We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
The ousted boss of Endeavour Mining has been stripped of more than £20million of pay just weeks after he was fired for gross misconduct.
ADVERTISEMENT
Sebastien de Montessus, who had led the gold miner since 2016, was sacked earlier this month after an investigation into two separate incidents including an irregular payment of £5million relating to the sale of a company asset as well as allegations about his personal conduct.
Endeavour Mining said he will lose £23million of pay, including £14million relating to a bonus for 2023 and unvested share awards.
The board also wants to retrieve £9million of payments from previous years.
It comes just one month after oil giant BP decided to strip former chief executive Bernard Looney of £32million in pay and bonuses following a scandal over his behaviour.
Endeavour, which is the largest gold producer in West Africa, became aware of the irregular payment during a review of its acquisitions and sales of parts of the business.
It is unclear where the payment was directed and a review is ongoing into the details.
De Montessus, 49, faces separate allegations over his conduct with colleagues, reported in October through a ‘confidential whistleblowing channel’ and which have prompted an external investigation, Endeavour said.
He was among the highest-paid Footsie bosses, earning £8.9million in 2022, and £18.8million the year before.
https://www.dailymail.co.uk/money/markets/article-12980575/Ousted-Endeavour-Mining-boss-stripped-23m-misconduct-scandal.html?ns_mchannel=rss&ns_campaign=1490&ito=1490
Rebess and other members,
After over eight years of trying to put it off the reality it's time s to finally admit the open pit is simply a drag on profitability at current grades!
From what Mr Horgan has stated in the past the whole point of the Capital waste moving project was to get access to better grades in more places, which is apparently underground!
Or is quarter 4 2023 an anomaly?
If not, I wonder how the EMRA would handle learning the open pit gold would be best left in the ground to ensure the viability of Sukari and future profits.
Likely the news would go down like a lead balloon!
Operational viability-
Run-of-Mine leaching has the advantage of very low processing cost and is used as an add-on that can generate cash flow as the overheads are carried by the higher grade ore than is treated conventionally. However it has usually a much lower metallurgical recovery.
However It cannot/should not be regarded as main production
So check 0.67 g/t Au feed and do some rough numbers.
Gold price - US$2,000/oz
US$64/g
Grade - 0.67
Value - US$43/t
Recovery - 80%
Value after treatment - US$34/t
Mining cost - US$3/t (I do not believe his US$2/t cost, that is nowhere in the world achieved apart from sometimes in Mexico).
Strip Ratio - 5
Mining Cost - 6 x US$3 = US$18/t
Processing Cost - US$10/t
G&A - US$5/t (= guess, I did not check)
Total Opex - US$33/t
Add to this Royalty + Sustaining Capex Cost + Corporate Overheads and you have negative cash flow.
Thanks Goldnome , with a very good explanation , a very informative article.
Thanks Dasut
You have to factor in recovery, but you are on the money.
The average open pit grade in 2021 was 1.29gpt gold, down 16% since 2012, while the average underground grade was 4.15gpt, down 20%
https://stockhead.com.au/resources/when-it-comes-to-gold-deposits-grade-is-not-king/
regards
the gnome
Hi Dasut,
A highly experienced professional analysts opinion on today's RNS .
The fact of the matter is that with such grade the open pit operation makes nothing to very little cash flow.
In my reports I have also always pointed out that the Sukari resource model is based on Multiple Indicator (“MI") Kriging and that I suspect that the assumed selectivity of distinguishing between ore and waste is not possible resulting in more blocks of waste being designated ore and send for processing.
I think that MI is a very dangerous method of grade estimation and usually overestimates grade. In practice the selectivity does not occur resulting in lower grade. There are a number of other examples (Moose River, Brucejack) where they had to find out the hard way.
I shall be asking for the rationale behind Centamin’s chosen method of grade estimation, but then perhaps they prefer to employ those analysts data that give them the answers they want so that they can reel in the unsuspecting investors?
Tibbs
Steve yes for a large trader but even so I would have hoped it would have been a higher price by the close of play today.
If there’s any proof anyone needs that this is a great trading stock- today is more proof.
Trade it, don’t hold- no stamp duty and use economic indicators to trade it.
Rebess the open pit is the best place to have low grades because it is the cheapest place to actually move a tonne of material. Just a quick and dirty calculation.
Capital move waste for about $2 per tonne if that tonne carries 0.67 grams and a truck carries 150 tonnes then it is carrying about 3.5 ounces so approximately $6,800 per truck at a cost of $300 per truck load.
This is an average brought down by the very low grade leach dump ore.
The dump leach at say 0.3 will still show a profit and far better than throwing on the waste dump at a cost of $300 per truck load and zero return.
