Centamin PLC Share Chat (CEY)

Gold miner Centamin (LSE: CEY) is a FTSE 250 stock that’s trading on an attractive earnings rating. It also offers a prospective dividend yield of 4.7%, rising to 5.5% next year. Meanwhile, smaller-cap miner Gem Diamonds (LSE: GEMD), which released a strong Q3 trading update today, is on an even cheaper earnings rating but with only a small dividend pencilled in for next year. If I had £2,000 to invest today, would I plump for just one of these stocks or divide my investment between the two?

Gold plus cash

Centamin, whose assets are in Egypt, is a stock I think is well worth considering. I reckon it’s good to have some exposure to gold in a diversified portfolio, as it can provide a bit of stability in times of trouble.

ETFS Physical Gold, which simply tracks the price of gold, less a small annual management charge, is one stock I’d be happy to buy today. However, Centamin offers something you don’t get from the metal itself. Those valuable cash dividends I mentioned earlier. I think this reward more than offsets the business risk and a share price that tends to be more volatile than the gold price, due to miners being largely a geared play on the metal.

In addition to its appealing dividend yield, I reckon Centamin’s price-to-earnings (P/E) ratio and price-to-earnings growth (PEG) ratio, based on earnings projections for 2019, are attractive at a current share price of around 100p. With 25% earnings growth forecast for the year, the P/E is an undemanding 12.7 and the PEG is 0.5, which is well to the ‘good value’ side of the PEG ‘fair value’ marker of one. As such, I’d be happy to buy this stock today.

https://uk.finance.yahoo.com/news/2-000-invest-think-ftse-154914598.html

Hi Tibbs , if you go back a few months on this discussion board you will see it was I who stated that there were absolutely no excuses regarding the u/g long hole drill machine breaking down .Also if you go back +_ two years you will see I moaned then that lack of grade control caused a gold output shortage which caused the share price to drop at that time.
Lower gold price did play a part but with +_ 50 years experience Africa gold mining as owner and manager ,it is obvious to me that poor grade control or mine planning has played a bigger roll in the last gold shortfall and hence the fall in the share price. The timing of the announced lower gold output forecasts and their later corrections did not help at all .Those announcements were made with the Board,s blessings. Atb

By comparison to our peers we're well out of favour today - What can it be I wonder?

fair comments Bardill, I agree that Mr Pardey is not entirely to blame, as you say he is mining engineer although I think you must agree he should have known it wasn't at all wise to depend so heavily on one LHDR running at either
near or over limits without any credible back up or sufficient essential spare parts.

Also a you state they achieved what they did in 2016 by "High grading" but that can only be done for so long, as I should think that Mr Pardey would have realised and surely Josef would have been aware of this?

When Josef was making all those large sells I emailed Centamin PR and asked the reason why as shareholders were concerned that something was wrong, I received a reply that Josef could only sell his shares during certain periods and that he was doing so in order to be able to take more of a back seat in the future before moving onto other things?

Kees Dekkers 2015 report "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."
"Another major issue is outside management control: they are now having to share the net free cash flow with the Egyptian parastatal company"

As you say hindsight is a great thing, although even better is having all the information in advance in order to be prepared for future events!

Political accusations / discussions on a mining site will always cause critical repercussions. I think it's best left off.
I don,t solely blame Mr Andrew Pardey ( mining engineer) for the recent $500 000 000 market cap loss. He is told by the Board of directors what he can say or do. His function is to advise the board and in Centamin,s case to present the quarterly and year end results. The board is run by the Company Chairman. Mr Joseph el Raghy who after selling many millions of shares at a very high price then announced his retirement within this year.
Observing the u/g mining grades over the last couple of years it is clearly obvious that the high u/g ore grade during 2016 caused a high gold output and with-it a higher year end profit and an extra ordinary high dividend declaration This caused the share price to rocket . Hindsight is easy but my opinion is that too much high grade ore was mined in too short a period. ie bad grade / mining policy. The future was gambled with. A lesson learned - --maybe !!!
I think the worst is behind us shareholders and I have faith in Centamin to increase output, profit and dividends in the near future ATB.

Because I'd be interested to hear how you are voting.... I'm not a shareholder but if I were I'd tell Barrick to go stuff it!

Barrick shareholders vote on Nov. 5 and Randgold investors on Nov. 7.

https://fingfx.thomsonreuters.com/gfx/ce/7/1687/1686/barrickRandgold.JPG

https://www.reuters.com/article/us-randgold-rsrcs-m-a-barrick-gold/barrick-randgold-sweeten-dividend-ahead-of-takeover-deal-vote-idUSKCN1N51RA

Bryn85,

CEY performance is linked to POG, The US president is quite relevant to POG.
I agree with you Trump is very 'smart' here are some quote which illustrate that fact.
“It’s freezing and snowing in New York – we need global warming!”
“I’ve said if Ivanka weren’t my daughter, perhaps I’d be dating her.”
“I have never seen a thin person drinking Diet Coke.”
“I was down there, and I watched our police and our firemen, down on 7-Eleven, down at the World Trade Center, right after it came down”
“Why can’t we use nuclear weapons?”

