Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
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That's better news and with gold up then hoping for good week
Centamin PLC (06:02:10)
News: *BERENBERG RAISES CENTAMIN PRICE TARGET TO 132 (131) PENCE - 'BUY'
Gold now up $20 since Fridays close....
Equities in Europe traded mixed in the premarket on Tuesday ahead of several economic reports that are to be released during the day. Those include the latest data on the employment rate and manufacturing in Germany and the European Union. The United Kingdom will also unveil its latest results in the latter sector and in housing prices.
Earlier, the European Commission supported the European Medicines Agency's recommendation to approve the use of Pfizer Inc. and BioNTech SE's vaccine against COVID-19 in children aged between 12 and 15.
The DAX traded 0.40% higher at 8:00 am CET. At the same time, the CAC 40 advanced by 0.29%. On the other hand, the FTSE 100 dropped by 0.10%. The euro stood flat against the dollar, selling for $1.22239 at 7:57 am CET. A minute later, the pound sterling gained 0.12% against the greenback, changing hands for $1.42266.
Breaking the News / JR
Think yourself lucky you are not a client of Liburam.
Poor souls.
I assume AISC does go up but by the same proportion as the POG so margin is maintained....
From what I've been able to glean from the shock Broker target price of 80p published last week they are under no obligation to justify themselves other than some general observations. If this is not the case then apologies but I thought I would do my own back of a fag packet calculations to see what I came up with. Assumptions:
- price of gold to stay the same at it is over a 10 year period when expressed in GDP deflated $. I.e. it maintains its real value when measure against USD
- AISC is at 1400 $/oz and stays that way over the life of mine
- life of mine 10 years
- only published reserves of 5m exploited no further gold at Sakuri exploited
- no further exploration expenditure since resources not converted into reserves
- break up balance sheet value is $400m based on intangibles and plant having zero value at end of mine life
- the west african prospect is realistic based on high discount factors.
First we have break up value of $400m
Next we have 5m oz at AISC margin of 450/500. Given the 45/55 split let's allocated $200 oz of CEY. Multiply by 5m reserves gives you $1b
Add in the west African prospect which, depending on assumptions, is worth 300-500m - take the median - $400,
Thus 400m plus 1b plus 400m gives 1.8billion or ~ 150p per share. Not a million miles away from other broker estimates
So what assumptions did the rogue broker use? POG? - in which case all miners are impacted. AISC - the 1400 figure I use is pretty steep already. Do they have such a low opinion of the new management to deliver. Reserves ? What inside information to they know that nobody else does?
Perhaps I have missed something obvious.?
Suggestions on a postcard gratefully received ...
This what we'll have to do, we all have a choice, GLA ;-)
I’m personally make very happy reading regarding the project news on the last RNS, especially Doropo adding potentially another 200,000 ounces annually. I also believe it was a case of the sell on news brigade along with the ridiculous 82p broker note that contributed to the excessive drop & panic selling.
When a decent RNS lands on any company I’ve seen many a time that the sp will sell off....only to recover again quickly a week or so later, I believe this will be the case with CEY.
7 Wall Street analysts have issued ratings and price targets for Centamin in the last 12 months. Their average twelve-month price target is GBX 153.29 The high price target for CEY is GBX 240 and the low price target for CEY is GBX 82. There are currently 1 sell rating, 1 hold rating and 5 buy ratings for the stock, resulting in a consensus rating of "Buy."
I guess this has become a very touchy subject. To explain:
"Burkina Faso isn't a country we should or can afford to abandon going forward."
that is to say
"Burkina Faso is not a mining district we should or can afford to abandon going forward"
or to articulate further
"Burkina Faso is not an area we should or can afford to abandon going forward"
This wasn't to suggest that BF is not a country or an area or a mining district... but thanks for reminding us BF is a country ;-)
Kitco report:
"Eight out of the top ten lowest cost mines in the region located in West Africa."
https://www.kitco.com/news/2021-05-18/Top-10-lowest-cost-gold-mines-in-Africa-in-2020-report.html
2020 All In Sustaining Costs
B2Gold's Fekola Mali $599/oz
Endeavour Natougou-Boungou mine in Burkina Faso $609/oz
Perseus' SGP mine in Ivory Coast $692/oz
Newmont's Akyem mine in Ghana $757/oz
Barrick Kibali mine in the Democratic Republic of the Congo $778/oz
Newmont's Akyem mine in Ghana $757/oz
Barrick Tongon mine in Ivory Coast $791/oz
Endeavour Ity mine in Ivory Coast $808/oz
AngloGoldAshanti Iduapriem mine in Ghana $809/oz
Resolute Mako mine in Senegal $812/oz
Burkina Faso isn't a country we should or can afford to abandon going forward.
Opinion of Kees Dekker Mining Analyst
But…… they are in Africa with all its associated risk. Take for example the recent coup in Mali, Jihadist threats and when in the DRC a very corrupt government and society. I anyway for not like cash cost metrics because they are so open to manipulation.
Just capitalise much of your waste stripping cost as “deferred” and voilá you dropped out a lot of cash cost.
