Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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Number 1)s from my yesterday’s post are remarkably quiet today …
What good newsto start the day, better days to come.
Oh thank you Siko for your support.
The Company will host a webcast presentation today, Wednesday, 26 July 2023, at 08.30 BST to discuss the results, followed by an opportunity to ask questions.
Webcast link:
https://www.investis-live.com/centamin/64632d444170900d004d0607/lubo
Tornado, it means they can sell 240,000 oz or just over half their output at $1900 in 12 months time and the counterparty can buy 240000 oz in 12 months at $1900. If price stays above $1900 it is worthless to us, if it falls below $1900 we can sell those ounces at that price, however far gold falls. bBeing a paper option it means we can sell gold at whatever price over the next year and then on the last day claim the difference between $1900 and the lower gold price if that is the way gold goes. The option will also rise in value as gold falls towards $1900 and could be sold early. It will not have been that expensive. However it is slightly surprising for miners to spend money hedging unless needed to enable them to continue paying losses and of course if they continue doing it is an extra cost. I wonder why Centamin thinks it worth the money or if they are really gloomy on the gold price. It is quite surprising how bad miners are at predicting the gold price though not as bad as analysts. At least it doesn’t reduce the upside other than the cost of doing it, unlike Hochschild who yesterday said they had hedged to sell around 2100/$2200, guaranteeing them this price,, a very different and more expensive view, and necessary to them with big debts.
Protects to downside, leaves upside open
Everything as i hoped for and they answered my questions that reserves and resources to be updated in H2 and the progress on Nubris drilling. I hope he explains the put option in the presentation on how it all works. Unless someone here can tell us in a couple of lines.
And an answer to the waste removal question:
The Centamin fleet mined 36Mt of waste in H1 2023. The waste mining contractor mined an additional 22Mt, resulting in the total contracted 120Mt programme being approximately 70% complete, with scheduled completion mid-2024.
Adding... dividend news as expected ... results stellar.
IMPROVED RESULTS DRIVEN BY STRONG OPERATING PERFORMANCE
AND STRINGENT COST MANAGEMENT
MARTIN HORGAN, CEO, COMMENTED: "This marks Centamin's third consecutive six month period of improved EBITDA, driven by our focus on operating performance and cost management, whilst also benefiting from an improved gold price. This has enabled us both to continue investing in our portfolio and to distribute returns to our stakeholders. Our operational track record and strong balance sheet put Centamin in a robust position to deliver the next stage of growth including further optimisation at Sukari and continued development of the Doropo project."
Of course the financial situation in Egypt is bad.. very bad indeed.. and the main problem is the lack of foreign currencies.. especially the dollar.. but if you think about it, this is due to the lack of foreign investments and exports.. so the last thing the government wants to do in order help the situation is doing anything that would deter investments, and foreign investments in particular..
a) and b).. inflation and pound devaluation are problems, but inflation in Egypt is mainly linked to the pound devaluation.. so for Centamin it's not a problem, because the company's income is in US dollars, so for example, while the value of the Egyptian pounds nearly halved in the last few months, Centamin pays employees in Egyptian pound, has the company doubled the wages in Egyptian pound? Of course not.. so it costs less to pay in dollars.. and most other increases in expenses, linked to the pound devaluation, are protected by the company's income in dollars.. Of course there is a percentage increase in expenses, but that would be the normal international inflation like the rest of the world ..
C) Sisi is going no where as people understand that the country can't afford another revolution.. this is very clear to everyone.. and people understand now that (the grass is always greener..)
Sisi needs the IMF loans and relies on them, so he is following the IMF conditions to cut subsidies.. of course people suffer more, but they totally understand that any move trying to get rid of him thinking this would make things better, it would make things financially worse for them.. so they are angry as suffer, but are getting on with it..
