The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen 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 Kees experience there is an extra cost working in African countries. The productivity there is lower than elsewhere.
Kees does not subscribe to many unit mining cost estimates used for African countries in the economic assessment in technical reports.
It was confirmed to Kees that a SRK study had come up with an average unit rate of US$3.5/t mined for Africa.
This includes drilling and blasting, I estimate for free dig material this should be some US$1/t lower.
About Batie, it is non-core in Kees mind because the very low grade makes it unattractive given the risks associated with a project in Africa and a political high-risk country at that.
No wonder they downgraded Batie!
Although Doropo is better, although still not fantastic.
Mr Tibbles ,I would broadly be in agreement with Dasut on strippiong,there is no other option.
To throw everythingb at ist would be a big mistake. As it is now Centamins fleet hauls ore to the plant, the waste moved by thee contractor,thus maintaining as much production as is possible.
followwing the plan.
Burkina Faso was a mistake so is as good as gone,no matter if sold or not.No more money thrwn at it. The same would apply to the other if it is not feasable.
Some keyboard warriors think differentnly ,its their right, but some allegations are downright supposition and libelous.
But that is only my opinion.
Hi Dasut ,Paul,
You may recall that Martin Horgan spoke about this on one of the Webinar's
Centamin’s Sukari gold mine in Egypt is in the process of upgrading its fleet of Caterpillar 785C haul trucks with “lightweight truck trays” designed by VR Steel and fabricated by Egypt-based Aresco.
https://im-mining.com/2021/08/12/centamin-working-with-vr-steel-real-mining-and-aresco-on-truck-tray-rollout-at-sukari/
Paul No worries it gave me a chance to show off a little and yes I would agree when done right it is a very good thing and Caterpillar are a good group to get on board to finesse areas such as this and great that people at Centamin understand and listen because can look to be expensive in the short term but long term very profitable.
Spoon I don't think it is a total blitz and then go mining as I have said they are already back in mining the west wall phase 4 and it would be crazy for the production guys not to incorporate areas that are opened up into their mine plans and phase in to maintain grades.
Yes it is an expensive exercise but they are paying for material moved and not having to invest in expensive plant and additional people to drive and maintain the equipment, supervise and manage the production etc.
As I say I find it really difficult to offer up alternative solutions especially frustratingly sitting in my armchair at home.
Don't get me wrong I would far rather we weren't in this situation created by naïve Gucci miners but as I say Horgan does make a lot of sense when I listen to him. I particularly like the more conservative sensible targets that can be maintained and have a chance of being beaten.
Australia Day brings back great memories of my trips down under. Great prawns but couldn't get enough of the Bay bugs when first introduced to me up north in Mackay as part of a magnificent shared sea food platter.
Thanks for your information on Batie better out than in as more suited to a company with support from a major.
Hi Dasut
From what Information I have seen I am of the opinion that the amount of waste being stripped up front is more than is required. If the waste stripping up front is reduced it allows for a steadier increase in production levels as opposed to a more sudden jump which will occur under the current apparent strategy.
I believe the steadier production increase is more favourable to shareholders whereas the sudden jump is likely to create greater benefit to executives by way of performance based remuneration. I do not begrudge executives performance based remuneration but I do take umbrage when I perceive there exists gaming of the system at the expense of shareholders.
I would love to see the release of more detailed information concerning the current pit problems & the overall mine plan as this may assuage my worries however the information has not been released which only serves to further increase my concerns.
Dasut
Batie is non core, because it does not return the right amont on investment, commecnurate with risk. The gold is double refracoty(mostly aparently), requires an ultrafine grind and has high stripping ration. Apparently they could not find enough oxide gold to get the capital down quick enough
Australia day today ... Australia Day events begin with calls for country to unite as 'one mob'. Interesting day, beer and prawn on the BBQ
best
the Gnome.
It was probably me not wording it right. I did understand about the amount the trucks could carry. Anyhow--it is a good thing.
Tibbs I am not sure that there is an African cost structure given the number of countries on the African continent having worked in 6 of the countries there are quite large differences and considerable political risk variations.
Quick difference Burkina more expensive than Ghana and Ivory Coast purely based on logistics of land locked and easy access to ports.
I would love to know why Batie is non core, is it political risk, physical risk is it cost prohibitive suggest a combination of all in addition to a difficult ore structure, not sure if I have seen a detailed justification relating to Batie being non core.
There are numerous mines in West Africa long standing that are profitable and if Doropo and ABC are anything like projects that I visited on numerous occasions in Ghana and have free dig start ups of oxide ores then I see both resources as benefiting Centamin 's bottom line.
paul I don't know if I mentioned the trucks but just a bit of an explanation they aren't light weight trucks they are lighter weight truck bodies/trays. Caterpillar together with the Caterpillar dealer named Mantrac for Egypt would have undertaken a job study working with Centamin's production team to calculate the weight of the material being carried per cubic metre. This has to be a detailed quite lengthy study over a period of time and once all parties are in agreement Caterpillar will calculate how much weight they can take out of the body and at the same time increase the cubic capacity of the tray without compromising the integrity of the body structure and also protecting the truck from over loading. These bodies/trays are know as mine specific bodies and a mine said to be carrying light material will quite obviously benefit from carrying more cubic metres of material so therefore more tonnes than a standard build body/tray without overloading the trucks which is of paramount importance to all parties.
