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Sotolo, From your statement I assume you had magic mushrooms on toast for breakfast this morning or you are smoking a "Spliff!". or both!
Centamin Surkari Gold Mine to transition to owner-operator mining
………….
Centamin tweeted this article 1/2 an hour ago.
https://www.globalminingreview.com/mining/08022022/centamin-surkari-gold-mine-to-transition-to-owner-operator-mining/
Schomosport from 2018
Posts: 11
Off Topic
Opinion: No Opinion
Price: 119.20
RE: Re Complacency
Today 20:45
In general I find this forum extremely informative and am most grateful for those such as MrT who agitate on behalf of shareholders and bring back information directly from the Company. I would however like to say a few words on the topic of the sudden loss of the single drilling machine.
I know very little about mining however I do know quite a lot about reliability, dependability engineering, contracting for availability, etc. which is the gist of the discussion regards the absence of a hot standby replacement for the single drilling machine. Fundamentally it is a cost/risk decision where in almost every case in every industry, management will ignore the recommendations of risk engineers and trade cost NOT incurred against the cost of what MIGHT be incurred if the risk comes to fruition. Sometimes management get it right, sometimes they get it wrong, often massively so, BP Macondo being an example of the latter.
So I am not even a little bit surprised at the predicament that arose when a single critical equipment item failed and bought production to a halt. Saddened, cynical, disappointed, world weary but surprised, no, it happens all the time. Given that a new machine has now been ordered it would appear that management have also concluded that they got it wrong as they have ordered a replacement. Hopefully they will extrapolate the argument to other single point failure parts of the production process, but don’t bet on it. People do not like spending money mitigating risk!
As to the wails about penalty clauses, liability insurance, contractor should pay for loss etc.; forget about it unless you want to add two noughts to the contract price. And spend years in court fighting for ‘victory’ at every twist and turn. Centamin management don’t appear to have been overly successful in this arena with their own government I note. Sorry, that sort of a world doesn’t exist and, if it did, nobody would bid for it, they all want to be like these companies who think they can experiment in running a railway at a profit and then give it back when it goes tit’s up. Dream on.
You might also like to ask the contractor how many times he has been encouraged to delay preventative maintenance just to get a little more output out to boost the month end figures. The contractor always agrees of course as its customer’s risk. That sort of mentality doesn’t do much for reliability either!
Martiin Horgan seems to be pushing ahead with his strategy of moving key services back in house from contractors, after the balls up by Barminco underground drilling contractor in 2018 I think this is a move long overdue!
I found it hard to understand why in 2018 Centamin failed kick Barmico out for failing to have critical spare parts available for the one and only and working on limits underground LHDR or invoke some sort of action re penalty clauses to claim back costs of lost production.
One of our members at the time (Schomosport) then informed me that in order order to keep contract costs lower/affordable such penalty clauses are generally not part of the T&C of contracts, so it seems in that instance bad supervision on the part of Pardey, Youssef & team was and lack of lost production penalty clause gave Barminco a get out of jail free card!
You may be interested in their informative comments in the next post re production risks and contracts T&C
Re Centamin production downgrade to 505,000 oz 2018
2018 tipped as ” a year to forget” for Centamin as grades falter
By David McKay -May 25, 2018
https://www.miningmx.com/news/gold/33018-2018-tipped-year-forget-centamin-grades-falter/
"The cause of the issue is two-fold. First, lower than expected grades in the transition zone of the open pit mean less gold than expected. This should pick up through the year as mining moves out of this area. Second, volumes of ore mined underground has been down on budget due to kit availability issues. These issues are being resolved (and a second crew has been mobilised by the contractors) and again should see improving tonnage through the balance of the year. Which should mean 2Q is the weakest production quarter this year."
https://www.markets.iweb-sharedealing.co.uk/research-centre/market-news/article/?id=3313405&type=bsm
Part of a post from Cowichan
Question: Has Centamin's management sufficiently explained the continual (going on two years!) poor grading control in the main pit?
Which just happens to be under the authority and watchful eye of Capital Drilling?
Or has management ever come clean with the ill fated long hole drill rig LHDR? I spotted this article which seems to imply the LHDR was damaged when it was left in the blast zone!? Who did that? Capital Drilling?!
https://www.thetimes.co.uk/article/endeavour-needs-to-dig-a-bit-deeper-g5p06w5fc
"All gold miners enjoy a spot of pyrotechnics. Take Centamin. It had such an explosive day of it last year that it clean forgot to remove its own kit from the blasting zone. The upshot? A poleaxed “long hole drilling rig”.
A trip down Memory Lane
https://www.lse.co.uk/ShareChat.asp?ShareTicker=CEY&share=Centamin-PLC&thread=00E2F959-BAC4-4978-B38A-42B319F53BDF
Moving more operations/services "In house"seems to confirm that at the very least if "Balls ups" happen in the future it will be easier to determine responsibility!
Good move. Cheaper and more control. Looks like a no-brainer and something that was long planned as soon as the prior 5 year agreement expired. This will reduce AISC
My assumption of owner mining is that I stead of hiring sub contract compannies they are now carrying out mining with their own employed staff
More control- always nervous when an RNS hits- but so far flat so seems to be moving on gold etc- bit of a "phew" moment as you never know initial market reaction on RNS!
Taking more control is a good move, I worked in a business (OK so not mining) and we bought most in house, in preparation for a sell- and we did sell as demonstrated to investors we had increased control of our destiny.
it is ok I google it.
https://www.crown.co.za/images/LatestNews/ModernQuarrying/Owner_vs_contract_miner.pdf
The best news we have received since Horgan took over. Now that he is taking the reins himself and has shown faith in his team it reflects confidence in his own strategy.
can anyone explain the term owner mining and its impact?
