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Thursday, 5/12/2022 15:31
BUY GOLD prices held above yesterday's new 13-week lows against a surging US Dollar in London trade Thursday as global stock markets sank again, commodities slipped, and so-called cryptocurrencies crashed amid the worst inflation in 4 decades and the steepest US Fed rate hikes in 2.
Regularly promoted as "digital gold" since its invention in 2009, original crypto Bitcoin today sank towards $25,000 per unit – its cheapest since Christmas Day 2020 and down 61.7% from last November's record high.
Shares in crypto exchange Coinbase (Nasdaq: COIN) sank to new all-time lows after it warned that customers will become "general unsecured creditors" with no direct claims on the digital assets it holds in the event it declares bankruptcy.
Crypto-promoter Michael Saylor's tech business MicroStrategy (Nasdaq: MSTR) meantime sank back to pre-2021 spike prices after he offered to pledge some of the company's $3.3bn in current Bitcoin holdings against its $2.4bn in debt.
The Dollar has actually gained quite a bit since [Wednesday's] CPI print and that's prohibiting gold from making gains."
https://www.bullionvault.com/gold-news/buy-gold-crypto-051220222
* Feb 2017
Re - removal of fuel subsidy – Centamin may have won the dispute by now?
The International Centre for Settlement of Investment Disputes (ICSID) had ruled in March 2017 that Egypt’s revocation of the tax exemption status of the EMG project until 2025 afforded to it under the private free zones system to be tantamount to expropriation and in breach of the bilateral investment treaty.
Did an Egyptian court really order EGPC and EGAS to pay EMG founder USD 1.03 bn in damages?
Israeli newspaper Globes is claiming that a Cairo court ordered state energy companies EGPC and EGAS to pay Israeli businessman Josef Maiman, who co-founded East Mediterranean Gas (EMG) with Hussein Salim, USD 1.03 bn in damages after EMG was forced to halt shipments of gas to Israeli Electric back in 2013.
http://www.globes.co.il/en/article-egyptian-court-rules-gas-cos-must-pay-emg-$1033b-1001224254
Many long term share holders are of the same opinion in that Centamin appears to has been extremely passive in its stance against the court case, including the diesel fuel subsidy dispute,
I appreciate it was a case involving EMRA rather than Centamin directly, nevertheless, the pain and punishment has been felt solely by Centamin and its shareholders.
Centamin must have a case to bring, which, like the case just highlighted above involves the pursuit of damages?
All share holders have really had had for six years is an annual almost cut and paste statement that says “Proceeding could be lengthy.”
Lengthy indeed, even allowing for the fact that this is Egypt !
Isn’t it time that Centamins legal team were more proactive on these issues?
Diesel fuel case
Points to consider from a well informed Egyptian friend
As the agreement between the Egyptian government and Centamin is based on law 222 year 1994, so it does not fall under the same laws as other investment projects.
-The agreement clearly states that the investor has the rights to recover any operational costs and expenses, and that includes fuel obtained at any price.
-The company, incorrectly and against the agreement, was supplied with subsidized fuel, but that does not give the investor any right or legal position.
To my knowledge It has never been argued that the investor has any right or legal position , it is only Centamin the concession partner and mine operator. who has any right or claim.
I fail to see how supplying fuel to a government/Centamin partnership Sukari at the subsidised price is favouritism in fact it might be argued that it s beneficial to EMRA & Egypt because Centamin will not be claiming as much initial capex costs back from before commencement of profit share
However surely the administrative error allowing fuel at subsidised rates lies with EMRA or the supplier, not with Centamin.
Although whether the fuel supplied is subsidised or not is irrelevant as in the paragraph above It states "fuel bought at any price can be claimed back" so that would include the international price" for fuel since January 2012 $22 million
Perhaps this is why no provision has been made by CEY in the company accounts for the $22 million?
Recovery of all Capex by Centamin was agreed with EMRA before profit share would start.