Thank you Bryn85, but especially at week ends we discuss lot's of different issues most of which are all related to Centamin, the markets and gold in one way or another.
Our discussions may of course include dictatorial bullying world leaders who care more about profit than the future of our planet and the well being of it's inhabitants, again this is related to the POG.
I appreciate that you are entitled to your view of Trump and that your ethical views may not be the same as mine .
Thank you for your opinion though!

Cowichan - Behave yourself! - See what you've done! :-) :-) -

I told you he would be "seething" after langley's post

Tibbles this board is for discussing CEY performance not politics. Keep your opinions and your guardian inspired propaganda to yourself please. Trump is a much smarter guy than any of us and my personal opinion is that he will be remembered as the greatest president of the United States in living memory. On a more relevant topic looks like DXY could be in the process of a double top. If confirmed gold will break out.

Excellent post Cowichan and and very valid comments Rebess about the failings of the CEY senior management on recent issues sues such as mitigation of production risk or to be honest about the poorer grades which they were aware of in 2015, despite Andrew Pardey claiming he was unaware of them himself. perhaps the other board members kept them secret?
Big respect to the analyst who had the integrity and courage to point out the complete failure of the Goldcorp management
“I’m trying to think about the accountability on management, how shareholders are expected to understand this — the stock’s down 35 per cent,” said Peter Jacobs, an analyst with Stifel RMG Group. “And it’s almost as if it’s business as usual, just another failed gold mining stock.”
What a pity that some of Cey analysts weren't more frank about the situation and a few on here and the ADVFN were so blind to the managements apathy,complacency and lazinesses not to mention the lack openness about the true state of the ore grades that they didn't have the courage to make their view known to Mr Pardey and instead complimented him on a very professional presentation as half a billions pounds of company value went down the drain!
Also in my view that things like this happen in mining is not a valid excuse, the situation with the LHDR was avoidable and the lower grades were known about three years ago!

"He said that the Trump administration is committed to fighting dictators performing atrocities in neighbouring countries."
Trump is the world's worst dictator, he is incompetent as a diplomat an unfit for office, he stirs up racial hatred and is sexist he has connections with the Russian Mafia, he encourages gun ownership making making America less safe and his son's are African endangered wildlife slaughters https://www.theguardian.com/us-news/2017/nov/16/trump-sons-us-lifts-import-ban-african-elephant-trophies
https://www.theguardian.com/environment/2018/jul/17/trumps-wildlife-board-claims-trophy-hunting-saves-endangered-animals
He locks young children in cages https://www.theguardian.com/commentisfree/2018/jun/19/donald-trump-child-cruelty-american-pedigree
Trump dictates to the est of the world that they should not deal with Iran https://asia.nikkei.com/Politics/International-Relations/US-tells-world-to-halt-all-Iranian-oil-imports-by-November
Trump says says it's wrong for Iran to have nuclaer power whilst he want;s to increase American nuclear arms https://www.politico.com/story/2018/02/02/trump-plan-nuclear-weapons-386087
Trump scraps environmental protection that would benefit future generations because he is greedy and only cares about short term gain `
https://www.theguardian.com/us-news/2018/aug/20/trump-coal-emissions-power-plants-rules-
obama
Trump is jealous of what Osama achieved and he can only respond by selfishly destroying anything that his predecessor achieved by imposing executive orders because he is incapable of rational reasoning or reasonable political debate where anyone else's view is considered apart from his own selfish opinion
Trump scraps protection for the world oceans and wildlife https://www.washingtonexaminer.com/policy/economy/trump-administration-set-to-scrap-much-of-obamas-labor-legacy-in-2019
https://www.telegraph.co.uk/news/2018/07/03/trump-administration-set-scrap-obama-era-guidelines-diversity/
Trump causes unrest and hatred in the The Middle East
https://www.bbc.co.uk/news/world-us-canada-44120428
Trump scraps affordable health care for the poor and many ordinary Americans
https://thehill.com/policy/healthcare/396379-trump-officials-cut-funding-for-obamacare-outreach-
groups
Trump rants and raves about the rest of the world taking advantage of the US whilst the FED and Wall Street control and manipulate the currencies and trading of virtually every other nation using market manipulation and the petro dollar.
Trump claims to be fighting dictators he should look in his bathroom mirror and consider what is looking back at him!

