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Hi Gnome,
Great post as usual!
My gradfather went through most of WW1,he would did'nt think much of the treccjs but he would'nt have thought much of outr leaders today eiher!
The last thee stooges at Sukari Josef, Youssef and Pardey ran things on baloney ,spoof & bullsh*t certainly not sound mining methodology or geology, they were in short Carpet Baggers running a 'Pyramis Scheme" and we got taken in!
Hi Oz,
Good for you, well done!
The ridiculous share price is completely unjustifiable!
I am in touch with a well respected and very knowledgable independent mining analyst who wrote critical reports in 2016 & 2018 highlighting since proven to be justified regarding the way that Josef, Youssef and Andrew Pardey were glossing over of the true facts at Sukari in order to promote unrealistic and unsustainable guidance.
That same analyst now fully endorses Martin Horgans and his teams new Sukari strategy which although painful in terms of AISC on a temporary basis during the clear up will start to reduce next year and result in a mine where all areas are accessible and guidance is more reliable, realistic and sustainable.
unfortunately there is now only one way to put things right at Sukari and that s by doing things properly which takes time, painful for us all now and unpopular with some short term holders, analysts and traders,but there is no alternative if Sukari is to recover and attain its full penitential for the future!
Once again well done and thank you for posing!
Tibbs
I'm with you 100%. Can't see any reason for current share price. Have piled in today as I sold my recently acquired Ocado with a nice profit. Dangerous but exciting. Inflation is here. Gold always tracks inflation at some point. CEY outlook and cash is still attractive.
There's too much self serving forensic examination in the share price. At the present Sp I'm on the side of the many buyers here today. Gla
The latest trader views on Bloomberg is that UK interest rates not moving up in December or January. Pound set to devalue against USD (129-130) and Euro (86-87) by around 2%. A small tailwind for Centamin on the cards. UK economy is slowing down, growth is falling and interest rates would just accelerate a slow down. Brexit has hit UK trade.
I don't believe anyone said that the Omicron virus took its first life in UK, but that someone died who had Omicron. That's very different.
Major European stocks stood overall in the positive territory during Tuesday's premarket session as investors awaited the latest data on the state of unemployment in the United Kingdom during October.
The previous day was marked by news that the Omicron coronavirus strain took the first life in the UK, sparking new pandemic-related concerns. Meanwhile, Germany passed a €60 billion budget bill that aims to boost economic investments targeting climate change and modernizing the country.
The FTSE 100 gained 0.38% at 7:43 am CET, while the CAC 40 increased by 0.09%, and the DAX inched up by 0.06%. A minute later, both the euro and the pound traded flat against the dollar to sell for 1.12813 and 1.32123, respectively.
Baha Breaking the News (BBN) / ND
The bizarre and worrying thing for gold was how fast it lost it's ~USD100 gain. On top of this, the FED communicated that transitory is not the case now, which should have boosted gold. To me, it's a combination of the QE and COVID causing supply chain issues that caused this inflation, the second one means around for longer. Equally, the labour market is strong regards employment numbers, considering COVID.
Will be interesting to see how this plays out over coming months.
Inflation, has, of course, hit miners cost base- Vitaly at POLY mentioned this twice this year, in Jan and Aug and both times their SP took a whack.
The gold price rose a lot last summer, and the question is always- "what is the correct price for gold?", PMs move on intra-day gold prices mainly and sentiment of gold price along with the obvious RNS'.
The FED meet this week- so normally means some gold movment.
In the good old days, one would dig a trench or a deephole, get comfortable, and move only when dangerous things got or sounded too close? How things have changed, and it makes me wonder why bother with all of the guns and bombs and nuclear submarines, and the killing of innocent largely uneducated people..this is not a conspiracy piece please...when there are other ways .
When Mario Draghi said he would do “whatever it takes” to save the euro on July 26, 2012, the spread between 10-year Italian government bonds and 10-year German bunds was about 500bp. By the end of 2014, after the European Central Bank defied multiple treaties to buy Italian bonds, that spread had collapsed to 100bp. By late 2016, this unelected technocrat (what happened to democracy is another story) had overseen a situation that drove nominal bund yields negative. It amounted to a tax being imposed on German savers (the poor bugg$rs again, that did not get shot in the trenches) that had never been authorized.
