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Johnathon DA Silva.
There is he admits a possibility of 1880 soon.
If that were so ,it would negate the AISC somewhat.
The wild card.
There's one thing for sure which is glaringly obvious: - The waste pile might be slow in disappearing but the'Cash pile' has rapidly disappeared. - It was a treasury contingency that afforded some degree of protection. Now it's disappearing fast and leaving Centamin exposed. - Sotolo makes a good point I feel. - The CC is gonna be an interesting experience.
Centamin has around $160M plus cash. My comment related to Egypt. The company has reduced quite a bit of costs but they are still 8% higher than before and a lot of costs in 2021 overran into 2022. They also had a lot of additional operational costs by replacing subcontractors and doing their own mining. The overall figure still comes out to 16% although the Board did guide those costs for 2022.
Looking back !
Dec. 19, 2018 10:45 AM ETCentamin plc (CELTF), CEE:CA2 Comments
Summary
Grades are dropping significantly at the Sukari Mine of Centamin, far below planned reserve grades.
They are soon starting up underground.
The stock seems overvalued on a NPV5 basis.
https://seekingalpha.com/article/4229201-kees-dekker-reviews-centamin-plc-analysis
Nov 2015
https://seekingalpha.com/article/3695246-centamin-get-out-while-going-is-good
The case against Centamin was brought by Egyptian lawyer Hamdy Fakharany, who argued that the state was not receiving sufficient returns and should stop operations at Sukari.
https://www.reuters.com/article/centamin-idUKL5E8M8DY520121108
Westhouse Securities says: 'It is obviously positive news for the company, and reinforces our belief that the company is likely to win its appeal. However, until the challenge is removed we are retaining our 18% discount rate on the stock.'
https://www.sharesmagazine.co.uk/news/shares/centamin-eyes-end-of-legal-pains
Good Points Dasut,
Information such as this is essential for shareholders, it keeps them informed and helps to avoid possible misunderstandings or misconceptions!
Perhaps you will put them to Centamin in writing and I will do the same, possibly Cowichan will raise them via his social media links?
Sorry Typo below should read "Interesting assumptions regarding my Centamin shareholding",
True the Centamin management made a lot of money, albeit by short term and unsustainable practice but unfortunately they made some big mistakes and bad decisions for which we have to pay the price!
Spoonington
Interesting assumptions my regrinding Centamin shareholding, but that aside.
No one is disputing that Sami did very well to get the Sukari mine going, unfortunately once underway the operations were run for short term high gain and inevitably due to this production was unreliable, unsustainable and never delivered as promised on a sustainable basis.
The reasons for this were highlighted in 2015 & 2018 in Seeking Alpha articles although, subsequently denied by Andrew Pardey who actually tried to get the 2015 Seeking Alpha article pulled,
Sami must have been aware of the articles, Youssef certainly was because he was sent copies as was Andrew Pardey and the company in Jersey after yet more problems and guidance cuts in 2018.
Both 2015 & 2018 were an opportunity to make operational changes for the better, but instead the evidence was denied and and the shareholders understandably chose to believe in the supposed professional competence and integrity of the Centamin directors rasher than than an experienced freelance mining analyst.
If Youssef was to be some sort of company governmental go between or representative then he should have been appointed as such and given the appropriate title, although considering that the court case based by the now admitted false claims of a convicted felon and and the disputed diesel subsidy dispute remain unresolved after over a decade must raise some doubts as to the capabilities effectiveness of Youssef as comapny government negotiator?
That said a mine general manager should be suitably qualified and experienced and accountable not appointed and tolerated by way of family nepotism.
Tony are you saying Centamin or Egypt is in Financial difficulty ? Suggest Egypt's inflation will have a limited effect as Sukari is like an independent state with costs primarily related to the dollar not the Egyptian Pound, never the less inflation will hit AISC but hopefully somewhat less than 16%.
Spoonington you are right we should have more information on the waste removal contract but I haven't heard anyone ask the question when the opportunity arrives during a call in.
Not sure of an alternative if we accept that the strip back is necessary. Yes do it yourself but does it mean expanding the operation for a limited period? As I have said previously the numbers either way should be easy to compare.
