Firering Strategic Minerals: From explorer to producer. Watch the video here.
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Cont 7
From Marsa Alam the Idfu bitumen highway first runs west up gravel outwash plains to the mouth of Wadi Khariga, then it follows the winding narrow wadi to Bir Umm Khariga, some 20km from Marsa Alam. From Umm Khariga Well a corrugated gravel road runs southerly for 10km where it crosses a low divide and goes down into Wadi Sukari, and then on to the old Sukari gold mine. The Sukari road then turns east from the Wadi Sukari road and continues on for about 1.5km north-west to the modern Sukari Gold Mine operations complex.
Egypt has a dry climate. It is hot in the summer, with temperatures averaging between 80 and 90°F
(27-32°C). Winters are warm, with temperatures averaging between 55 and 70°F (13-21°C).
A steady wind from the northwest helps to lower the temperature near the coast. The Khamaseen is a wind that blows from the south in Egypt, usually in spring or summer, bringing sand and dust, and sometimes raises the temperature in the desert to more than 100°F (38°C). Rain seldom falls in
Egypt. Along the Mediterranean Coast, the average yearly rainfall is 8 inches (20cm). Farther south, only about one inch of rain falls every year. During winter snow falls on Sinai's mountains and some coastal cities, such as Baltim, Damiatta, Sidi Barrany and Alexandria.
The Sukari Gold Mine site is in the Eastern Desert of Egypt and it is estimated that nearly all of the gold mineralisation occurs within a porphyry outcrop which is expressed as a 2,500m long jagged-toothed, strong topographic high rising to 350m above the local wadi (intermittent water course) level. Wadi drainage plains pass to the east and west of the outcrop and the sharply incised green – brown Red Sea Hills surround that. The area is arid and almost bare of vegetation.
The Sukari Gold Mine operations complex is located in stark desert with little or no vegetation.
There is no permanent population in the immediate area and it has been visited only by people tending nomadic livestock herds in recent times.
The site has access via bitumen road 5km from the site operations boundary. The nearest local town is Marsa Alam (25km distant) on the Red sea, which is a fast growing tourism, focused suburban town area with population estimated at approximately 5,000 persons. This town offers a local hospital and also police presence in the area. There are two banks and 5 x ATM cash outlets and several local restaurants. The town has many small stores and is able to support a moderate sized construction workforce, as demonstrated by the recent completion of the Sukari stage 4 process plant upgrade capital works during 2012 and 2013. Sukari mine site provides all the power and water services to support its operations.
Cont 6
Description of the business
4.1 Sukari Project
The information in this section is based on the technical report titled “Form 43-101F1 Technical
Report – Mineral Reserve and Resource Estimate for the Sukari Gold Project, Egypt” (the “Technical
Report”) dated 30 January 2014.
The Technical Report is the compilation of work performed by a number of engineering organisations
for Centamin on its Sukari Gold Project as well as Centamin employees dating back to 2003 and
10
draws heavily on a previous technical report dated 14th March 2012, which report has been filed on SEDAR at www.sedar.com.
Portions of the following information are based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the Technical Report which is incorporated herein by reference and is available on SEDAR located at www.sedar.com.
4.2 Property Description and Location
The Sukari Project is located in the Eastern Desert region of Egypt, about 700 km south of Cairo and
30 km south-west of the Red Sea coastal resort town of Marsa Alam. The project area is defined by the Exploitation Lease, which covers an area of 160 km2, surrounding the ore body.
4.3 Accessibility, Climate, Physiography and Local Resources
A coastal highway runs along the west coast of the Red Sea from the border with Sudan in the south to Suez in the north, passing through Marsa Alam, Qseir, Safaga, Hurghada, Ras Gharib and Ein Sokna. Another highway connects Cairo directly to Ein Sokna. From Cairo to Marsa Alam by highway is about 750km, about ten hours by supply truck. There is also a bitumen highway from Idfu on the Nile to Marsa Alam. There is a new international airport north of Marsa Alam.
Cont 5
9
3.5 Competitive position in Egypt
Although the gold mining industry in Egypt is in its infancy, with very few other foreign precious metal
exploration or development companies active in Egypt, the industry globally is very competitive. So
although the Company has a well established business in Egypt it is likely to face strong competition
from other mining companies in connection with the acquisition of additional mineral properties as
well as for the recruitment and retention of qualified employees and other personnel.
