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Mr Amr Hassona (CEY country manager-Egypt) to the Egyptian media:
The SCC ruling is considered a ruling on the validity of the license of Centamin to own and manage the Sukari mine.
We are waiting for the ruling to be published so we could go to the SAC to request cancelling the case based on the ruling of the SCC.
https://alborsaanews.com/2023/01/16/1621693
It will come
Could account for todays Poor showing in the markets today. Gold especially.
Like it or lump it ,the market still is affected by their direction.
Aghrrrr i meant UP approx 25% and old old myth of the inverse relationship gold and crypto once again wrong and dated - the complexity increases exponentially
Oops I meant funny how there's a lot less speculation on unexpected rises in the last sentence! At least crypto's now ip ~25% in past month, along with a ~7% rise in gold- showing again the old myth of inverse relationship- global markets up overall too in same time period.
Who knows, i can't provide a rationale either- no one provided a fall prediction before the weekend news, closest prediction was neutral- sometimes it's doesn't go the way we expect, but been a great run recently to be thankful for. Overall peers and markets suggest an odd drop. but this just happens sometimes - I don't agree with any rationale read so far, but that's just me, sometimes we never find one- it's funny how there's always a lot less speculation on rationales on unexpected drops- but that's normal.
Hi Tornado
Cowichan has raised an interesting question regarding gold-sales/forward contracts in order to secure new bank-funding.
If it turns out be true, given the current and expected market going forward, this could be unfortunate timing.
It's been very much a no-go area for quite a while within the industry and regarded very much as a last-resort strategy.
Personally I hope it turns out not to be the case.
Bob
Several issues to consider. Before news a share can be technically oversold, neutral or overbought. Centamin was heavily overbought and now only remains so on monthly indicators (best to ignore) and one remaining weekly indicator. The hourly indicator is now giving oversold but the daily is now in neutral. It would not have been good for CEY to go into a reporting RNS being way overbought as the sell news would be a more probable outcome unless gold was taking off further.
The five indicators on Centamin fundamentals that i want to make are as follows;
1. The company gave an RNS announcing new reserves and resources with the economic price listed at $2,000 per ounce. This qualified as a red flag in my book.
2. The company AISC was proving difficult to get down. Egypt was experiencing higher inflation and around 15% of its costs are affected by it and this was probably adding $30 an ounce (16%) to say a cost base of $1350 an ounce. The high USD was also putting up costs, but at least some of these may have partly abated lately or might do so during 2023. Overall increasing production slightly was leaving the company staying flat on AISC. Some may argue that holding a flat position in the later part of the year is okay.
3. The company indicated that quarter 3 was likely to be the best production results as they had a few issues in the underground mining (if memory serves me correct) back in October. (Its interesting to note we saw a lining being refitted the other day so recovery data in the mining circuit may have changed slightly. Overall, we might see a weaker Q4 compared to Q3 despite some gold price uplift in December.
4. The cash being held by this company has been consistently going down. A lot was spent sorting past problems out, investing to reduce future costs and that also includes a large solar farm. In part the money has I am sure be well spent but the cash reduction reduces the overall enterprise valuation as money has to be earned to replace it.
5. The missing of deadlines by a considerable margin is a growing habit of the CEO and Board along with Capex cost overruns. This is under the control of management. In addition, communications with private investors have become unimportant. If Centamin do not want to communicate with us then they should at least support a broker to give us more insights.
The key is in the future gold price. If it were to set new highs than Centamin would get into the 130's at least , remain as a good divi paying stock, and build up some additional cash on top of the bank line of credit. If the gold price goes flat and returns down to 1800 then Centamin travels in the other direction to 108-115p area. We await to see how that one plays out. Tony
Through a conversation with a well informed friend It seems the diesel fuel subsidy case was settled a couple of years ago!
See below the relevant part of the 2021 annual report which covers this:
“The claim before the Administrative Court (the ‘Court’) concerning diesel fuel disputes Refer to page 208 (note 5.1 to the financial statements) and page 64 (Principal risks). The Group was involved in a legal case relating to historical and current fuel subsidies in Egypt. During the year, the appeals by both the Group and the counterparty, the Egyptian General Petroleum Corporation, were dismissed by the Court on procedural grounds. The Group has received legal advice from their external legal advisors asserting that both parties have no further legal recourse with the Court. Prior to its appeal being dismissed, the potential amount that could have been recouped by the Group relating to the subsidy case was $367m and the potential amount that the Group could have had to pay, if they lost the historical case, was approximately $26m as at 31 December 2021.”
https://www.centamin.com/media/2529/cent-ar21-full-web-secure.pdf
Thanks Tibbs - Wow! - Some filing system you have there sir. - No wonder you are able to keep us all so well informed.
