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Doropo PEA 2022 2nd version : Build $275 million; AISC $ 904 ; gold $1,450 ; AFTER tax NPV $234M ; IRR of 21%
Doropo PFS 2023 : Build $349 million ; AISC $1,017 ; gold $1,600 ; BEFORE tax NPV $330M ;IRR of 26%
Important Differences Between 2022 PEA & 2023 PFS are these added caveats:
1*) "Under the current Ivorian mining code, mining permits are subject to a 10% government free-carry ownership interest. However, for the purpose of the PFS project evaluation and disclosures included within this document, the cash flow model is reflected on a 100% project basis"
2**) "Centamin will continue to review their tax position regarding corporate income tax, withholding taxes and VAT to ensure that the DFS accurately reflects the most suitable and relevant taxation for the asset."
3***) "The evaluation method considers the Project has been evaluated on a 100% ownership basis, with no debt financing."
* 'free carried interest' means the interest derived from holding shares of which the holder enjoys all the rights of a shareholder but has no obligation to subscribe or contribute equity capital for the shares; i.e a 10% share in the net profits
** Cote D'Ivoire royalty rate on gold sales: 3-5% (sliding scale based on gold price) & corporate tax rate: 25%
*** any means of financing (debt, streaming, etc) will further reduce IRR
Conclusion:
a) Doropo will be more costly to build than estimates made in 2022 & 2023
b) why Centamin chose to fabricate a higher IRR of 26% in the 2023 PFS by raising the sell price of gold, deleting taxes & royalties, ignoring the Ivory Coast's 10% free carry interest and the biggest faux pas - the cost of debt financing or other (like royalty or streaming financing) is IMO cynical & deceptive marketing (not an idiot thing to do on the part of CEO Horgan, just plain evil to shareholders and the Market)
somebody persuade me I'm wrong in this assessment , preferably backed up with facts & figures
Cowichan
Why do you keep posting if you are no longer a shareholder.
Auto,
Same question for you, why are you still posting on Genel chat if you are no longer a shareholder? Actually don't answer - I really don't care where you post or why you post - afford me the same courtesy.
Or better yet, comment on the Doropo project - that is the subject of my post after all.
I can guarantee you this, if you are more curious to uncover if I'm some type of Centamin saboteur than determine the future prospects of Doropo - your investing acumen is incredibly low.
Hi autonomy,
Before investing in any company, not just Centamin it is prudent to say the least to do research from varied sources including forums like this one.
As a former shareholder Cowichan has gained some considerable knowledge about how the company operates , possibly more than many other investors, one that comes to mind is the present reluctance to answer any questions that might not adhere to the company slant on things!
As a long term shareholder that has been disappointed far too many times than delighted by a management that has proven itself to be less than truthful with the market and its investors I urge everyone with any investment in Centamin to follow Cowichans example and keep asking questions, it is after all investors right to get straight and honest answers rather than company slick PR baloney!
Lets face facts ,despite the slick presentations of Martin Horgan and the employment of FTI a much less knowledgable agency, although possibly more willing to be complicit with the present comapny policy of being very selective about what information is passed onto shareholders the market remains unconvinced!
The present POG is near $2000 yet the Centamin share price is less than 85p but despite this the directors won't demonstrate faith in their own company policy by making some meaningful share purchases!
Cowichan may not hold shares at present, possibly he is wise not to do so, but that said I certainly do and should the company wish I can prove it, although I appreciate I could sell out and move on in my opinion that would be letting the company off the hook, so I shall retain my right as a shareholder to praise when appropriate, but also hold the company to account and at the present I suspect that we aren't being told the full facts and instead are being led up the garden path by very polished PR baloney!
Everyone must come to their own conclusions, but they also need to take off their rose coloured glasses and ask themselves just why the share price languishes at these levels,t here is likely a good reason!
I have given the company the link to this website and I am more than happy to enter into an honest and meaningful dialogue with them, possibly even getting some of Cowichans questions answered, they have my contact details.
Considering the failure of the Eygptian projects to yet deliver the promised results after over thee years of huge expenditure I am seriously considering contacting the financial press and the UK regulators to express my dissatisfaction with the way that shareholders are possibly not being given an honest appraisal of the full acts and tthat here is a risk that many millions of dollars may well be squander ed on yet another unfinished and commercially unviable project, that being Doropo!
