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DASUT - my logic (rightly or wrongly) the Law 32 ruling paves the way for the CC challenge to Centamin to be null and a non event… that has not yet actually happened yet… we have been on a solid Northerly trajectory since Nov22
Barrick Gold Corp.’s bullion output slid last year to its lowest level since 2000, missing analysts’ expectations and its own target as operational woes curbed production.
The Toronto-based metals producer has seen bullion output slide since acquiring Randgold Resources Ltd in 2019. Barrick’s highest annual output was in 2006, when it produced a record 8.64 million ounces in the year that saw the company take over its Canadian rival Placer Dome Inc.
Acquisitions could help lift Barrick’s metals output while awaiting longer-term development projects to come to fruition. Bristow said in a Dec. 28 interview that he’s focusing on deals in “the junior part of the market” this year.
Barrick is scheduled to release fourth-quarter earnings results on Feb. 15, a report that typically outlines the firm’s guidance for metals production for the year ahead.
https://www.mining.com/web/barrick-set-to-report-highest-quarterly-gold-output-for-2022/
--------------------------------->>>>
M&A or bust.
If the removal of energy subsidies was an IMF requirement in order to secure funding necessary to ensure Egypt’s ongoing economic viability I think the Egyptian government would have had a reasonable force majeure argument for withdrawing the subsidy. That may be why the case died a quiet death, no point in trying to kick the Egyptian government (& accordingly it’s people) when the IMF were already attending to that.
I know nothing of Egyptian law in practice but when a nation is in the trouble Egypt was in they need the IMF to bail them out & the IMF is not known for being particularly flexible - you do what they say or they screw you (usually they will screw you anyway even if you do what they say).
I'd like to see a regualr stream of director buys. I dont think there have been any for 18 months or longer. I think the last one was when we were in the 130's and was a buy of 20 or 30,000? A steady stream of buys, along with regular updates (especially good news!) would help with credability and trust.
Obviously it comes down to OZ's out of the ground at what cost, but directors putting their hands into their own pockets would send positive signals.
Hi Dasut,
Possibly after so many good news announcements in the past that didn't work out and especially after 11 years of being in limbo nobody believes them any more until there is proof in the pudding as it were!
It's always been easier to knock Centamin down than to pump it up, I think we have come to expect share price drops as the norm now, its getting out of that mindset that's difficult!
Cholly I do hope you are right because right now I am totally confused by good news always seemingly nocking a few pence off the SP.
Sorry typo below, $375m should be $367m!
Possibly the fall in the share price yesterday may have been due to one of the brokers downgrading their recommendation from buy to hold on the basis of having reached their share price target?
I had thought there may be more questions from other retail share holders on this, but possibly the announcement of the ratification of Law 32 which null and voided the unresolved court case of over 11 years was so overwhelming that the withdrawn diesel subsidy seemed unimportant?
However just in case anyone should be curious find the managements rationale or explanation below why it would have been been impossible to recoup the $375m due to an administrative error in an Egyptian court!
Centamin had been paying the full rate and has been since it was brought in. The full price has been factored into all forward forecasts. The recoup of $367m (which did not happen of course) was at the time of the 2021 annual report (ie end of 2020).
If Centamin had lost the case they would have had to have paid $26m. In view that the case was simply dropped, no-one pays anything to anyone.
Re Profit Share with EMRA, they get 50% of the free cash flow generated from Sukari (plus 3% royalty), but growth capex is then removed (over 3 instalments of 1 year each), so cost of fuel does not count, nor does labour, nor other input costs.
Hope this helps
Tibbs
Major equities in Europe were mostly down in the premarket on Tuesday as investors looked ahead to the release of unemployment data in Britain and the report on consumer price index (CPI) in Germany. In addition, Centre for European Economic Research (ZEW) will publish data on the current economic conditions in the European Union and Germany respectively.
After the data rollout, market participants will turn their attention to the World Economic Forum (WEF) in Davos, where Kristalina Georgieva, managing director of the International Monetary Fund (IMF), and European Commission President Ursula von der Leyen are scheduled to address the symposium.
The Euro Stoxx 50 dropped 0.28% at 8:00 am CET. Frankfurt's DAX was down by 0.08%, and the CAC 40 slipped 0.28%. London's FTSE 100 climbed 0.10% a minute later.
The euro was flat against the dollar, to sell at $1.08199 at 7:55 am CET. The pound sterling lost 0.13% versus the greenback, to go for $1.21807 concurrently.
Baha Breaking News (BBN) / AB
Mr Amr Hassona (CEY country manager-Egypt) to the Egyptian media:
The SCC ruling is considered a ruling on the validity of the license of Centamin to own and manage the Sukari mine.
We are waiting for the ruling to be published so we could go to the SAC to request cancelling the case based on the ruling of the SCC.
https://alborsaanews.com/2023/01/16/1621693
It will come
Could account for todays Poor showing in the markets today. Gold especially.
Like it or lump it ,the market still is affected by their direction.
Aghrrrr i meant UP approx 25% and old old myth of the inverse relationship gold and crypto once again wrong and dated - the complexity increases exponentially
Oops I meant funny how there's a lot less speculation on unexpected rises in the last sentence! At least crypto's now ip ~25% in past month, along with a ~7% rise in gold- showing again the old myth of inverse relationship- global markets up overall too in same time period.
Who knows, i can't provide a rationale either- no one provided a fall prediction before the weekend news, closest prediction was neutral- sometimes it's doesn't go the way we expect, but been a great run recently to be thankful for. Overall peers and markets suggest an odd drop. but this just happens sometimes - I don't agree with any rationale read so far, but that's just me, sometimes we never find one- it's funny how there's always a lot less speculation on rationales on unexpected drops- but that's normal.
