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Excellent discussion here. Dissenters are essential to get people thinking and debating. I'm not interested in a cult or share fan club. Investing is not easy otherwise we'd all be millionaires but here are 3 big points I'd like to make:
1. commodities ex Iron Ore are all out of favour and the smaller the company and more obscure the production site(s) the more out of favour. Gold is particularly neglected pretty much every junior goldy has bee caned! I note Sotolo has sold some CEY for THS. An excellent idea in theory but as a fellow THS holder he has my sympathy for recent falls.
2. The previous CEY management were as best incompetent at worst crooks. They basically trashed the mine to keep the big lie of effortless profits going for as long as possible. The new management seem to be doing the hard yards i.e. shifting dirt at a great pace. New practices workstreams etc appear to be making an impact in all aspects of the business but it takes time. Mr Market is behaving like a jilted lover and will take time to come round.
3. Gold must stay high whilst management of CEY wrestle the costs down. Keep a weather eye of 10 year US treasuries. The inverse relationship between yield and POG is pretty eerie. The other thing that could sink gold - that barbarous relic - are modern virtual alternatives Bitcoin, NFTs etc. There's a generational war going on with millennials shunning the physical and buying the virtual. There is no law that says gold maintains its role in finance even with thousands of year's of history behind it. If Dogecoin is treated as a serious financial asset despite it being originally invented as a joke, the under 30s could screw us all, so long as they don't run out of pocket money with which to speculate...
Adamsmith,
Love your post which echoes my thinking exactly - just put more succinctly than I ever could!
Best wishes,
Prof
Pleasure prof - I felt like I needed to get it off my chest!!!
Prof wasn't Adamsmith's post great. I nearly sold some more Cey on the results and bought more THS, (now have same of each), wish I had as THS is way undervalued on a PE of around 3, while Cey will I guess be around 30 this year, I might tomorrow even though THS up and Cey down, as from what Horgan said about delayed Capex next half will be worse and it is painful hanging on till (if) it gets better, and as AdamSmith points out our recovery depends on getting costs back down and gold recovering. And how about you...
Hi Sotolo,
Yes I loved every word of his post but particular that 'dissenters are welcome' (hello Sotolo) and that gold has to stay high for long enough for CEY to get its costs under control.
Thought about buying some more THS today but actually bought more CEY. Can't help but think, provided gold doesn't do anything silly, that CEY is going to rise and rise from here as Horgan delivers and the market regains faith. My biggest fear for CEY, other than the price of gold falling, is that in the H1 update, they announce a reduced dividend and that all the investors who here for the juicy yield, decided to exist hence driving the price down.
My biggest fear for my heavy miner centric portfolio (CEY, FRES, JLP, RMM, THS, SLP) is that the overall market that I consider to be stupidly valued, crashes and drags them down too.
Tomorrow is another day (GWTW) !
Best wishes,
Prof
Prof, in the March results they promised a minimum divi this year down 40% which I think they are likely to stick to: “The Board has proposed a final dividend for 2020 of 3 US cents per share, equating to US$34.7…The Board reiterates its intention to recommend a minimum 2021 dividend of US$105 million (interim and final)”, ie 9 cents to come. We have had a very variable divide 2015 3c, 2016 15.5c, 2017 12.5c, 2018 5.5c, 2019 4c, 2020 15c. So as said this year we already know will be 9c (generous as partly paid out of cash reserves as bot fully covered so as said down only 40%), more than many years. Next year should be down further, unless paid again mainly from reserves before hopefully a recovery in 2023. Like being a dissenter tho not sure I pray enough
Sotolo,
Yes I remember their commitment to this year's dividend - it is next year's I worry about. My hope is that 2023 revenue is good enough to pay and current levels without it being uncovered and that they decide to take the hit and pay next year's from reserves too. I would rather we avoid any excuse for Mr Market to smash us (again).
Best wishes,
Prof
You two make me smile.
Excellent well reasoned comments in this thread. Thank you to both Sotolo and El Prof.
I would like to add we have some forthcoming positives in the pipeline being:
Sukari reserves and life of mine
Offloading of West African assets
The new licence areas
However if these will actually have a positive impact on the share price or just help prop up the existing SP I really don't know.
Martin Horgan explained that new developments would not be a drag on future dividends so seemingly movement in gold price will be the significant driver for CEY SP in the forthcoming period.
'That barbarous relic' was a quote from Keynes where he was talking about the gold standard. It doesn't refer to gold as a commodity, in the way it is regarded today.
Like everything else, there is good and bad in every exchange rate mechanism. In the 1930s, the effect of being on the gold standard created terrible hardship, particularly for the USAs poor. We will see in a few years time in the West, whether coming off the gold standard in 1971 was such a good idea afterall.