Centamin PLC Share Chat (CEY)

FRES is a Mexican silver / gold miner listed in London (FTSE 100) to be precise...

Its profits are approx a 50 / 50 split between the two pms, so good exposure to both is afforded. I like it, too - sasa.

Thoroughly agree and compounded when working with equipment/plant that is mechanical and therefore breaks especially with age and operators who are human and therefore can't work at an efficiency of 100%.
This is why I am somewhat confused by an announcement that is focusing on being up to 2% down on production.
Is it that they feel they are under too much pressure to keep us informed but they MUST know such an announcement will have a negative impact on the SP even though this isn't quantified in relation to the financials?

+.74% $9.42 $1275.74

Fresnillo plc (a U.K. gold miner) are up 3%

So getting excited about 2 % is just a reflection of the stupidity or naiveity in the market, and there is plenty of this around...
Google some of the assessments of the accuracies of various studies and you will see that the vast majority miss the mark by significant amomunts. Given the vagaries of sampling, exspecially high grade underground ores, I wonder how any get it right at all !!! Sampling 40 cms, and then interpoltaing 2,000 meters or a lot more....gold which can occur and vary widley on a milimter basis, or finer, in one or more of 3 directions ....really....tsk...

All very ridiculous really,

Keep going Centamin, doing a solid job, BUT keep shareholders in the loop

Happiest, Healthy, Propserous and Lucky New Year to all....the gold gnome

Ladies and gentlemen....

There is no international agreement on the terminology for each stage of feasibility study and there is no agreed standard for quality or accuracy. The AusIMM’s Monograph 27, Cost Estimation Handbook (second edition 2012) provides a set of standards that may become more widely used.

Surveys of many studies reported by RL Bullock in 2011 reveal that accuracy ranges are:

Scoping -50% to +30%
Prefeasibility -27% to +30%
Feasibility -20% to +27%
Detailed engineering -12% to +20%
These ranges are wider than generally understood but are constrained by what is practical. For example, many people expect a feasibility study accuracy to be +/- 10% but this is rarely achievable other than within the constrained boundary of the processing plant. Estimates for mining and infrastructure are much less reliable. It takes twice as much effort (and cost) to reach +/- 10% as it does to reach +/- 15%. Bullock also reported that the average capital overrun (over the last 50 years) was 26%, with no evidence that estimation accuracy has improved over that period despite the use of computers. The average overrun has been worse in recent years due to rapid cost escalation, but has probably now stabilized. There have been many studies over the years that reveal the generally poor performance of feasibility studies.

A feasibility study should be considered a failure if:

The capital cost is higher than expected
The operating cost is higher than expected
The recovered grade is lower than expected
Sales revenue is lower than expected
It takes longer to build and ramp up than expected
Initial performance cannot be sustained, though it may take several years for the failure to become evident.
AMC data suggests that around 25% of projects fail, a further 20% perform better than expected and the remaining 55% perform more or less as expected. There is no apparent difference in performance between junior and major companies, large and small projects, or locations around the world. Common causes of failure are:

Mine design and scheduling
Over-optimistic ramp-up schedules
Learning curve not considered
Over-optimistic production schedules
Geology, resources and reserves estimation
Inadequate attention to local variability
Statistics and modelling override common sense
Metallurgical testwork, sampling and scale-up
Metallurgical domains within the orebody not understood
Testing is done on unrepresentative composites
Failure to identify process contaminants
Inability to handle ore types as per mining schedule
Process water chemistry differs with lab
Often, the root cause of failure is an inadequate understanding of the geology of the deposit. In general, failure of a feasibility study can be attributed to inadequate resources or human factors.

Inadequate resources
time (and artificial deadlines) or skipping stages
budget
availability of skilled personnel for studies and for construction management (or poor choices

Good question that DA SUT - Why have they announced it?