Gold producers in Egypt operate under similar competitive conditions to those in other parts of the
world, all of which operate in a commodity business with little to no ability to influence the price of its
product, gold doré bars. Gold doré bars are sent to an accredited gold refiner for smelting and
refining into a London Metal Exchange grade gold bar. Sale of gold is thereafter via the standard
industry practice of delivery from this gold account into either a pre-arranged hedging contract or a
spot market sale contract.
3.6 Other Projects – Exploration Properties
Centamin, through its subsidiary Sheba Exploration Holdings Limited, has interests in 4 exploration
licences in northern Ethiopia. During 2013 Centamin continued exploration on these four tenements,
namely Una Deriam, Finarwa, Winibo and Shehagne in northern Ethiopia, and in total, 11,134
meters were drilled over the four tenements. The drilling to date has confirmed the presence of only low grade mineralisation.
In September 2013 Centamin entered into a joint venture with Alecto Minerals plc to pursue existing and new opportunities identified by Alecto in Ethiopia. The initial joint venture projects relate to two exploration licences Wayu Boda and Aysid Meketel. Centamin’s exploration programme in Ethiopia will prioritise progression of the two licences under joint venture with Alecto Mining plc.
The acquisition of Ampella Mining Ltd is expected to be complete in early 2014, and the Company will focus on implementation of a systematic exploration program aimed at developing the outstanding potential for further significant growth of the existing 1.92Moz Indicated and 1.33Moz
Inferred resource base.
The Company also holds a royalty interest in the Nelson Fleet gold project at St. Ives in Western
Australia through its subsidiary, Viking Resources Limited. The Company has not been informed by the operator of the project, St Ives Gold Mining Co Pty Ltd, a subsidiary of Gold Fields Ltd, of any mining or near term intention to mine at the tenement.
CONT
Cont 4
The validity of the exploitation lease is currently the subject of a case in the Egyptian courts. The
details of this action are set out in detail in Centamin’s regulatory filings including the most recently filed Management Discussion and Analysis (MD&A) and the Financial Statements which are available for review on SEDAR located at www.sedar.com.
3.2 Activity over the last three years
2011 - During 2011, the underground operations commenced at Sukari Gold Mine. A corporate
acquisition was completed during this year, with the acquisition of Sheba Exploration Holdings
Limited (formerly Sheba Exploration (UK) plc). Centamin also re-domiciled from Australia to Jersey.
2012 - The underground operation continued to develop at the Sukari Gold Mine. The development
of the ‘Stage 4’ expansion project was a key feature in 2012, the aim of which is to double the plant’s
nameplate capacity from 5Mtpa to 10Mtpa. Investment and diversification continued through the
acquisition of a 17% interest in Nyota Minerals (by early 2013), which owns the Tulu Kapi advanced
exploration project in Ethiopia.
2013 - Construction on the stage 4 expansion project to double the nameplate capacity from 5Mtpa
to 10 Mtpa was completed during the year and is undergoing commissioning.
The Company made significant progress on its medium and long-term growth strategy during 2013.
In September 2013, Centamin entered into a joint venture with AIM-listed Alecto Minerals plc over
their exploration projects in Ethiopia, thus expanding its presence in this important region of focus for
the Company.
A recommended all-share takeover offer for ASX-listed Ampella Mining Ltd, valued at A$40.9 million, was announced on 10 December 2013. This takeover provides Centamin with an extensive licence holding over a highly prospective and underexplored 100km+ trend of gold mineralisation in Burkina
Faso as well as further exploration properties in Cote d’Ivoire. Centamin will implement a systematic exploration programme, aimed at developing the outstanding potential for further significant growth
of the existing 1.92Moz Indicated and 1.33Moz Inferred resource base.
3.3 Project description and location
The Sukari Project is located in the Eastern Desert region of Egypt, about 700 km south of Cairo and 30 km south-west of the Red Sea coastal town of Marsa Alam, as shown in Figure 1 below. As at 31
December 2013, the Company had a total of 1,340 employees (excluding contractors).
Cont
Cont 3
Ivory Coast - Ampella holds three permits in the Ivory Coast covering 1,200 km2. These permits are adjacent to the Batie West project area. Applications for a further four permits covering 1,056 km2 have also been made.
