George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
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Central banks are suddenly reducing bond-buying programs, known as quantitative easing (QE), that were used successfully to suppress interest rates.
Liquidity is a global phenomenon but it’s clear Australia has been acutely affected. A study by Sweden’s Riksbank showed that initially QE enhanced liquidity, but once the percentage of stock held by a central bank reached a tipping point of about 40 per cent, liquidity deteriorated significantly.
And New York Federal Reserve governor John Williams commented last week “more work needs to be done to improve the resilience of the US Treasury market”. “A well-functioning US Treasury market is critically important for the US economy and the entire world.”
... large carry trades have been disrupted. These are where hedge funds and the like borrow in low-yielding assets to buy higher-yielding assets.
Often these are leveraged, so any sudden lift in volatility causes many of these positions to be unwound. The Reserve Bank via QE and the old yield curve control could have reasonably been expected to offset some of this. However, the RBA was in the middle of a policy rethink and Australian short-term rates went nuclear. Been caught with pants down before ...
According to Goldman Sachs, volumes in Australia’s major bond contracts are down about 46 per cent. Other liquidity metrics point to a 71 per cent decline. The US two-year note has some liquidity measures flashing 94 per cent lower than average.
The Australian bond market is currently factoring in six increases to the cash rate over the next 18 months. The volatility and lift in interest rates has begun to move fixed-rate mortgages; the five-year swap rate has lifted 1.1 per cent since mid-August.
If anything, fixed-rate loans should be priced higher than where they are now.
There is, however, another force countering the momentum of fixed-income markets: the quantum of excess liquidity the banks currently have. It’s allowing home loan rates to have had only modest increases. At the risk of oversimplification, once this is extinguished, the banks will have to step back into wholesale markets. So, it could be worse, and if it does, that will be reflected in higher variable loan rates. BUT THE LOW INTEREST RATES ARE CAUSING ASSET SPIKES AND HOMES ARE UNAFFORABLE TO THE YOUNG AND UNCERTAIN.
Should we be as worried about inflation as the bond market is? So far, it has been largely cost-push. Shanghai to LA freight costs are 180 per cent ..and going north, enrgy up 40%, wages pushing up, productivity down.
Gold - the ultimate inflation hedge, but gold ETFs have not grown. Gold miners underpriced This suggests that investors are not so worried about inflation that the ultimate safe haven is required, but they are worried enough for some prudent tail risk hedging...
Thanks Cowichan.
Mr H maybe a tad too cautious/conservative. I am interested to see how his predictions go, I think he is comfortable underpromising and overdelivering, but see how things work out. Some short term pain? for long term gain?
best
the gnome
CEO Martin Horgan laid out the timeline for Doropo on his video with RBC
- Deliver Doropo PEA by Q3 2022 and assuming it's positive proceed to
- Deliver DFS 18 months from then (which takes us to approx Q4 2023) assuming that's positive
- Build a mine within 18 months of then (which takes us to approx Q1 2025)
Also, ABC won't be delivering gold until 2027 (as it's two years behind Doropo)
This means we could be a single asset company for 3 more years. How is that delivering value for shareholders?
Centamin's board is WAY too slow to develop assets. I think most of the board needs to go - they are dead weight - a hinderance to our survival.
https://event.on24.com/eventRegistration/console/EventConsoleApollo.jsp?&eventid=3512860&sessionid=1&username=&partnerref=&format=fhvideo1&mobile=&flashsupportedmobiledevice=&helpcenter=&key=730F3DE40842E2667B62401391D0B059&newConsole=true&nxChe=true&newTabCon=true&consoleEarEventConsole=false&text_language_id=en&playerwidth=748&playerheight=526&eventuserid=494384500&contenttype=A&mediametricsessionid=427217270&mediametricid=4930159&usercd=494384500&mode=launch
PS Mr Horgan said they could be looking for assets around Doropo in terms of M&A - said bankers keep knocking on the door with their pitchbooks
Also said he doesn't see Centamin in South America or Asia in terms of M&A
Thanks Mr T. And if they do an RNS on it beforehand I’ll go to their office and go nuts!
Red diesel in Spain i s double that price, so Egypt is keeping some control of fuel prices, but it is much closer to it's source,less transportation costs.
