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Alas it is one that impacts the SP though and one that the markets use.
Every time the AISC goes up in the RNS, with all else being equal, the SP goes and down and vice-versa.
AISC is a very flawed metric that can easily be manipulated and does not reflect the true cost of mining.
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.
An important component is hidden by classifying these as “growth”.
Centamin stands out as one of the few companies that consistently generates positive cash flow and able to pay dividends.
Doubt Endeavour will ever get paid, these funds will end up in the pockets of corrupt government officials or possibly get confiscated by one of the fundamentalist groups, either way its a kick in the crotch for Endeavour share holders!
Major stock indexes in Europe traded lower in the premarket on Wednesday as investors turned their attention to economic releases from Germany. The country's CPI figure was confirmed at 8.7% in January, while the report on business climate will be revealed later in the day. On the agenda today are also earnings from Stellantis and Lloyds.
DAX fell 0.17%, while CAC 40 and FTSE 100 both declined 0.26%. The Euro Stoxx 50 decreased 0.23%.
The euro was up by 0.11% against the dollar at 7:58 am CET, selling for 1.06570. The pound stood flat against the greenback and went for 1.21083 concurrently.
Baha Breaking News (BBN) / AY
Happy hump y’al
Burkina Faso's energy and mines ministry issued a statement on Tuesday saying it had "commandeered" 200 kilograms of gold from the Mana mine for "public necessity".
The company will be compensated for its value, the statement added without providing further detail.
The government spokesman did not respond to a request for comment on Wednesday.
"Endeavour confirms that it has signed a sales contract for 200kg (approximately 7,000 ounces) of gold to the Burkina Faso government at current market prices, from its Mana mine," the company told Reuters in an emailed response on Wednesday.
"This sale is in line with the country's Mining Code which stipulates that it may acquire gold directly from mining companies, in exceptional circumstances for reasons of public necessity, subject to fair and pre-agreed terms," it added.
His government has increased the security budget, and set up a "patriotic support fund" to raise money for the mass recruitment of volunteer auxiliaries to support the army.
Endeavour acquired the Mana mine in July 2020, as part of its acquisition of Canada-based gold miner Semafo. The company owns 90% and Burkina Faso's government owns the rest
https://www.bloomberg.com/news/articles/2023-02-16/burkina-faso-regime-forcibly-purchases-gold-from-endeavour-mine
--------------------------------------------->>>>>
Perhaps it is a good thing gold has not rocketed beyond $2000 like some gold bugs desire - if it did it would certainly be harder for countries short on cash not to create matching 'Patriotic Support Funds' to protect their national interests - Egypt included
True if less high grade gold is found not if not.
AISC is deffo higher due to general inflation which will abate- and some costs will actually deflate
Steve I think it is mining inflation rather than the general level, that Gnome is talking about. with gold getting harder and harder to find it will become rapidly increasingly expensive to get out - expect for us who already have the gold and mostly have costs that increase or decrease with inflation/deflation, unless we start searching for far more expensive gold to get out
Hi Sotolo
You're close.
Mining like any business you have to play a margin +/- volume business. Build brand. So this is what I watch, and CEY has the reserves, the resources and the exploration hectares, and is a 10 year plus comfort position, with pipeline of growth. Mngt has done a good job of building brand
If you go to miners who have small resources, low margins, ..the end is in the volatility of the market and their ability to build a cash reserve or investor buffer. Muical chairs for ambitous Mine Mngrs and future CEO's a cash cgrab and acreer jump/ The short term volatility will on odds, bury them. Lows odds for investors, more pain than gain.
regards
the Gnome
Thanks goldgnome and Tornadotony- very useful.
I'm still on inflation "top and drop" so i don't see stagflation but a drop soon as the FED will ensure this - but I also see data reflecting this and making its possible without .5 hikes- i hope I'm right!
Sotolo,
As above- with inflation dropping AISC will reduce a lot (it's well high at the mo) so an increased gold price will create a double positive whammy, along with the other positives in the CEY Pipeline.
Again, here's hoping, a strategy is only good when it's right but it's better thanks flipping a coin(I think!)!
So Gnome, in the longer term gild should rise, but because miners are doing worse with far higher costs so better buy gold than the miners, unless like CEY with a long life mine that should become increasingly profitable at least until 2040 or 50 in your scenario, as other miners find life much more expensive ( just look at the likes of scrabbling Hoc)
Gold down today, in the fickle market of traders and speculators ,that could be enough.
I bought physical coins today ,the lowest price its been for a week.
The dollar higher and less buyers, Kitco Gold Index.
But nonetheless still in a strong position.
101.55
-1.80 (-1.74%)
Phoebe D.
(She/Her)
HSES Advisor (Health, Safety, Environment and Sustainability) at Centamin PLC, currently working on site at the Sukari Gold Mine, Egypt. MSc Environment and Development (Distinction), King's College London.
5h • Edited • 5 hours ago
Over September-October 2022, I had the most fantastic two months working with Centamin PLC in Egypt at their Sukari Gold Mine, working on two projects relating to Sustainability Performance Monitoring and Supply Chain Due Diligence. I learned a great deal about how mining companies can conduct business responsibly and sustainably, and the vast number of things that need to be tracked and monitored in order to do so. This experience has solidified my decision to pursue a career in sustainability the mining industry and I would like to say a massive thank you to Women In Mining UK (WIM UK) and Centamin PLC for providing this internship.
I am pleased to share that I got the opportunity to head back to Sukari, to continue working on my projects and taking on some new ones.