I must admit that I wasn't expecting to hear any news prior to 7th January and for only a 2% shortfall in production why announce it? Depending on what they can sell at the higher GP spot which is an advantage over those mines who hedge this shortfall should be wiped out given higher sales price?
It is evident to me that it isn't currently a production issue it is a forecasting issue and Pardey is struggling with the reliability of his ore body mapping.
I fully appreciate it ain't easy given that it is impossible to drill every square centimetre of the property and that so many influences can affect vein thickness, ore body deflections, voids etc BUT I would far rather go back to a conservative forecast than an over ambitious forecast.
Seems to me that they know what ore can be mined given machine availability but they are suffering from grade knowledge and subsequently control.
Disappointing but if they can forecast 45 thousand ounces a month next year (achieve closer to 50 thousand ounces a month, they have the plant and process to achieve the production but need to get a better handle on their mapping) and also announce a new mine (better 2 new mines) opening then hopefully we will be back on track with a greatly improved and SP consistency.

Hi Somnamna

Yes indeed , key questions, the answers to which will be contained in the Feb. release with the likelihood that we'll get a good hiding when they are. POG might have a mitigating effect. -It's difficult to know and therefore sustain a position with such an untruthful BOD. - It's odd don't you think that Q1 will be half-way through before we know next years forecast. - I get the distinct feeling that we are caught-up in a playing for time game. - Q1/Q2 will tell a story.

Rebess I too share your lack of trust.
Some key questions that I am struggling with answers for are:
1. what will be the FY results (free cash flow) for 2018
2. what will be the likely FY dividend.
3. What will be the forecast for 2019 (given this years events it can only be a wait until 09-Feb-19 to see)
A worry is if the 2018 FY dividend amount is less than 2017 it may well prove to be another nail in the coffin.

**On a personal note seasons greetings to all board members, thanks for your posts which have made excellent reading and I take this opportunity to wish you all a happy a prosperous New Year.**

Gold production, Gold sold, Gold poured. Is 20,000 Oz's that should have been sold in the 3Qrt included in the guidance of 135,000- 140,000 ounces poured !?. - All a little bit confusing to me, it seems you can only believe half of what the management say-- its just knowing what half to believe!.

I believe that serious investors will want to invest in a 540/560 thousand ounce prospect. - Bearing in mind that the 'Darling' of the FTSE 100 in the sector (Randgold) is emigrating. This should bring Centamin into much sharper focus. - IMO

Sadly it appears that production has not been fully restored, is this due to continuing low over ground grades, when I spoke to Alex (IR) earlier in the yea (during Q2 )she informed me that the over ground production was getting through the lower grades ahead of schedule?

I guess I should't have written at 0959 that I was confident Q4 would be in line with forecast.

Up to 2% under is not a big short fall and at least the management is signalling ahead rather than subsequently. The disappointment for me is that every bit of news regarding the company (as opposed to gold generally) is to the downside at present.

The positive is that Q4 is being forecast at 135 to 140 and that takes into account weaker Oct and Nov than planned. Dare we hope that there was a bit of lower grade left to get through and we will now be up and away. Clearly a x4 of Q4 production as currently being forecast gives 540 to 560k for next year. Given Dec is forecast 45 to 50 that give a full year of 540 to 600K. In other words I am still confident 2019 should be a good year.

Best wishes,
Prof

Rebess... I agree with your lack of trust, that and the market being pathetic at the minute quells any excitement.
It’ll be interesting to see what comments appear in the FT and elsewhere in the media, also broker ratings in the coming days will map the course.
My old belief that there’s 300m reasons and no debt that are continually preventing the pps from collapsing.

I’ll watch with interest.

Hi Razor - Projecting Q4 production as a guide for next year and if my calcs are correct, It wouldn't surprise me to see a positive reaction. - We'll see.

Using the 'up to 2% shortfall' in the statement, if I'm understanding correctly, means full-year output of 470,400 ounces. - So, based upon Q4 being sustainable, bearing in mind we were told that we were through the worst, next years forecast should come in between 540,000- 560,000, - It'll be interesting to see whether there's deceit in their statements, as has been the pattern this year, or some semblance of truth. - My caution and lack of trust has not diminished.

Not very good and not very bad either.

The markets immediate reaction has been mute but I suspect the pps will rise in general as a mere 2% off guidance is nothing to get alarmed about.
I think this is fair enough and I expect the share to trend upward which is only inline with gold

Well, I said there was no time left to issue a further down-grade in production and therefore was mildly optimistic that we would achieve the previously revised forecast. - How wrong can you be!

