Centamin PLC Share Chat (CEY)

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.

Sorry to see you go Tiger, although you could well be right to do so.
Over the 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 report you mention to make them aware so they could comment on the points raised, I also suggested that Jan 9th would be an opportunity.
As yet I have only received my requested email delivery acknowledgement from Buchanon PR ,nothing else.
This was the point I was making yesterday that future dividends are not guaranteed!
As Mizolgit mentioned Josef's behaviour appears to have been a complete dereliction of his duties and responsibilities to share holders he must have been aware of the Sukari problems , certainly Andrew Pardey should have been when he made the Q! 2018 stated guidance of 560.000oz for 2018/19.
Perhaps others may care to make their concerns known by emailing Centamin IR & Buchanon PR?

Wel, having dodged the first two profit warnings this year by pure good luck, I got grazed by the third bullet yesterday. I just sold off my remaining shares here on the early morning bump.
Why? Because I fear the Centamin have an chronic ongoing problem with grade prediction (just as Kees Drekker laid out in his latest research on the company). I'm thinking that the company knows this, and that this is why it has delayed making its annual production forecast until February, The worst case scenario is that Centamin feel it necessary to restate (downwards) its resources and reserves, because they just don't match up with the reality of what they are actually mining.
I hope I'm wrong, but I'll be watching Centamin from the outside until February.

as well as buyers pushing gold higher ,1300 now seen as resistance with 1276 on the downside.
GLA and a prosperous New Year.

European markets in the green in premarket trade
Markets across Europe were in the green in premarket trade on Friday after German benchmark index DAX saw a two-year low during yesterday's session, while other European markets closed sharply in the red. Meanwhile, talking about inflation, European Central Bank (ECB) official Klaas Knot said earlier in the morning that there was no reason to expect more than a little slowing of growth. Markets in the Asia-Pacific region were mixed in late trading during Friday's session.

The FTSE 100 was up 0.95% at 8:00 am CET. The French CAC 40 rose 0.89% just moments later. The DAX increased 0.58% at 8:02 am CET.

The euro gained 0.15% against the United States dollar, to go for 1.1457 at 8:03 am CET.

Breaking the News / BM

+ .5% $6.18 $1281.24 (aprox)

What a great post rightfully correct.

2 OF 2

IC View

That puts Centamin's shares on less than 13 times forward earnings, which looks attractive value given the years of expansion ahead, and the potential for the cost base. To our mind, the shares should trade on a higher multiple, even if the past year has highlighted the risks of the company’s reliance on one mine. Unlike many peers, Centamin pays a dividend, is debt-free, maintains good government relations, and boasts a 20-year mine in Sukari. We remain buyers.
Last IC View: Buy, 114.4p, 5 Aug 2018

IC Tip: Buy at 102p

By Alex Newman
Centamin (CEY) beat some stiff competition to the title of most disappointing UK-listed gold miner in 2018. Persistent low grades at the Sukari mine, exacerbated by a lack of available equipment in the second quarter, led to a swell in costs and not one but two production downgrades. Full-year output is now likely to hit 480,000 ounces, 17 per cent off the original plan, while all-in sustaining costs could reach $890 (£706) an ounce, 16 per cent above January’s guidance.
Consequently, sentiment is dour and management is likely to be cautious in its 2019 guidance. But we still think recent operational improvements are being overlooked, underlined by the group's assurance at the start of November that it “remains on track to produce 145,000 ounces” in the current quarter. Should that rate of output be maintained, investors might soon view 2018 as a lost year, rather than a sign of an enduring crisis.

If we simply assume that fourth-quarter output guidance is achieved and persists, and the gold price remains at $1,241, Sukari should produce 580,000 ounces in 2019, worth $720m. Next year, capital intensity should fall as output rises, but even if all-in sustaining costs remain at the third-quarter average of $889 an ounce, Centamin will generate operating profits of $200m. Strip out Egypt’s 45 per cent cut, and the miner is still left with net earnings of $110m, or 9.5¢ a share.