I do not understand the comment that Burkina Faso is not a country. It is.
And of course ,you are not wrong ? !!! ;-)
Of course mate. We are still friends (even if you are wrong about this) ;-)
Ha Ha, Don a drop of sarcasm is like water off a ducks back, we must agree to disagree on some topics :-)
MrBond46
You are so very right. There are other places to voice my concerns over West Africa and I can assure you I am making my voice heard on that stage.
On the subject of not understanding why one would talk about West Africa on this BB - that is more than a little wrong. You can speculate whether gold goes up or down on this BB. You can speculate about the open pit at Sukari. You can speculate about Capital clearing the overburden, when we might get concessions awarded around Egypt even what you ate for breakfast, lunch and dinner - but oh my gosh - stop making noise about West Africa?
Maybe it's past your nap time...
Can't disagree with your opinion on this, after the most recent drop in share price due to the WA strategy announcements is almost of no consequence when compared to the previous two drops as a result of the problems at Sukari.
This seems to show which issue is of paramount importance at the present to share holders.
I really do not se why there is so much noise is being made over this subject, B/F,
At the end of the day , nothing much that is said here on this subject ,makes the slightest difference to management strategy, Everyone has their own opinions and that is all they are.
What fun ,Razor's!
I confess to c&p’ing the odd post into google translate which I just did with this one..
It all became quite comical when the female voice with a trans-Atlantic accent read out...
“I wouldn't touch that bunch of carpetbagger's with a barge pole!”
Nice choice of words Mrtibbles.
Cheers
Hi Cowichan,
I greatly appreciate and respect your input and opinion's, you are well informed and know your subject, I also appreciate your opinions and enthusiasm on what could be done and the possibilities in West Africa.
In the past I held Barrick, but can't say that I was impressed particularly with the share holder returns or the communication which was patonising ,even rude to say the least, however the CEO Bristow is an arrogant and awful character who pays lips service to environmental issues, slaughters wildlife for his own pleasure and over bloated ego, also Barrick does not treat its workers well and seems quite prepared to rub along with some pretty corrupt governments for commercial gain.
So not that Barrick would care a jot I felt it would be hypocritical to hold their shares, as to Slimy Seb's Endeavour ,I wouldn't touch that bunch of carpetbagger's with a barge pole!
So although I have my issues with the way Centmin has run they pale into insignificance when compared to my feelings on Slimy Seb and lion slaughterer Bristow!
Personally if Martin Horgan wants to sell Batie West and make either of those two two buggers squeak over the price and then uses the money wisely elsewhere in Centamin I have no objection.
I appreciate your enthusiasm over West Africa and agree you should have received answers to your justified questions on the pertinent points, but unfortunately after being invested in Centamin for over a decade and enduring so many set backs , broken promises and disappointments my enthusiasm for what might be has disappeared, but at least we seem to have a CEO who may actually get what we have now Sukari running properly!
For Those that may have missed it-
May 27th 2021 Peel Hunt Note
West Africa growth from Doropo
Centamin has released the review of its West Africa gold project portfolio, with the announcement that its Doropo project in Coted'Ivoire will be progressing to PFS stage. Management seems fairly high conviction on Doropo being in production by late 2024 at an impressive capital intensity. At 150-200k oz pa,
Doropo should also provide a substantial production uplift to CEY after Sukari operations have stabilised. Diversification and growth are now firmly part of the CEY strategy.
Doropo project could be in production by late 2024
Centamin (CEY) completed the West Africa portfolio review, from which the main conclusion is that the Doropo project is likely to be CEY’s second mine.
The Doropo PEA showed potential to build an open pit mine for US$275m in capex with the aim of producing just over 150k oz pa over a 13 year life of mine
(LOM). Doropo’s average AISC is estimated at US$904/oz with cash costs estimated just below US$800/oz. Doropo could also produce over 200k oz in the first five years of production for an early payback period. Management has stated that the PFS will be technically heavy so time to DFS could be short, while costs included (capex and opex) could well come in lower than stated today. CEY has allocated US$14m in 2021 for 70km of drilling and to move the project to PFS stage by mid-2022.
Batie West looking for strategic options
Meanwhile, the board has decided to explore third-party development optionsfor its Batie West project in Burkina Faso. The Batie West PEA showed potential for a US$265m capex mine with a LOM of just 8.5 years of 140k oz at an AISC of ~US$1000/oz. However, with a higher opex and capital intensity compared to Doropo, the CEY board has decided that this mine does not fit its investment criteria, and so will categorise the project as non-core.
Production uplift expected by 2024/2025
The ABC project in Cote d'Ivoire has also been allocated US$3m in exploration spend for 2021 to get permits by mid-2022, but was the project with the shortest update today. It sounded as if management would like Doropo in production by late 2024, in our view, with any potential construction capex for Doropo being timed to come at the tail end of the current Sukari pit stripping. Meanwhile, the reclassification of Batie West as non-core could potentially bring in funds to CEY should they sell off the project
MARTIN HORGAN, CEO commented: "Building a strong active growth pipeline is central to our strategy, while maintaining our capital allocation discipline. Today's announcement of a positive preliminary economic study at Doropo and the exploration potential at the earlier stage ABC, demonstrate the quality and potential of our portfolio.