Just popped up in my mailbox, no mention of if they are through the lower grades, no news on the new LHDR etc ,
Perhaps this will all be revealed on Jan 9th 2019?
Released : 27 Dec 2018 10:43
RNS Number : 5695L
Centamin PLC
27 December 2018


For immediate release




27 December 2018





Centamin plc ("Centamin" or "the Company")

(LSE:CEY, TSX:CEE)



Production Update



Gold production for October and November combined was above 90,000 ounces. While being solid production months, this was slightly below forecast. The December mine plan forecasted higher grade from both the underground and the open pit, which would have balanced the quarterly shortfall. However, lower than expected underground grade delivered in December thus far indicates gold poured for Q4 between 135,000 to 140,000 ounces, resulting in annual production from the Sukari Gold Mine of up to 2% below full year 2018 guidance of 480,000 ounces. Cash cost of production will be towards the top end of the previously guided range of US$625 to US$640 per ounce produced and an all-in-sustaining cost will be approximately US$900 per ounces sold.



Whist the focus remains firmly on sustaining the operational improvements, stringent cost controls and improving gold price means the Company continues to be a cash generative business.



Further operational detail will be included in the preliminary production results for the final quarter, ending 31 December 2018, scheduled for publication on 9 January 2019. The Company will provide 2019 Outlook, including production guidance, and updated Mineral Reserve and Resource estimates for 2018 with the Annual Results in February.



This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014.



For more information, please visit the website www.centamin.com or contact:



Centamin plc

Andrew Pardey, Chief Executive Officer

Not very good :( Production Update Gold production for October and November combined was above 90,000 ounces. While being solid production months, this was slightly below forecast. The December mine plan forecasted higher grade from both the underground and the open pit, which would have balanced the quarterly shortfall. However, lower than expected underground grade delivered in December thus far indicates gold poured for Q4 between 135,000 to 140,000 ounces, resulting in annual production from the Sukari Gold Mine of up to 2% below full year 2018 guidance of 480,000 ounces. Cash cost of production will be towards the top end of the previously guided range of US$625 to US$640 per ounce produced and an all-in-sustaining cost will be approximately US$900 per ounces sold. Whist the focus remains firmly on sustaining the operational improvements, stringent cost controls and improving gold price means the Company continues to be a cash generative business. Further operational detail will be included in the preliminary production results for the final quarter, ending 31 December 2018, scheduled for publication on 9 January 2019. The Company will provide 2019 Outlook, including production guidance, and updated Mineral Reserve and Resource estimates for 2018 with the Annual Results in February.

I agree Demon Hunter, but might it be because the management appear to have glossed over the true state of the Sukari overground ore grades for some time by high grading and completely failed too manage the underground production in a professional manner.
The chairman would or should have been aware of what was going on, but instead of trying to act in the best interests of share holders by showing solidarity and taking steps to rectify things he instead decided to take a back seat and sell millions of his shares in 2017.
In May 2018 Andrew Pardey announced a an estimated 560,000oz for the forthcoming year, yet at that time as a geologist and mining professional surely he must have been aware of the lower overground ore grades and also of the high grading of the overground pit?
True despite the company losing half a billion pounds the board have continued to paying a good dividend which s welcomed by ordinary share holders, but one must also consider why is this and who really benefits the most from this policy?
Centamin has a IR officer and employs a PR company and yet the communication with retail investors has gone from mediocre to dire, even the Egyptian media seem to have nothing to report on Sukari which is most unusual.

Hi Prof - Although mildly optimistic at this stage, my optimism is tempered somewhat by a lack of trust based upon the shenanigans of the board this year. - Q4 will tell us a lot but Q1/Q2 next year will tell us a helluva lot more. - It's crunch-time for me this next year and after all the years I've been invested here, I have a feeling that I might be saying cheerio.- That's not to say I'm kicking my gold-investments into touch but rather that they will probably be riding a different horse.

Not sure it will automatically keep the currency and time period so you may need to adjust those yourself.

https://www.bullionvault.com/gold-price-chart.do

This is worth taking a look at if you have not already:
https://www.bullionvault.com/gold-price-chart.do

We have rarely been in a better place gold price wise over the past 5 years and are still heading upwards.
I am optimistic that Q4 results will be in line with forecast and that 2019 will see production shoot back up. I am therefore very positive about the CEY share price in 2019 although I admit I have been hideously wrong in the past.

Best wishes,
Prof