Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
In Life certain things are very strange.All on here seem very sensible,knowledgeable, and know what they are talking about,especially the Fundamentals of this company.
Why then is the truth of the worth of this company,is at opposite ends of the scale.The truth about anything must waver,at worst, in the middle range,when nobody is sure,(e.g. Brexit ).
It CAN'T be at opposite ends.The consensus should be that it is either bullish,or it's bearish or it's a "don't know", (as in election polls,Brexit etc ).Truth about something should not be, and cannot be at opposite ends of the scale.
Yet here we are,and if we include brokers,we have an opinion of 82p and 150 p.
The problem,is how we get around this and get to the truth ,as to the true value of this company.Any suggestions as to how we get around this ?.It's an important question that the answer could well help us all,in the future,not only in Finance ,but in all matters in life that we come across in the future. If we can work out the answer,success will follow.Any tips and advice on this ?.
Whenever the price dips, I try to look at it this way :-) , more shares with the dividend. Did they mention what the predicted dividend will be later in the the year? I thought it was supposed to be quiet a high one? I'll reinvest that one as well then maybe think off taking the cash in futre. Ive been in Centamin since 2012---------------kicked myself plenty of times. I sold some RMG last year when they were about the same price as Centamin! (That one is still hurting!) . I think I am actually down on paper with Centamin now, without the divis, but hoping that things will work out with the new bloke and the licensing round Sukari. THE COURT CASE! --------------will we still be alive when that gets sorted ?:-)
If we get the land round Sukari, maybe the safest option is selling off the African projects and focusing on Egypt?
Of course it wasn't coincidence that Liberium came out with their lowball SP on the day CEY should have been basking in the glow of a 200 oz future development, with the result the SP was knocked.
I am not saying CEY Management were complicit but there were a lot of others involved in the WA reviiew and studies and the timing of the RNS could easily have leaked.
There are a lot of crooks out there including so callled professional investors and market makers. Also as I have explained before CEY being cash rich, literally a gold mine and low cost to buy and sell (no stamp duty) is a traders dream.
So my take on the Liberium SP announcement = skulduggery.
Sad because of good work by Martin Horgan CEY had a good story of a 200 oz development in the pipeline plus possible disposal of Beattie West.
From my post 2014
The profit share will be what the profit share will be – the joint venture partner, ie the government, sits in the 50% owned subsidiary Sukari Gold Mines. The management board of this subsidiary has representatives of the government and an equal number from Centamin. All of the investment into the Sukari mine is audited, with Sukari Gold Mines very much being a part of this process. Similarly, all gold sales go through Sukari Gold Mines, where the operating surplus will be divided 50/50 between the government and Centamin, once the original capital has been repaid back to Centamin and its shareholders. The 3% royalty has been paid to the Egyptian Treasury ever since production started (this also goes through SGM).
With the above in mind, there is no issue with regards to the money that has been ploughed into Sukari, particularly the costs of Stage 4 (c.$350m) – this needs to be recouped before any of this operating surplus can be shared. This is not due to kick in until later this year, or possibly in Q1/Q2 next year. It is all a function of the ramp up in production and the gold price.
There is no dispute between Centamin, the Egyptian government and/or EMRA, nor the 50/50 Sukari Gold Mines subsidiary. What you are getting is probably a series of people mouthing off that they want profit share now. This is a political game more than anything, as the deal is the deal (in fact Centamin have advanced the country a few million dollars as a demonstration of their faith in this deal – this will also be recouped out of future operating surpluses due to the government).
What is wonderful is that very few people seem to understand what this 50/50 deal is – it is effectively a 50% tax on free cash flow. In fact the 50% will not kick in until 2016, as in 2015 this will be 45%. To counter this there is no VAT, no corporation tax, no other taxes to pay all beyond the above and the royalty, which on a blended rate compares reasonably well with other 1st world mining jurisdictions (like the US, Australia, Northern Europe etc).
See page 51: after the deduction of royalty payments and the recovery of costs and expenditure as provided in paragraphs b,c,d and e, any remainder of sales revenue shall constitute net proceeds and shall be shared between EMRA and Centamin.
(See the details in the pdf file. Alternate pages in Arabic & English).
http://gate.ahram.org.eg/Media/News/2017/2/26/2017-636237441861789391-178.pdf
Some figures from Mr-Yousef El-Raghy in case some of you find it useful:
-$12.2m advance profit share paid to EMRA in October 2017.
-$136m total advance profit share have been paid to EMRA since October 2016
21/11/2017
https://www.arabfinance.com/2015/pages/news/newsdetails.aspx?Id=416470&lang=ar
2018
https://www.egypttoday.com/Article/3/58671/EMRA-proceeds-4-5M-on-profit-account-from-Sukari-mine
Auson and Adrian work together but we don’t know,who they work for.What a coincidence,he is registering today to give us very useful advice????
