Firering Strategic Minerals: From explorer to producer. Watch the video here.
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opportunity here?
Hi Early Bird,
That is the million dollar question. Although with inflation running at current levels a million dollars is not what it use to be!
A few years ago you would not have put any money on Cey being well under a pound with gold just short of $1900. Then again a few years ago you would not have put money on the monumental mess that previous management have left current management to clear up.
I am very tempted to buy some more however:
1. I have rather a lot already
2. What if gold falls back before the market moves Cey back up?
On balance I suspect we should have a good year.
...
Gold is up spiking because of Russia/Ukraine but more fundamentally because of inflation now being acknowledged. With the regards to Russia, regardless of whether they invade or not the relations East/West are going to be in the doldrums for many a year. Even short of war there are a whole spectrum of interventions that both East and West can to, short of war, that will cause serious economic damage from gas pipeline energy restrictions to freezing of assets and of course cyber disruptions. With regards to inflation well what did we expect with the amount of money printing over the past few years.
Now turning to Cey I think Hogan is slowly getting their house in order. He is taking the hits early (ish) in his tenure which is what a good turnaround CEO does. I was hoping we would be starting to see daylight this year so was shocked by AISC up over $1400. I think by next year we should really see a difference but my worry is that I could be wrong and it could be another year still.
So in short yes I think the opportunity is there and the market will cotton on an rerate this. But no (if I can be disciplined) I won't buy anymore.
Obviously just my slightly rambling views and would really like to hear what some of the other posters think.
Best wishes,
Prof
Prof, snap (and lovely to see you and your wise words here)
I see your snap and raise you one ditto
Hi Sotolo,
Thanks. Not sure about the wise though. That would have seen me out when we were over £2.
How are your investments going? I am taking quite some pain on FRES although fortunately did not put too much in. HOC is a car crash although made enough there on short term trades before it dipped badly and was not particularly exposed at the time. SLP getting better but still down. THS about level. RMM level pegging(ish) but expecting great things. JLP the golden child.
Are the investments enabling the build yet?
Best wishes,
Prof
Well Prof it has been a lousy year with this which has fallen more than two fold, and worse Hoc, as you mention, down by over three fold, both hit by lower ounces and more important much higher costs that will only be rising further with inflation. So the question with both is can they and the gold price improve faster than inflation pushes their costs ever higher; ever hopeful but what a hit! The good thing has been what is now my largest holding and I have mentioned a few times here, Tharisa that has risen 25z since Xmas, and 50% since Nov and is still super cheap valued at under half Cey while pushing out much bigger profits, that are fast growing; and my investment is entirely thanks to Tiger on this board, who did sell out around 200 and recommended Tharisa here. It shows how useful pessimistic comments are on these boards as well as the more usual optimists
Sotolo,
I agree that pessimistic comments on this boards are key to balance. It is very easy for us all to end up rebreathing each other's overly optimistic air. After all most people who are on a company BB hold that company and are therefore (presumably) positive about it.
Let us hope that we have many more days like today. Gold just at few hundreds of a cent off $1900 a short while ago.
Best wishes,
Prof
Gold at 1901 now
If this continues surely £1 a share must be a strong possibility…
Thanks Prof, I think the big disappointment is the hui gold mining index is up 15%, the Gdx over 20% so we should be laughing, yet Centamin and Hochschild lag way behind with Cey up 10% and Hoc up a measly 2%, partly I think as their high costs mean investors seem to think there are better mining alternatives immediately than speculating on shares like these coming good. Let’s hope they start playing catch up, who could have believed both these around £1 with gold at $1900 but then who could have believed costs also going up to 50% higher obviating the gold rise.
Sotolo,
Shareholders were all made of the reason that AISC would increase albeit in the medium term in order to make the necessary changes to Sukari for the benefits of the longer term.
I couldn't care a jot about HOC, it's a pile of poo in comparison to the potential prospects for Centamin.
As Dasut explained on several occasions there really is no alternative way of rectifying the results of years of bad mining practice than what Martin Horgan is doing now.
As Kees Dekker remarked with the new strategy Centamin investors can now just sit back and enjoy the dividends whilst the recovery takes place!
You really are worrying about things you have no control over,and its pointless, just wait and see, or bail out into some other mining company, but most likely they have their problems which they won't tell you about.
Sotolo,
AISC is a very flawed metric that can easily be manipulated and does not reflect the true cost of mining. See my article attached, which was published by Crux Investor as an “Analyst’s Note”.
- It is simplistic to believe that gold mines will be mothballed when they cannot produce at positive cash flow. There are a myriad of gold producers that have to go back to the market continuously for funding with gullible investors prepared to do.
- The AISC cost does not cover ALL cash outlays required to keep mining
Mr Tibbles. Aisc is indeed not a perfect metric, but it is the best we have and an improvement on before we it, plus the percentage increase for a particular company is illuminating, especially if like us it is large and reflected in the reduced share price, or like Barrick up as we see, but quite a lot less, and shows the effect of the raised oil price. My second sad big holding, Hochschild, mothballed their Arcata mine because the aisc was higher than sales, and have had to hedge the entire output of their Pallancata mine as again if the PM prices fall it would be losing money, thus will miss out on any rise. Ultimately a company can not continue operation if the gold price is below aisc as even capital raising will soon be eaten up.
On another note I think the possibility of the dividend being raise from 5c to 6c is highly unlikely, it is more likely to begin to fall later this year unless gold continues to soar faster than the aisc