Centamin had a nasty hiccup this year. However in the 5 years I have held them Centamin has more or less doubled while Goldcorp is down 3 fold. Happily a near 6 fold dissimilarity if I have it right

Hi Rebess,
It was the similarity that made me think to post. (Misery loves company and all that!) Cheers

Hi cowichan - The situation you refer to has a familiar ring. - Non accountability seems to be the accepted norm. - In Centamin's case, losing 1/2billion pounds of value and reaching almost 3/4billion at one point was regarded by some as just another day at the office. - Move along please, nothing to see here. - Some even had praise for management. - The tremors caused by our lax management oversight which also includes their apathy towards the resolution of the court-case are still being felt and yet nobody has been called to account..- It adds a frightening dimension to the competence of those in whom we have placed our trust. - Very little trust remains now in a company with some of the greatest fundamentals around but nevertheless seem incapable of making progress.

...investors have increasingly shown impatience with mining companies, as Vancouver-based Goldcorp Inc. learned on Thursday.

With a $101 million loss in the third quarter, compared to $111 million profit the previous year, the company’s stock fell 18.40 per cent to $11.09 Thursday — a price it hasn’t closed at since 2001.

The first 30 minutes of Goldcorp Inc.’s quarterly earnings call on Thursday proceeded without mention of the stock trouble until one analyst suddenly unleashed on the company’s management.

“I’m trying to think about the accountability on management, how shareholders are expected to understand this — the stock’s down 35 per cent,” said Peter Jacobs, an analyst with Stifel RMG Group. “And it’s almost as if it’s business as usual, just another failed gold mining stock.”

https://business.financialpost.com/commodities/mining/another-failed-gold-company-goldcorp-and-other-miners-face-investor-fury-amid-tepid-gold-prices

(Now that Trump signed an executive order that forbids American companies and individuals from buying Venezuelan gold....)

In a televised announcement, Maduro said his government is now certifying 32 gold fields that "are going to set Venezuela as the second largest gold reserve on Earth".

The politician said the massive mining project will be financed by both the public and the private sector and is expected to generate $5 billion in 2019.

As a reference, in the first nine months of 2018, Venezuela sold 23.62 tonnes of gold to Turkey for about $900 million.

http://www.mining.com/maduro-blasts-new-us-sanctions-venezuelan-gold/

I am talking 10yr.Treasury/Bond rates. - When the rate increases it's because the underlying value of the T Bond is collapsing. - There is an inverse relationship between rising rates and value. - EG. Using $100 bond issued at 2.5%. - In the secondary market say said bond can only command $50. Since it still carries a $100/ 2.5% coupon (% rate) buying it at $50 means the bond is now paying the new owner the equivalent of 5%. Thus collapsing T. Bond values = a rise in the interest rate. - A flight from fixed income instruments can be good for gold where investors seek a hedge in it's safety. - The problem for Governments with a rising 10yr. interest rate is that new Gov. issuance has to compete with the current state of the market, making Gov. borrowings more expensive, thus adding to the difficulty of servicing the debt. - Just a talking point for a Sunday morning. - Apologies for the crudity of the example.

Thanks again I have been sitting tight from my original purschase at 110 down into the 30’s and back up again to the 190’s and back to where we are now. I have added on the way at the wrong times, I only occasionally have money to invest, in small amounts, so buy when I can, usually at the wrong time. I am an optimist and a hoper so I still believe that some time in the next couple of years we will get to that, now far of, 200!

Ps those are ten year real US interestl rates that I just posted, and look positive, and have been rising, not great for gold unless inflation rises . Seems current us inflation was nearly 3% in July, 2¼% in sept but rising again. The interest rate is 2 ¼ % but should rise above 3%. So the two are battling it out

Thanks Elonex. Just to add I don’t think it is either inflation or interest rates that ultimately count on their own, but the expected relationship between the two together.
Interest rates higher than inflation bad for gold, as holding money on deposit creates real return, hence there is an opportunity cost of holding gold
Inflation higher than interest rates good for gold as money loses value.
In early 2016 real us rates fell for around 3/4% to 0 and gold soared, since it has risen to around 1% putting pressure on gold. Now we know rate will rise further but will inflation rise faster. I would say that is the biggest question for the future of our share, alongside the sentiment it creates which can start a trend, that then has momentum and builds.

Finally just to say that I love all the different views her, including the political when relevant to gold value and cey price. But above all this board mostly displays a great tolerance of different views, which to my mind is a key part of democracy.
So all are right!

Good morning Langley - Well, all credit to you, that was a canny post :-). - A few paragaphs, a few opinions and some weight of reading material. - This is the thing about all the posts, they serve as a contribution, adding enjoyment, frustration, whatever, to a shared experience. - Try and contribute more if you can. If you can't then keep tuning-in even if you have to bite your lip, sometimes the release of it all can be therapeutic. - cheers.

You can’t post pro Trump stuff Langley - Tibbs will be seething

Just sit tight.
Easier said than done, I know.
Or sell and regret..
More turmoil will come without doubt..
We are in times of uncertainty.
The market in general shows that.totally clueless.
But that is only my opinion,cause, I cant read tea leaves.
ATB all