7
3 General Development of the Business
3.1 Centamin Overview
Centamin is a mineral exploration, development and mining company that has been actively
exploring in Egypt since 1995. The principal asset of Centamin is its interest in the Sukari Project,
located in the Eastern Desert of Egypt. Construction at the Sukari Project commenced in March
2007 with the first gold bar being produced on 26 June 2009.
The Sukari Project is the first large-scale modern gold mine in Egypt. Centamin’s operating experience gives it a significant first-mover advantage in acquiring and developing other gold projects in the prospective Arabian-Nubian Shield.
In 1994, PGM negotiated an exploration and mining agreement known as the Concession
Agreement (CA), with the Egyptian Geological Survey and Mining Authority (‘EGSMA’; now EMRA) and the Egyptian Government, to explore for gold and associated minerals in the Eastern Desert of
Egypt. The CA was declared into Law 222 of 1994 and came into effect on the 29th of January 1995 pursuant to which PGM had the right to explore and develop gold and associated metal deposits
within the concession area.
On the 4 November 2001 PGM was formally notified by EMRA that, in accordance with the terms of the CA, the feasibility study submitted by PGM and dated the 26th of October 2000 relating to the
Sukari Gold Project, had been accepted by EMRA and had demonstrated the existence of a “Commercial Discovery” at the Sukari Gold Project.
In April 2005 EMRA and PGM agreed that an exploitation area of 160km2 containing the proposed
Sukari Gold Project and surrounding prospects was appropriate and the Minister of Petroleum approved an exploitation lease covering this area on 24th May 2005.
Under the terms of the CA, PGM has title for a period of 30 years from 24 May 2005, renewable at
PGM’s election for a further period of 30 years.
Following demonstration of the commercial discovery, PGM and EMRA were required to establish an operating company, Sukari Gold Mining Company (SGM). SGM was incorporated under the laws of
Egypt on 13 April 2006 to conduct exploration, development, exploitation and marketing operations
in accordance with the CA. Responsibility for the day-to-day management of SGM rests with the General Manager who is appointed by PGM.
Cont
March 2014 AGM cont
2.2 Ampella Mining Limited
Subsequent to the year end the Company declared a recommended takeover offer for Ampella
Mining Limited (Ampella) and now holds over 94% of Ampella. Details of the holding structure are
set out below:
Centamin West Africa Holdings Limited (a wholly owned subsidiary of the Company) holds
Centamin’s interest in Ampella, an Australian Incorporated entity. The wholly owned subsidiaries of
Ampella are as follows:
Ampella Mining Limited (Australian incorporated);
Ampella Share Plan Pty Ltd (Australian incorporated);
West Africa Gold Reserve Pty Ltd (Australian incorporated);
Ampella Mining Gold Pty Ltd (Australian incorporated);
Ampella Mining Gold Sarl (incorporated in Burkina Faso);
Ampella Mining Sarl (incorporated in Burkina Faso); and
Ampella Mining Cote D’Ivoire (incorporated in Cote d’Ivoire).
Details of the recommended take-over offer of Ampella can be found in the Bidder’s Statement which
has been lodged with the Australian Securities Exchange and can also be found on the Company’s
website at www.centamin.com.
A Form 51-102F4 Business Acquisition Report was not required as the acquisition was not material
to the Centamin Group. However, the total Resource of Ampella is considered material to Centamin
and a Form 43-101 Technical Report has been compiled in conjunction with this Annual Information
Form and provides details of the Ampella Resource and is available for review on the System for
Electronic Document Analysis and Retrieval (SEDAR) located at www.sedar.com.
2.3 Ampella Projects.
Ampella is an Australian listed company and holds exploration licences in a highly prospective region of Burkina Faso and Cote d’Ivoire. Ampella has been listed on the ASX since 2007. A summary of the licence areas are detailed below.
Batie West - The Batie West gold project consists of 10 permits, covering an area of 2,000 km2. Six of the permits are 100% owned by Ampella. Ampella holds an interest in the other five by way of joint-venture and earn-in agreements.