But it depends which currency the 54 c is.
Best wishes from grey skies here, and cold.
Daniel Nature (?) of UBS 9 minutes and 40 seconds
Q: exposure to world fuel costs?
A: Fuel costs dictated by the Egyptian government , company fully exposed until solar power comes on stream next year. The current price is 54c per litre which was 44c at the beginning of the year.
https://www.investis-live.com/centamin/6156f486e7d5c90c00312729/iewlw
Yes Bob ,I have done my research.
But to save boring many I prefer precie.
Best wishes.
Mr Bond
Love your succinct analysis of the present scenario , however you have not researched sufficiently to determine the major players in the Comex debacle. i I did some research some time ago as to the elements as to determining the Comex price syndrome and was astonished as to the manipulators of what is supposedly an open market availability. You might find the Fed has a massive input into Comex but what do I know . Kind regards
Bob
The fact paper prices affect the physical prices, is really absurd but of course a strong tool for manipulators.
As there is apparently no will for the so called regulators to interfere means licence to manipulate, because that is what it is.
IMO.
Sorry ,
https://on.rt.com/blb8
https://on.rt.com/blbe
Try that. :-)
There may not be a need for fuel hedging, https//on.rt.com/blb8
As for physical gold demand, the problem may be ,less demand for paper.
https/on.rt.com/blbe
Now there is more demand from the American public.
Correct Razors,
I recall in the past they did have an agreement with Chevron that fixed the price for 3 months in advance, although whether that fix still applies I don't know
a) In January 2012 Chevron informed CEY DFO (Diesel Fuel Oil) would be supplied to the mine at Sukari at international prices instead of at local subsidised prices.
b) In November 2012, Chevron demanded repayment of fuel subsidies for DFO supplied from late 2009 through to January 2012, the claim is EGP403 million (approx US$22.9 million).
It seems Chevron were forced into a) and b) by EGPC who in turn were informed by the Department of the Council of State that companies operating in the gold mining sector in Egypt were not entitled to DFO subsidies.
c) In June 2012 CEY lodged an appeal against EGPC£s decision in the Administrative Courts.
d) As a practical measure has paid the full "international price" for fuel since January 2012 however no provision has been made by CEY in the company accounts for the USD 22 million.
CEY management believes that, notwithstanding an unfavourable State Commissioner’s report, the prospects of a court finding in its favour in relation to this matter remain very strong.
Hi Steve,
I can confirm that the Sukari life of mine presentation will be hosted on Wednesday 8 December. Please find attached the details of the event.
Centamin will host a virtual investor presentation on Wednesday, 8 December 2021. Members of the Executive and Senior Management team will present the updated life of mine plan for the Company's flagship asset, the Sukari Gold Mine, including further identified opportunities, framing the long-term vision of the asset.
The event will start at 10.00 GMT and expected to end no later than 11.30 GMT, including a Q&A session.
EVENT ACCESS
To join the webcast: https://webcasting.brrmedia.co.uk/broadcast/618e790238a15b548bb9077d.
Please allow a few minutes to register. A replay of the event and presentation material will be available on the Company's website.
QUESTIONS
Investors are welcome to submit questions prior to the event via the above link or by emailing investor@centaminplc.com.
I saw the tweet, but they still have confirmed whether they will release as an RNS on 1st December
Mr T, did you manage to get clarity?
Cheers
I’m not sure what their overall fuel bill is - but I guess if it was high they would hedge- am sure they’re all over it…
Friends Mr Bond, friends we could have done better without, sold our banks piles of sub prime debt causing a financial crisis, told lies to our PM to get us involved in Iraqi and Afghanistan costing British military perennial losses and injury and costing the UK billions of pounds that could have been spent on the HNS and public services , etc.
If the Brexiteers really wanted freedom for the UK they should have campaigned for a divorce from American special relationship and influence, that has really cost the UK far more in many ways than any EU costs and for what so the UK remains the "poodle"to the US!
Hello Sotolo I believe I heard an analyst ask Ross Jerrard in the last cc about fuel hedging and Jerrard replied that no hedging was in place.
An hour would find it, I’m sure the cc is still available on the Centamin website.
