Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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@Buchanan notes and would like to respond to the allegations made in the above post by guiding the author to the below announcement, which was made publicly on 2 December 2020 by Centamin via RNS of the London Stock Exchange and on the TSX, which provides details on why the highly competitive tender was awarded to Capital. Announcements such as these from companies which are regulated by either FCA in the UK, or the CSA in Canada (or both), undergo significant scrutiny before being announced.
https://www.linkedin.com/feed/update/urn:li:activity:7007435213572116480?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A7007435213572116480%2C7010937328881795074%29
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Note: there has been an overwhelming response to the post Buchanan mentions, with several Centamin & Capital Drilling employees, mining professionals agreeing with the allegations made - thus Buchanan was pressured into issuing some sort of defense.
Despite this, increased scrutiny has been brought to bear - esp. in regards to a certain employee who was key in destroying Centamin's share price via a pit movement fiasco
https://www.linkedin.com/in/andrew-sands-0b6b9458/
Andrew Sands
Group Mining Engineer -Open Pit Planning Superintendent Sukari
Apr 2019 - Present · 3 yrs 9 mos
Endeavour Mining - Senior Mining Engineer
Endeavour Mining Corporation
Nov 2016 - Feb 2018
The fact that they responded shows that you are having an impact.
Your patience & tenacity are impressive, please keep on if you can maintain you’re energy :)
The announcement refers to "competitive tender process" but not a two stage competitive tender process (with seperate technical / contractual and priced envelopes) which is good practice for technically complex major contracts. By two stage I mean the first envelope is opend first and evaluated and aligned for technical and contractual complaince and only after all bidders are aligned is the second priced envelope opened then the contract is awarded to the lowest pricxe technically acceptable tenderer. i.e. all have priced on the same technical / contractual basis. Single stage tendering mixes technical and price aspects and is open to abuse, hence the reason for two stage tendering. Buchanan are not giving the full story.
In all my time working in the mining sector I never saw such a complex form of tendering. I guess this is because the contract isn't technically complex. As I have said previously if Centamin production team don't know their cost per tonne then they need sacking so doesn't take a lot to work out if you are being ripped off.
Capital will have had an advantage because they already had an in country infrastructure and as far as I am aware there isn't an established contractor capable of this project.
Hi Dasut,
I agree entirely and it must surely raise some concerns that the same Buchanan PR director may well have been party to some pretty sensitive information regarding Centamin is also representing Capital Drilling in a PR capacity and it is Buchanan PR who are now justifying the way the contract was awarded.
It is also of note that the El Raghy have had close ties with Capital Drilling in the past.
https://offshoreleaks.icij.org/nodes/82006106
Perhaps of interest, I see that Capital Drilling forms strategic partnerships with companies, which includes drilling for equity, which it does for a range of companies. Other drill companies do the same. It may have been a good thing for Centamin at the time to help it get going? It also is rapidly expanding into West Africa, including Burkina Faso and Cote D Ivoire. It may of course be a coincidence that that is where Centamin is expanding, and then again it may not be.
http://www.capdrill.com/about-us/strategy
https://www.imd.org/research-knowledge/articles/the-four-tiers-of-conflict-of-interest-faced-by-board-directors/
From 2019
From the most recent report on 25th Feb 2019 the Cleopatra incline and the open pit are still not producing the higher grades or the improved output within the timescale share as promised to share holders by Andrew Pardey on behalf of the Centamin board.
This arrangement of Centamin and Capital Drilling being so closely intertwined by way of share ownership and the same senior management on both company boards and being represented to share holders by the same PR representative may be perfectly legal.
But even if this arrangement is perfectly legal then is it really in the best interests of the share holders as there will no doubt be occasions such as in 2018 (the effects of which of which we share holders are still suffering) when there may be a conflict of interests or management may be in a position where a particular situation means their loyalties may be divided?
Is this another example of glossing over a too close connection that may prove to be imprudent between the company and one of is contactors
It may be worth contacting Centamin Investor Relations or Bobby Morse of Buchanon , but as some shareholders are all too aware they seem to have adopted a policy of silence when it suits them towards investors.
The only comment I can make is that getting equipment into and out of Egypt is a major headache, and delays are the norm, it is just a matter of how many months if not more than a year. There was and still is limited mining industry sevices in Egypt...this may have flavored decisions...
Tibbs As we have seen from Cowichan's input the Mining world is somewhat incestuous and mercenary with people from mining companies jumping from one to the other for improved financial rewards. mining and drilling contractors are no different. Machine equipment dealers also have their tech guys tempted to work for all of the above companies.
Early days Pharoah Gold saw people moving from Tanzania from the likes of Barrick North Mara, AngloGold Ashanti's Geita. Capital had a base in Mwanza supporting the Tanzanian mining projects so no surprise that they were introduced to Pharoah Gold.
It is also common place to see contractors moving with Mining companies particularly into new mining areas. Ashanti Goldfields move to Geita in Tanzania saw African Mining Services venture into Tanzania as Tanzania developed then other West African Contractors spread their wings.
Well noted Dasut, a similar situation existed in the oil and gas industry until it was reaslised how easy it was to tilt a contract in the direction of a fvaoured bidder, be it at company level or by management in their own, often personnal interets .
Well noted Goldnome re fleet avaiability, I would have expercted that to be a techinical crieriteria balanced against need for early start and price diffrerential.
My feelin g on the waste contract is Centamin through Buchanan could do a better job of informing and communicatiing, espcially the costs v future benefits in more detail. This way Shareholders could understand better the rational.
Thanks Mr T.
There are steadily more and more "partnerships" between drilling companies and exploration and mining companies. Be interesting to know how (and when?) the drill companies decide on which company to drill for equity in, and which not, and what the nature of the partnership is (do they get free options, etc?). It would not be open slather, as most Junior exploration companies are financially and/or intellecutally near bankrupt.
thanks
the Gnome
( and good to see you back Mr T!)
Somnamna I would like to see more detail on the waste material contract especially given the reason is to move material quickly and 4 years isn't what I call quickly. So compared to what is my question. As for transparency I am not sure that this pretty simple to understand muck shift leaves a great deal to cover up financially as it would be very easy to see any discrepancies especially when using same size trucks and loading tools.
I would be surprised if all contractors asked to bid didn't use the same software to give them the basis of their bid and likewise Centamin and the independent organisation evaluating bids also using the same software.
Mantrac/Cat will have been asked for equipment life or 4 year costs which would be the same for all bidders.
As I have said previously the costs will have been less for Capital as they already have an infrastructure and therefore economies of scale.
Thanks Dasut
This is what I implied, somewhat vaguely, in a previous post
When you start UP, you need to START UP very quickly, and the bankers look for risks which they can leverage off of'
Thanks Dasut
This is what I implied, somewhat vaguely, in a previous post
When you start UP, you need to START UP very quickly, and the bankers look for risks which they can leverage off of'
golgnome yes I understand and we are in agreement which is why I wanted to emphasise how relatively simple the muck shift contract is to calculate/compare and the advantage that Capital has will have made the difference.
If it had been a full on Contract Mining project I am sure the competition would have been far greater given the increased complexity and think Capital's advantage reduced considerably.
Would Capital be successful at Doropo for a full on contract mining job, Questionable?
This is where the well known and well established contractors will fight hard and the cost comparison between owner and contract becomes very close.
Already established infrastructures, start up fleets, established people and local knowledge of sub contractors, experience in both drilling and contract mining jobs, reducing risks and up front capital expenditure on equipment.