The Batie West Project is located approximately 450km from the capital city, Ouagadougou, in southern Burkina Faso, West Africa and occupies a 150km long gold-bearing shear zone that occurs along the southwest margin of the Boromo Greenstone Belt, adjacent to the country boundaries of
Cote d'Ivoire and Ghana.
Ampella is focused on developing the Konkera Resource, which is part of the Batie West gold project.
In March 2013, Ampella announced the new independently verified JORC (2004) compliant Mineral
Cont in 3
March 2014
4
2 Centamin plc
Centamin plc (“Centamin” or the “Company”) is incorporated and registered in Jersey under the laws
of Jersey and its registered number is 109180. The Company’s registered office is 2 Mulcaster
Street, St Helier, Jersey, JE2 3NJ. The Company also maintains offices in Alexandria (Egypt), Perth
(Australia) and Ethiopia (Addis Ababa).
The Company’s Articles of Association have not been amended or varied since 15 December 2011,
save in the case of the passing of special resolutions adopted by the members at an annual general
meeting (AGM).
Below sets out a table of the Company’s wholly owned subsidiaries, jointly controlled entities and
associates, their place of incorporation and the percentage ownership (and percentage voting rights)
in the subsidiary undertakings at the year ended 31 December 2012 and 31 December 2013.
2.1 Subsidiaries and jointly controlled entities and associates
Name Incorporation Activities 2013 2012
Subsidiaries
Centamin Egypt Limited Australia Holdco 100% 100%
Viking Resources Limited Australia Exploration 100% 100%
North African Resources NL Australia Dormant 100% 100%
Pharaoh Gold Mines NL Australia Exploration 100% 100%
Centamin Limited Bermuda Holdco 100% 100%
Egyptian Pharaoh Investments Egypt Exploration 50% 50%
Sukari Gold Mining
Company Egypt
Exploration &
Production 50% 50%
Centamin Holdings Limited Jersey Holdco 100% 100%
Centamin Group Services Limited Jersey Services 100% 100%
Centamin West Africa Holdings Ltd United Kingdom Holdco 100% 100%
Sheba Exploration Limited United Kingdom Exploration 100% 100%
Sheba Exploration Holdings Limited United Kingdom Holdco 100% 100%
Centamin UK Limited United Kingdom Dormant 100% 100%
Associates
Sahar Minerals Limited Bermuda Exploration 39% 0%
Nyota Minerals Limited Australian Exploration 12% 0%
Pharaoh Gold Mines NL (PGM), is the primary wholly owned subsidiary of the Company. PGM was incorporated in Western Australia under the Australian Corporations Act as an unlisted public company incorporated on 20 October 1993. PGM is a no liability company and its company name has remained unchanged since incorporation. The Company’s interests in the Sukari Project (as described below) are held through PGM.
The Company’s other wholly owned subsidiaries are either intermediate holding companies (in the case of Centamin Egypt Limited and Sheba Exploration Holdings Limited) or are companies that have been used to acquire investments (in the case of Centamin Holdings Limited and Centamin Limited) or are companies that provide services to the group (in the case of Centamin Group Services Limited). Other subsidiaries or associates have acquired the licence to carry out exploration (such as Sheba Exploration Limited and Sahar Minerals Limited
Cont Part 2
I asked Josef about Van Eck Associates the 2nd largest shareholder
This is a passive tracker as is Norges Bank.
I think this is significant.
The discretionary institutional investment in this company is very low for obvious reasons. They will not invest before the cc is resolved.
As a result I expect the market makers and the analysts to want the share price to stay low for the potential institutional investors. Expect more apparently irrational share price action over the coming weeks.
Profit share. I have always thought that this will not take place before Dec 2015.
Profit share. If you look at the cumulative profits in the account and the cumulative cap ex. and exploration costs and then take into account future cap. exp. etc there is still a long way to go.
There is a note in the accounts that the company expect profit share to start in the year ended 30th June 2015. When I questioned Josef on this point he readily accepted that this may not happen in that year or even the next.
I think the suggestion in the accounts that profit share might start in year ended 30th June 2015 is there purely for purposes of internal reassurance.
The analysts should have questioned this, but they are probably only too happy to make low ball estimates while there is no institutional investor interest.
Their consensus estimate of 7.7p earnings for 2015 is strictly for the birds.