Hi Tornado
Cowichan has raised an interesting question regarding gold-sales/forward contracts in order to secure new bank-funding.
If it turns out be true, given the current and expected market going forward, this could be unfortunate timing.
It's been very much a no-go area for quite a while within the industry and regarded very much as a last-resort strategy.
Personally I hope it turns out not to be the case.
Bob
Several issues to consider. Before news a share can be technically oversold, neutral or overbought. Centamin was heavily overbought and now only remains so on monthly indicators (best to ignore) and one remaining weekly indicator. The hourly indicator is now giving oversold but the daily is now in neutral. It would not have been good for CEY to go into a reporting RNS being way overbought as the sell news would be a more probable outcome unless gold was taking off further.
The five indicators on Centamin fundamentals that i want to make are as follows;
1. The company gave an RNS announcing new reserves and resources with the economic price listed at $2,000 per ounce. This qualified as a red flag in my book.
2. The company AISC was proving difficult to get down. Egypt was experiencing higher inflation and around 15% of its costs are affected by it and this was probably adding $30 an ounce (16%) to say a cost base of $1350 an ounce. The high USD was also putting up costs, but at least some of these may have partly abated lately or might do so during 2023. Overall increasing production slightly was leaving the company staying flat on AISC. Some may argue that holding a flat position in the later part of the year is okay.
3. The company indicated that quarter 3 was likely to be the best production results as they had a few issues in the underground mining (if memory serves me correct) back in October. (Its interesting to note we saw a lining being refitted the other day so recovery data in the mining circuit may have changed slightly. Overall, we might see a weaker Q4 compared to Q3 despite some gold price uplift in December.
4. The cash being held by this company has been consistently going down. A lot was spent sorting past problems out, investing to reduce future costs and that also includes a large solar farm. In part the money has I am sure be well spent but the cash reduction reduces the overall enterprise valuation as money has to be earned to replace it.
5. The missing of deadlines by a considerable margin is a growing habit of the CEO and Board along with Capex cost overruns. This is under the control of management. In addition, communications with private investors have become unimportant. If Centamin do not want to communicate with us then they should at least support a broker to give us more insights.
The key is in the future gold price. If it were to set new highs than Centamin would get into the 130's at least , remain as a good divi paying stock, and build up some additional cash on top of the bank line of credit. If the gold price goes flat and returns down to 1800 then Centamin travels in the other direction to 108-115p area. We await to see how that one plays out. Tony
Through a conversation with a well informed friend It seems the diesel fuel subsidy case was settled a couple of years ago!
See below the relevant part of the 2021 annual report which covers this:
“The claim before the Administrative Court (the ‘Court’) concerning diesel fuel disputes Refer to page 208 (note 5.1 to the financial statements) and page 64 (Principal risks). The Group was involved in a legal case relating to historical and current fuel subsidies in Egypt. During the year, the appeals by both the Group and the counterparty, the Egyptian General Petroleum Corporation, were dismissed by the Court on procedural grounds. The Group has received legal advice from their external legal advisors asserting that both parties have no further legal recourse with the Court. Prior to its appeal being dismissed, the potential amount that could have been recouped by the Group relating to the subsidy case was $367m and the potential amount that the Group could have had to pay, if they lost the historical case, was approximately $26m as at 31 December 2021.”
https://www.centamin.com/media/2529/cent-ar21-full-web-secure.pdf
Thanks Tibbs - Wow! - Some filing system you have there sir. - No wonder you are able to keep us all so well informed.
Thank you.
Repost-
Centamin Court Case Share Price Discount 24 April 2014, 10:33
https://www.sharesmagazine.co.uk/news/shares/centamin-eyes-end-of-legal-pains
Gold producer Centamin (CEY) implies a new law in Egypt could result in the dismissal of a legal case questioning its right to operate the Sukari gold mine. Investors understandably like the news, sending the share price up 9.3% to 61.17p. It is very encouraging but this remains a risky stock as the legal matter is not yet concluded and political instability is still a problem.
Hi Rebess.
Unless the world of commerce and business has changed since my prehistoric days , statements, results , etc etc would go out to many places perhaps many days before with a caveat of STRICTLT NOT TO BE PUBLISHED BEFORE WHATEVER OCLOCK ON THE WHATEVER DATE. Th City. Institutions. wholesale Investors et al have the reputation of being like Ma' colander. However equally the major players in the market are well awre of the saying and I expect some astute mopping up of short term depressed shares. Have you had a look at the short position on CEY at this time. I have my interpretation (available on this board at the top) . Others more knowledgeable than I such as Tibbs . TornadoTony et al might care to comment on their more astute views.
Bob
Hi bobliz - Yes, what you say makes sense. - It'll be interesting to observe the 'theory' buy on rumour sell on news play out over the coming days. - With regards to Q4 news, so far as I'm aware, there is no news circulating, only hopes and opinions. - We'll see. :)
Hi Rebess and all.
There is an old trading saying "buy on the rumour and sell on the fact" I expected the drop this morning as the short term traders were well flagged as to the Court decision and have scalped their short term gains with sell orders placed at market this am on the bell. Happy to see this shake out although the Trading Statement due soon might enourage similar. Normal retrenchment. It would be naïve to believe that an RNS release is highly secret until the day published . It goes through too many who have access to such reports which circulates well before the retail and private investors have RNS notice.
I take the drop as a healthy sign which is temporary in nature .
All my personal opinion obviously and not intended to be advice of any sort as I am wrong in many things .
I add my thanks and best wishes to Siko for his in depth knowledge of Egyptian Law posted to this board.
Bob
You would hope the market will eventually get there ....when the telegraph says.........
I would like the 20% uplift now please
Anyway, lets hope for good production news