'd be grateful of any comment on this matter.

can give and take.
ores are difficult to predict.!!!But there is in
just the 3klms much more to survey, which is not exact science .
Then after there is a much larger area to "guess"with present technology..
The reallity is this is a company with good connections with government, apart from the chairman ,who made a grave, greedy mistake. But that is life and human stupidity,
Come back to the fold Joseph ,its simple enough.
Swallow your mistake,your family and others may forgive you.
Everyone makes mistakes..
Use your "intelligence "and buy back at a good price and and traders profit ,or was it just trading with insider information.
If the latter ,the respect you had is gone and you are open to legal challenge.
Prosperous New Year..

Tibbs where do you get the information on the high grading on the surface as we have seen the "transitional ore" wording more over last couple of years which I read as the opposite to high grading.

A positive end to the trading day with Gold achieving a high of $1280. The highest for 6 months.

As for Centamin, I believe the management team will learn the lessons of a disastrous Q2 and Q3 2018. We will see an improved performance next year. With gold price expecting to go much higher in 2019, CEY must deliver on its forecast.

First - thank you Tibbs for relaying many of our unspoken concerns to management. Your efforts have no doubt resulted in the untimely production update from management.

While we can all debate the seriousness (& blame!) for this shortfall, I think it's good for shareholders to keep pestering their board for full disclosure — it really is our responsibility.

Personally I'm not the least bit concerned about the long term profitability of Centamin.

Overall the underground is simply too well endowed to be pessimistic. Certainly the high grade mineralized zones will present a constant challenge — we'll have ups and downs — no ore body is evenly distributed and no method of appraisal can fix that uncertainty.

Some of us are getting to our rope's end with waiting for positive momentum with this company BUT just like the unexpected takeover of Randgold it's certain change will come when least expected.

Burkina Faso may be poo pooed by naysayers but the multiple ore bodies are substantial. Batie West will be a generational type development - not a hit-and-run like so many others in West Africa.

And then Cote D'Ivoire - plenty of growth is coming for those willing to hang on.

A Prosperous & Happy New Year To All!

Minor strata variations , which are not in their control ?
Whilst I agree the strata variations are not in the boards control they employ highly trained geologists and mining professionals to carry out detailed investigations and analysis of the strata grades the results of which are known to the board yeas in advance.
So the excuse of hitting lower than expected ore grades in Q2 isn't credible especially as the board would have been aware of the high grading overground for over two years, they should been better prepared to cope with the grade grade problems.

Andy Davidson, Head of Investor Relations

Dear Andy,

Over the past couple of weeks I have sent Cey Jersey, Cey Australia, Buchanon PR and Youssef El Raghy the Egyptian Sukari General manager copies of the latest Kees Dekker Sukari report to make them aware of its findings, I also suggested that Jan 9th 2019 would be an opportunity to make any comments on behalf of the company.
As yet I have only received my requested email delivery acknowledgement from Buchanon PR ,nothing else.
It seems that the Centamin have an chronic ongoing problem with grade prediction, just as Kees Dekker laid out in his latest research on the company.

Centamin obviously knows the true state of Sukarii and as a share holder I can only surmise this is why it has delayed making its annual production forecast until February.

Like many share holders I hope that ore grades have improved significantly at Sukari and that Centamin doesn’t have to restate (downwards) its resources and reserves, because they just don't match up with the reality of what it is actually being mined.

Yours sincerely

So what is the progress on the new and additional LHDR, shouldn't Centamin be keen to promote any good news ?
Although if the underground grades are going to be problematic then this additional & new LHDR may not have the effect we all hoped for..
What a pity that Josef El Raghy who wouldu have been aware of at least the grade problems seems to have reneged on his responsibilities and duty of care to the share holders in favour of his own self interests last year!
So just who is the chairman now and isn't it about time they got of their butt and started to turn things around because Josef seems to have even vacated the back seat now!

Can't really see any other firm bidding for Centamin whilst the court case is still in limbo.
But then of course Lord El Nagy might be interested as despite being a fake lord EMRA still awarded his firm a concession and the government seems to be changing the T& C in retrospect to suit him!

Hi Razor - Yes, it's a good question isn't it? - Obviously, just my opinion, and a lay opinion at that. but the current 'legal status' as it stands, suspending exploitation beyond the 3kms of Sukari , although currently on hold pending the outcome of the CC, would surely present as a legal impediment to any company with sights set on taking them over. Any company splashing-out millions on a take-over would want legal certainty don't you think. - And this is the thing about the CC and the colossal effect/influence it has and why it should have been settled. - However, it's viewed as a scene out of 'Guys n Dolls' - 'The people all said sit down, sit down yer rockin the boat'. :-)

Hello Rebess... do you think Cey are leaving themselves vulnerable for a bid/takeover?

I don’t think the cc would be a prevent a bid. If a company was interested the cc would merely be on the lawyers list of due diligence. As things stand I believe the market has lost faith in Centamin’s management and nothing short of sterling results for at least 2 + quarters will bring back market respect.
I think Cey are going to bob about like a cork or else get a bid.

Hi ton-fra-cen - Nice theory but it tends not to work like that with Centamin. - If the prelims are bad the SP gets a good-hiding. - Later, when official figures are released, more or less confirming what the prelims told us, we get another duffing-up and it's not unknown for us to get a third thumping. - So, a nice thought, if only it were true. - The Dec, warning taking the sting out of the Jan. announcements, I don't think so and then we have Febs announcement to contend with. - Where have you been this last year?

The main reason for the abrupt shortfall in production in 2018 was the failure of the LHDR. Q1/18 output was 124,296 oz. (averaging 41,432 / month).Q2/18 averaged @ 30,960 /month. Q3/18, Jly & Aug averaged @ 34,600/month; LHDR problem resolved in Sept producing 48,511 oz. Oct/Nov averaged 45,000 oz. Dec projection appears to be 45000 to 50,000 oz. It would appear Q/4 Projection was based @ 48,500 oz/m, based on September production. Releasing an RNS of 2% projected shortfall should be appreciated , as this could help to maintain unnecessary shock in 2019 when Q/4 results are released. The board should also consider their operational problems, due to minor strata variations , which are not in their control. Let us all cheer up and hope for better 2019 & BEYOND.

I have a feeling that yesterdays announcement has put the brakes on any SP rise we might have expected as a result of a rising gold price. - We've been neutralised. - It's happened so many times this year when good news has been trumped by negativity resulting in nil progress.

The way I read it 140 k poured,90k for Oct nov means 40k was produced in October 50k in November 50k for December.i would also think the amount poured is given as we are not finished the month so total produced can’t be given but they as they have finished pouring.which means dec or nov or both will be above 50k produced.which would support a good outlook

Hi Mr Tibbles!
I'll still be lurking here - this is by far the best board for general discussion of precious metal miners. It's literally a gold mine of useful information! And I'm moderately optimistic about the gold price in the short term (without believing that the big break-out has arrived; the Fed haven't surrendered and launched QE4 YET!)
But I do think it may be wise to lay off investing in Centamin for a while. Three profit warnings in a year - all of them at least partly due to grade control issues - indicate (at least to me) a structural problem. I'm not qualified in this field, but Kees Drekker's argument about methodological errors in the JORC calculations does make me cautious. God forbid Centamin restate the resources and reserves downwards in February!
I do hope you get a reply from Centamin to your questions. But I'm not sure you will.