One other private investor came up to me at the end of the meeting as he thought I must be representing some investment institution and told me he was planning to sell a house so that he could buy another 500,000 shares. Amen
The Chairman said they might hold a meeting in London for investors next year, but I concurred with their decision to relocate to Jersey and do it properly with their office presence being there.
I hope this may be useful. I have given a very full account and am not holding anything back.
Finish Thank you to our forum member!
AGM Jersey 2014 Centamin
Mon 19/05/2014
Report from one of our group.
Last Friday I spent the day in Jersey. The whole trip cost just over £200, including taxis and my lunch at Longueville Manor. It was worth every penny for the info that I obtained at the CEY AGM.
First the dividend. The non exec who was chairing the AGM announced that there would be a divi. Having not seen the announcement I asked "how much and when". He asked if we could deal with my question later. When Josef did his presentation he answered my question by saying that brokers were forecasting that it would be 3-4%. On my calculations that means 1.8 to 2.4p. After the presentation I spoke to Josef privately to get further informal guidance. An interim div. will most likely be announced in August. The payment is likely to be in early September. I got the impression the mom and dad were keen to get their cheque.
The interim divi may be of the order of 0.75p.
In making the calculation of the divi a sum for the notional profit share with the Egyptian Govt will be taken into account.
I agreed with Josef that it would be sensible to make further advances to the govt before the profit share formally became due.
Back to the formal presentation:-
. Josef expected that there would be 2 years of drilling probably costing up to $20m. There was $11m of cash in the company on acquisition. After that $250m might be spent on building a mine during say 2016 and 2017.
Drilling at Sukari Hill. The drilling from the top of the hill down was expensive and hit and miss.
In future, the resource would mainly be increased through sideways drilling of the underground portion.
Future production. In answer to a question Josef stated that 500,000 oz per annum was not a ceiling and 600,000 to 700,000 oz. were conceivable in 2016.
This is new to me and the presentations on the website are sensibly prepared on a conservative basis.
I must say that I find this has significant upside potential for the share price in the longer term.
Court Case. I asked when he thought the new law would be considered by the Constitutional Court.
In the 2 cases that had been considered so far those bringing the cases have 90 days in which to make a referral.
However, he expected the Constitutional Court to consider the matter in 30 to 40 days.
This was because several major investment announcements were ready to be made and the govt. wanted these announcements to be made as soon as possible.
Cont in part 2
Hi Paul,
The present share price is ridiculous, despite some may claim from their consultation of various charts and moving averages,etc ,etc, although what it does clearly demonstrates is just how vital market trust and confidence in a company is.
As long termer's will be aware Andrew Pardey, Youssef and Josef between were was less than truthful about the state of Sukari on more than one occasion, so after this last but in many ways inevitable set back it is hardly surprising the punishment to the share price has been especially severe.
That and considering the great progress being made to rectify past errors and restore reliable and sustainable production the share price is unjustifiable if common sense is applied.
Would'nt worry too much, I understand that Centamin have aleady helped B2 regarding a number of issues in Eygpt, there are excellent professional relations between the two companies!
China's gold consumption surged 48.44 percent year-on-year to 813.59 tons during the first three quarters as macroeconomic policies supported demand, an industry report showed on Thursday.
Domestic gold consumption during the first nine months was also 5.89 percent higher than the pre-COVID January-September 2019 level, said the China Gold Association.
https://global.chinadaily.com.cn/a/202110/29/WS617b4676a310cdd39bc72028.html
Don I would be a little worried by so much attention
Be careful.
But I don't expect you to worried..
** updated numbers
28 people from SRK Consulting **
21 people from Centamin PLC **
23 Barminco **
3 Gold Pyramid Group
13 Barrick Gold Corporation **
5 The Egyptian Mineral Resources Authority
3 Shalateen Mineral Resources Company
6 Vale
4 SUKARI GOLD MINES
7 Newmont Corporation **
plus 18 Executive Director's of unknown origin **
Note - the last 24 hours saw a large spike in views from Sudbury Ontario where Vale has a world class mining complex (employing over 4000)
I think Sotolo had 600,000 centamins shares , so if half were sold at £2 and invested in THS at £1 or less , a year a so ago, then they must have bought 600,000 shares in THS? As these have gone up to £1.40, Im sure some could be sold to start work on the house? That is without the successful trading getting in and out of Hoc and Cey.