Dasut --that made me smile. I.ve often thought just sticking a load of explosivesi in the ground and then mining what it throws up would be a good idea-------maybe a small Nuke? Oh hang on thats the plot for "Goldfinger" isnt it, contaminated gold?
Was it you or cowichan who mentioned the larger? lighter trucks that Centamin brought in ?
None of us are getting any younger and hopefully things will start to fall in line for Centamin before too long and the share price and dividend will go up.
I suppose when you are shifting a pile of waste, the first bit at the top of the heap takes the most time and as you get lower, each trip should be a bit quicker.
As an aside-------are long term holders looking at a high share price and selling or just holding for a good dividend? I think most of us missed the boat with the former!
Spoon,
Why do you think that the share price has reacted so erratically in the past , its because the Sukari mines output couldn't be relied upon due to poor mining practices , the market knew this which encouraged some brokers to take short positions.
Properly run companies don't crash 50% in value in a few days !
You claims of trading success in taking advantage of huge share price surges and falls is confirmation of a the failure the previous Sukari management to establish sound mining practice in order to achieve consistent and reliable output guidance.
So now the recovery of Centamin is at last underway and will gain pace over 2022, although as Dasut points out, such is the task facing the new management it will take some time, but that said it may well prove to be a great investment for the long term!
Sppon ,
If you recall the main reason that Centamin decided to develop outside of Egypt was due to the mining code at that time.
Since then the Eygptian mining code has changed considerably and making development of new mines very attractive for Centamin and others!
I am informed you need good grade in Western Africa to pay for extraction there. There is such a thing as an African cost structure and it is relatively high!.
To that you need to add the security risk which is increasing annually with the fundamental islamist insurgency. Sure, the comment below about forfeiting 1.4 million ounces may be true, but are they economic ounces? It may well be a case of preventing throwing good money after bad money.
Funny how often people believe that management makes decisions unfavourable to the company and, by extension, them. From recent actions it seems that Centamin management has decided to rather focus away from West Africa with all its problem back to Egypt where they have a strong foothold, existing government relations, knowledge of the geology and it being a country with very little historical exploration.
So it seems prudent instead of risking share holders money on developing resources that may be far better sold to others .
Wanadoo
Apparently its history goes back to 2011, first advanced by a company called Ampella Mining, which was acquired by Centamin in 2014, which was seemingly mostly interested in the Konkera and Batie prospects. I did a search for “Wadaradoo” on Centamin’s website and it does not even pop up. That is how unimportant the prospect is for Centamin. They do give a resource for Batie West of 2.11 Moz at a grade of 1.17 g/t all in Indicated and Measured category. The project is classified as Non-Core, which does not surprise me given the relatively low grade and its location. In the October corporate presentation of Centamin Batie West does not feature. The downgrading of the project came soon after new management got involved.
Wadaradoo is apparently now owned by Altair, which states in a corporate presentation dated October 2021 that the resource is 1.4 Moz at 0.95 g/t Au, even lower grade than Batie West. I have not found any details on this prospect and have no information about the type of mineralisation (oxide versus sulphide, amenable to heap leaching, prospective strip ratio, etc.), but suspect it is pretty mediocre to worthless. Why otherwise would Altair’s market cap. be currently only US$5 million, including having another project? Apparently the market also does not see much value in the project. Maybe some attache too much credit to the statement in the Altair corporate presentation that "Feasibility level projects in West Africa: "Typically $300 million to $400 million valuations”.
This statement's generalisation is questionable. Value is determined by size, grade, prospective strip ratio, dilution, metallurgy, etc. There is no such thing as “typical” for mining projects.
Hi Mizolgit,
Be interested to hear you opinion on why we are where we are at Sukari and if you agree the new strategy for the company in Egypt and west Africa ?
Absolutely agree Dasut!
Spoon I am not sure what else Horgan and his guys on the ground can actually do to improve the situation
, what is your suggestion ?
I once remember talking to a great old boy who had his own mine and he said ideally he would like to stick some explosives in the ground and the outcome of the blast being all of the material flying through the air ending up on the leach pad and let the cyanide solution do the rest. Cutting out the need for people who drive, maintain and fix expensive machines but unfortunately they like processing plants among many other things are necessary evils of the business and we then went on to talk about flogging him a larger fleet of equipment.
A bit of waffle but just saying we once again need to bite the bullet as to achieve the £2 share price too many corners were cut. Had they removed all of the waste with cut backs at regular intervals they wouldn't have achieved the ounces, although had I been looking at the job I would have been pushing for additional or larger equipment to achieve overall higher material movement, so not impacting on the all important ore. I suppose I would then be criticised for throwing shareholder money at the problem.
