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There are two separate BF issues regarding forfeiture of concessions & assets.
The first is a lost cause because Centamin already forfeited these (we just learned) about two years ago - Mr Horgan spoke of it briefly on the last quarterlies (it's at the 50 minute mark if you want to hear it)
Those gold resources are now in the hands of these guys:
https://www.altairresources.com/the-burkina-faso-opportunity/
Specifics:
- Altair Resources signed a binding agreement for a 90% ownership and 10% Burkina Faso Government ownership for an open pit, 3 deposit, gold exploration project containing 1,388,120 oz of gold (Historic Estimate) at an average grade of 0.95 g/t (COG @ 0.5 g/t).
- The 3 deposits are located in the south west of the country and 35km from Centamin’s Konkera project of 3.1M oz.
- The project is located in the safest area of Burkina Faso, a mining friendly jurisdiction.
Altair has commissioned a NI 43-101 Resource Estimate and completion is expected late 2021 or early 2022. This will be followed by a PEA.
- 387,596 m of drilling & 294,504 core samples completed from 3 deposits.
The second is in regards to the currently held Batie West deposit (which is an exploitation concession - i.e. permitted ready to mine) which is about to expire in November 2021. You are correct in pointing out Centamin has decided not to develop the Batie deposit by themselves and have stated they may want a partner or simply divest it.
By all means I agree with this plan - the trouble is if they wait much longer the only option remaining will be letting the permits permanently expire - which I suggest isn't the smartest path forward. I'd hate to think Centamin's board are waiting this long because they're a) too busy or b) figure it's not worth the effort - as as some current shareholders also seem to think.
Be that as it may, I'm not satisfied that the board is keeping shareholders in the loop as to what the current status of Batie West is and I would like to know all avenues are being pursued to sell/develop before we forfeit said assets, again.
So to recap - tens of millions (more probably hundreds of millions) of potential value has already been lost to Altair and a greater amount stands to be lost (to who knows, maybe Endeavour ?) if Centamin's board of directors don't negotiate a deal very, very soon.
Altair has a certain resemblance to some fringe dwellers that I met. Like to know what changed hands for them to get the permits ...
CEY handling by new mngt of this Burkina assett will be of great interest,
thanks
the Gnome
Thanks Cowichan for your clear and concise explanation .
My comments are as follows :
1. Like you said, the previous forfeiture of concessions and assets have already come to pass , but it does beg the question why did CEY hand over these key concessions to a 3rd party ( altairresources ) for them to exploit and realise their value .. why couldn't CEY have realised this value for themselves ..
2. Regarding the current Batie West project . I concur entirely with your views ..as an aside, when I was still researching Centamin prior to investing , I was drawn to the 27th May RNS because it began with the headline that the West Africa review had identified 'profit potential' .
It was only when I read the full transcript that I discovered Batie West had been ruled out due to insufficient IRR and had therefore been classified as 'Non Core '. This information was disguised within the main text. I can remember thinking at the time that this wasn't in line with what the headline had suggested.
Like you though and despite this , I did agree that Cey were right NOT to pursue the project on their own . They have scare resources in terms of mining equipment and manpower , and that which they do have should be allocated to the higher margins on offer at Sukari .
I also agreed that seeking out a partner to extract what value they could from BW was a good strategy.
What I didn't realise , until you pointed it out , is that the exploitation license ends this month . I went back and read the RNS and discovered this fact in the footnotes .. To me this is dishonest . There is absoloutely no way of seeking out a partner to take this forward with, at this late stage , because for all intents and purposes , the deadline has now passed.
If what I am asserting is correct, then the amount held as assets for resale ( $ 36 million ) is now valueless and will have to be written off.
I find this extremely hard to believe , because they must have known this when the accounts were being prepared .
I think the obvious action now should be , ( have been ), to attempt to extend the duration of the exploitation license . Are they doing this ? ( If not why not) , if only to buy time to find a suitable partner or sit on it themselves, in case the gold price reaches say $2,500 to $3,000 an ounce , (unlikely but not impossible ) where the project would then become a viable one
Disenchantment is the best word to describe how I feel about these events .
Your post just shows the need for thourough research.
Pardey now long gone gone ,was responsible for that ,by prompting from his wealthy master. N S.
There is a need to do much more boring reading Candid.
All you are interested in is getting out with a quick profit it seems.
So now you are trapped for who knows long along with many others.
Quote ,"not interested in minute details" was it ?
No I know about the previous administration, and what went on during their watch and tbh it is of little concern to me . I am only concerned with what happens from here. I wasn't invested when they were in place. ..why , were you ?
Regarding the boring details ..I do try to separate out the key points from the crackle and background noise. I miss things .. some of which are important , others less so . Conversely , I pick up on other things that may have gone unnoticed. Despite and notwithstanding my earlier remarks , nothing has changed my judgement in the soundness of my investment . I will wait ..returns will come .
Yes of course my focus is on EPS and corresponding returns. .what is wrong with that ? My point is about the integrity of the current management team. I read the posts on here and note the high level of respect they bring , nothing wrong with my reserving judgement on them until I see the fruits of their labours.
With regard to the assets held for resale ..these mainly comprise the exploration works to locate and quantify the gold resource and to evaluate and appraise the returns from the project. In that regard they will still be of value to anyone who intends to carry out subsequent mining operations .
Perhaps , there is the potential to trade this information in some way for mutual benefit ?
Just a thought ..
Hi Candid,
For somebody who claims to be so astute at picking investments you may be well advised to stay away from bargain priced gold miners, because the industry is not easy to judge in the short term, especially if you know so little about the history your chosen miner!
I dare say many of us long term investors were invested because we had no good reason not to assume that the the previous management were professionals who knew what they were doing from the available presentations and indeed the analysts who rated the future prospects for the company very highly.
When things didn't go to exactly to plan most share holders were decent enough to accept that there can often be unexpected procurances in the gold mining industry and took the word of the management that lessons would be learned for the future.
Steady on Mr T and B. This is a public forum. Let's keep things civil.
The cyclical nature of the mining sector is something I am well aware of and attracted to . It presents many attractive investment opportunities .. I have invested profitably in several other mining companies in the past. As always , patience is the key and the market will catch up... .eventually .
This is my first foray into Centamin, and is similarly based on the underlying fundamentals .. I am learning more about them each day , from the more knowledgeable people on the board .
Whilst the fundamentals of the company remain strong and is the main reason for being here, that doesn't preclude me from not having a blind faith in the current management team. Some of my posts reflect that .I accept you may have a different view. With respect , I think it's time to move on in that regard.
Yes , Gnome, I agree, it will be interesting to see how the current management team handle the Burkina asset .
Regards