Tibbs
Cowichan,
How many of your critics have actually written to Centamin, from speaking with Centamin IR relations in the past I am pretty sure, the number could be counted on the fingers of one hand!
Before criticising your efforts on their undeserving behalf's whilst in some instances claiming to be investors or expert traders their time would be better spent putting some effort into calling the company to account !
We have some very knowledgable former mining professionals as members and they must suspect that all isn't well and are likely as frustrated as many of us who want some straight answers and some measurable results rather then yet more polished boloney of good times coming some years down the track, sorry not good enough!
I have no doubt that Martin Horgan could sell fridges to Eskimos, but at present I just wish that he would deliver on Sukari before possibly wasting more time and money on Doropo!!
Tibbs
Cowichan I don't disagree with any of the numbers or caveats. Input from Horgan himself at the stage of a prefeasibility study I think would be minimal other than directional and an outline by way of a questions to justify future development of the resource. As far as I can see nothing hidden from people like you and I should we want to read and digest the report.
There are many vague numbers reported and to be honest I wouldn't expect much different from the brief that all of the consulting teams have when putting some flesh around the bare bones of a pre feasibility study.
At this stage people like my old team would be asked for numbers that relate to the Life cycle costings of an estimated fleet of equipment based on annual tonnage.
At DFS stage there might be some more information to go on but until someone actually produces a mine plan with a pit layout it is extremely difficult to provide anywhere near some good estimates.
So I would only ever treat a PFS as a good guide risky business this mining lark.
The reason why I feel Doropo is a goer is because the wording the numbers and the consultant company names involved are so common to the many gold mines that I was involved in when working the West African region.
Not saying I am right just saying that much is early days gut feel and the detail will only become clear when the mine plan is known for the first stages.
The teams involved will by now have a great deal more information that will be fed into the DFS at the end of which it will be decision time.
Cowichan
My view on Doropo was made before. I believe they should sell Doropo and buy Shanta Gold outright. Suppose it cost them $250M to buy Shanta Gold and they get $25M for Doropo. They will have an asset that delivers 90,000 ounces plus a year for the next 5 years. This would give 550,000 ounces net to Centamin plus they would have a major West Kenya asset that competes with g/t gold grades we have seen with Sukari underground mine in the past and is far more promising to develop. I estimate Centamin would build a net surplus of $700M in the bank if they bought Shanta Gold. I can not understand why they are not doing it. Doropo is for an existing West African miner to develop. Centamin should stick to being an east African mining company.
Hi Tornadotony,
Interesting strategy. I haven't dived into Shanta's numbers so couldn't comment on that aspect but the part about selling Doropo to an existing WA producer sounds plausible. Doropo made more sense when the Batie/Konkera complex of deposits right across the border with Burkina was the plan - the combined metrics making both more affordable and longer lived - but since that is no longer the strategy the economics need to be thoroughly reassessed.
That said, waiting until the literal last second before the main Doropo concession expires ( without possibility of renewal ) as Horgan is currently doing by pushing the DFS out to mid 2024 will doom any possible sale to another miner. How that is tolerated (nay, lauded) by some shareholders I don't comprehend
Hi Tornado,
On first impressions your idea makes a lot more sense than trying to develop Doropo!
Hi Tornado,
I understand from a mining professional that it all depends on the cash flow performance of Shanta.
Once you have that information then compare the current reserve grade with historical processed grade which will give a good idea about how attractive the company is.
Also look at prospective remaining life of mine.
Tornadotony Shanta a mining company formed in 2005 a company looking for a new CEO and struggling to produce 25,000 ounces a qtr. Market value of £110 million. AIM listed SP less than 11 pence.
West Kenya has been promising for quite some time and I visited the region back in the late 1990's and we all got excited when Barrick became involved but they sold to Shanta in 2020 so I wish Shanta luck because the grades look amazing.
Singida is new but a relatively small resource "So far".
My view is a neat junior but doubt it would fit into Centamin's core business plans.
Thank you Dasut for that insight!