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I invested in fres some reason the share drop all the time .....you guys invested in the right share....
Interesting words Goldgnome, I very much agree with your take on AU house prices, hyperinflation in capital value coupled with rock bottom interest rates - a bubble waiting to burst! At least that’s what I tell myself as a sore first time buyer struggling to jump onto the Melbourne market!
Anyway, back to gold and our abysmal sp - seems I misinterpreted the awful CPI data yesterday…..5% obviously wasn’t a big enough hike……! Shocking.
As always, GL all.
The housing prices will go up for a while. Then people will realise they do not have a job, do not have certainty in the job they have or the business they are in, cant pay the looans interest, the interest rates will go up, the banks will close down on the loan books, the young people will realise home ownership is being closed out to them yet again and be ****$d off, the governments will continually expose that they have no idea whether to exterminate the virus (which incidentally has rarely if ever happened, but whatever does one learn from medical history?), or behave rationally, and on we go...then we get a social revolution, and life goes on...
all good fun
the gnome
The cheapest thing to match paper debt is more paper debt. Perhaps Oddly. Because the paper debt can be created out of nothing, and it is and has been for a while now. Gold on its bad day, has more backing that paper promises. The latter goes on adnauseum, hidden behind ignorance of the masses and deceit by the elite. I always find it hard to understand why the vast population can be doped up for so long, and seemingly happy.
Why doesn't the Western World learn from West African countries. A coup de'tat a day keeps the b%stards honest.
good luck to all
the gnome
Investment summary
Sukari is a Tier 1 asset. Centamin operates its sole asset, the
Sukari gold mine, in southern Egypt. The mine is a Tier 1 asset,
in our view, albeit one in a relatively high-risk jurisdiction. The
mine has a c20-year mine life with low costs.
Potential for high-return brownfield growth. Recent
exploration drilling at the Cleopatra target has outlined
potential for a second high-return underground, in our view.
That CEY has already begun a potential 1Mtpa decline there
indicates good potential for production to grow to >700koz pa.
This is not included in our base-case NAV.
Track record on dividends set to continue. CEY has been a
consistent dividend payer for some years. With the group net
cash, management has outlined a minimum cash balance that
needs to be held with FCF above this set to be paid out to
shareholders. This gives CEY a potential return ahead of most
EMEA peers.
Potential catalysts
• Update on new Egyptian bid round-Q2 21
• Updated life of mine review- Q4 21
• Improved operational momentum at Sukari – 2022.
• Ahead of consensus dividend – Q1 2022.
Risks to rating and price target
• Production risk: Post a difficult H1, we think CEY will rebuild
trust in Sukari's ability to deliver. However, a risk is further
underperformance of the underground vs plan impacting
grades and hence ounces.
• Political risk: Whilst we think the profit share with the
Egyptian government insulates CEY from high levels of
political risk, Egypt still has the potential for a volatile
political situation to arise.
• West Africa: We see CEY as not under pressure to pull the
trigger on a new project in West Africa, but if one was
commissioned that had lower quality or returns than Sukari,
then we think this would dilute the group's investment case.
• COVID-19: If the pandemic impacts Sukari's operations
either directly through an outbreak on site or indirectly
through limits to contractors and consumables then this
could lead to downgrades to earnings and the group's
dividend.
How does the company manage the
relationship with EMRA partners?
Although CEY has control over the Sukari mine, the project is jointly owned with
the Egyptian Mineral Resource Authority (EMRA). The board of the holding entity
operates with simple majority, making arbitration necessary should a conflict arise.
The Group has regular meetings with officials from EMRA and invests time in liaising
with government representatives.
Our view
What are the most material ESG issues facing this company?
• Employee health and safety: In 2019 the company recorded one fatality and had
LTIFR of 1.45 (peer average: 2.82). Safety was improved in 2020 with 0 fatalities
and a drop of 40% in LTIFR to 0.84.
• Energy efficiency. Sukari has limited access to energy resources. Currently, the
power is supplied through a diesel fired power station which explains why CEY has a higher scope 1 GHG emissions intensity than peers (34t CO2e/kt processed in 2019 versus peers at 21t CO2e/kt processed) (scope 2 and 3 emissions are not reported). The Group is working on the installation of a solar power plant which is expected to meet up to 25% of the mine's energy needs while reducing scope 1emissions by 48-53Kt of CO2 p.a (12% of 2019 Scope 1 emissions).
• Water management: The bulk of Sukari’s water supply comes from the Red Sea via a 25 km long pipeline. In 2019, CEY consumed 1.01KL of water per ton processed (peers 1.02KL/t). This is +7% vs 2017 level (base year) but during that period the Group has managed to increase the water recycled from 35% to 44% in 2019. This is, however, below peers who recycled an average of 71% of the water used in 2019.
• Waste management: Gold mining involves the generation of rock and hazardous waste. The Group complies with the International Cyanide Management Code and its tailings and waste dumps comply with all regulatory requirements.
• Maintaining the social license to operate: In 2019, 92% of the employees were locals and the company invested $340 thousands directly in communities. This represented 0.05% of the yearly revenues, a level below peers at 0.55%.