I do agree that it isn't uncommon for miners to take short cuts and follow the ounces to achieve targets but it isn't something that is good for the long term and inevitably it comes home to roost.
The issue is a a very large issue, you only have to look at the waste tonnage that is being shifted when compared with the low movement of ore to understand the magnitude of the problem.
If the new guys get the show back on the road with regular 500,000 + ounces per annum with a sensible cost base and the SP up at the £2 level then I won't be against some well earned bonuses.
Unfortunately I think it will be some time coming but I would certainly be very interested in what you believe Horgan and the guys should do to get back on track sooner rather than later.
Stay safe
Turnaround?
Ratings adjusted upward?
I can only think we are talking about different companies.
After selling the majority of my CEY position at 2 pounds (missed the peak but very profitable) in 2020 , I then significantly increased my holdings again at around 1 pound (missed the bottom but I still believe it will prove very profitable) so I simply don’t understand your conjecture that people did not wish to take a position - I am very comfortable with my position & am sure their are many others who are in the same position. I simply believe that the remedial work could have been done more efficiently which would have resulted in a far better share price than we are seeing at the moment. This adversely affects my capital management & accordingly annoys me - it does not change my view on the true value of the Sukari project which was created long before Horgan came on the scene & will remain long after he has departed.
As for West Africa, there are plenty of very successful projects taking place in West Africa so I don’t think a dump everything attitude whether it be yours or Kees Decker’s makes economic sense. Conflict & political turmoil are simply an unfortunate part of Africa & have been for a long time, this does not mean successful projects cannot be developed & without development the beleaguered people of West Africa have little chance of improving their lot in life so I find your dump & run attitude to be quite callous as well as lacking proper economic analysis.
Just my opinion & you are fully entitled to yours.
Spooninngton you and Mr Tibbles both have the right to post rubbish on here if you wish, whether it has one jot of relevance or not.
Its called free speech.
That does not mean others like it ,or not, so get used to it.
Nothing can be done about it.
Spoon,
Comments from Kees Dekker mining analyst on the present situation who incidentally approves of Martin Horgans present strategy at Sukari.
It again shows how short is the time frame is of many investors.
The turnaround was signaled more than a year ago.
That was however too far out for people to take a position and just sit it out.
Now at last the ratings are adjusted upwards.
Best to dump western African projects.
All far too risky given the local politics and conflicts.
I am not implying anything Tibbs, simply repeating a comment you posted concerning Horgan - to be quite frank your opinion as to whether Horgan is a decent chap or not has not one jot of relevance to his suitability nor performance as CEO.
Hi Dasut, I agree that Horgan inherited a crappy situation but that is part of mining.
However, I do not believe, based on the information released about the pit problems, that the rectification program is being carried out in an efficient manner. Unless the problem is far more serious the available information indicates then I see two likely explanations:
1. Horgan lacks the detailed technical skills to properly oversee the rectification & either needs more support or replacing.
2. Horgan is using the situation he inherited as an excuse to do more up front stripping than is necessary which will make him look extremely good when the overdue recovery happens & no doubt entitle him to some very generous performance bonuses.
Either explanation means that shareholders money is not being used efficiently which I object to.
I agree that the previous management overshot the mark in attempting to maximise short term production but this is not uncommon in gold mining, there is a very fine line between being a hero with great production numbers & losing your job as Pardey discovered but I do not believe that there was an orchestrated pump & dump or spoofing as Tibbs suggests. No matter what mistakes previous management made it does not give current management an excuse to use shareholders funds inefficiently & that is my concern.
Yes still here Drunkinfti, unfortunately along with many others I was foolish enough to believe the Centamin management at the time instead of heeding the concerns flagged up by Kees Dekker in the 2015 & 2018 reports.
We retail share holders have been taken for saps by Pardey, Josef & Youssef the carpetbagging crew of the Sukari Pyramid Scheme.
Also it seems that many millions of dollars may well have been chucked down bottomless pits on exploration and supposedly developing mines in what turn out to be unstable zones of insurrection and corruption, although it is hoped that some of these projects may be disposed off for some sort of return if buyers can be found.
That said some of the remaining WA projects may be developed and it is hoped, or envisaged the returns may be good, although they aren't guaranteed by any means, and may not be that good when the initial outlays and other factors are taken into account.
At Sukari It seems that over a decade has been spent on building a hole that is far too narrow and so unsafe and inoperable in some ways that it is now going to take possibly half a decade to put things right, so basically 15 years to create a mine that should have been created in far less time were it not for the deception and greed for short term gain by the previous management!
At least now we have a competent Sukari management who is now doing the job properly and hopefully the new concessions in Eygpt may prove to be as good or better than we hoped for!
Sorry the comment below was to Spoon.
I said Martin Horgan had integrity, quite different from what you are trying to imply.