Also should not a percentage if not all of diesel bought at any price be reclaimable by Centamin against future Sukari AISC?
Very fair observations in my opinion!
A glorious story that has to be told and spread far and wide
Invaders had designs on that mine , but they never could finish its good
And so it's stayed there , a hidden treasure for the Egyptians to dig out
And finally arrived those who prospect for gold , in that golden spot of Egypt's land
Egypt witnesses an engineering and technical miracle
without much work, effort and conscious national investment
We blow up the ground daily and we transform these giant rocks into dust
without shouldering the state any costs
in a race against time, like a giant bee hive , you can see harmony
that gets the best out of those real life heroes
our heroes will put up with cruel temperatures, pressure and humidity
we'll get to unprecedented depths — 250 meters deep , or even more
these great men will be face to face with many dangers , nevertheless
(bla, bla, bla, bla etc. and so forth.... fast forward to the end)
Why would we leave our Egyptian gold hidden , when we stand ready
for digging it out ?
And after achieving the impossible , in (redacted) mine
why would we content ourselves
with only one gold mine ? (fade to black)
--------------------------------->>>
Still don't know what I'm droning on about? Al Sukary - Egypt's Mountain of Gold of course!
Have a look at the slo-mo & drone footage below (it's actually quite good - filmed last year)
Special thanks to General Yasser Lamada , Mr Shady El Raghy (Shadi Al-Rajhi), Colonel Malek Mohamed & Ahmed El Shahat
https://youtu.be/baEr-gNml7c
No Problem Auson,
Yo may recall the the last year at one of the Q & A sessions Ross Jerrard was asked by one of the analysts if Centamin hedged its diesel prices and Jerrard said it didn't.
This is why I keep asking about a resolution on the outstanding and withdrawn diesel price subsidy which was and still is part of the original agreement despite its withdrawal!
Well even if the diesel subsidy is not reinstated there is still $20mmillion owed to Centamin by the EMRA prior to its withdrawal.
Other companies hare gone to the international courts over similar issues and Egypt has been forced to pay u
When asked if Centamin had ever considered going to the international court Ross Jerrard replied that he supposed they could have done, but didn't!
Centamin actually paid EMRA in advance of profit share starting because the government was strapped for cash, when profit share started EMRA could have paid the outstanding diesel subsidy back by now by installments, but it didn't!
Centamin has gone over and above what it is required to do under the concession agreement and yet the directors seem reluctant or afraid to ask why the Egyptian government can't at least reciprocate in some way by chivvying along getting a ruling on a farce of a court case !
Fire sale tomorrow?
ElProfessor,
12 month low £1244.60 12 month high £1553.35, current price £1497.53. Centamin's market cap should really be valued in USD so I guess its just a sentiment thing when gold price is falling.
It's all OK anyway...the further it goes the more feul it will add to the run that is coming...its the elastic band effect
Also I would like to think that by London opening POG might be close to the 1836 or London close. Not always be often it seems to do that regardless of what it does when London is closed.
Interestingly if you look at gold in GBP you get a very different picture. We are still hovering around £1,500 per ounce which is historically very good.
Gold at 1820...looks like cey will break its 5 year low tomorrow. Tin hats on boys and girls, could be messy for a few days
Thanks mrtibbles,
That does seem to match the US at the pump diesel price in 2020, I thought we might be a bit more insulated than that.
Last time I inquired in April 2020 Centamin had a flexible contract with EGPC, which had a set diesel price on a quarter by quarter basis, it was also based on the international price - to some extent!
As we know is a lot of concern in the market about the impact of fuel pricing on cash costs - the model Centamin used in 2020 had costed diesel @$0.60 per litre.
Q1 2022 higher fuel costs to the value of US$23 million!
Thanks for your replies Mr T.
I know Egypt havent really put anything into Centamin but they get a cut of the profits. You would have thought they would have had an expert of their own who could have --and still could--go into Sukari and see what is / has been going on. For what it would have cost them, the would have got their small investment back many times over. Ok we might have had less gold mined previously but it would have been at a steadier rate and without the C-ap of cleaning up the mess the last lot left.