Does the company integrate ESG considerations into its strategy?
The group reports its sustainability performance in line with GRI standards. The Sustainability Committee has the responsibility for drafting the Group’s ESG strategy.
CEY has quantitative yearly targets but it does not have a public long term plan to improve its environmental footprint. However, the Group is working on setting medium and long term emissions targets. CEY includes safety in its management bonus (the company reckons this could be as much as 30% of the annual remuneration in some cases). However, it does not include any KPIs related to the environment.
What is diversity like at board /management level?
CEY is governed by a unitary board of 9 directors. 67% of its members are independent (peer group: 71%) and 33% are female (peer group: 33%) and members come from 5 different
countries. Executive board members are remunerated through a base salary, an annual bonus and a performance share plan. There is a minimum shareholding requirement for the CEO of 200% of base salary (peer group: 270%) and variable compensation is caped at 275% of base salary (peer average:275%).
May 10, 2021
Centamin plc
Upgrading to Outperform
Our view: With operational expectations reset, some potential positive
catalysts from Egyptian concessions and the West Africa portfolio review,
and with Centamin trading sub 0.84x NAV at spot gold we think risk reward
is now skewed to the upside, in particular if gold can hold its recent gains.
Upgrade to Outperform.
Key points:
Still hard work but risk reward now skewed to the upside
Centamin's challenging 2020 and guidance reset was the culmination
of many years of the operation being run for the short-term. New
management now looks well on track to proving out a brighter long-term
future for Sukari. Q1's better than expected production, albeit only one
quarter of many which would be needed to prove out the strategy, was a
positive sign. Although there are likely to be further bumps on the road,
the potential of Sukari remains intact and we think we are now past the
worst of the news flow.
This year could be augmented by two potential catalysts. First, the group
has won a recent Egyptian bid round. Details remain scarce, however, with
grades constrained in the open pit and the underground yet to show its
true potential, a material near-mine satellite discovery could reshape the
production profile and add potential for expansions. We expect to hear
more details in the coming weeks. Secondly, Centamin's adventures in West
Africa have taken away focus from the key Sukari mine. We think a review
could monetise the current exploration portfolio, and this, added to the
$331m of cash and equivalents on the balance sheet, could potentially
drive future buybacks or more optimal usage of the balance sheet, further
enhancing value.
Everything else is going up, and so is gold, so why not gold stocks?
In recent weeks, signs of inflation pushing through the wider economy,
especially from a diverse suite of commodities, appears to be picking
up momentum. With consumer balance sheets and corporate profits
providing plenty of room to pass on price and wage increases, and limited
signs of excess liquidity being removed, we think that gold's optionality
here remains elevated. Centamin is trading on 0.84x spot P/NAV and 4.4x
consensus EV/EBITDA (c. 10% below 5 year average but in theory should
trade at a higher multiples through this compressed profitability phase).
We see potential that gold's recent revival could push multiples higher
again, as we saw in 2020. We move our target multiple to 1.3x our RBC
base case NAV and 6.0x EV/EBITDA (from 1.1 and 5.0x prev). This moves
our price target to 140p from 120p and we move our recommendation to
Outperform from Sector Perform.
Hi MrBond,
Yes indeed as some of us have remarked re "Brexit" "The Good Old Days"were never quite how some would like us the believe and accepting the trade union movement was'nt perfect it brought about the terms of employment and working conditions that many take for granted today.
admittedly Tory governments since Thatchers time have systemically eroded employee's rights and protection and try convince people that unions are wicked lefties and all employers know best.
That said there are good and bad amongst any workforce, but a good union rep recognised that and would take to one side any member who was'nt behaving as they should and warn them if they didn't change their ways they were likely would be going upstairs, or even worse down the road, this helped avoid many disputes.
The early "Bitcoin" or workers tokens you mentioned were used by many employers and are now collectable https://www.dgcoins.co.uk/webpagetokens.htm
https://www.money.org/money-museum/virtual-exhibits/moe/case14
The Battle of Matewan: 100 Years Later (Episode 1
https://www.youtube.com/watch?v=gY4DRFcunAA
Mathew & Son
https://www.youtube.com/watch?v=fOl9P4ib_20
Life in the 30s - The Great Depression - Overproduction Crisis
https://www.youtube.com/watch?v=adqeJDHdr6s
https://www.youtube.com/watch?v=LUyCEz_Fjms
When they going to let it rise? next inflation report ?
When they going to let it rise? next inflation report ?
Auson
Any thoughts of retiring to Sandgate on the Queensland coast will need to be shelved. They probably wouldn't even let me in in any case. It's a pity; it really is a beautiful coast.
RedSparrow7,
With negative rates whats going to happen to the house prices in Australia now
you noticed the gold price drop a lot last few hours lost what gain overnight... any idea why?
It will be interesting to see what happens when the music stops. Our job is to minimize the hit we take when we can no longer see the politicians backsides for dust. Keeping my money outside the financial system and growing as much of my own food is a good start.