My question isn't necessarily is it necessary to use contractors but why 4 years why not reduce duration with a larger fleet? My guess is a good deal of work was already done prior to the earth moving and cash flow played a major role in the decision.
As for exploring the 160 km concession I am not sure that they haven't already got a very good idea of the opportunities as Sami spent many years looking at the area and focused on Sukari, again another great question to ask at the next call in. Are known areas being played down until the cc is sorted I have no idea?
Having worked in West Africa I am not overly worried about Cote D'Ivoire albeit yes there is risk but unfortunately there are few regions of the world where the risks are much less. West Africa is a well established mining region and risks can be reduced and if banks are coming on board with finance then I suggest Centamin's business model must be strong.
go should be gold in previous.
I find the attitude is that we get a big dividend so management can do whatever it wants. This approach has prevailed before. It eventually breeds arrogance, lack of transparency, complacency and that investors money held in the company can be taken for granted. Hence the sensitivity on poor communications, supplying vague data, low balling to meet targets that pay management well, poor decision making as scrutiny outside of the board is ignored. It is a cycle that long term holders and the in and out longer term investors are fully aware of. In the end this is a one show mine in one country that is in huge financial trouble. Having all the eggs in a Centamin basket does have risks. I would encourage more shareholders to be proactive with the board and keep asking questions. As for AISC it will go up because of inflation. $1250 x 16% Egyptian inflation rate is $1450 per ounce. The problem is will the inflation in Egypt get worse and can then go price go up to maintain margins. Tony
Gold tagging $1840 - $1850 in early trading
Spoonington again you are spot on. Gold is now lees than 2% off its all time high (in sterling that counts for us) yet the share price still languished at half its high due to the soaring costs of last 2 years. Let us hope that despite inflation they now flatten or even fall. I too wish management were more communicative but they are not as bad as Hoc who have been stum through a siege of their mine by maoists! You are again quite right. Miners don’t seem to realise shareholders own the mine or even matter.
Major stock indexes in Europe traded mixed in premarket on Tuesday, as investors awaited the latest data on German inflation, with analysts predicting it might fall to single digits. In addition, traders will be paying attention to the country's unemployment rate figure. This week will also be marked by the release of the euro area consumer price index (CPI), alongside the Eurozone consumer confidence.
The DAX edged down 0.06% at 8:00 am CET, while the FTSE 100 added 0.34% at the same time. The Euro Stoxx 50 lost 0.19% at 8:01 am CET. The CAC 40 declined 0.20% at 8:02 am CET.
The euro traded 0.14% below the dollar at 7:59 am CET, selling for 1.06520. The pound gained 0.12% against the greenback to go for 1.20631 simultaneously.
Baha Breaking News (BBN) / AY
Happy New Year y’al
Gold registering circa + 1.00% at $1841.50
Should set 2023 off on a positive footing.
Very true Dasut, but I question whether the extent of the waste stripping program was either necessary or financially prudent - it would certainly not have been possible had Centamin not had the big accumulated cash pile.
Before a company enters into such a capital intensive & revenue depleting project I would expect a detailed cost/benefit analysis to be conducted reviewing all available options, if this was done then the details of it should have been released to shareholders, if it was not done then it is just poor management.
My big problem with the current management is on the face of it they are either incompetent in terms of their continuous disclosure obligations or in terms of their actual operational management (or both) - whichever it is results in short term pain for shareholders.
On the bright side I remain confident that the quality of the Sukari deposit will ultimately shine through & we will be rewarded - I just wish they would devote more resources to the exploration of the 160 km2 concession they have which has already shown numerous highly prospective areas rather than risking our capital chasing greenfield pipe dreams in risky jurisdictions.
Oriole Resources PLC said it will write down the carrying value of its 24.94% interest in privately-owned Thani Stratex Resources Limited (TSR) after its Hodine licence in Egypt was formally relinquished.
On 19 October 2022, Oriole reported that Red Sea Resources Limited (RSR) had spent US$2.2mln on exploration at Hodine, specifically the Anbat project, but that it would not be exercising its option to acquire an 85% interest in the licence.