Thank you.
Repost-
Centamin Court Case Share Price Discount 24 April 2014, 10:33
https://www.sharesmagazine.co.uk/news/shares/centamin-eyes-end-of-legal-pains
Gold producer Centamin (CEY) implies a new law in Egypt could result in the dismissal of a legal case questioning its right to operate the Sukari gold mine. Investors understandably like the news, sending the share price up 9.3% to 61.17p. It is very encouraging but this remains a risky stock as the legal matter is not yet concluded and political instability is still a problem.
Hi Rebess.
Unless the world of commerce and business has changed since my prehistoric days , statements, results , etc etc would go out to many places perhaps many days before with a caveat of STRICTLT NOT TO BE PUBLISHED BEFORE WHATEVER OCLOCK ON THE WHATEVER DATE. Th City. Institutions. wholesale Investors et al have the reputation of being like Ma' colander. However equally the major players in the market are well awre of the saying and I expect some astute mopping up of short term depressed shares. Have you had a look at the short position on CEY at this time. I have my interpretation (available on this board at the top) . Others more knowledgeable than I such as Tibbs . TornadoTony et al might care to comment on their more astute views.
Bob
Hi bobliz - Yes, what you say makes sense. - It'll be interesting to observe the 'theory' buy on rumour sell on news play out over the coming days. - With regards to Q4 news, so far as I'm aware, there is no news circulating, only hopes and opinions. - We'll see. :)
Hi Rebess and all.
There is an old trading saying "buy on the rumour and sell on the fact" I expected the drop this morning as the short term traders were well flagged as to the Court decision and have scalped their short term gains with sell orders placed at market this am on the bell. Happy to see this shake out although the Trading Statement due soon might enourage similar. Normal retrenchment. It would be naïve to believe that an RNS release is highly secret until the day published . It goes through too many who have access to such reports which circulates well before the retail and private investors have RNS notice.
I take the drop as a healthy sign which is temporary in nature .
All my personal opinion obviously and not intended to be advice of any sort as I am wrong in many things .
I add my thanks and best wishes to Siko for his in depth knowledge of Egyptian Law posted to this board.
Bob
You would hope the market will eventually get there ....when the telegraph says.........
I would like the 20% uplift now please
Anyway, lets hope for good production news
I'm wondering if the market has not yet comprehended the significance of Saturdays announcement. - It may at first appear that Centamin has set in train an appeal to the SAC which is being interpreted as a negative. - Just a thought.
Gap in the London gold chart closed. Partly created as USA market is closed today. Gap in USA market now exists to 1923 to be closed by Comex 1pm tomorrow or during USA open. Centamin and gold should now slowly edge up. Centamin has a lot of resistance at 125p. The highest it can run to is around 132p if gold was to have an average of $1900 ounce for the entire year and AISC was under $1400. Still holding a small amount of CEY.
Well the SP hasn't done what I was expecting and with the GP still above 1900, Go figure? I honestly thought we would see an upward spike this morning.
We’ll the share price doesn’t seem very interested so far at the open
Good Morning all, this may help in the case of Saudi as announced last week to invest more in gold mines in Egypt and at the same time was a condition of a loan of 3 billion to the Egyptian government to privatize its own project.
I hope that is for the better to the investors.
GLTA,
Dan
Thank you as ever Siko for the advance information, and thank you Mr Horgan and Buchanan for your speedy Rns this morning. Roll on the appeal which seems a formality and the share price we hope today. Although still half owned by EMRA this should also make Centamin a more attractive bid target albeit 50% more expensive than last summer. However if gold continues to strengthen and further exploration gets going and is successful we will hopefully do better alone as a growing long life tier 1 miner. About time the company had some luck and much now seems to be going their way. My holding remains the biggest I have and a third of my portfolio
BACKGROUND
Sukari Gold Mine Concession Agreement Case
· The Concession Agreement between the Egyptian government, Egyptian Mineral Resource Authority ("EMRA") and Centamin's Egyptian subsidiary Pharaoh Gold Mines ("PGM"), was enacted by the Egyptian Parliament under special law No. 222 of 1994.