Please click the link below to read my blog sharing the highlights of my experience!
https://www.womeninmining.org.uk/women-in-mining-uk-2022-summer-internship-at-centamin-plc-phoebe-dawes/
London – 17 February 2023: Women in Mining UK 2022 Summer Internship at Centamin PLC – Phoebe Dawes
Written by: Phoebe Dawes
I was offered an eight-week internship with Centamin PLC, a FTSE 250 gold miner and one of Women in Mining UK’s (WIM UK) Industry Partners, over September and October 2022. I was based at Centamin’s principal asset, the Sukari Gold Mine, located in Egypt’s Nubian Shield. I undertook two projects relating to Supply Chain Due Diligence and Sustainability Performance Monitoring, working with multiple departments at Sukari and under the supervision of the Corporate Head of ESG. I’d like to thank Women in Mining UK and Centamin for providing this opportunity as I gained valuable experience that has solidified my decision to pursue a career in the mining industry.
Upon my arrival in Egypt, I started the internship straight away on site. The site itself is very impressive, about a 35-minute drive from my accommodation in Marsa Alam – and it’s not uncommon to see a herd of camels on your daily commute! When my internship started at Sukari, there were still very few women working on site as the Egyptian law that had previously restricted women from working in certain roles on mine sites had only changed fairly recently. Despite this, it was clear from the start that the site is very welcoming to women and the company is working constantly to improve any challenges arising from the legacy gender imbalance.
My first couple of days were spent completing health and safety inductions and visiting each area of the site to gain an understanding of the process from ore extraction to processing and the management of tailings. I do not have a background in geology or chemistry so the details of how (continues via
Steve
The oscillations in the gold price, and interest rates can be just noise or can be signal depending on your investment timelines (to perhaps state the obvious).
LONG Time Lines....Gold discoveries are monotonically down in number, down in grade, down in evry way, and there is no way gold will be found at a “sustainable” rate in the future. The new discoveries of size are most likely to be very low grade, and relatively deep, and as such will need a high gold price before they are ever mined. So mine supply is going to be limited in the future, which leaves demand for gold. My guess is demand is going to increase. It has been an asset in human history, it is entrenched in the vernacular, and entrenched in the human psyche. A long standing emotional asset, that has carried far more significant value than the Ponzi schemes of the fiat paper machines.
Interest rates were unsustainably low for an unsustainable time, and now the "engineers" look like they are going to make them unsustainably high for an unsustainable time, and so on it will go. Thde bt loading will see interest rates plummet in the near term, or businesses will wobble.
SHORT time lines: Interest rates up, Gold may go down in fiat pricing, except for the contrarians who have a longer time line who will see it as a (great) buying opportunity and create a buffer to limit the gold price contraction (if there is any). The hot money looks like it has run out of Venture Capitalists (and the new darlings of fintech -low moat high bravado businesses), and is concerned about what WILL BE an economic slowdown, unless there is a big move on developing the undeveloped countries to try and sensibly counter the spread of terrorism (the other way is knives, bombs, wars -big and small and I think everyone is sufficiently unimpressed with the outcomes of these)?
Interesting to watch the quality bitcoin types (again the hot money has gone) as there is real opportunities in the space of quality providers.
But in short I am a long term gold bug. Have been for a long term. The flatulence in the market are my buying opportunities, and I have bught quite a lot. I am a long term CEY share holder of significance. Loved the original story of CEY. The silver spoon child did not do well, and his buddy a very mediocre performance. But it proved to be not what you know, but who! Anyhow, I think CEY is out of the woods, and in great hands.
Sorry for the length of discussion, lots missed ut
The gnome
Steve
We have been losing visibility on the extent of long gold contracts closed and the extent of the short contract increases at 27 times leverage. The short contracts can face margin calls when the volume position is high and gold moves 4% up. Those playing long contracts will wait to see if the short contract volume is at particular ratios to the long volume. It helps give them an edge as to when a new rally starts or a bottoming process is forming on gold. Those who went short could see he long volume buying was reducing when gold was at $1960 odd per ounce.
I am curious how a war in Ukraine can be fought with western central bankers continuing to hike interest rates. After pulling out of Afghanistan the optics would not look good for USA if they did the same with Ukraine. Inflation is going up anyway and high rates just create a much deeper stagflation.
Hi,
Does anyone have a view (maybe goldgnome?) on the implications of this on bullionvault if any of note?
"With gold prices falling almost $100 per ounce this month as longer-term US interest rates have jumped by half-a-percentage point, the market has had no sight of speculator or commercial-trader positioning for the last 4 weeks as Comex futures and options data from US regulator the CFTC continue to be delayed following a "cyber-related incident" at a third-party provider.""
I get the interest rate bit, just not the gold bit.
See the link for the entire bit for more context if needed:
"https://www.bullionvault.co.uk/gold-news/gold-etf-022120231"
I just wish people would state their rationale around any prediction of a rise or fall on the SP at the time they post. We will never all agree but at least post the reason- else it's a pointless post.
…turning? Which way? Miners prices are predicting down….
There’s still hope, the precious metals prices are turning.
Hi Paul,
Centamin holders certainly need that!
Hope?
Well it needs to gain about ~2.25% to go blue today... so what are you using to think that this will occur today? This is not a criticism but an interested question.
Can see this closing in the blue!
Like it has done last few sessions!
And.... the key word ... "was"
Major European markets traded mostly lower in the premarket session of Tuesday ahead of a new batch of economic data and with investors focusing on the future moves of central banks. Today, investors will receive new reports on economic sentiment, manufacturing, and services.
At 7:12 am CET, the DAX was flat, while the CAC 40 fell 0.07%, the FTSE 100 declined by 0.12%, and the pan-European Euro Stoxx 50 dropped by 0.12%.
The euro was down by 0.13% against the dollar at 7:14 am CET, selling for $1.06703. In comparison, the pound lost 0.10% to go for $1.20247 simultaneously.
Baha Breaking News (BBN) / JG