Sorry I can’t find anything on a Cey fuel hedge, the last quarterly report said: “ Strong balance sheet with no debt, no hedging ….. with lower underground costs partially offsetting higher fuel prices ”. My view is that miners, like airlines, are ultimately better off not hedging fuel, or PM sales, as unless they are prescient they are paying a margin to the hedge givers, or unless like Hoc they have a mine nearing life end with high cost and low profit, which they can lock in for another couple of years as Hoc did with Pallancata, which would barely be making, or losing, money this year without it, but doesn’t apply to us!
The single asset companies either have to develop multiple assets through development and exploration (organic) or through mergers and aquisitions. Aquisitions can be done best if you use script and the SP is strong which does not apply to CEY at the moment. So the growth (development) or aquistion of CEY is the more probable growth paths. ..plus development of project.
If there is CEY acquisition, then this will be at 30%+ above the current 30 day VWASP.
If organic growth then there will have to move the West African assets forward quickly. For sure they will not do 2 assets simultaenously in West Africa, so the choice is which asset to move. They have decided is my read, and they ae spending money to convert the asset into a development green light, and this is not done overnight, as they have said clearly. I am waiting for the Doropo project in Cote IVoire, to get a green light mid 2022, and ABC 6-12 months after this, and CEY will then be a 2-3 asset company, which is what they wanted to achieve in their move to WEest Africa.
Yes, like them to get value in Burkina, but perhpas the smart money here is for them to sell and get back ended, say plus a NSR royalty?
best
the gnome
Thanks Cowachin
One of the issues in investing in Burkina Faso, is that there are some ongoing security (and I won't post again about corruption) issues in Burkina. So this makes raising money in Burkina difficult, and if a project is marginal, then the security and corruption issues will provide the tipping (down) points, sadly for the average citizens of Burkina
NEW SECURITY ISSUE
"We can establish the following toll: 49 gendarmes dead, 4 civilians (killed). Fortunately, we have found 46 gendarmes" who were missing, said Ousséni Tamboura after a cabinet meeting.
The death toll could rise further, however, as the gendarmerie detachment in Inata, a town in the Sahel region close to the border with Mali, comprises about 150 men, according to local sources.
The detachment was attacked on Sunday by "a large number of armed individuals" travelling "on several pick-ups and motorcycles," according to a security source who described "long exchanges of fire" between the attackers and the gendarmes.
This is one of the deadliest attacks against the defense and security forces since Burkina Faso has been confronted with jihadist actions, which began in this country six years ago.
At the end of the council of ministers, the president of Burkina Faso, Roch Marc Christian Kaboré, deplored "dysfunctions at a significant level" within the army, mentioning in particular problems with food supplies.
"This is unacceptable and that is why I understand very well the different reactions of anger that are expressed," he added.
The government spokesman said earlier that two commanders in charge of the northern sector of the country have been removed from their posts after the attack in Inata.
https://www.africanews.com/2021/11/18/burkina-faso-president-criticizes-army-dysfunctions-after-deadly-attack
There are wide scale and ongoing protests about the handling or lack there of, terrorist threats. I expect these to magnify very significantly in the next few months. I am also suspecting there may well be a regime change. This is not disimilar to Mali, where there have been 2 coups in the last 12 months.
"A convoy of French troops in Burkina Faso was stopped en route to Niger on Friday by a human barricade of protesters opposed to France's involvement in a regional conflict with jihadists. Anger is rising in the former French colony over the inability of Burkinabe and international forces to prevent rising violence by Islamist militants"
Why, when they were going to help?
France continues to deal poorly with the investigation of the assasination fo Thomas Sankara. There is now a trial in motion
The poor will become poorer. Protests and civil unrest will increase
best
the gnome
[hope I do not get censored this time!?]
Speaking to Anthony Vaccaro, president of The Northern Miner Group during a keynote session, Bristow said fund managers’ ambition to gain more relevance often meant shareholders didn’t get the best value from the opportunities at hand.