Yet other motives were in play. My contention is that those who pushed the euro’s adoption also wanted to destroy the Bundesbank. After all, Germany’s central bank had made enemies in the 1980s and 90s (no other dates please). It had effectively blocked US efforts to lower interest rates in 1987, leading to the “Black Monday” crash. In 1992, it expelled the British and Swedes from the European Exchange Rate Mechanism and then, in the mid-1990s, killed France’s economy due to the effect of a deutschmark peg that left French firms paying real interest rates of 6-7%. As a result, Buba was loved by savers globally but hated by politicians, who wanted to be able to lower rates and print money before elections.
I could go further and say that the Bundesbank singlehandedly stopped the fiat monetary system collapsing in the inflationary 1970s, as all bond markets came to be priced against bunds. This was because Buba fiercely defended the deutschmark’s reserve of value function. Thus, by the time Draghi made his 2012 declaration, the underlying political motivation of treasury officials in the US and France was probably to permanently emasculate the Bundesbank.
And the place of gold? when so many bigger ideas are going around ...
Of course on it goes and where it stops no one knows, but do spare a thought for those who fought in the trenches, and still don a uniform, but it does not seem to be where the action is happening and the real shots are being fired in our most modern of days.
go gold, those were the days and they will come again, once the people do understand what is going on and who is shooting who.
the gnome
Key takeaway:
Gold’s historical status as an inflation hedge and safe haven investment was highlighted in November.
During the month, markets signaled that owning gold in a rising inflation environment was favourable. Gold traded up by almost US$100 from the month’s low, on higher-than-anticipated US inflation prints.
Overall, we believe gold miners remain in great shape—enjoying healthy margins at current gold prices and trading at historically low valuations.
According to the US Conference Board, consumer confidence dropped to a nine-month low in November, further exacerbated by the challenges that the Omicron variant poses. During a Senate testimony on November 30, Fed Chair Powell said that it might be appropriate to accelerate the central bank’s tapering of asset purchases by a few months, given increasing inflationary pressures, and also pending more data and information on the new variant ahead of their next meeting on December 14–15. The stock market sell-off has intensified on Powell’s guidance for potentially faster tapering. Gold prices also dropped following his statements, despite a much worse outlook for inflation.
worth a read
https://www.vaneck.com.au/blog/gold/does-gold-get-back-to-work-with-transitory-retired
Thanks CI
Always a couple of ways you can read the hires
1. CEY is a more preferable employer than Barrick
2. The hires seem to be fit for Francophone countries, does this bode well for moving the West African CEY story onwards and upwards?
3. The pit wall needed fixing. I suspect the "cut back" was a biproduct of the pit going deeper, which was going to get done anyhow? Inde experts do not do this. Tend to write reports. Make lots of recomendations. Cover their bottoms.
4. The pit wall failure was a geological failure (which does tend to happen in large pits, due to a lack of proper geotechical assessment, which again hints at the past "management" being substandard or optimisitic or both) and management failure. There are viable ways to map out 3d zones of weakness priro to mining (these were not done it appears) and monitor 24/7. No rocket science here, just sound business.
Yes, be great vote of confidence in himself and his company for the CEO to buy CEY shares.
Be interesting to see how the stockpiled ore impacts on the AISC? I suspect the impact will be to decrease the AISC at a time of calling and need?
best
the gnome
Undeerlying the trouble with money, is the trouble with governments and what they do...some do their best, but its not good enough...here we go off int he wrond direction again in Oz ... commentary on the latest stimulus from the Oz Govt.
The stimulus is not needed. “The reality is that it’s availability of labour, it’s supply chain issues and it’s potential cost blowouts on fixed price contracts that are constraining the SME sector. What we’re seeing is all related to the underlying inflationary environment, where costs are being driven up by wages and to a lesser extent, supply chain blockages.”
“Allowing people to borrow more so that they can pay more for labour just creates a different problem. That creates inflationary pressures whereas if you do have open borders you can make sure we have the people to work in these jobs.”
— Glen Kanevsky, partner Deloitte
I guess govts do their best ? But what a mess
best
the gnome
That cannot be a coincidence.
Is it really likely those long term Randgold/Barrick employees suddenly got tired of working for the largest and most successful gold miner on the planet?
In other words Centamin shareholders need our board of directors to be honest regarding any SET UP for a takeover this implies. And since these hires are directly attributable to our new CEO I also have to question his level of involvement. As much as I respect him Mr Horgan hasn't
made any Centamin share purchases himself. So it begs the question - does he not see extreme undervalue in the current share price and/or is there something else going on?