Market detached from reality where Liberum note concerned.
Peel Hunt issued their own just yesterday with 150p target. All other brokers consider CEY a buy, with targets 120p upwards. Liberum the anomaly.
Conditions perfect for increase in price of gold. CEY has generated an enormous amount of cash past 12 mos. and will likely continue to do so.
Market missed the mark, in my view.
There have been several posts and statements as to what is fair value.
I am not saying any are wrong but without substantiation / explanation they are meaningless hot air.
So Adrian77 I can understand that "fair value" will vary depending on gold price so please kindly expain how you have calculated your figures of 120p and 82p.
Please don't take this post the wrong way, I am genuinely interested as to how the sps are calculated.
Adrian registered today to come and tell you cey is over valued? Wonder who he works for.
Adrian77,
I didnt ask about a risked valuation as risk is subjective no matter how we try to quatify it. I asked what is the value of the Gold in the ground at Sukari ?
Yield/div is 10 percent at these prices so not too shabby, whoever listened to anal cysts anyways future earnings and growth exploration.
Infrastructure alone is worth over 1bn. Crazy drop this...could bounce now off the 50 day moving average. Scare mongrels out in force.....good time to buy
I have translated adrian's valuation:
Quote ( "With the risk of the single asset and waste stripping I see an mcap around 1.2bil being about right given balance sheet strength. With gold around $1900 I would say a share prixe of 100 - 105 seems gair value.")
Translation: "With the focus of single monetary asset and high central bank ownership! together with exploration and development potential of the West Africa project, I see £1.2bn being too low for the mcap. With gold likely to exceed $1900 I would say a share price of £1.50 would be fair value."
Say hello to Jamie at the Tavern...
I hope this price dip stays til after 15th June. Will get more shares with dividend
Why have my Posts been deleted.....
And.....as stated 111 has gone. 106 next up
Apologies gnome, I am working from a mobile handset fat fingers. For you I will ensure I am more careful and check my spelling!
Essentially this share is 5- 10 % over valued at present there's no need to take offence to that. 2 x dividends will make it up if you can hold for more than a few weeks
The royalty payments make this difficult to see how it gets anywhere near 150p. The more they make the more that goes to the government no wonder cash flow is basically zero. If gold falls then this might be Lomnin all over again........
I think there is a bit of a short attack going on. I suspect had the African assets rns yesterday shown stronger figures then the 82p sell note wouldn't have seen the light of day. All planned by Liberium imo and executed on seeing some disappointing numbers yesterday.
Sp down from 1.22 to 110 so you could say well executed but dodgy.
Thats my take, i sold at 115 to preserve profits, may be back in when the dust settles.
I smelt it a mile off so sold to secure profit yesterday,, will be back when the dust settles.
"gair value" indeed Adrian77, off you go now...GandT at the tavern for you
best
the gnome
Adrian777. It looks highly suspicious when you have just joined LSE and are talking the SP down, don`t you think???
At the present those that have sold out are trying to convince themselves that they have made the right decision, just like those of us that stay!
Whichever way one decided there is no point fighting on the board, but the therapy of debate is welcome for all with current positions or future positions on CEY, whether these are long, short or hold.
A stock very rarely moves in a straight line, some will want to be traders, some will want to be long term holders., both are valid, but they require a different mentality.
It is dangerous to use a long-term mentality for short-term trades and vice-versa.
Even if production is slightly less for a short period , it will still cover existing guidance.
However if production is better than guidance, then all the better!
When material new information comes to the fore, like yesterday the market will adjust accordingly. as the market always does.
I wish everyone a sincere good-luck whatever their decision on Centamin and whichever way they are looking to participate in this market!
With the risk of the single asset and waste stripping I see an mcap around 1.2bil being about right given balance sheet strength. With gold around $1900 I would say a share prixe of 100 - 105 seems gair value.
Gold at $2000 = 120p
Gold at 1800 = 80p
Reserves alone plus cash is 98p. Resources would add another 21p = 119p is fair value.
Following on from yesterdays 82p target deramping, Peel Hunt has today issued a price target of £1.50 on this stock.
It is trading 32.5% below fair value according to simply wall street, and the consensus ratings are all higher than todays share price. It is also worth noting that Liberium's rating was based on $1800 gold, so they had not even taken the time to notice the uptick to $1900, and most analysts think we will break the all time high in gold price in the next 6 months.
Adrian77,
Congratulations on joining LSE today ! In your analysis on Centamin might I ask what you value the Gold in the ground we have at Sukari ?
Any thoughts on the bid we had at 125p ?
Supercharger,
I think analysis and logic is not part of the value offering from Liberum, to their customers.
They have not been around for long time, and probably have less time ahead, before they sink beneath the waves.
best
the gnome