I suppose now legal action will have been taken as it would have caused an even bigger crash in share price that we have had , so the culprits got off free and with money in their pockets.
Times flies. it is coming up to 3 years since Sotolo predicted the share price was going up to £3 --------and we know what happened after that.
I try and stay positive. If the share price is around this price rather than 90-95p then we will get more share with our reinvested dividends. However, at some point we will need a bigger dividend and a higher share price to make it seem worthwhile.
Maybe it is me getting older and grumpier, but the share price always seems to go up between ex dividend date and the date the dividend is reinvested-------then it goes down. it also seems that with every bit of news that Centamin release , that the share price goes down. Maybe we need less news!
Re the food banks etc. Some people do not know how to cut back and economise, but there are people who do and have been doing it. If you are already buying basics in the cheaper places, how much more can you cut back? How much more can you turn the thermostat down? What if you leave the curtains open when it is sunny?
I really fear for a lot of people later on this year. Im fully expecting the announcement " dont worry about your fuel bills, keep warm and sort it out in the spring"
Bit political here Mr T --but after the Queens Jubilee, I dont think we have any Royals who can get married , which they always seem to do to "cheer up" the rest of us when times are hard.
Also pog going back to $1700
Halfpenny
Maybe your name should be "not a full shilling" more appropriate
My advice since you asked is don't buy centamin as they've ran out of gold only a few ounces if any left and it'll cost $7000's to get it out of the ground. Also Egypt is siding with Putin so run run away.....
mrtibbles,
Are you suggesting Centamin are paying circa $5 plus a gallon for diesel when it can be bought on the street in Egypt for around $1.35 ?
Just topped up here. My BT went up 4% and this came down 4%. Looking forward to an extra share of the dividend. Am I right in thinking there is going to be a share buy back now too?
17th June 2018-06-17
RE: Diesel fuel case
The subsidised diesel price in Egypt was increased yesterday by 50% ( from 3.65 to 5.50 LE), but this will not affect Centamin as the company has been paying the international price since 2012 and the company currently is not benefiting from any subsidy.
Egypt aims to completely lift the subsidy according to instructions from the IMF, which means the diesel fuel case would be meaningless soon and would only apply to the arrears that Centamin had been asked to pay for the period between 2009-2012, which Centamin is challenging in court.
Yes it seems to be fine now. I'm with Halifax as well. Very strange.
I have posted this previously on several occasions, , but it seems appropriate to remind some and make new members aware of the full facts.
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).
Absolutely agree,
Unbelievable , the UK in the 21rst century and people refuse free vegetable because cant afford to boil them up ?
I appreciate that there will be people who have cut out all but the basic necessities , but how many will claim its too expensive to cook free vegetables but will keep the TV and PC on in every family members room and carry on getting further into debt by paying car leases for all the family,sky and smart phone and all the other subscriptions?
What a mess the UK is in!
Special Resolution 8
Market purchase of ordinary shares
757,153,122 98.73%
9,774,773 453,956
Thanks George
At the risk of being my being shot down in the future!
The opinion of of a very experienced and well respected independent mining analyst who has gained a reputation in the past for their forthrightness and accuracy
The Q3 Report for the three months ended 31 March 2022
This makes for depressing reading.
They really take it on the nose, but it seems management goes all out to improve the long term prospects:
- very high stripping volumes
- replacement of the underground mining contractor, which is very disruptive and requires loads of capex to acquire mining equipment, hire and train staff.
- investments in a solar plant
- exploration to find higher grade resources.
The better open pit grade cannot compensate for the terrible underground grade. Whether the underground grade has anything to do with changing to owner mining is not clear.
If you believe these are all transitory, then this is probably a low point. If you distrust management, then it looks horrible.
*Please note That this isn't in anyway to be taken as financial or trading advice!