Numis expects slightly more than this (see table), despite forecasting for production of 540,000 ounces. That’s because the brokerage thinks the dollar-denominated gold price will average $1,300 next year – hardly a quantum leap, given a possibly slowing US economy and all manner of geopolitical and market risks. Free of hedges and loans, Centamin is well set to benefit from further gold price rises. On Numis’s numbers, a 10 per cent rise in the price of the yellow metal prices translate to a 29 per cent uptick in earnings per share, a 16 per cent rise in cash flow per share, and a 20 per cent lift in net asset value.

That’s one forecast, at least. Another is Centamin’s $40m indicative free cash flow projection for the fourth quarter of 2018, which is based on a $1,200 gold price and all-in costs of $745 an ounce. Annualising this would certainly support a re-rating in the shares. But if 2019 production comes in nearer to Numis’s estimate, the effect of improvements in the underground mine and improving open-pit grades – both of which were flagged by the company last month – could push all-in sustaining costs back towards $850 an ounce, which would still feed through to EPS of 9.5¢, assuming the gold price goes sideways.
IC View

That puts Centamin's shares on less than 13 times forward earnings, which looks attractive value given the years of expansion ahead, and the potential for the cost base. To our mind, the shares should trade on a higher multiple, even if the past year has highlighted the risks of the company’s relia

The solution is simple, no buy backs ,just Joseph buys back.
I am sure he is an embarrassment to the other family involved.
He realises this.
OK Joseph ,all is not forgiven, but you are intelligent ,keep your credibility, do it .

the value of any dividends so far has been wiped out by the severe drop in share price caused by the managements failure to mitigate risk to essential plant and by glossing over the true state of the grade structure of Sukari using high grading methods which although OK in the short term also has consequences which some on here will be aware of
https://www.kitco.com/ind/Cook/2013-08-16-High-Grading-The-Implications-Of-Turning-Ore-To-Waste.html
Remember the future dividends you so enjoy having in your pocket are very much dependant upon free cash flow from the production being restored to at least previous levels and the ore grades improving, neither are guaranteed,
IR relations stated to me six months ago that overground production was ahead of schedule in stripping out the lower grades, well from today's RNS this statement was'nt entirely accurate to say the least was it?
From my experience in the majority of management share buy back the share price rises.

Sorry state of affairs for a great company, lost a lot of credibility and disappointing again RNS probably half expected. Great board best wishes to all for the New Year.

Having seen very few gold mining companies produce according to their budgets within 5 % I must say I am not worried at all. 2% is good enough, if not an outstanding result for a mine which is operating on numerous faces, and in both open pit and underground mining styles. There is a lot lot worse for various reasons as I said below......here is what happens when you dont reward workers adequately (under the human factors category).....
"Gold output at Randgold's Ivorian mine to fall 23.3% below 2018 forecast
Reuters | Oct. 26, 2018, 12:01 PM |"
Reading the comments about the spare cash and dividend payments, I am quite happy they either pay a dividend or buy back their shares. Certainly not happy with their strike rate in investing in other exploration / near mine opportunities. The investments in Ethiopia ($Xm) and Burkina Faso ($Y0m) have produced nothing of value, and the jury is out in Cote D Ivoire. Best to stick their knitting.

The talk of doing a 3d seismic survey for exploration is not well informed, alarming and I definitely rather see a different approach, as I am sure there is still low hanging fruit in trucking distance of the mine.before bringing in the big expensive weapons..by the way it is remarkable how the 3d seismic produces so little information in the top 500 meters ? Thats where the orebodies are that make real money? Perhaps I am missing something....

the gnome

The dividends are in my pocket
Retained profit isn’t and can be lost

Just to say I for one would not appreciate a share buy back as I consider Cey shares are worth more so they would be being bought back on the cheap
I don’t think it is managements responsibility to support the share price or otherwise, but their job is to make profits, pay dividends and plan a future where they can increase both, then the market can decide on the short term share price, but if management get the above right in the long term the share price will rise.
I appreciate the profits being returned to us in great dividends if less this year.
So please management don’t start peeing out rns’s of start buybacks but get in with the job, thanks