Regarding Mando getting out at 99.4, it looks a good move now, but not as good as if they had got out when Cey went up the other week to £1.05?
Im hoping for good things from Matin Horgan and Cey in the not too distant future. Then if we have reinvested our dividends and the price rises, we will forget about the bad times.
If the share stays at £1 but we get a really good dividend Id be quite happy . Ultimately shares should be about dividends, otherwise it is just gambling or some sort of pyamid scheme. Look how well Ocado have done price wise over the years. Have they had a dividend yet? So if the price crashes, someone who has bought in recently will lose out big time.
Sotolo you have a good weekend also.
All that is happening now for LTH is just because of unbelievable short termism of the previous CEO and others within the BOD including the pervious Chairman /interim CEO Joseph.
In hindsight he sold a vast amount when the going looked good.
For Traders of course that is terrible ,but you have not lost unless you panic and sell.
The Dividends for a few years were being subsidised by lack of investment in clearance for the future.
Now that is being done ,but at least this BOD is not making LTH suffer too much by cutting the Divi out .
As for the profit this year that will be seen in not too much more time.
I know this platform is for Traders being LS East ,because that is how they make their money.
But Traders are not the majority of shareholders.
I hope one day you manage your house renovation ,it must be very frustrating seeing your dreams put back several years.
We all have bad times in life.
Good luck.
Hindsight... stocks are always gamble, especially gold and more so crypto.
As I'd said before this is why a small my % of portfolio is gold stocks and less is crypto.
I trade my CEY- sometimes get it right, sometimes wrong, but luckily more right than wrong on CEY. My view is here is all about futures- this SP is very low because of Oct2020 coupled with gold price being so high just before this, causing this fall. All PMs are down around the 30% mark YTD.
The year results won't be good, and this year always being compared to previous year at RNS time- but we never know how much is priced in already- we've performed broadly in line YTD with other PMs.
Now the BUT, and it's a big one in my view...
If 1st Dec shows a good report and significant progress to a regain towards the 500k at Sukari again, coupled with all the expansion plans, this will rise from this very low SP. All the comms so far have NOT indicated any further issues, and have shown ahead of schedule.
The odds and all the logic point to this.
This is why when I trade around CEY during some days, I don't want to be out for long (plus those "in the know" may pounce on CEY).
Yes, selling at 99 was deemed good- but not good if it jumps- plus although it makes one feel good that they missed out on a drop- it doesn't get you more money unless you either buy back in when below the 99 or invest elsewhere and this succeeds. I did very well out of the rise last year- some just went back alas, some didn't pick up on the big rise year- at the time many analysts were saying stocks will crash like they did in March 2020 if we get a second COVID wave, but this didn't happen (the overall market crash that is).
If, like you, I had held a stock for many years, I would find it very hard to not watch the stock post exiting, and if it does jump and go well above the 99 would not feel good, it's human nature for the majority.
No one knows, you take your choice- but for me, having traded this stock for years- the SP is very low.
I have zero emotional attachments with any companies I invest in.
Good luck with whatever you decide to do.
Hi Cowichan,
Thank you for flagging this up, as you will be aware this has been identified in the most recent presentations as one of several very promising potential contributors to total guidance!
All part of Martin Hogan's new strategy of adding the value of Sukari!
As posted a couple of weeks ago I didn’t think Mando had made a mistake selling at 99.4 as Cey , it is down a further 6%, so well called Mando. Ths I said I was had switched a few Cey to is up 40% on the month. Just wish I had the guts to sell far more, and followed Mando (tho not back in) I just sold a tiny few, despite the derision of some here on posting that gold and Cey might fall. Now I think the odds of rise or fall are more evenly poised I think at this lower price, tho the year results are a big danger when people see in black and white how badly they compare and we might get thwacked . However THS has far more to rise, when it’s results come out and seen in black and white, but can’t bear to take the loss on Cey and switch more, I already have more THS than Cey, all thanks to this board and another, Tiger on the Tail, saying get out of Cey at near 200 as it fall began, and buy THS I had never heard of, what generosity (I don’t believe posters move markets in these sized shares unless posting news that isn’t known.. Anyway as said before it would be great if people could be more respectful of those like Mambo or Tiger who post they are selling as the price will fall, and those who hold long term but post reasons for short term fall. Have a lovely weekend all, and hopefully 2023 should be a good year for Cey, or as Candid points out gold price rise may save us
Thank you DJ. The point I was making, was that the multiplier effect will move up and down during the day, based on accompanying factors included in the commentary ....of course there will be other ones too , a key one being unexplained shifts in market sentiment .
