Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
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For anyone wishing to comment on the interview why not send an email to
alexandra.carse@centamin.je
or reply to Mining Journal's tweet (make sure to tag @CentaminPlc)
https://twitter.com/DonLawson_/status/1410735674660036612
It's apparent from the interview that Mr Horgan does indeed consider feedback from investors concerned about the dividend being in danger — great, but what of the other issues raised by investors? Are we not worthy of a response?
HORGAN COULD NOT CONSIDER M AND A USING SCRIPT WHEN THE SHARE PRICE OF CEY IS BELOW WHAT IS FAIR AND REASONABLE VALUE FOR A TIER ONE ASSET PLUS DEVELOPMENT DIVERSIFICATION OPTIONALITIES.
TASK 1 FOR HORGAN IS TO GET THE CEY SP UP (STAGE 1 OF SP GROWTH), AND THEN THE WORLD MIGHT BE HIS OYSTER (STAGE 2 ETC)?
BEST
THE GNOME
At the point of construction [of Doropo], I'm not touching the cash flows from Sukari; I'm using the balance sheet that we've built up to basically deliver the construction phase. And I'm putting some asset level financing into the asset to build it and at that point, Sukari keeps paying the dividend, said Horgan.
The CEO has made no secret of his wish to diversify beyond Doropo, but suggests potential M&A is contingent on a period of consistent delivery at Sukari.
We need to spend 6, 12 or even 18 months showing that we're on top of our game, and I think then at some point on that continuum, we can then start to look at how we build out from there as well he said.
If I can get to Christmas this year, deliver guidance, with the asset set for the next 12,15 years with some upside; exploration upside in West Africa, and then the key is to be able to go out and do things.
Egyptian Upside
Before then, Horgan plans to make significant headway with the company's Egyptian exploration programme.
An unappetising mining code based around the profit-sharing style of oil and gas contracts had previously ruled out Egypt as a destination for major miners, but a recently promulgated new exploration code triggered a flurry of interest, with Barrick and B2Gold among a group of companies - including Centamin - to secure blocks as part of a bid round launched in November.
Though the new code is clearly positive, Horgan said Centamin had requested clarification around a number of terms and conditions, both on the economic and regulatory side.
We're just working through that with the Egyptian mineral resource authority. And if we can get those clarifications in place, we're ready to go. So if we could get that signed up through July, get a bit of prep through August, I think we'd be busy from September onwards, we'd been moving pretty quickly said Horgan.
The absence of exploration in Egypt to date presents huge opportunities, suggested Horgan.
You've got this huge prospective package of rocks, and it's just never been explored using modern techniques.
lt's kind of the geologists dream, they're itching to get involved. Because there can't just be Sukari, right? I think it'll be pretty interesting to see what comes out.
This lack of trust coupled with a recent dip in the gold price means Centamin is now trading close to its post-pandemic low at just over 102p
Horgan is unsurprised and unphased. You look back at the recent history of the asset and it couldn't deliver a bloody pizza over the last two or three years. And I recognize that, and that credibility gap - that trust - is the biggest thing that we've got to build back, he said.
We need a period of sustained delivery into stated goals in order for people say: okay, they're on top of it, now they're starting to deliver said Horgan.
I'd love guidance this year to be like a long-haul flight: we took off on time, we watched a movie, we landed on time.
Another solid set of quarterly numbers - to be published on July 22 - should help matters, and while Horgan couldn't comment on where the company stands currently in relation to its Q2 production target, he said he was not overly concerned.
We're nearly through June and the finishing line's in sight, said Horgan.
If turning Sukari into a consistent performer meant drawing on experience at BDI, Horgan's work at Toro in West Africa has proven critical to another key objective: diversification.
Centamin has been developing two projects as part of its West African exploration portfolio, and late May published preliminary economic assessments for Doropo in Cote D'Ivoire and Batie West in Burkina Faso.
The former was promising, with the PEA showing a post-tax NPV 5% of US$234 million with an IRR of 21% at a US$1,450 gold price.
Total capex to develop the 13-year, 150,000oz per year operation, was estimated at $275 million, with an average all-in sustaining cost of $904/oz
We like what we see there it's a pretty vanilla project of pretty reasonable scale and robustness.
We can push the pedal hard now. We've put the band back together...the Mako/Toro team and template and roadmap; I don't have to micromanage that - the guys are just running with it.
Horgan said a PFS would follow in a year, with a DFS about nine months later. A construction phase of around 16-20 months will put first production towards the end of 2023 or early 2024.
The economics for Batie West were less compelling, with the PEA showing an NPV 5% of just $63 million with an IRR of 11% against capex of $265 million. Centamin is now looking to divest the asset.
