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My original post from 2014
The profit share will be what the profit share will be – the joint venture partner, ie the government, sits in the 50% owned subsidiary Sukari Gold Mines.
The management board of this subsidiary has representatives of the government and an equal number from Centamin. All of the investment into the Sukari mine is audited, with Sukari Gold Mines very much being a part of this process. Similarly, all gold sales go through Sukari Gold Mines, where the operating surplus will be divided 50/50 between the government and Centamin, once the original capital has been repaid back to Centamin and its shareholders. The 3% royalty has been paid to the Egyptian Treasury ever since production started (this also goes through SGM).
With the above in mind, there is no issue with regards to the money that has been ploughed into Sukari, particularly the costs of Stage 4 (c.$350m) – this needs to be recouped before any of this operating surplus can be shared.
This is not due to kick in until later this year, or possibly in Q1/Q2 next year. It is all a function of the ramp up in production and the gold price.
There is no dispute between Centamin, the Egyptian government and/or EMRA, nor the 50/50 Sukari Gold Mines subsidiary.
What you are getting is probably a series of people mouthing off that they want profit share now. This is a political game more than anything, as the deal is the deal (in fact Centamin have advanced the country a few million dollars as a demonstration of their faith in this deal – this will also be recouped out of future operating surpluses due to the government).
What is wonderful is that very few people seem to understand what this 50/50 deal is – it is effectively a 50% tax on free cash flow. In fact the 50% will not kick in until 2016, as in 2015 this will be 45%.
To counter this there is no VAT, no corporation tax, no other taxes to pay all beyond the above and the royalty, which on a blended rate compares reasonably well with other 1st world mining jurisdictions (like the US, Australia, Northern Europe etc).
Tibbs
Not that no one didn’t like it. Probably the fact it wasn’t factual info,(ex. Cey in trouble if) good to see you have reflected on your numptiness and bought.
Adrian77,
Yesterday you thought Gold was going to $1700 and CEY to 80p.
Today you buy £20ks worth at 106p + ?
No I cannot manipulate the supply and demand of centamins shares. Apologies for being Frank, you clearly didn't like it.
I've just took £20ks worth, do you have an email address I can screen shot too?
Sotolo
Don’t take the bath, the guy is clueless and pulls statements snd prices out of the air,
He’s the type of guy who never has the bottle to buy on fear of further drops.
Should he ever buy you’ll see a drastic change in his views, Im sure he thinks on his own he can manipulate the market
It's been paid a couple of days ago.
Hi Guys,
Do we expect any more dividend announcement further this year in 2021,as we already past AGM.
Thank you
Most people's concern is a falling gold price. If it falls it will be temporary, it swings all the time. And this is a great company to invest in to hedge your gold-swinging concerns. After all, they have cash in the bank, no debt, and if the gold price is unfavourable you mine it and stockpile it until the price improves. It's that simple. ( Other miners have to sell their mined gold at poor prices to cover debt and costs - CEY dosn't). Thats why I am in.
Adrian you say DYOR. I have, and where do you get that we reach breakeven with gold $1600-1700 and are in trouble below $1700?
AISC is currently much higher than usual $1150-$1250, plus add on $200 and still $1350-1450
This should come down a fair bit within 18months
Jefferies, in Mr Tibbs post yesterday, suggests that at $1500 gold we deserve a share price of 175p
Finally the Royalty is no more than tax for many companies and is 52.5% on PROFIT so if we were to hit breakeven as you suggest it would be immaterial.
We will have a choppy time now as gold falls, as was expected and I have been criticised for expecting, but we are very well positioned to ride it out and the mid term looks very good unless gold spends long below $1500 and doesn't rise again. Unless the tumble is below $1300 for long we should ride it out and not be in trouble form how I read the figures; which ar you using Adrian? Mostly people here have an unfounded optimism but you seem to have an unfounded pessimism. I am sure our share price will overshoot on the downside but that is different to being in trouble.
you are quite wrong, lots of positives to come if you care to wait and see!
Adrian 77,
From your conclusion and statement it's clear that you don't understand the existing Sukari royalty and profit share agreement that Centamin operates to in Egypt.
indeed it is far better than you might imagine when compared to some royalty terms in other countries and further more any new concessions awards in Eygpt are on even more advantageous terms, you also need to take into account the future AISC savings that Centamin will be benefiting from before much longer.
Forget the rubbish that some of the day traders post, they poo up from time to time full of bluster and then soon disappear once they realise just haw contrarian Centamin can be!
Please take the time to read back through some of the annual reports on the Centamin home page
If you like I can repost the original Sukari royalty terms if you feel it would be of help?
Got you sussed.
There is nothing hypothetical about it. Do you even understand the makeup of the stakeholder and royalty payments. It's basically paid so cey can operate in Egypt.
Secondly cey are break even around 1600 - 1700. Dyor before commentary
Adrian, what hypothetical nonsense you have been coming out with.
We have about another 8 years of the commodity bull market. All metals took a smash today, as the US dollar rose. These things happen and all bull markets try their hardest to throw you off. You just have to ride the ups and downs. The best thing to do is get in your E-types and have a nice drive in the sun.
Adrian77 --> re: the coming destruction of Centamin
Do you know the average price of gold for the last 10 years? No? Have a look.
2020 $1,773.73
2019 $1,393.34
2019 $1,268.93
2018 $1,268.93
2017 $1,260.39
2016 $1,251.92
2015 $1,158.86
2014 $1,266.06
2013 $1,409.51
2012 $1,668.86
2011 $1,573.16
As you can see prices have been low before and might well be again and yet
Centamin has managed to avoid destruction — which is more than I can say for your assessment of their future.
The only positive is cash balance to survive the next few years. The stakeholder/royalty will destroy this share they simply take too much out.