There was a superb programme on TV a while ago about bread in the UK. Some of the things unscrupulous bakers added to the ingredients was wicked and poisoned people.
I still see gold going for $1950 soon. I think Tony nailed it for the moment and the buy for Centamin was the 109s. Now there's a gap from this morning. If it gets filled, I'll buy. Then reassess if $1950s is reached, and see if there is a bigger pullback or we're going for all time highs. I'm cautious that the 107.4p hasn't been filled. It may not.
I've no idea why I'm concerned about all this; confidence in western governments is ebbing fast and the Centamin share price should be much higher in the future.
RBC RAISES CENTAMIN TO 'OUTPERFORM' ('SECTOR PERFORM') - TARGET 140 (120) PENCE
I suppose if for example the $ or most Fiat currency fell of a cliff.
What would be acceptable for buying AU. OR Indeed any important commodity.
Gold.
More likely labour.
It would be like stepping back in time to the Mills that paid workers Tokens that could only be redeemed at the factory shop ,that sold flour mixed with chalk dust and other dub standard essentials. I suppose that was an early form of inflation
That really happened in the UK.
In the "Good old days".
Excuse me I am just letting my imagination wander.
Or is everyone really being tricked and scammed like never before in History.
Paper with nothing to back it ,is just paper.
European equities traded higher during the premarket session on Friday as investors digested US inflation data and awaited news from the G7 summit, scheduled to kick off today in Cornwall.
Aside from discussions between G7 leaders, traders were also awaiting a fresh batch of economic data from the UK, including the country's GDP figure. Earlier, the European Central Bank kept its monetary policy unchanged, but raised the growth forecast for the euro area.
The DAX was up 0.15% at 7:55 am CET. Meanwhile, the FTSE 100 gained 0.15% as well. In Paris, the CAC 40 rose 0.12%. The euro added 0.10% against the dollar, buying 1.21882 at the time.
Breaking the News / JC
OT: another attempt to sign my property lease will be made today, apparently...
I shall revert in due course!
Happy Friday y’al
Russia’s Nordgold has confirmed plans to list in London with bankers eyeing valuations of up to $6.6bn amid ‘significant interest’ from investors
Subscription only:
https://www.thetimes.co.uk/article/russian-miner-aims-to-pave-the-citys-streets-with-gold-gwktrc7pj
The countdown is .... We are excited about our forthcoming listing on the Premium Segment of
@LSEplc Admission is expected to occur at 8am UK time on June 14, 2021. Shares will trade on both the TSX & LSE under the ticker symbol “EDV”. #LSElisting #responsiblemining
https://twitter.com/EndeavourMining/status/1402668331157626896
------------------------>>>
Who's in?
The Oz federal government has paid a negative interest rate [-0.010 per cent and zero to lenders until September] on $1 billion borrowed from institutional investors, the first time on record [this time is different] the total cost of a Treasury debt sale has fallen below zero. Institutional investors [ foreign pension funds, insurers and banks] need to park their money for short periods of time in safe assets and will pay the Australian government to hold their funds for the next three months [whilst they try and find real assets].
Australian Office of Financial Management CEO Rob Nicholl says demand for Australian government debt is strong [so investors are lining up to effectively lose money?].
The historic financing reflects central banks suppressing interest rates by buying government bonds in the secondary market and HUGE amounts of cash [why?] sloshing around the world’s financial system.
Counterparties are pretty happy to get zero per cent at the moment.
— Chris Dickman, co-founder ALTIUS Asset Management
Investment banks are buying the debt on behalf of offshore investor clients, making a loss on the yield but earning a profit on three-month forward foreign exchange contracts [ one of the more productive centers of global finance? ] Banks are flush with funding thanks to deposits by households and businesses that are cashed up from government stimulus payments. Banks also have access to cheap 0.1 per cent, three-year loans from the Reserve Bank of Australia’s $210 billion term funding facility. Housing loan rate 2+%, business loan rate 2.5-3.5%. Nice money if you can get it!!! And the banks are still shedding staff and branches like no tomorrow.
But the question remains, why is there so much cash around, and why are corporations sitting on so much cash. Uncertainty (insurance measure/liquidity) or just cant find the write investment/real asset or that the assets are all so over priced (such that a correction is getting closer?). Watch the FLOW OF FUNDS DATA
https://www.federalreserve.gov/releases/z1/
Can't wait to see what happens when the music ends?
best
the gnome
Funny how Cey dropped when gold lost nearly $50 but has not lifted today along with POG same for Fres, seems the market is keeping these miners behind for some reason, one would expect this to be at 117 at least as I see 1900 being breached soon...
Kicking ass (as they say)
Just topped the session high of $1895.48
Currently $1895.31
As usual… long time until 8:00am
for me…
Of course there will be a place in the order of things for unallocated . - The problem is that the unallocated market has gotten out of hand with reported leverage at times of as much as 100:1 - The market has morphed into a cess-pit of corruption, manipulation and greed. - Like everything else when it becomes too easy and when the Regulator is part of the problem. It's not just the PM market, the derivatives market in general has got the world by the b***s, exposing the global financial system to the catastrophic consequences of collapse..