Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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Spoon I hear your frustration and agree there has been as Tibbs explains some rubbish management and misrepresentation and short term gains creating long term disasters.
Results when mining can be achieved by short cuts and this is what has happened at Sukari what we appear to have is a narrow hole in the ground when we need a wide hole in the ground, so to get the hole wider they are having to employ a contractor to widen the hole (over simplifying but trust you get my drift).
4 or 5 years of creating this issue isn't going to be corrected quickly and results aren't going to improve for some time. As gnome rightly says strip ratio of over 10:1 means 10 times as much waste producing 0 ounces and at a direct cost to the bottom line. Unfortunately this is a necessary evil and nothing Horgan or any hands dirty miner can sort out any quicker unless they throw even more money at the problem and employ another contractor with more equipment and doubt very much that this is a solution worth looking at as more costs to the bottom line won't improve your results.
I am not sure I agree that Horgan lacks technical hands on abilities as when I listen to what he has to say he comes across as very knowledgeable in pretty much all aspects of mining.
Unfortunately he joined Centamin at least 2 years too late because given the decisions made during his tenure we would have been in better shape than we are currently although in my opinion we are way better placed than we were this time last year.
Whether Horgan is a "good chap" or not I have no idea in fact I hope he is far from it and is a strong ruthless SOB and gets things done, maybe another thing that hasn't been picked up on is there has been a change of General Manager at Sukari and that suggest Horgan can make difficult decisions and has put someone in on the ground floor who understands the nuts and bolts of mining rather than a political appointment.
Are you still in here mr Tibbs.. I must say, I got in then Sukari happened and my instinct started to flash.. but things do go wrong.. but I find the older I get my instincts seem to be right more often than my 'judgement'!
I remember that time well Mr Tibbs. - I believe he spoke at the 'Denver' conference and informed the world as to how Centamin were on target to reach objectives/guidance. - As you say - 3 weeks later he performed a U-turn with the unexpected announcement that shattered the SP. - An act of sabotage to what looked like a deliberate attempt to accommodate Endeavours' interest. - I've often wondered if Denver was where they got together and agreed a plan of action.
The present situation at Sukari with loss of market is a direct result of bad or unsound mining practice and it's pretty obvious who is too blame, its no good trying to sugar sweet the facts now.
Kees Dekker's reports of 2015 & 2018 were warnings of the reality and offered opportunities to the management of the day to put things right, but instead Pardey denied the findings and although initially entering into dialogue with Kees then failed to supply his supposed correct data, instead Pardey then contacted the Seeking Alpha editor and tried to get Kees Dekker silenced.
When questioned on the 2018 Webinar after yet another RNS guidance cut in 2018 despite three weeks previously predicting output of over 600,000ozs Pardey denied any knowledge of the 2016-2018 Kees Dekker reports warning of impending dire consequences through previous years high grading to pump up output, this was deliberate deceit and misrepresentation of the facts to the share holders, further more this deceit was condoned by Josef & Youssef El Reagy.
Why did hedge funds like Worldquaint take short positions on Centamin over so many years, pretty obvious now they must have had an pretty strong inkling that all wasn't as well as being claimed.
After the revelations about the true situation at Sukari then it would not be unreasonable for share holders and the market to question if the claims made about West African reserves are accurate or even to be relied upon.
Matin Horgan has already proved his integrity, credibility and indeed professional abilities by what he achieved with his previous company.
I had many misunderstandings or misconceptions about large scale gold mining techniques but I am grateful to Dasut for since teaching me taught me a a tremendous amount about Sukari and gold mining in general.
That said whilst I admit my misunderstanding of the gold mining industry I do have a greater understanding of integrity and whilst I am always willing to accept that no one is perfect, mistakes can happen and that in most instances the benefit of the doubt should be given with an opportunity to put things right, there comes a time when the continued deliberate bad practice and deceit can be tolerated no longer, as with Sukari!
I implore everyone to read and digest the last paragraph of Dasut's post it is VERY relevant, I would say more, but it would be inappropriate in an open forum for several reasons at this time!
Best
Tibbs
BUY: Capital (CAPD)
The value of stakes in mining and exploration companies has increased substantially, writes Michael Fahy.
Mining equipment provider Capital said revenue for 2021 came in at $226.8m (£189.7m), 68 per cent higher than the previous year and slightly ahead of recently-revised guidance.
The company posted its strongest quarter of growth in the final three months of the year, with revenue up 8 per cent on the third quarter and 92 per cent on the same period a year earlier.
Throughout 2021, the company grew its fleet by 16 per cent to 109 and increased utilisation levels substantially — 78 per cent of rigs were used, compared with 57 per cent a year earlier. Average monthly revenues per operated rig also grew by 6 per cent to $181,000.
The Mauritius-based company has also been increasing stakes in mining and exploration companies, an activity it aligns with securing service contracts. These investments recorded (largely unrealised) gains of $29.1m, doubling in value compared with the second half of the prior year.