· On 29 September 2011, a private Egyptian individual issued proceedings in the Administrative Court against the Ministry of Petroleum and Mineral Resources ("MoP") and EMRA, in which the individual sought nullification of the Concession Agreement. The same individual also instigated similar claims against several other international companies in Egypt around the same time, most notably in relation to privatisations which took place during President Hosni Mubarak's administration (1981 to 2011).
· On 30 October 2012, the Administrative Court, as court of first instance, held that, although the Concession Agreement was valid, insufficient evidence had been presented by the MoP and EMRA to demonstrate that the 160km2 exploitation lease between PGM and EMRA had received approval from the relevant Minister as required by the Concession Agreement.
· In November 2012, Centamin's subsidiary, PGM immediately joined proceedings and filed, with EMRA and the MoP, an additional appeal against the judgment (the "Appeal") and submitted a copy of the Sukari exploitation lease which clearly shows that the 160km² exploitation lease was approved by the MoP.
· On 20 March 2013, the SAC unanimously decided to suspend the lower court's decision until a ruling was made by the SAC on the Appeal. Operations at Sukari Gold Mine have continued uninterrupted.
· On 28 June 2016, the Appeal was stayed indefinitely pending the outcome of the SCC's ruling on the constitutionality of Law 32. On the basis that the constitutionality is upheld, an application would be made to dismiss the proceedings.
Egyptian Law No. 32 of 2014
In April 2014, Law 32 was enacted by the former interim president, Adly Mansour, which prevents third parties from challenging contractual agreements between the Egyptian government and investor(s). The law applied to all prospective cases and any active cases in front of the courts where no final judgment had been given.
In July 2014 the Egyptian Center for Economic and Social Rights ("ECESR") (a non-governmental body whose aim is to protect the economic and social rights of workers) challenged the constitutionality of Law 32 before the Egyptian SCC.
Delays ensued as the SCC was overwhelmed with cases following a period of political disruption between 2011-2014 following the Hosni Mubarak government and before the current stability under the Abdel Fattah el-Sisi government.
On 14 January 2023, the SCC rendered its judgment considering that Law 32 is constitutional, meaning third parties have no legal standing to challenge contracts between the Egyptian government and investor(s). A copy of the judgement will be available in due c
16 January 2023
Centamin plc
("Centamin" or "the Company")
LSE: CEY / TSX: CEE
legal update: Favorable Constitutional Court Ruling
Martin Horgan, CEO, commented: "Today's judgment on the constitutionality of Egyptian Law No. 32 is most welcomed. We are delighted to now be in a position to apply to set aside the 2011 third party challenge to the validity of the Exploitation Licence issued under the Sukari Concession Agreement."
Summary
· Egyptian Law No. 32 of 2014 ("Law 32") was upheld as constitutional by the Egyptian Supreme Constitutional Court ("SCC") on 14 January 2023, having been under challenge since 2014
· Law 32 provides that third parties are prevented from lawfully challenging contractual agreements between the Egyptian government and an investor(s), such as the Sukari Gold Mine Concession Agreement ("Concession Agreement")
· The SCC judgment gives Centamin the right to request the Supreme Administrative Court ("SAC") to rule that the 2011 challenge to the Concession Agreement is now legally inadmissible on the basis that the original complainant had no capacity to bring the claim as he was not a party to the Concession Agreement
· As per the provisions of Egyptian Civil Procedures Law, Centamin's subsidiary, PGM, will imminently submit an application to the SAC to resume the Appeal proceedings and request the SAC to reject the original case in its entirety in accordance with the provisions of Law 32
· Operations at Sukari Gold Mine remain unaffected and continue as normal.
cont.
European stock exchanges were above the flatline in the premarket session on Monday with investors locking their attention on the World Economic Forum (WEF) which is set to take place from January 16 to January 20 in in Davos, Switzerland.
In the coming hours, Centre for European Economic Research (ZEW) will publish the report on current economic conditions in Germany.
The European Stoxx 50 climbed 0.49% at 7:18 am CET. Frankfurt's DAX and the CAC 40 both increased by 0.47%, while London's FTSE 100 rose 0.09% at the same time.
The euro traded 0.09% higher against the dollar, to change hands to $1.08433 at 7:33 am CET. The pound sterling stood flat against the American currency, to go for $1.22396.
Baha Breaking News (BBN) / AB
Happy Monday y’al