By the way, life goes on in Egypt by people helping each other.. you have not seen anything like it.. everyone with money helps everyone without.. you won't understand it until you see it.. my mum's door bell never stops.. genuine people come asking for financial help, and my mum is constantly handing out money.. me and my brothers give my mum money every month just for this purpose.. we have families who get monthly allowances from us.. and believe me nearly all Egyptians, who could afford , are doing the same.. it's our nature.. I talked here before about what me and my friends do in Egypt, and this was the main reason for me getting out of the stock market, which was only Centamin for me. Making money is good, but it's much better to spend it in a way that makes you feel better, and nothing is better than knowing that you are making a difference in people's lives..
I see they have hedged about half of their production?
Gold price protection programme implemented for the twelve months to June 2024, with the purchase of put options for 240,000 ounces of gold at a strike price of US$1,900/oz
RNS Number : 1625H
Centamin PLC
26 July 2023
26 July 2023
Centamin plc
("Centamin" or "the Company" or "the Group")
(LSE:CEY, TSX:CEE)
INTERIM DIVIDEND DECLARATION
for the six months ended 30 June 2023 ("H1 2023")
Consistent with the Company's stated commitment to shareholder returns, the Centamin Board of Directors are pleased to declare an interim dividend of 2.0 US cents per share (US$23 million), for the six months ended 30 June 2023.
As per the dividend policy, this distribution is in line with the commitment to return a minimum of 30% of Group free cash flow before growth capital expenditure1 to shareholders in cash dividends. In consideration of the below factors, and reflecting the Board's confidence, a total of 56% of H1 2023 Group free cash flow before growth capex will be distributed to shareholders on 29 September 2023:
· Centamin is in a financially robust position with US$161 million in cash and liquid assets
· The US$150 million sustainability linked revolving credit facility remains undrawn as a result of H1 2023 growth capex being funded from cash flow
· The gold price protection programme limits the revenue downside risk below US$1,900/oz gold price
· The Company is operationally and financially well positioned for a stronger H2 2023, in line with plan
The interim dividend is calculated by the following:
30 June 2023
US$'000
Group free cash flow
19,362
Add back:
Growth capex financed from treasury[1]
21,818
Cash flow available for dividends
41,180
30% minimum distribution as per dividend policy
(12,354)
Surplus cash flow for discretionary capital allocation[2]
28,826
Board interim dividend supplement
(10,814)
Total interim dividend declared
23,168
DIVIDEND TIMETABLE[3]
Below is the final dividend timetable for the London Stock Exchange and Toronto Stock Exchange:
· Ex-Dividend Date: 31 August 2023
· Record Date: 1 September 2023
· Last Date for Currency Elections: 4 September 2023
· Payment Date: 29 September 2023
Dividend Currency Elections
The dividend will be paid on 29 September 2023, in US Dollars ("USD") with an option for shareholders to elect to receive the dividend in Pounds Sterling ("GBP"). Currency elections should be made no later than 4 September 2023 as per the instructions detailed on the Company website (www.centamin.com). Payments in GBP will be based on the USD/GBP exchange rate on 5 September 2023 and the rate applied will be published on the website thereafter.
As a Jersey incorporated company, there is no requirement for Centamin plc to make any withholding or deduction on account of Jersey tax in respect of the dividend.
ABOUT CENTAMIN
Centamin is an established gold producer, with
Not bad results, decent output and nice aisc, but dividend down another 20% much as expected and half what it used to be so no longer a high yield share (at least at this share price) as we know.
European stocks mostly decreased in premarket trading on Wednesday as investors focused on an array of earnings reports from across the continent and awaited the United States Federal Reserve's interest rate decision due later in the day. Deutsche Bank, UniCredit and Santander all published their results this morning, while Stellantis, Rio Tinto and Lloyds are also set to report before the bell.
The Euro Stoxx 50 fell 0.45% at 7:56 am CET, the CAC 40 slid 0.59%, the FTSE 100 declined 0.26%, while the DAX traded flat.
The euro added 0.08% against the dollar to sell for 1.10605 at 7:57 am CET, while the pound traded flat compared to the greenback, going for 1.29004.