Horgan puts the lack of positive market response to the PEAs down to a fear among certain quarters that developing Doropo would potentially compromise Centamin's dividend.
They thought: oh my god, they're going to blow US$ million bucks on this thing? Does that mean the dividend not going to be paid? And it's not either, or; it's both, quite frankly, said Horgan.
Centamin is in a strong financial position: ungeared and unhedged, with US$330 million on the balance sheet.
We talk about putting a world-class mine around the world-class ore body; we've got the ore body, now let's put the mine around that;
Horgan said the company was addressing the under-stripping in the pit, which had led to limited working areas, leaving minimal operational flexibility which meant any slight hiccups that happened from time to time hit your guidance
On both the openpit and the underground, Horgan said he wanted to get ahead of the curve, such that we've got an operation where we've got embedded flexibility
While Horgan believes the company has already made significant strides over the past 15 months, the CEO has identified a number of areas for potential efficiencies in a bid to shave costs.
We've got this target of US$100 million of savings in the opex annualised repeatable, and we've delivered about $60-65 million. And then of the balance, we've got two or three things that we've identified as well.
You're unlikely to walk in and find a 20% saving straightaway; it's 2-3% here, or 3-4% there and when you amalgamate the number of these individual initiatives, all of a sudden, bam: you're taking 10 15% out of the cost base said Horgan.
Restoring Faith
Bearing in mind Centamin's struggles over the autumn, analyst response to Horgan's time in charge has been largely positive.
An April note from US investment bank Jefferies entitled Steps in the Right Direction noted the fact Centamin moved a record 22.6Mt of material in the March quarter suggested its waste-stripping program had started well.
In May, Canadian bank RBC upgraded the stock to outperform, pointing to the company's strong performance in Q1 as a sign new management was ironing out issues at Sukari. Peel Hunt also weighed in with positive note, calling the company's Q1 a strong start to the year and the first signs of Sukari becoming a more consistent mining operation on a quarter-to-quarter basis.
However, the company's bumpy performance since 2018 - when it suffered three production guidance misses due to operational issues - means some are yet to be convinced
"I just can't trust those guys - they don't do what they say they're going to do" was the verdict of one London-based analyst who wished to remain anonymous.
IT Security Administrator
Full Time
Sukari Gold Mines
- Hurghada, Red Sea
https://wuzzuf.net/jobs/p/Bx1RAKwmhkG2-IT-Security-Administrator-Sukari-Gold-Mines-Red-Sea-Egypt?l=cpp&t=cpj&a=Sukari%20Gold%20Mines&o=1
Appointed in April 2020 following aborted takeover talks with now fellow London-listed gold player Endeavour Mining, Horgan oversaw a strong share price run last summer before pit stability issues at Sukari west wall forced the company to lower guidance. Centamin stock plummeted by nearly a quarter overnight.'
'Having reworked the mine plan, the first phase of a life of asset review at the beginning of December offered a chance for Horgan to lay bare past failings at Sukari.'
'I think the company got itself into this tailspin whereby it was working year to year. Somebody somewhere said tier one assets have to have 10 years of 500,000 ounces. And that became dogma, without thinking about what right for the asset.'
'That how the company got itself under-stripped in the open pit, underdeveloped in the underground, under-explored in geology...we were too busy thinking just about replacement.'
'You can't run a 10-15 year asset on a year to year basis' you've got to basically have a life of mine plan, or at least 10-year plan, that drives your five-year plan, and that drives your 12 month budget, he said.'
'The CEO said the fact Sukari had at least another 12-13 years to run meant it was a case of stripping it back to the chassis.'
'There sufficient runway ahead of us that it worth doing that and basically breaking it down to its constituent parts, and then putting it back together, he said.'
'Rather than using different mining techniques, Horgan said the key to improving Sukari performance was a simple combination of people and processes.'
'You can take the best ore body in the world and put a bunch of amateurs in charge and they wouldn't make a penny' you can take a marginal ore body with some pretty sharp people and you can make a pound note, said Horgan.'
'When I came in, I just felt we were light in two or three really key areas, or to be blunt the people in the place weren't of the requisite quality. So it was about plugging some headcount into some key areas, said Horgan.'
'Horgan previous experience as CEO of private West Africa-focused gold explorer Toro Gold - which sold the Mako gold mine in Senegal to Resolute Mining in 2019 - meant he didn't have to look far for likely candidates.'
'Howard Bills, Horgan Toro co-founder, came on board as group exploration manager in June 2020, with another former Toro alumnus Paul Cannon joining as environmental and social manager in September.'
