Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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The problem with Hummingbird is that it's very small cap at £60 million and share liquidity low , making it difficult to take larger positions in it
One thing I forgot to add , was the critical figure for AISC which is when the gold price falls below that (in approximate terms) , due to specific accounting judgements in any given situation
For Centamin , if the average gold price had been below c $1186 it would have made a loss . The gold price though averaged nearly $1800 , during the first half year so a large profit was made .
Mr T. The $ 900 AISC you refer to was the figure for Centamin last year ..however that was on higher production .the AISC for the current half year was $1,1186 per ounce due largely to the reduced level of production
The cash cost went up from $ 650 to.$800.
I ignore the cash costs though, because that is just the visible direct cost of extracting and producing the gold
As an example of the irrelevance of cash costs , just think about your car ..people will tell you their car is cheap to run. . but they are only taking into account the visible cost of petrol and their mpg. ..The AISC equivalent would be to add in the cost of tax , insurance, MOT and maintenance , as well.as the depreciation of the car , so the full cost of the car per mile is much higher than the cash cost . Obviously the full cost per mile decreases as mileage increases Likewise a mine, and most other things when you think about it.
Hi All, my analysis is that the US inflation rate will be sharply higher around March2022. This is based on the $M2 figures and assumes that the velocity will be close to (or even higher than) 1.6. Yes, the USA economy will expand as will assets prices.. However the exceptional pressure from the QE will force hard the inflation rate. Close to this time there will be many warning signs and the POG will start to respond. Probably the CEY share price will anticipate this and considerable upward movement will occur. How much this will be?, and how long?, I have no idea. It should be noted that the velocity is very hard to predict (though someone did post some very helpful graphs on this) so this might confound my analysis above. Bitcoin is a house of cards and in my opinion heading for an almighty crash, when?, and how big?, I have no opinion. Blomberg seems to be predicting a gold spike soon. If so?, and if it is big enough?, I might be selling CEY and returning early in 2022. Otherwise I am staying till around March 2022. Helpful and constructive remarks please!, anyone spot mistakes?.
Good point Rebess, It's easy to forget that!
Hi Dasut,
Thank you for your opinion on this, it also proves the immeasurable value of your on site professional experience and knowledge gained at Sukari.
In my view those that are critical of the length or detail covered on any such important facts either aren't really serious investors ,or share holders.possibly just day traders too lazy to do research themselves, or even just spoofers without any sharers at all!
Thank you also to Cowichan for all the research and to Candid, Bob. Rebess, Mr Gnome and others who have contributed so much detail and thought provoking onions and analysis on this.
what is interesting is Candid's AISC evaluation, somewhere in the past I can recall $900 being regarded as rather an important benchmark although even at that Cey & EMRA were still sharing a profit.
The chart looks to be in Position A at 90p.
Take a look at HUM @ 15p if you haven't already.
Dasut..could the answer be that the plant capacity can't be expanded on a marginal basis but that it needs another plant once a certain productive capacity has been reached , and to do this would incur substantial extra costs , which could remain idle depending on the prevailing gold price. Goes back to your point about optimising rate of return
Or doesn't it work like that ?
What the accounts do tell us is that the value of inventory at $200 million means that there are currently approx 200,000 equivalent ounces of gold currently in the cycle of production ( based on approx AISC per ounce of $1,000 )
I think you will find that this level of gold within the production c to cycle remains fairly constant as gold sold is replaced by gold entering the cycle. I have made this assumption on the basis that the values of gold inventory remain very similar at the half year and end of year for the past few years that I can see.
Since there is no physical constraint on the supply of fiat currency, this sort of fragile monetary system is based on TRUST. Most of the trust rests on the shoulders of Congress that they will restrict their deficit spending to a reasonable degree such that inflation is gradual and pervasive rather than spectacular and acutely disruptive. It is historically around wars and the conclusions of long-term debt cycles that this trust gets broken.
As cracks appear in the financial system, showing users how arbitrary it is, it could erode confidence in the system and the institutions that support it. In the meantime, any individual loophole, like a temporary $1 trillion platinum coin exploit or an invocation of the 14th Amendment, is unlikely to be immediately inflationary in its own right. It’s more about the build-up of cracks and the increasing perception that the existing monetary system is rather arbitrary and that the checks and balances are gradually losing power.