I think they have just touched the top of the iceberg for the underground. It is going to be interesting to see how they plan to mine this, as commented previously, especially with those grades, and the volumetric envelopes of uncertainty. To my mind, this will show the worth of the new CEO and team.
the Gnome, getting hotter about gold ...
Equities on major European stock exchanges were in the green territory in premarket trade on Tuesday with market participants monitoring the latest quarterly numbers from BNP Paribas and BP.
The DAX gained 0.14%, London's FTSE 100 rose by 0.32%, while the CAC 40 advanced 0.26% at 8:02 am CET.
The euro was 0.16% lower against the dollar at 8:05 am CET, trading at 1.14205. The British pound was flat compared to the American currency, going for 1.35270 at the same time.
Baha Breaking the News (BBN) / MS
https://twitter.com/centaminplc/status/1490945230434152450?s=21
MARTIN HORGAN, CEO, COMMENTED: "The decision to transition the underground to owner mining reflects extensive planning and evaluation to determine the most effective operating model as we continue to grow and maximise the value of the Sukari orebody. Following a 200% increase in underground reserves with further identified growth opportunities and an underground expansion study underway, we believe this move best places us to extract the maximum value safely, efficiently and cost-effectively from the expanding underground operations. In addition, we welcome Geodrill to Sukari and look forward to working with the team as a key partner and contractor as we continue to explore and develop the full potential of the underground operations."
End.
Sotolo I normally enjoy reading your posts but the latest. As a long term holder the last thing I would like to see is a sell out and especially to Endevour. Sorry but my view on this is no surrender at least not less than GBP 5 per share. Best wishes Peter.
SUKARI UNDERGROUND RESERVE GROWTH SUPPORTS TRANSITION TO OWNER MINING, DELIVERING COST SAVINGS AND INCREASED FLEXIBILITY
Centamin announces that, following an independently managed contractor tender process, the underground operations at its Sukari Gold Mine ("Sukari") will transition from contractor-mining to owner-operator mining with immediate effect. This change will deliver significant cost savings and improve operational control and mining flexibility, whilst also enabling the company to upskill the local workforce.
The decision to move to owner mining, following the expiry of the current five-year contract, has been based on the following:
· Reserve growth - the 200% increase in Sukari underground Proven and Probable Reserves, as announced in December 2021, underpins an eight-year underground life of mine, with identified near-term growth targets to extend beyond a ten-year life of mine
· Leadership team - the operational leadership at Sukari has been significantly strengthened, with experienced underground expertise and increased investment in the development of the national workforce
· Operational benefits - an owner-operator model including risk-based analysis against the submitted contractor-mining tender proposals identified significant operating synergies for the broader Sukari operations
· Cost savings - the transition to owner-operator mining is expected to generate long-term cost savings of an average US$19 million1 per annum from 2023 onwards compared to the 2021 cost base, and
· Mine life extension and upside - 90,000 metres of underground drilling is budgeted for 2022, including identified near-term growth targets to extend the underground beyond a ten-year life of mine and helping to support the underground expansion study which is due for completion in H2 2022.
UNDERGROUND MINING
A detailed transition plan to owner-operator mining is in place with implementation underway, including utilising a third-party underground mining specialist to assist with workforce training. The Company has also executed its contractual right to purchase the current underground mining fleet from the incumbent contractor for a total capital cost of US$10.5 million to be paid this quarter, Q1 2022.
UNDERGROUND DRILLING
Following the completion of an independent tender process, the Company has awarded Geodrill Limited ("Geodrill") a five-year contract to provide underground drilling services, including a minimum of 90,000 metres of drilling per annum and introducing reverse circulation ("RC") drilling to the underground which is faster and enables larger samples to be taken. The contract is to commence this quarter, Q1 2022.
2022 GUIDANCE
There is no change to the 2022 annual production and cost guidance. As a result of purchasing the incumbent contractor underground mining fleet, the annual capital expenditure guidance for 2022 is increased by US$10.5 million to US$225.5 million.
Cont…
If only Endeavour would offer the same again, their offer would now be worth around £1.50 as the Endeavour share price has risen considerably since the offer as it has gone from strength to strength while our share price has fallen. Or if only anyone would make a similar offer and the board, unsurprisingly keen on keeping their own jobs, would actually recommend what is in the interest of us, the shareholders, for once. Presumably if the Endeavour bid had gone through Cey would have been a drag on the Endeavour rise but we at least would not be talking about having lost money over the last couple of years. I for one would welcome any bid at £1.50, but chance would be a fine thing, especially if it left me with shares in a better growing gold miner. Roll on Barrick but I imagine that only being able to get 50% of the company is putting them off.
Hi Steve, Gold price is popping, currently $1822.11
Was $1823. 53 earlier.
It’ll all come good.. patience reaps reward!
Whoop whoop Razor :-). Hopefully gold, and CEY will continue with traction.
More US CPI this week...
Thanks 3bear
For responding really appreciate.
Closing on today’s high.
sorry typo last para should read
That said though and football aside Martin Horgan will be judged on whether he can deliver!
I am sure we all hope he exceeds his ambitions and our expectations!
Martin Horgan comes across well, but that said I never not hang too much on these type (sometimes paid for) interviews.
It was clear that he gave a well prepared speech and tried hard to come across as being one of the boys, whilst I believe someone in that type of role should be approachable, there are ways to achieve staff respect without becoming too familiar which can be counter productive or lead to misunderstandings in the long term.
That said though and football aside Martin Horgan willl be you judged on whether he can deliver.
Thank you for posting drunkinfti,
Certainly sums the situation up, especially the appalling calibre of the majority of western political leaders and the failure of their unfit for purpose policies!