Investment in mining activity boomed last year when compared with a pandemic-disrupted 2020. Exploration budgets increased by 35 per cent globally to $11.2bn in 2021, according to a report published in November by S&P Global Market Intelligence. It predicted that growth will moderate this year, but exploration budgets will still be 5 to 15 per cent higher than last year.
Capital’s share price rose 4 per cent, bringing its 12-month gain to 47 per cent. Broker Peel Hunt said that despite its re-rating, it is still only valued at “the lower part” of its historic trading band, suggesting it has much further to go.
The broker forecasts earnings of 13.1¢ per share for the year ahead. Capital’s shares are currently valued at nine times this level, which is below both its peers and the industry average. Given that the industry shows few signs of a slowdown, we maintain our buy recommendation.
https://amp.ft.com/content/8708e3cf-8530-4a4f-8381-cf2f23156826
https://twitter.com/centaminplc/status/1485522900035768320?s=21
When you are deep in an open pit, the stripping ratio gets higher and this means it takes longer to turn the ship, in the case of wall instability... strip ratio for the quarter was 10.3:1...I would like some more description on this from the mngt, or from the CEO or both....
Total material moved (waste and ore) of 30.4Mt (FY: 110.2Mt), a 43% increase YoY, driven by scheduled increased
material movement and improved operating efficiencies and productivities.
Total open pit waste material mined for the quarter was 27.7Mt (FY: 97.8Mt), a 56% increase YoY, driven by the
successful execution of the accelerated waste-stripping programme, improving the long-term flexibility and stability of the
open pit. The strip ratio for the quarter was 10.3:1 (waste:ore) (FY: 7.9:1).
Open pit ore mining in Q4 continued to focus on the Stage 5 North and Stage 4 West areas. Total open pit ore mined for
the quarter was 2.7Mt (FY: 12.4Mt), a 24% reduction YoY, at an average mined grade of 0.93 grams of gold per tonne
(“g/t Au”) (FY: 0.86 g/t Au), a 26% improvement YoY, driven by scheduled higher grades delivered from Stage 4 West.
...there are reasons to believe the current equity sell-off will be relatively short-lived. Moreover, heightened fears suggest a near-term bottom may be close. As a result, investors might consider taking some profits on hedge positions in the Vix. Once a decline in realized volatility confirms a market bottom, they should rebalance back into US equities, preferring large-cap value stocks, especially banks, to minimize the drag from higher yields (see US Equity Transitions). Beyond this, however, they should continue to maintain hedges, as monetary tightening and narrowing budget deficits suggest heightened volatility will be more common in the medium term. Vix futures remain the preferred hedge
European stocks fell in premarket trading on Monday as tensions between Russia and Ukraine remained in focus. European Union foreign ministers are meeting today in Brussels to discuss the matter and are expected to issue a joint statement urging Russia to avoid invasion. Elsewhere, investors digested Philips' earnings and awaited PMI data from the euro area.
The FTSE 100 was dawn 0.20% at 6:32 am CET, the DAX declined 0.29% and the CAC 40 fell 0.27%.
The euro lost 0.21% against the dollar to go for 1.13172 at 7:24 am CET and the pound was down 0.08% compared to the greenback, selling for 1.35426 at the same time.
Baha Breaking the News (BBN) / NP
Happy Monday y’al
Tibbs, what I understand is results or the lack there-of.
I do not accept excuses for poor performance especially when the excuses seem to be centred around Horgan being "a good chap" rather than any explanation as to why remedial action is taking an apparently inordinate amount of time.
My opinion is Horgan is lacking in the technical/geological side of gold mining, he either needs more support at executive level from people with this background or we need a CEO with dirtier hands. CEY needs real miners at the executive level at the moment rather than deal makers which is reflected in our lousy share price. The market is a relatively unbiased judge of performance and it certainly does not concur with your quite inexplicable hero worship of Horgan.
Spoon
For the first time in a long time, we agree with Jeremy Grantham – equities likely need to correct quite significantly. Here are some simple mental models. The cyclically-adjusted Shiller price-earnings (p/e) ratio is sitting at 37 times compared to its long-run mean of 17 times and median of 16 times. The only time in the last 150 years it has been higher was just before the 50 per cent drop in US equities during the ‘‘tech wreck’’, which resulted in the Shiller p/e falling from 44 to 21 times.
If we suppose that it is reasonable for US shares to normalise back to their pre-pandemic peak on the basis that investors incorrectly extrapolated ultra-low inflation and 10-year bond yields in perpetuity, stocks would need to adjust downwards by 28 per cent.
If we consider a more serious downside scenario whereby equities mean-revert to their December 2018 level (which is when the Fed last had its cash rate at a ‘‘neutral’’ level of 2.5 per cent), shares would have to drop 48 per cent. There are many shortcomings with this analysis. One of the biggest is that this time is different to the recent past in so many ways. Unfortunately, that point of difference implies even greater downside risk.
When was the last time you can remember a US president egging on the Fed to crush inflation and raise interest rates? When do you last recall inflation being a major US political issue? The post-GFC period has been defined by politicians trying to strong-arm central banks into easier, not tighter, policy settings.