Overall, my base case remains that the 2020s decade will continue to be one of real asset outperformance, meaning commodities and other scarce assets are the things to have exposure to. This won’t be linear, and there will be periods of time where having some currency allows you to buy dips and rebalance, but overall, the key is to have strong legal claims on real productive assets at appropriate valuations, and/or exposure to other truly scarce things.
Cowichan grateful if you can tell me where you accessed your figures as not sure I interpret ROM as stockpiles.
ROM stockpiles agree as this is material used for blending to get best rate of return through process plant. My question would be if they are carrying over 18 months of stock is why hasn't the plant already had an expansion to cope with such demand or why isn't it sitting on a leach pad?
Correction:
31.10768gsm per troy ounce. :-) :-) :-)
Hi Cowichan
Ordinarily I would never question your arithmetic. However, gold is measured in 'Troy ounces' not 'Imperial' and there are
31.10467 gsm in a Troy ounce. - Just saying - Hope you don't mind. :-)
Simply calc will work it out.
Morning, just passing through and wondered what divi yield the company has at current valuation? Thanks
Courtesy of Chinasyndrome on Pensana Board.
China’s growing electricity crisis
Scores of Chinese homes are in the dark and in just a fortnight coal reserves could run out. It’s proving to be a very dangerous problem for leader Xi Jinping.
Traffic lights were abruptly turned off in the northeastern city of Shenyang last week. Local authorities deemed it necessary “to avoid the collapse of the entire grid”.
Since then, the problem has spread, with power cuts and consumption limits imposed in several key industrial zones. Aluminium, steel, cement, wood mill, and fertiliser production have all been affected in Zhejiang, Jiangsu, Yunnan, and Guangdong regions.
Those Provinces ring a bell ~ Zhejiang, Isn't that where Shenghe have their operations ? and aren't all the others where most of the HRE's mines are located.
China's whole economy is teetering on the brink of collapse and yet Xi is focusing on Taiwan instead of ensuring that his people can live thru this coming winter ! Mao all over again !!
https://www.news.com.au/finance/economy/world-economy/xi-jinpings-power-plays-collapse-chinas-electricity-grid/news-story/8dcefd6400a409d656a7ca1d5df118cf
The greatest risk when Investing in a mining project is to Ignore the Fundamentals !
I finally find my Barclay dividend this am, extremely annoying as I planned to buy more Tharisa with it (this years PE looks like being a tenth of Cey) but the price rose 10% yesterday, usual sods’ (or Barclay’s) law. As usual they take the dividend in dollars then spend days switching them to pounds often saying they have to wait till they actually have the money when the Cey company secretary says they have. Like Mr Tibbs I have complained and got a measly £100 or so apology back when as this time it has cost me four figures. In answer to your other question I started buying this time at around 50p at the start of 2016 (I owned previously but sold out as gold kept falling around 2013) and steadily built tho was lucky enough to sell 10% near the start of the way down at 210, unlucky enough to keep the other 90% tho sold a few for Hoc that hasn’t been much better. I plan to hold through the vicissitudes of the gold price to see whether the promised recovery in output and aisc transpire in 2023/24. However given I don’t think worth using the divi to buy more I shouldn’t be holding but I have FOMO, and who knows, though unlikely gold could rise too.
Major stock indexes in Europe traded below the flatline premarket on Wednesday with today's economic data in focus. European Central Bank President Christine Lagarde predicted that the European economy will reach pre-pandemic levels by the end of the year.
The FTSE 100 dropped 0.59% at 7:39 am CET, while the DAX tumbled 0.66%. The CAC 40 lost 0.60% at the same time.
The euro fell 0.09% against the dollar at 7:40 am CET, selling for $1.15876. The pound decreased 0.15% concurrently to go for $1.36090.
Breaking the News / MD
Happy hump y’al
Bob
Inventories whether they be gold or anything else eg carpets , are all valued at the lower of cost or net realisable value .