'How you turn the culture around is that obviously you lead by example' you try to inspire, you talk, you put rules in place, systems etc. But another good way to do it is you just inject that successful DNA into the business. And if you can bring people across who have been successful with you, who know how you work, and inject that enthusiasm, energy, respect, professionalism into the business' it helps to just it accelerates that process, said Horgan.'
https://www.mining-journal.com/gold-and-silver-news/news/1413033/centamins-
Thank you MrBond46
It never occurred to me before as i was just using the paper market price for any valuations.
It goes first to Canada for refining, then sold.
It certainly gets much more than paper. Probably slightly less than coinage and public marketed bullion.
Question, , so if the real price of physical gold is $1850
and paper gold is around $1760s which price does centamin get when it sells its gold ?
Hi Dasut,
I hope for good news too, especially after the past three years or so !
Yes, it seems that Kees Dekkers past concerns over some of the managements claims and their behavior of management were indeed justified.
Tibbs Sukari is a world class resource given proven reserves.
This doesn't mean it is a world class operation although to date if you average out the number of ounces over the life of mine they are pretty close to what was predicted when I bought in.
Problem is to get to these numbers there have been short cuts to keep investors happy and these have come home to roost but there again I remember having to defend cut backs, when concentrating on waste removal over some periods. Such again necessary evils and the criticism that could have been levied is that management were naïvely over estimating production to keep investors happy.
Unfortunately it appears they didn't continue with the cut backs on a regular basis to maybe again naively keep the investors happy.
One excellent result is that there was no slide so someone was on the ball and they live to fight another day and the higher grade ore is still an asset it hasn't gone anywhere and not sitting at the bottom of a slip.
As I say lets hope we get some good news over the coming weeks.
The real price of gold is at 1850 if you wish to buy coins or Bullion.
So CEY doing well ,even with reduced output and higher costs.
When you consider for a long period gold was $1300 per troy oz.
EFFECTIVE FED FUNDS RATE 0.08% JUNE 30 VS 0.1% JUNE 29
Hi GlyBristol,
I appreciate that many hold Sammi El Raghy in high regard as a geologist, I must accept their opinion because because II am not in a position or adequately qualified to dispute the opinion, nor do I wish to!
Sammi has often quoted Sukari as a world class mine, with only the best people, however after ten years of erratic guidance performance, several avoidable production equipment disasters, the claimed unexpected grade problems that were known about three years previously and most recently the near collapse of the open pit wall due to the complete failure to clear waste and manage water drainage, Sammi's claims seem unjustifiable to say the least!
The Sukari mine in it's present state cannot be regarded a world class mine, it is a a mine that is operating in limp mode due to certain area's being full of waste restricting access which has to be cleared and although work has already commenced at present the timescale for completion and the resumption of more normal production can only be estimated at best.
Also whilst the ordinary Sukari site staff may be hard working and committed, their success is reliant upon the directions given and professional abilities of the previous senior management who have now been proven to be inept, complacent,possibly even worse!
In its present state present the Sukari mine cannot be regarded as world class and neither can the previous manegment be regarded as the best, quite the contrary on both counts in fact!
Those facts accepted, I agree that Sukari has the potential to became a world class mine, but only under the right manegment team, this achieved and on a sustainable basis then that team may well justify being regarded to as some of the best!
The future of Centamin and Sukari is now dependent on the new management walking the talk and proving themselves to the market and the share holders, no mean task, but I remain optimistic!
Tibbs drilling holes and making presentations to investors is what a mining company does.
The latter is considerably cheaper than advertising in the media.
As for drilling there is considerable science a lot of gut feel and a hell of a lot of luck involved.
Yes Centamin have had 10 years plus in West Africa trying to find a viable resource and it isn't just about finding a resource it has to be an emphasis on the viable cost effective project.
Centamin knew when taking on Ampella's properties that they had some proven sulphides in BF and a considerable number of square miles of additional ground to look at and yes the need for a whole lot of holes to drill and this is a necessary evil, you don't just say thanks and use it as a nature reserve you have to work it to ascertain whether you have additional reserves and OK BF and Batie didn't work out BUT we should all be tipping our hat because it looks as though they have viable resources in Ivory Coast and bonus is not land locked somewhat safer and yes they still need to drill more holes as I say if we want to invest in a mining company they need to spend money on exploration and it doesn't come cheap.
Don't get me wrong I am not making excuses for many short comings over the last 5 years but this isn't about exploration it is about how they buried their head to Sukari issues all of which should have been obvious if you are working the mine.
I don't get why they being the board need to concentrate on just Egypt WHY? they are the board they aren't the grafters on the ground who are doing the work.
The board member(s) will be making a visit possibly in current times only virtually and looking at management summaries of reports provided by their teams and outside professional consultants and then writing up policy and relying on their project managers to bring in the results.
