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What is the point of centamin? A whole load of gold in the ground, a big fat dividend and $300m in the bank - right? The fact that the price has stagnated is just lovely as far as I'm concerned.
Hi Auson!
Just putting some concerns out there.
Aren't Barnier and Frost now meeting in person? Since I live in Kent, I sincerely hope they make some kind of even vaguely workable deal soon. Otherwise the whole county is going to turn into a giant lorry park.
A hard no deal Brexit would, of course, be good for Centamin, as it would send the value of the pound down (perhaps to $1.20). It might even cause a full scale sterling crisis - lucky us!
TigerByTheTail,
From what I have heard/ read, there is no Brexit deal to be done ( before the withdrawal deadline ) So unfortunately it will be a hard Brexit and then negotiations after the SHTF.
I also think the US election result will be contested but Trump will win.
Just my 10 cents
Hi Sotolo!
I've decided to wait a couple of weeks before making a decision on buying back in or not.
Firstly, it now looks like we'll get a Brexit deal (of sorts) sometime around 12th November. That will likely push up the value of sterling (by 5%?), and so drive down the value of dollar earning companies like Centamin.
Secondly, and more importantly, the US election is 3rd November. One possible outcome is that Biden wins but the Republicans keep control of the Senate. That would scupper hopes for any meaningful US stimulus, and so push down the price of gold. Another possible outcome is a bitterly contested election, which might be enough to cause a panicked deleveraging from all financial assets, like we saw back in March.
I'm happy to wait both of those potential developments out. Remember both Wheaton and Kinross are seeking London listings, so they may suck investment oxygen away from Centamin as well.
The only reason I can see to be in a hurry to put money in Centamin is the chance of a takeover. Endeavor's original offer for Centamin was a "nil premium merger". If they repeated the exact same offer today it would come with a 30% premium, considering the relative movements in the two companies' share price since then. I wonder if that's not how this story ends sometime in the next year.
Question is it time to buy back now just below 130, past times it has continued down for a while after fallen production with management talk of recovery next quarter not fully believed, sensibly as it turns out, this time it is in a year and who know what will happen in the meantime and then permanently slightly lower production. Plus who knows if gold will escape the 1900’s doldrums up or dow, think I’ll wait maybe.....now to have another look at the price....
At the current 130p, shares in Centamin PLC (LON:CEY) have now given up nearly all the gains they’ve made since the beginning of the year - an unexpected and dramatic underperformance from one of the largest pure-play gold producers listed in London.
The effective flatlining of the share price has come at a time when gold has soared from less than US$1,500 per ounce to the current levels some way north of US$1,900.
The reason is simple enough, though: the company is now saying it will produce around half as much gold from its Sukari mine in Egypt during the fourth quarter of this year as it thought it would. That in turn translates into higher unit costs and lower cashflow, and the effects of rejigging the mining schedule, which has been necessitate by instability in the Sukari pit will be felt in coming years too.
New chief executive Martin Horgan is now trailing what he calls an “asset life” update that will be forthcoming in December, all of which have led investors to wonder, quite simply, what is the point of Centamin?
After all, the context in which that question is being asked is the best gold market anyone’s known in years, a market in which even if you just hold physical gold you’re up by more than 20% since the start of the year. Holding physical is traditionally thought to be a more cautious approach in the mining world, where actual miners traditionally offer much greater upside due to their operational leverage.
Thus, since the start of the year, African Barrick (TSE:ABX) has risen by around 40%, Newmont (NYSE:NEM) by more than 40%, and Endeavour Mining (TSE:EDV), a company which made a tentative offer for Centamin earlier in the year, by a similar amount.
To be fair, some others, like AngloGold (NYSE:AU) and the Australian champion Newcrest (ASX:NCM), have also flatlined.
But in a sense, this just goes to illustrate the point. In a buoyant market investors have plenty of choice. Those that underperform will very quickly be left behind.
For a while, Centamin was somewhat insulated by its unique status in London, following the departure of Randgold and the Russian taint on all the remaining peers. But now, companies are wising up to the apparent vacuum in London.
First Australia’s Resolute Mining (ASX:RSG)(LON:RSG) took a dual listing, and now the well-established mid-tier Yamana Gold (TSE:YRI) has come to town too. Amidst a peer group like this, Centamin could very quickly find itself dropping down the rankings.
As it stands, Horgan brings immense goodwill from the wider mining sector with him into the job. But he’s going to have his work cut out
https://www.google.co.uk/amp/s/www.proactiveinvestors.co.uk/companies/amp/news/932034