Naturally, assessing the inventory value of carpets eg will be much easier than assessing the inventory values for gold .
There are rules governing how this is done known as International Financial Reporting Standards (IFRS for short ) but of course how these guidelines are applied is open to interpretation , and for that matter, manipulation , which is why all accounts have to be professionally audited.
With gold mining there are 3 separate stages at which inventory values are measured ..these are :
1. Run of the mill ore
2. Work in progress, ..crushed ore and ore in circuit
3. Finished product ..gold concentrate ready for sale
In simple terms, run of the mill ore will be recognised in inventory once it has been extracted , reliable assessment of gold content is possible , and the future costs of production, can be reliably determined. The value placed at this stage will usually be cost
The work in progress stage is much more difficult to measure , because of the complicated stages of production , but estimates have to be made using established valuation methods .
Finished products of gold concentrate is relatively easier to measure , and it will still follow the same accounting principle of the lower of cost or net realisable value .
The accounts will not recognise the saleable value of gold ( and thus the profits ) until it has actually been sold and shipped out . It's essentially ensuring that you don't count your chickens until they are hatched, accountants refer to it as prudence , one of the governing principles in the field of financial reporting
For Centamin, the accumulated value of all of these 3 stages was approx $ 200 million ..of this $ 113 million was shown in the Statement of Financial position as at 30 June 2021 as a current asset , meaning that the ultimate sale will take within the next 12 months and $88 million is shown as inventory stock piles as a non current asset , meaning that the inventory won't be sold until at least 12 months into the future .
I hope this sheds some light on the answer to your question
What makes you think that when the open price today was 95.06?
I agree with that logical final assessment
I know the realities even if I sometimes post criticism .
Good night here ,time for bed.
Magic roundabout quote, ;-).
Hi bobliz35,
I'll try adding to your arithmetic equation but don't hold me to the numbers as I'm not any more qualified!
18,800,000 tons x .46g = 8,648,000g
8,648,000g / 28.35 = 305,049 ounces
All this stockpiled ore would definitely be included in the reserve ounce total.
I suppose the point of my historical review was meant to illustrate the ability (or better yet optionality) that exists in utilizing Centamin's own load & haul equipment.
Given the stockpile grows by 30% annually it might have been possible (but maybe not preferable) to utilize that spare capacity to focus on the area Capital Drilling is under contract to remove.
Why this option wasn't chosen - and all the extra costs spared shareholders I cannot say - only that perhaps this was in anticipation of Capital's fleet also being used to work the satellites.
Although, even if this were to be the reason the plant cannot process any more ore than Centamin's own load & haul equipment currently handles - meaning any new satellite ore would just add to the excess.
Second guessing management's decisions over the years has turned out to be a fool's errand but what is certain is that Capital Drilling now has established a sizeable equipment presence in Egypt (and well on their way to paying off this new fleet)
Maybe this is Centamin's preferred way of training & weeding out future employees without directly hiring them and firing them? Maybe a processing plant expansion is coming sooner than we think?
Bottom Line: Capital's fleet will need something to do after they complete the 'transformational' Centamin contract. What that might be (and how it impacts Centamin shareholders' profit) for better or for worse is what concerns me. Cheers
Cowichan,
Rather late and following a rather good Pinot Noir. Apologies.
What evaluation of AISC would be attributed to extracting value from this stock pile. in your professional opinion.
Sorry to be a pain.
Bob
Cowichan
Following my errant and large thumb early post.
There are few on here I follow with conviction but you are one However we are not all blessed with your understanding of mining procedures et al I am loathe to interpret your exacting figures but are you saying that (I am probably totally misrepresenting your analysis that the reserve stockpile held by CEY represents 1,880,000 at average return at .46/t Au equivalent to 828,000 Oz's of gold.
More importantly to an area I am quite functional in is whether this is shown in the reserves or impacts on the balance sheet. I cannot find it in the accounts or in the reserves. Any views contrary on this board or to add.
Bob
Please explain your logic when the trade price is more than both uncrossing and considerably more than sells ?
Cowichan
There are few on here I follow with conviction but you are one !