Having got this far in WA it is time to push on to opening another mine or hopefully two and if they bring in Doropo from a virgin plot to a productive mine in the next 18 months it will have been done in very good time.
Everything crossed for some good news over the coming weeks and if it is good news the market understands it is good news.
Mr Tibbles, I agree that sorting the Sukari mine out has to be the priority with exploration elsewhere secondary. However, I think your post is confusing the previous management failures and the current managements' plans ( agreed yet to prove themselves). This new management appears to be sorting the mine out and getting back to production levels that saw a £2 share price, and reducing the cost of production. I think the future for the mine and shareholders is positive. Also, they are thinking about growth and exploration, (which has to be positive), and they cannot be held responsible for unproductive exploration expenditure by the previous management over the last 10 years. Please give them some space to prove themselves.
Looks like he's notched up another one.
Equities in Europe traded higher on Thursday ahead of several economic reports that will be released during the day. Those include Germany's retail sales, the manufacturing activity in the Eurozone, the United Kingdom, and Germany, and the unemployment rate in the euro area.
Earlier, the UK's National Health Service (NHS) stated it plans to offer the so-called booster shots of vaccines against COVID-19 in September to those considered the most vulnerable to combat potential new spikes in infections.
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The euro lost 0.15% to the dollar to sell for $1.18398 at 7:34 am CET. A minute later, the pound sterling declined by 0.14% against the greenback, changing hands for $1.38116.
Breaking the News / JR
Thank you Cowichan, very interesting, I just can't get enthusiastic about these West African operations, certainly after Centamin's past record they would be drilling more holes and producing coloured charts for the next two decades, and you would still be waiting for your promised recourse updates!
Considering the past shambolic organisation of production in the open and the underground pits at at Sukari projects like this are most probably way beyond the capability of the Centamin, management at present, they have after all spent a decade and many millions of dollars drilling holes and making promises of guidance updates anytime soon, yet have failed to produce anything of any substance!
The new Centamin management team have yet to prove themselves by sorting the mess at Sukari, a project like this would be just another diversion and the excuse why they haven't delivered guidance in Eygpt again!
10 years and millions of dollars drilling millions of holes and yet delivering nothing of any worth as far we are aware speaks for itself, there is either nothing there or as a mining company Centamin aren't up to the job in that environment.
27th June article. Curry got one call wrong between November 2020 until this week. All the other forecasts have been very accurate. https://www.gold-eagle.com/authors/jim-curry
Au999 contract was on the floor last night. Years ago this gave a high probability (85%) of heavy buying with a new month and new quarter. We shall see if that proves to be so once again.
https://www.en.sge.com.cn/data_DailyReport
@Auson - obviously I don't know what it's going to do but the, clear to my eye, retrace target would have been $1,735 last week but it never made it and has only managed $1,750 this week so I'm very much leaning to bull mode now given the inflationary backdrop.
The Fed/BoE/ECB can BS the general populous all they like about the real-world inflation numbers but they know the score and they need an instrument to recapitalise themselves on, which certainly won't be fiat paper that's for sure, hence Basel III IMO - they must surely want gold up, very up, now.
Dropping below $1,700s very much implies a longer-term downswing IMO and surely that's not on anymore - if it can't go down then it has to go up, be it slowly at first then all at once as per.
I did add today below 101.5p, which gave the total shares I was looking for. I noticed last night on the NYSE my Newgold finishing in the positive, despite a drop earlier in the session. There was no corresponding rise for the gold price at the time, so I took it as a temporary bottom.
Hopefully, we'll see a rise in the gold price now, but I think it will be a bounce rather than a sustained move up. If that is true, I'll sell my recent additions (providing the are in profit!) and wait for a final bottom. I don't know yet if this is going to occur, so I'll let the price action dictate. I'm in, come what may.
I'm sorry to say this, but I get the distinct impression this share is being shorted. The selling was pulled off a couple of minutes before the end of today's session, which caused a little price jump at the end. Unless the shorter has got things wrong, I don't think they would continue to short if the gold price was about to make a sustained rise.
I could have this all wrong, of course, but I don't post here for the sake of popularity, only what I think.
The good news is that when this pullback is finally over, I believe gold will be on the up and up. On the five-year chart, the bottom will give us seven swings ( yeah, a chart - I know).
28 June 2021
ASX-listed West Africa gold developer Tietto Minerals appears on an unwavering pathway towards kicking off the main construction phase at its Abujar gold project in Cote d’Ivoire by early 2022 and achieving production start-up at the end of that year.
Tietto has also just hosted representatives from more than a dozen mining contractors bidding for the Abujar open-cut mining services contract.
https://thewest.com.au/business/public-companies/cote-divoire-gold-mine-development-motoring-along-for-tietto-c-3258136