Leach pads save the extra costs of the expensive processing through the plant, nowhere near as efficient but cheap way of processing very low grade ore. If the gold price was down where it was back in the late 90's it wouldn't be worth mining such low grade ore and leach dump pads were very much the way to go even with grades at 1.5 grams per tonne.
Something always better than nothing.
Looks like the market liked today’s update?
A couple of decent broker updates in the next few days will further push the share price.
Tony is spot on - they were stripping waste rock and found it contained gold at very low grade - an unexpected bonus - thousands of tonnes of worthless rubble became pay dirt and went straight to the dump leach. It did bring down the average grade from the open pit but it was a good thing.
Tibbs
The open pit grade being lower arose as waste ore from the top of the Sukari Hill in stage 7 was reclassified and utilised as it contained some gold. As a result the stripping ratio in Q4 was lower at 5:1 instead of 6.7:1 as in previous quarters. The grade in the open pit should get higher in 2024 and hence probably why they have forecast a 20,000 increase in production. I believe the cut off grade is 0.3g/tonne. Tony
Hi Steve
I looked at the unemployment report. A lot of jobs being lost in New York, California and Texas. It looks like some jobs are moving out of one state to another state to cut costs. Nearby states in some cases gaining jobs. Tony
Correct, Rebess , It really is terribly low!
Its doubtful that they make any positive cash flow at that grade after Capex spending.
If you recall in the Seeking Alpha articles of 2016 and again in 2018 Kees Dekker maintained that the cash flow predominantly came from underground mining!
https://seekingalpha.com/article/3695246-centamin-get-out-while-going-is-good
With that in mind unless something we are unaware of has changed from the information supplied at this open pit grade profits seem to be coming exclusively from underground mining!
In view of this it must raise the the question is it really cost effective or commercially viable mining the open pit and considering the recently announced Nugrus 2023 -Maiden drill targets will open pt mining be commercially viable in those areas?
Tibbs
I’m the title:
https://www.marketwatch.com/economy-politics/calendar
Observation: - Open pit grades of 0.67 gst/Au seems very low - Barely a grain of rice amongst a ton of rock.
Hi 3Bear,
Possibly because they have gotten to used to the time scale perceptions of market traders who tend to think 24hrs is long term and so have lost touch with the reality of the time scales outside of their cocoons for any changes to take place or have any effect in the real world!
Tibbs
Fair Comments Dasut,
As you are aware it seems all too often in the past Centamin has been less popular with the market than many other miners, of course this was'nt helped by the events of 2018 which certainly shattered most of any market confidence, so likely it will take a while yet for market confidence to return in any decent measure, quite likely it's the release of results in March that may well have a more significant effect in changing market opinion and elevating the share price!
Tibbs
Agreed Daz!
Spot on Tibbs, world markets realising the plunge in central bank rates they'd all priced in might take a while...
M. Henderson and new member Alhamd,
Thank you both for the updates on Sukari gold production PRIOR to this RNS and for letting us know that targets were going to be met, not an easy challenge!
As I said previously to M Henderson it requires great confidence to contribute information to this forum offered with good intention from one's acquaintances and contacts because there is always the risk that if things don't quite work out then there are some who will delight in offering criticism and ridicule to you.
That said I am sure the majority of members will be grateful for the information you posted prior to this announcement and recognise your credibility and integrity.
Big respect to you both!
Tibbs
Retail sales report strengthens the Feds resolve to slower the pace of cuts
Also Thursday’s CPI (Consumer Price Index) which revealed that inflation did not cool in December, increasing by 0.3% on a seasonally adjusted basis after increasing by only 0.1% in November. Revealing that inflation increased by 3.4% year-over-year. Both reports will guide the Federal Reserve when it convenes at the end of the month.
https://www.kitco.com/news/article/2024-01-17/retail-sales-report-strengthens-feds-resolve-slower-pace-cuts
Hi Dasut - the market often seems to take a while to notice - the morning of Q3 results 2022 which were stellar the SP was bumbling along at 83p but in the following weeks it took off to 125. Also interest rates staying higher for longer acts as a drag on future GP - maybe that's it, who knows?
So what is going on we see positive news strong positive data and the SP isn't moving even with gold price over $2000 sorry I don't get it? Horgan must feel this is like a kick in the teeth what more does his team need to do?
Horgan says of little sukari: "Have we found a smallish plug of interesting mineralisation? That's one end of the spectrum. The other end is have we nicked the top of a LARGER SYSTEM that's then going to have legs to depth and along strike?
(disappointingly) "We've got no idea at this stage (but) we are very keen to follow up. If it's 300,000oz at 1.2g/t it's going to be accretive to the mine plan and we will take it on from there. If it's bigger than that then EVEN BETTER."
Tantalising stuff!