Baha Breaking News (BBN) / NP
Gold flat at $1964
Good luck today, I hope all goes well
Nice to hear from you Siko, Gosh, for me, its been years since reading about conversations on a train .. take care now.
Hi Siko,
It's always good to hear from you.
How about instead of me opining about the news articles I read on Egypt
(admittedly I've never spent a minute in the country)
please tell us the realities on the ground - your personal first hand experience with:
a) if inflation is or may be a problem for companies operating in Egypt
b) if pound devaluation is or may be a problem for companies operating in Egypt
c) if Sisi can continue to operate the country without being overthrown should subsidies need to be cut further
In one of the news reports I posted it said 70% of Egyptians currently rely on bread subsidies. Does that mean without those subsidies the general population would have trouble affording the basic necessities of life?
Nationalization is just one possibility. Take Mexico , a few years ago no one would imagine Lithium mines being nationalized - but it happened, and why? Because the leader said it was in the country's national security interest to do so. This is the exact language Sisi is using to justify NOT abiding by the IMF requirements his government just signed a 3 billion dollar loan agreement with - that doesn't give me much confidence in Sisi's regard for business deals.
Your thoughts, rebuttal is most welcome.
Hi Cowichan,
(Will foreign assets be safe in Egypt?)..
(Will Egypt nationalize foreign companies?)..
(Nationalization of gold reserves could be a real option)..
(Are Centamin's gold reserves actually safe ? It's a big unknown)..
I noticed that you keep repeating the same hint over and over, and I don't know why!!
I know that you are not a holder at the moment, the same as me, but why do you keep repeating this assumption??
Could you please direct me to one single report talking about Egypt MIGHT be nationalizing any asset? Or even thinking about it? Or any reporter thinking that this could happen because of the current financial situation in Egypt?
If you Google (could Egypt nationalize), you will only get results about the Suez Canal in 1956..
As you are posting here, so I take it you are still interested in this share, as I'm sure you are not posting here only to protect other investors and enlighten them.. and of course you are looking to buy again either at a price that attracts you, or subject to certain news being released, which is absolutely fine and fair, but while your are waiting for either to happen, I don't think there is any need to post things about nationalizing Alsukary, while it's only coming from your unfounded assumption, and you never mentioned this when you were a holder..
As an Egyptian and know a lot about Egypt, I could tell you that nationalization is not on the table at all.. full stop.. and it does not need an expert to tell you that..
Sorry if any of my assumptions are wrong..
July 25,2023
More than half of Egypt's 2023/24 budget is allocated to debt servicing.
Mada Masr reported that the debt situation is so precarious that, within government circles, the option “to voluntarily default on some of the debt and negotiate with creditors about a new payment schedule” is on the table.
https://www.aljazeera.com/economy/2023/7/25/will-egypts-asset-sale-get-it-out-of-its-economic-hole
(and in regards to Egypt selling state assets to get some much needed cash fast, another article tells how it's going...)
“The government was pushing to sell certain companies at different times, trying to pit the various companies against each other to reach a higher sale price. But it did not only fail in achieving this, since the Gulf countries communicate with each other, but it also created political tension between Egypt and the three countries,” the analyst says.
As the attempts to play the various buyers off each other to get the highest payout made the negotiations drag on, Egypt’s bargaining position weakened due to the downward pressure on the pound.
“The power is always in the hands of the buyer. They are the ones with cash looking to invest. In the beginning, the offers were tempting, but the Egyptian side’s greed wasted a lot of time and led to the buyers’ accruing more power,” the analyst adds. “The buyers are of course in search of the best investment opportunity, which would come only with the devaluation of the pound.”
https://www.madamasr.com/en/2023/07/17/feature/economy/reaching-a-dead-end-where-egypt-and-the-imf-stand-on-the-stalled-loan-program/
-------------->>>>>>
The questions I ask myself:
What could a financial crisis do to foreign operating companies like Centamin - especially if the Egyptian pound crashes further and hyperinflation takes hold?