The Batie West Project has potential to deliver a profitable mine, but not one that would currently meet our strict investment criteria. We are now initiating a review of development options for this asset.
The Doropo Project is very exciting and is our priority growth target outside of Egypt, showing excellent potential to become Centamin's second mine. Our highly experienced team has proven expertise at delivering successful gold projects in West Africa and will now commence the PFS, the results of which we look forward to announcing in mid-2022."
https://www.centamin.com/assets/doropo-project/
In view of our debate on what may be ways forward in West Africa and our frustrations about the erratic share price I though this post from 2017 from Dasut warranted a reread.
As we are aware since 2017 Egypt's new mining code of 2020 has hopefully removed many of the obstacles that deterred new commercial mines development, although that acknowledged unfortunately the legal system doesn't as yet seem even slightly more speedy with regard to Centamins outstanding issues or Law 32, which remains under scrutiny by the SCC, assuming they are still around that is!
Original post Dasut-
Centamin/Pharaoh Gold/Sukari I have mentioned various names because let us not forget the parent company is Centamin and currently their only production comes from their Egyptian flagship mine.
So currently political and commercial risk are based on Egypt which has unfortunately gone through and continues to do through many "basket case" scenarios.
Investors in Centamin are risk takers so the share price will be volatile BUT at the same time it is a profitable business model, with conservative management, with no overly ambitious predictions or advertising gimmicks.
It is a company that will be ham strung by what Egyptian politics/legislation dictate, coupled with fluctuations in the gold price.
I really don't see the frustrations that many on this board are suffering changing until the West African opportunities turn into producing mines and political and commercial risks are spread.
As an investor I would hope this will happen sooner rather than later
BUT I don't think fast tracking is always the best route especially in a mining business to take, especially developing virgin sites, so as I have said previously making sure double checking detailed strategically put together mine plans are essential and are the difference between bleeding money and making good profits.
So as I have seen under other postings patience is of paramount importance so I am keeping the faith.
Possibly Dasut may want give us an update on his thoughts of 2017?
Yes.
One of the things that happens in gold processing (like many other industries) is that with time, there are new breakthroughs, which are better and cheaper. Its happened for the last 100 plus years. Some call these disruptive technologies.
There is a tremdous amount of active metallurgical research being done on refractive gold ores, like those at Batie. Martin no doubt will be aware, and will have disensed appropraite samples of the Batie Ore far and wide, to the more capable researchers. Waiting for the results and for technology to provide a solution to the 4 m ozs probems is not a bad strategy.
See below for one insight
"TREATMENT OF REFRACTORY GOLD ORES – CASE STUDIES COMPARING
CYANIDE AND THIOSULFATE LEACHING TO RECOVER GOLD
By
Paul Breuer, Robbie McDonald and Hongguang Zhang
CSIRO Minerals Down Under Flagship, Australia
The majority of the world’s gold reserves are hosted in copper-gold ore deposits and/or are
contained in refractory ores. Hydrometallurgical processing options for these materials are
becoming increasingly attractive over pyrometallurgical processing due to their lower environmental
impact and flexibility.
Ultrafine grinding and pressure oxidation (POX are two common methods often employed in the
treatment of refractory gold ores prior to leaching. However, these pre-treatment processes do not
always result in high gold recoveries upon cyanidation (and can be uneconomical due to high
energy and/or reagent consumption. Presented in this paper are case studies for several goldbearing refractory sulfide concentrates and ores, where these pre-treatment methods have been
evaluated together with both cyanidation and thiosulfate leaching for gold recovery. The POX
conditions with and without the addition of sodium chloride are shown to have a significant impact
on gold recovery from the POX residues in most cases. Gold recoveries for most samples and pretreatment options when leached with ammonium thiosulfate and copper catalyst are generally
equivalent to, or better than, those achieved with cyanide leaching.
BECAUSE MARTIN CANNOT REACT AT THE WHIMS OF THE LIBERUMS OF THIS WORLD, DOES NOT MEAN ALL IS LOST
IT REQUIRES MORE STRATEGY AND THOUGHT PROCESS THAN THE "CUtE IN SUITS, KUTCHING!, FEE CHARGING, RENT SEEKING BRIGADE" maybe capable.
Just a thought
best
the gnome
Exactly gnome. To be honest I like Martin approach. Very professional indeed. He seems a decent bloke who can be trusted.
Like I keep saying the gold price will do the talking, and think it's only just getting going. However with projects like Doropo & potentially new assets in Egypt ( hopefully bang next to Sukari ) things for CEY could certainly get interesting. It's most definitely looking positive...just waiting for that Egyptian licence news next. Fingers crossed its good, can't see why not due to the fact they already have a successful working relationship. Obviously CEY needs better terms & that's why it's taking longer to iron a deal out. Time will tell