Cowichan by a quick speed read of the B2gold deal with West African Resources one (long suffering CEY LTH’s) can only salivate on how our fortunes would take an entirely different direction if Centamin were to report something similar.
https://www.b2gold.com/news/2021/b2gold-agrees-to-sell-burkina-faso-projects-to-west-african-resources
5 AM in Northern Ireland
Is coming...
Mining Geostatistical Resource Estimation Of Gold And Modeling Of Quartz Ridge Area, Sukari Project, Eastern Desert
https://www.linkedin.com/posts/jacqui-coombes-19a3204_proud-to-be-attending-mohamed-bedair-mausimms-activity-6859501947796492289-Hpaa
Razor --> thanks for sharing the alert - it's nice to have some possibilities opening up for this unloved share - even if it's only speculative at best!
Something else to consider, now that B2Gold has sold its last remaining Burkina Faso concession to WAF some might see this as an unwillingness to invest in 'dangerous' jurisdictions but according to a recent presentation (yesterday actually) at The Canada-Africa Chamber of Business Conference B2Gold has reiterated the company's long term commitment to West Africa.
Some excerpts from B2Gold's keynote address:
"We provide jobs where there are limited opportunities for people and have mined safely throughout the world, helping communities and governments,’ explained Neil Reeder, Vice President of Government Relations.
Mr. Reeder outlined extensive community development, educational and environmental initiatives – including conservation and green mining – in Africa and worldwide.
"B2Gold is a leader globally and sets the standard for international best practice, while pioneering Canadian investment and partnership in Africa,"
Also, B2Gold talks about their excitement to get drilling on their new Egypt concessions.
The entire video presentation (which is a very good) is found here:
https://canadaafrica.ca/blogs/news/closing-keynote-address-neil-reeder-vp-government-relations-at-b2gold
Y es I think it is quite clear, that all other things remaining equal , there will be a direct link between movements in the gold price and movements in the share price .
Furthermore this link isn't a linear one ..it brings about a multiplier effect . Take today for an example , a 1% drop in the gold price brought about a 2.7% fall in the fall in share price ..it has to be said that this is exceptional and won't be due entirely to the gold price fall entirely the same principle remains...let me explain
Using hypothetical figures , let's assume that the following is the situation ..
1. The gold price is $1700, the AISC is $1200 bringing about a profit of $500 per share
2. Let's assume that there are 1000 shares in existence then the earnings per share (EPS) is 50 cents per share
Now let's see the impact of a 10% rise in the gold price
1. Gold price is now $1,870 but AISC will remain at $1200 so the profit now rises to $670 which will equate to an EPS of 67 cents... so an increase of 10 per cent in the gold price has resulted in a 34% increase in EPS, giving a multiplier effect of 3.4
Let's now assume the price of gold decreases by 10% to $1530...the profit now falls to $330 ($1530 -$1200) which will result in a corresponding fall in EPS to 33 cents per share...in other words a 10% fall in gold price has resulted in a 34% drop in EPS creating a multiplier effect of minus 3.4...
The multiplier effect today was minus 2.7
So why was there a difference ? A multitude of reasons .
1. Markets dont behave rationally
2. Retail and institutional investors will be entering and exiting the market for a whole host of different reasons
3. Impact that external factors have on the price , inflation , interest rate expectations etc .
4. Company news flows
5. Fund manager notes on a company with associated share price forecasts ( though god knows why )
6. Outflows to Bitcoin or elsewhere
7. Index priced funds altering individual holdings to retain their benchmark with movements in FTSE
8. Significant events...new discoveries, take over rumours , production downgrades (or upgrades)
9. Flight to or away from deemed " safe haven assets "
Etc etc
So yes gold price has a significant impact on the share price , but that assumes all other things remain equal , and the markets react rationally ..none are true
Hi Canrtoad,
Have a look through recent reports or listen to the most recent podcasts, this may give you a better idea of Martin Horgan's strategy.