“My critique is that actually through the behavior of many fund managers, we keep forcing the gold industry into a trading platform and not developing long-term value,”
“The single-asset companies should be wrapped up because then you can invest on the back of that investment. And fixing broken assets in an industry where the average life of mine is ten to 15 years — right now it’s under ten — makes it more difficult, and it makes it more difficult to consolidate the industry. And so then the fund managers want to have that control,”
https://www.mining.com/between-fund-managers-and-miners-much-value-left-on-the-floor-says-barrick-ceo/?utm_source=dlvr.it&utm_medium=twitter
-------------------------------->>>
My Thoughts:
Not many single asset companies of scale left - and even fewer that were 'broken.' Wonder what mine(er) Bristow had in mind?
As a shareholder of a (formerly?) broken single asset I'm not fond of the term 'wrapped up.'
What else can you expect from our "friends" acoss the pool.
Like so many egoiststs ,now seeing the horrible possiblities ,and not at all good for themselves.
Every trick in the book.
But maybe they are to late.
We will see.
But still another year of do what it takes, now Basel 3 is pushed back.
Not unexpectecd from some.
So big big jump for PM miners till then.
It would not be approptiate for their stratedgy.
IMO,
Agree entirely about the Yanks Autonomy1!
The Yanks are always going on standing up for freedom and democracy, although that's only as long as it suits their own homeland agenda!
Every time the Yank's have gone into any country the world over in the name of freedom and democracy it's because they want to install their idea of how thongs should work to their advantage!
Every conflict since WW2 the yanks have been involved in has made things far worse!
The Yanks bankrupted the UK wit lease lend during WW2 because they could then make the $ the worlds reserve currency!
Mrtibbles
I would love Gold to be 2000 ,but whilst the Yanks hate it i think they will do what they can to keep it low,today is a typical example back down to 1845 as soon as they open
I think i am right in saying that everytime they issue results or updates the share price goes down so why will December be any different,Perhaps this time next year after better Aisc and more profits ( assuming gold dont go one way or the other) things will be a bit better
Regarding the quote from a mining expert (whom I highly respect AND agree with):
"You need good grade in Western Africa to pay for extraction there. There is such a thing as an African cost structure and it is relatively high. To that you need to add the security risk which is increasing annually with the fundamental islamist insurgency. Sure, the comment below about forfeiting 1.4 million ounces may be true, but are they economic ounces? It may well be a case of preventing throwing good money after bad money."
--------------------------->>>
My Thoughts:
Here is an actual statement from Centamin outlining their Wadaradoo rationale:
"Focused capital allocation with clear and frequent investment decision points towards value creation. If those decision points are not satisfied, then there needs to be the discipline to stop committing further capital and instead assess alternative opportunities for the asset."
So is that what management did in the case of Wadaradoo - 'assess alternate opportunities for the asset?'
No.
All the value that was created through exploration and drilling was forfeited. Perhaps $300 to $400 million of value creation. Gone. I hardly think 'not throwing good money after bad' is a good idiom for what transpired. May I suggest (for the UK audience) 'Penny wise pound foolish.' a better fit?
Just think about all the quarterly presentations where Centamin's management crow on and on about how they will find ten or twenty million in cost savings through efficiencies, reducing waste, saving fuel and so forth.
Should they then scoff at a shareholder suggesting Wadaradoo offered value through divesting?
Furthermore, Wadaradoo is right next to Batie West and Batie West is right next to Doropo.
Any issues with security will effect the entire area as it's literally a dozen kilometers separating one from the next and the next. And as far as metallurgy and good grades go - the new owner Altair gives a glowing report. See here: https://www.linkedin.com/posts/don-lawson-98619370_gold-activity-6866852365631332352-0pTv
And finally, the mining expert adds this:
"Funny how often people believe that management makes decisions unfavourable to the company and, by extension, them."
Well, people often think the government makes decisions unfavorable to the citizens/taxpayers. Is it blasphemy to imagine a board of directors making unfavorable decisions as well?
Bottom line is I do have an ulterior motive when it comes to my criticisms as a shareholder. And that is to see corrective action taken so our share price can appreciate & Centamin can grow. The board has been sitting on their hands and squandering assets far too long.
Honestly, isn't it those that make blanket excuses for the board's massive failures which ought to be questioned as having ulterior motives? Don't get me wrong, I understand the point of being positive minded - but there comes a time where one also needs to be pragmatic and