Furthermore, the movement in the pit wall - while possibly a serious and legitimate concern - was never followed up by an independent report by a third party describing the options and/or risks of continuing to mine below that section. The resulting mega-waste removal project devastated the share price.
I brought up the issue before but it bears repeating - Centamin already has so much stockpiled ore to feed the mill we could have utilized our own fleet to deal with the overburden removal, albeit at a slower pace, at the very least negating a very expensive capital spend.
I suppose what I'm saying is that if a Barrick takeover does happen at this sub-pound valuation I think we'll all see in hindsight that the writing was on the (pit) wall, so to speak...
Here are the three Barrick hires of 2021
Pierre Kanku Mineral Resource Manager ( formerly of Randgold/Barrick from Sept 2011 - March 2021 )
Gustav Du Toit Sukari General Manager ( formerly of Randgold/Barrick from June 2016 - November 2021 )
Rolly Wasonga Chief Resources Geologist ( formerly of Randgold/Barrick from Feb 2012 - Feb 2021 )
https://www.linkedin.com/in/pierre-kanku-76b52b3a/
https://www.linkedin.com/in/gustav-du-toit-b925808/
https://www.linkedin.com/in/rolly-wasonga-251076105/
Additionally Centamin's group resource manager Craig Barker also worked for Barrick (Centamin hired him in late 2020) making him the fourth Barrick hire in about twelve months
https://www.linkedin.com/in/craig-barker-a8469213/
pk221
You have heard it before, "but this time it will be different". With inflation rates heading up (very hard to see them coming down), and wages stuck with productivity (despite the wonderful world of the fintechs and the electric cars, climate changeologists, viruses and their endless mutations, and ...deglobalisation) you do have to spare a thought as to whats going on, and where are we headed now in our next financial (mis) adventure.
Economists and policy makers have long argued that globalization helped to lower price, so when deglobalisation happens as it is now, then one could assume that this alone will increase prices, and increase inflation. One can see protectionist policies such as tariffs and “Buy American” procurement rules, businesses moving production back to the U.S. where it will be less vulnerable to those policies, and depressed immigration inflows. In Oz we see the depressed immigration flows,(because we shut all of the doors?) and are now watching the flow on...a shortage of workers...so now we see even in the menial jobs, a dearth of workers. So businesses need stimuli, and because the economy in Oz is going so well the Federal Govt has put out another $9b stimulation package...in a bid to encourage the big banks to lend more cheap money to SME businesses...and so on the circus goes.
So the house of cards continues to be built until it becomes unstable, and all falls down, and this time it wont be that different to the last fall, and on it goes.
I look at CEY as a long term holding of a gold backed asset (almost broke out into crypto-speak!?) now in the hands of professional managers, which means I dont feel pain in the short term variations, occassionally seeing them as buying opportunities. I wont be surprised if CEY has more of a growth orientation, and in the right hands this could be a good thing. But it wont grow by MandA using its script, and so we then rely on organic growth, and they are in as good as position as any other company in this regard due to their investment in West Africa.
Yes, Batie was the lead project and is not in the investment window (one must do their Geomet studies early!) for CEY, but the other properties which led on from the Batie inspired move into West Africa, look value adding.
Also West Africa is one of the most underexplored Gold provinces in the world, where there are still low hanging fruit. Ignore the Coup detat's which come and go, and are part of the political process (pity we don't have these in the western world), and its a great place to develop a gold project. Try doing the same in Oz..LOL..red tape after pink tape after blue tape
The new CEO did alright in his foray into West Africa, and i think he will do fairly well out of leading CEY in this area.
the gnome ...
Good night, will look forward to your morning news
Razors the au at the moment is prcessed in Canada.
But a new proessing plant is about to come to pass ,or planned if my memory serves me right in Marsa Alam.
The trouble about money ...
HISTORY (brief version)
It was almost 2,500 years ago that the Greek philosopher Democritus—he who first proposed the existence of atoms—noted an inverse relationship between supply and price. Two centuries later, the Chinese historian Ssu-ma Ch’ien observed that an increase in the supply of money tends to depreciate its value and make prices rise—perhaps the earliest articulation of the quantity theory of money. Then in the 16th century the Basque theologian Martín de Azpilcueta, known to history as Dr. Navarrus, clarified that while—all else equal—an increase in the supply of money reduces its value, the demand for money also matters...and so on and so forth...