The decision was made on the basis that the exploration programmes had not significantly improved the existing 2017 inferred Mineral Resource Estimate at Anbat of 209,000 ounces grading 1.11 grammes per tonne gold.
Furthermore, the Egyptian mining authority, EMRA, had concluded that the 2017 MRE did not satisfy the definition of a commercial discovery under the Egyptian Mining Code. Accordingly, RSR, therefore, forfeited its right to an 85% interest in the licence and TSR resumed full control.
With the licence due to expire on 31 December 2022 and no possibility of extending its tenure, TSR has advised the company that it has now formally relinquished the licence.
https://polaris.brighterir.com/public/oriole_resources/news/regulatory_news/story/x4n6jdr
December 30, 2022
While most of the world’s metal never sees the inside of an LME warehouse, exchange inventory levels are important because every short seller who holds a contract to expiry must deliver physical metal registered in an LME warehouse. The LME has introduced new rules to allow deferral to prevent future squeezes, but the exemptions come with costly fees.
https://www.mining.com/web/lme-ends-chaotic-year-with-metal-stockpiles-perilously-low/
My Thoughts:
When the house makes the rules, the dealer always wins
Maintaining continuity is the key phrase, and ASAP.
By the end of this year it will be just history.
Then with new ventures ,especially in Egypt, hopefully much higher production figures.
Spoonington agree with most everything you say and have a great deal of respect for Sami as he worked extremely hard to get Sukari which was always a dream and passion of his, up and running.
I do however disagree with one major issue and that is Centamin should never had gotten into the position of having to enter into a 4 year waste stripping contract, to enable the production guys to have the flexibility to maintain continuity.
It is however history and now we have to suffer the consequences of the necessary evil.
Agree, gold starting to look bullish on the charts.
Thanks Spoonington.
Without Sami El Raghy there would be no Centamin.
Without the efforts of previous management there would not have been the large cash reserves to enable Horgan to engage in the massive & financially inefficient waste stripping program.
I am well aware that the previous management made mistakes in being too aggressive in targeting higher grade areas but overall their performance in terms of gold mined, dividends paid & cash reserves accumulated was excellent - your repeated & baseless allegations that they in some way conned shareholders & engaged in a pump & dump strategy are uncalled for.
As for Youssef, you may not be aware that business is conducted differently in Egypt to what you are used to. Youssef was there for his contacts & ability to cut through red tape without engaging in bribery or other unsavoury practices - there were others employed who had the technical knowledge required. His abilities are important in Egypt - probably well before your time in Centamin, but we spent a period of 18 months before production started when work on the site was suspended, drill rigs stood idle & it was a terrible time - to my knowledge this was caused by Sami refusing to grease the wheels of bureaucracy through the payment of bribes which, whilst the correct action for the long term, caused the company & its shareholders a great deal of pain. Having someone like Youssef to avoid such occurrences creates significant value.
Before you **** off the previous management & in particular Sami, it would be appropriate for you to look at the history of Centamin & who it was that built it into a successful, producing gold miner.
I've been trying to find the company's previous AISC guidance for 2023.
Best I can do is P36 of the Investor Presentation for December 2021: 450-475,000oz @ $975-1200/oz sold.
This was a hasty AISC upgrade from two months previously in the October 21 presentation (p10) : 450-475 @ $900-1075
From this point the company has not mentioned AISC guidance again as far as I can see - but I've got a niggling memory that production was upgraded to 460-480, just can't find it?
The fierce inflation of the last year must have nudged the predicted AISC numbers higher - perhaps the reason the company hasn't mentioning AISC guidance for more than a year. I'm itching to know what they think this number will be.
On a more cheery note, GP 1828 as I write - which in the 3bear cave warrants a lower case woohoo.
Pardey is now heading up Predictive Discovery since Jan 4 2022, and they are only down 33% in that time period.
Others of course are worse.
I our focus shold be fair and square on the future. Hold the board and mngt accountable, loud and clear. 24/7
good luck to us all...
the gnome