Of course, President Xi Jinping is begging the Fed not to hike interest rates given his currency is pegged to the US dollar. Further, China is, like the US, home to hordes of ‘‘zombie’’ companies. In the US, zombies represent roughly 15-20 per cent of all listed firms. These are entities that do not have enough money to service the interest repayments on their debt using existing earnings. Heaven help them if rates rise sharply, as they are now doing. In China, the state has been the primary backer of many of these entities, which can only survive with access to this artificially cheap public sector funding.
China’s latest economic challenges were on display this week with the release of its annual economic snapshot for the year just ended.... headline 2021 GDP growth rate of 8.1 per cent beat forecastsPeople’s Bank of China’s (PBOC) surprise interest cuts on two key lending rates. While flagged by policy-makers late last year,China and the United States are not only moving in opposite directions in the way they manage the pandemic, but they are now at odds over monetary policy.‘‘The Fed and the PBOC are very likely going to be moving in opposite directions in 2022, and that in itself is pretty remarkable,’’ Bloomberg’s chief economist, Tom Orlik, predicted in a December podcast. He notes that the Chinese yuan was historically tied to the US dollar, which meant the PBOC had to raise or lower rates when the Fed did, regardless of economic conditions.‘‘Now, after a decade of careful, painstaking reforms, the renminbi is much closer to a free-floating currency and that has given China’s central bank a new degree of freedom on how it manages monetary policy. We already see them using it,’’ Orlik says in comments that resonated this week.China is the world largest producer of gold, and the worlds smallest seller of goldBut this week Xi was back before Davos, held online for the second straight year because of the pandemic, with a new message. This time he was positioning China as a leader in global monetary policy. In an unprecedented move, he told the United States and other rich Western countries they should not raise interest rates when developing countries were saddled with huge debt...which they cannot repay. Same old game by the west, so smart to offer a better game for the developing countries, which is what China has been doing for a decade or more now.The global financial system does sadly need more rigour and structure and the US, which is near in civil war with a President who has one of the lowest public press conferences for a president (thank goodness), has shown they are not up to the job, to proceed.We live in velly interesting times? I am again! expecting good times for gold.the gnomeps lets not mention the shenaikans going on in the Ukraine?
Hi Dasut,
Binned my post after reading your far more capable assessment. Yes Barrick is global leader but do others not far off in stature wish to secede a Tier 1 asset like Centamin in a possible and indeed probable major world mining location to Barrick. What would the reaction of their shareholders (institutional) to handing Barrick this on a plate!!!! without at least resistance to make Barrick pay at least fair price if not as most aggressive take overs work out above reasonable market value. Going to be a very intersting time going forward and whatever the final oncome in my opinion CEY current SP will be some way forward of where it is at present.
With acknowledgements to Cowichan and have done as he asked.
Bob
It's great reading all the posts today - everyone sees things a little different but still very respectful - raising valid counterpoints just as it should be. Still, a little diversion never hurt...
https://twitter.com/middleeast/status/1485140154545278977
Yes Spot, like Sami ,for instance
That day if my memory ,hazy these days was a Monday.
I had a buy order in on the Sunday.
Was surprised and worried by the drastic drop, but ended up gettinjg a huge holding for my dosh
Which I mostly kept, after buying my new sporty car
Good luck all this week.
My point is that if Egypt for what ever reason, didn't like the takeover or think that its not in their best interest, it wouldn't take much to put in some sort of nonsense legal challenge that as we all know will never be resolved this would have dire repercussions for the bid from their shareholders.
It might even be a challenge from a private Egyptian investor who has a large position in Centamin and knows the true value of the mine and doesn't take kindly to being ripped off.
Not that hazy.
Far from it.
It was certainly serious at the time,you are of course right about the Court Hearing.
I think it was the 'Administration-Court' that did that, not EMRA. - If memory serves, EMRA stood shoulder to shoulder with Centamin in opposing the court's decision. - However, my memory is a little hazy these days.
Certainbly suspended it .
The SP hit 20p.
Was sorted within a week.
Hi Mr Bond - Take your point, mind you, I'm not aware that EMRA ever took licence away from Centamin. - That's news to me.
EMRA can give licences and also take away as Centamin have found out before.
Many of us will remember that.
Takeover or not, if EMRA does not consider it in the benefit of Egypt, it would not happen.
Bristow being well informed, will know this.
Rebess with all due respect to you .the plant ,now paid for is EMRAs and as I said ,so really they have total control. Licences are a privelege if companies lose them ,as Spot said go to court
No one fool themslves into thinking different.
Hi spot - I believe the Sukari licence is owned 100% by Centamin. - So far as I know, the contractual arrangement with EMRA involving their 50% take of profits/free-cash-flow, does not create legal-impediment to Centamin's rights of disposal. - Not totally sure. - Because of the implications, no doubt EMRA would be included in negotiations as they were with the 'Endeavour' bid.
Don't forget who also owns sukari !
If Egypt doesn't want it, there's always the poison pill of Egypts legal system.
As a 'rule-of-thumb' neo, a 40% premium to closing-price at time of offer is usually a ball-park figure. - It's not an exact science.
Also, it would depend on how the offer is made-up.