The answer was for Centamin's BOD to have diversified to reduce single country risk years and years ago -
however Mr Pardey's hit & miss tenure notwithstanding,
Centamin should have diversified when Mr Horgan & some brighter directors came in
Now the question becomes, will a rushed merger or sale be the 'preferred' solution to fix the single country risk once and for all ?
All they need do is put their shareholder's slush fund into an Egyptian bank - instead of London.
July 25, 2023
EGYPT FOREX
Egypt's two biggest state banks on Tuesday issued U.S. dollar-denominated certificates of deposit with high returns, in what appears to be the country's latest attempt to lure dollars away from the black market and back into the financial system.
The North African nation is grappling with a shortage of hard currency, with the Egyptian pound having lost nearly 50% of its value against the dollar in a series of steep devaluations since March 2022.
Banque Misr and the National Bank of Egypt (NBE) are offering a three-year dollar-denominated deposit certificate with 9% annual interest to be paid upfront in Egyptian pounds.
The country pledged to move to a flexible exchange rate regime and reduce the state's footprint in the economy while boosting the private sector.
However, the first review under the IMF programme has been postponed as the exchange rate has remained steady at around 30.85 pounds to the dollar since March.
Egyptian President Abdel Fattah al-Sisi appeared to rule out a further currency devaluation anytime soon in remarks made to a youth conference in June, saying such a move could harm national security and hurt Egyptian citizens.
-------------------------->>>>
Personal Opinion To Follow:
Government finances are generally bad in most countries (save perhaps those wealthy oil & gas exporters, go figure) but in Egypt the economic irregularities are papered over to a level that would make even China blush. A day of reckoning is coming - will foreign assets be safe?
Interesting notes Torn,
In Oz, there is a lot of pain, which seems to be driven from the mass immigration program the government has been running, This has spiked rental prices, putting renters in pain, and the interest rates which result from the Reserve Bank
response to Inflation (which has house prices and rents as a significant driver, courtesy of govt)...so a very large % of houses are feeling stress which is impacting on purchases, and on the story goes.~
The upward trend in salaries and wages, without anything close to a productivity increase is also creating significant pain
Hard not to see a drop in confidence
I am hoping future guidance holds and that AISC costs are on or below target. If they can update on exploratory drilling progress in Egypt that would be helpful and confirming reserves and resources to be updated in December.
In the meantime we get a positive CB confidence report trying to push up USD and pull down gold. However, reading the report shows USA families reducing spend on holidays, going to restaurants and gambling. However, they are spending a lot more on health and doing repairs within their homes (the idea of moving somewhere in the current market with a high mortgage deal looks bleak). The report suggests recession in Q4,but the optimism mainly arose because those on $100k a year or more are doing better which is certainly not the case in other income groups (something similar being seen in the UK). More low paid jobs arose in July which is usual prior to hurricane season (Stand-by jobs on retainer contracts).
Lol , the ****nal was not a rude word, just the real name for the “gunners” football team lol
I'd quite like the share price to rise after they announce that "Everything was on track to meet the upper levels of guidance---------------------and then we hit a bonanza grade and mined some big F---Off nuggets"
Well we could do with some cheer. :-)
lol/ just predicting what “experts” will claim after the rns tomorrow.
the fact is no one knows outside those in cey.
explanations after the event tend to be like football matches post match- eg ****nal win by 1-0 and make only one chance all game and they say “ sign of a good team, 1 chance and 1 goal, title contenders”… they miss the one chance and don’t score and the same commentators will say “you can’t hope to win a title only making one chance all game- hopeless and not title contenders”
Seems like you have all the bases covered Steve. - :)
Option 3) SP remains the same:
“ It was blindingly obvious to anyone with half a brain that targets would be met as Horgan and co have been very visible, so no surprises are what to be expected and steady as she goes. Inflation is on the way down but not quite fast enough to make a big difference so it’s obvious this won’t impact the SP until it’s accelerates down quicker or slows down slower. The FED decide later today which will decide on interest rates in the USA which drive gold prices- therefore not a lot would happen to the SP until then- anyone with half a brain on understanding the drivers for CEY and gold would know that”