The Fed is about to start tapering its money printing. This will weigh on money growth. The question is whether the Fed’s exit will be fully offset by a pick-up in credit creation by the commercial banking sector, the other principal creator of money. Remember that when a commercial bank makes a loan, or buys a security from a non-bank player, it creates new deposits, and therefore new money. Like the Fed, commercial banks can create money out of thin air.
There are some good reasons to think banks will be ready and willing to extend more credit. Their balance sheets are stress-tested, and are in much better shape than they were following the 2008 crisis. And they have recently been easing their lending standards. So they are reasonably well positioned to take over the money-creation baton from the Fed. However, as commercial banks, they are likely to require higher interest rates than the price-insensitive Fed. At the same time, the US net national saving rate has lately started to tick down, suggesting that interest rates may not be high enough to encourage saving .
If banks do step up, and lend enough (at only moderately higher market interest rates) to keep money supply growing sufficiently quickly to sustain the current phase of the cycle, then broad equity market returns should remain positive. Bank shares and value stocks will likely outperform.
But, if commercial banks are not able to step into the Fed’s shoes (and they are big shoes to fill) then money supply growth will slow. This may prove a headwind to asset prices—and especially to the prices of the most expensive assets, including long-duration bonds and growth stocks. In this scenario, investors may want to hold a combination of value stocks and bank shares, while maintaining a sizable allocation to cash. The holdings of value stocks and bank shares will profit should the cycle continue amid marginally higher interest rates. Cash will provide a refuge in case commercial bank credit creation fails to compensate for the Fed’s exit and money supply growth slumps, threatening to bring the cycle to its close.
Q: And where sits gold?
the gnome
What puzzles me is that Gold is at 178x right now, Cey has always followed gold and it seems it has broken away from this pattern and is stuck in the down direction. As usual over invested here and am feeling the pain… when and will this soon turn, looking at the historic pattern this has always lifted in December (except once or twice) right now it seems the opposite…
The problem with hoping for some sort of buyout, regardless of the discount to NAV, is that the same discussion is taking place on a bunch of other boards. There is consolidation around but it is a buyers market and every shareholder in every precious metal miner is feeling hard done by. Everything is on sale. I sold some CEY a few months ago to top up my HUM and have frankly given up trying to calculate whether it was a decent move or not. Hey both suck right now. It's like discussing which testicle you'd rather cut off. So it's pretty much grit your teeth and tough it out time, while the market flushes. There is unfortunately no reason for a knight in shining armour to buy this one ahead of the few dozen other bargains.
Hello MrBond with regard to remark that the Egyptian government will take control of Sukari.
Endeavour were prepared to face the risk of government intervention.
Other point I’m interested in, do Centamin have a gold processing plant or is the ore processed by a 3rd party before marketed.
If they process, wouldn’t Barrick Gold be attracted to Cey to obtain a ready operating processing plant probably the only one in Egypt.
If you take the GBP200 of cash, the NPV of the West Africa projects, (Doropo us$240m, and I would imagine ABC will get similar us$200m), converting all to GBP 200+180+150=GBP 520
Mkt Cap=960
Residual value=share of GBP 440 .... for plant, equipment, + 10 years ore reserves and 8 years ore resources ....(M+I 290 mt 1.05gt Au 9.81m ozs Au)
really? LOL , market knows best
best
the gnome
Candid in such a takeover it is likely EMRA ie Government would take control of SUKARI.
I would not be surprised by that, a good investment for them.
That is why no others will touch it,in effect Centamin "The Company" is in reallity just managing the asset.
Centamin is a very difficult and potentialy dangerous target for vultures.
They would fight a t/o with a very powerful ally.
It doesn't stretch the imagination too much to envisage a private equity firm acquiring the company and its assets , ceasing capex beyond that needed to sustain the business and selling off all of the individual parts of the business which , one would think, should undoubtedly result in a handsome profit , before moving on to the next target.
Just a thought . I hope that doesn't happen but it could
Paul..You can now actually buy shares in Centamin at a discount to their net book value ....
A billionaire could buy Centamin at current prices and inherit almost £200 million in their bank .
Staggeringly low share price, even I recognise that .
By contrast Polymetal shares for example are trading at 400 % of their net book value
Even Hoschild is trading at a premium despite all of their well publicised troubles
Silly to sell at this share price . The markets have over reacted , I will hold until a sensible price re-emerges
inconceivable to think that they will not be a target for takeover at their current price ..the question is how much ..
I must add.
Another year final 2022 , Basel 111 regulation in place with no exclusions means less paper PM promises to drive the market down when they please.