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El prof, deeply suspicious that this is a sea-change flight to real money as the world gradually realises that 10 years of QE culminating in 2020's insane "print-our way out of covid" paper orgy has increased the price of everything and the value of nothing. Silver also topping $27/oz. I would be a massive silver stacker and have kilos of under the stairs if the UK govt didn't whack a 20% VAT charge on bullion and coins. Idiots, they would create a massive investment market if they took that tax off - but what investor can stomach a 20% hit on entry before you look at the spread. Ridiculous.
Cheers Steve, I've been selling down since 99p, each time waiting for a pullback that doesn't happen. Sold a bit more just before close today at 117 so will see what the morning brings. I really wish I properly understood what is driving the GP at the minute - this feels like a permanent sea-change rather than a spike and drop. You can't print a trillion quid of fake money (GBP895 billion of QE - US much worse) without devaluing your fiat currency and I think that has created a godzilla chicken that is coming home to roost. GLA.
Jeff Christian very interesting on Central Bank purchasing of gold at 26mins into vid on link below.
He says Central bank purchases of gold are not at record levels at all and almost half of it last year was China buying from its own internal market.
But someone must be buying a lot of it - or an awful lot of people must be unwilling to sell - for the price to be continually breaking new ground - anyone got any ideas?
https://www.youtube.com/watch?v=t5h7-Gor5vk
Thanks Nimrod
https://www.ft.com/content/59298650-540a-43cd-86f8-a6c6db0aa906
Hi confluence,
This is my take, others may think I'm in cuckoo land, but for what it's worth:
The fundamental numbers for Centamin are stellar. It has no debt, it is one of the safest and therefore best run tier one mines in the industry. Three years of heavy investment into Sukari sorting out major problems and inefficiences is nearing completion and about to unleash a cash pumping machine as production hits somewhere around 500koz pa and all its niggles get ironed out causing the AISC to fall.
Secondly, I believe the GP is breaking out to a new level poss 2500. Even if it. isn't, the debt burden on first world powers is approaching intolerable levels (US annual interest payments on their debt are now greater than the GDP of Canada - UK interest on debt is an HS2 project every year) the viability of fiat currency as a store of value is under threat. As the possibility of a debt crisis looms central banks are buying tonnes of gold. This company produces more than 15 tonnes of it annually and the price is going up.
Third, the company's growth prospects are fantastic. The Doropo project in Cote D'Ivoire is about to get the green light with first gold around 2028 I guess. So the share price may dip as they sink $400 million into the West African ground for no return in the short term but long term it's all good. The possibility of another major ore body being discovered in the Eastern Desert - to quote another poster on here - is "mouthwatering" with Little Sukari and a neighbouring deposit significant targets under intensive investigation as we speak.
Fourth - Gold stocks as a sector have been significantly undervalued for years now and I think as the GP breaks out so will the miners.
Fifth, the significant downside risk to me - apart from those inherent in mining which is a risky, dangerous and unpredictable industry - is the state of the Egyptian economy and the fact the country is run by a totalitarian dictator, Sisi. If he decided to nationalise the mine and let the shareholders go hang no one could stop him. The risk of an Egyptian default on its debt is extremely high. Egypt is also at the centre of a region of extreme geopolitical risk, note its border with Gaza.
However it is my belief that Sisi is desperate to exploit the country's mineral wealth and wants to attract billions in foreign investment to get at it at no cost to himself. He won't do that if goes about confiscating assets. Egypt's huge strategic importance to the whole world (Suez canal just one globally significant factor) ) means it is too important to be allowed to descend into total chaos. Note the IMF intervention and decision to let the EGP float. I think the first world powers would go to enormous lengths to shore the country up if it was seriously heading for collapse.
So in short, a fantastic company but in the wrong place. You have to be happy with a high level of risk to hold or trade this stock but the potential rewards are enormous.
Paul and Robbie understand how frustrating Cey is especially in light of bumper dividends in the past. To put the other side of the argument for a minute - the current dividend pay out is 55% of free cash flow which is well above the 30% minimum we are entitled to. The company continued paying dividends even during the costliest stage of the Sukari reboot with gold down at 1700-odd when FCF turned negative - they didn't have to pay us anything at all at that point but did.
The hedge on 1900 was not an attempt to predict the GP it was insurance in case the GP fell with Doropo about to get the green light when they.'re going to need $400m in the bank. If your house doesn't burn down you don't say to yourself what a waste my insurance premium was - although £6million is an expensive policy I'll give you that.
Also Paul appreciate you would prefer cash now but remember Warren Buffett never paid a dividend in his life. Appreciate Horgan is not Buffett and none of us has unlimited time but I'm excited to see what Horgan does with the turbo-boosted cash pump he has created at sukari. I don't think paying a bigger dividend is anywhere near the top of his list unfortunately.
It means production will be lower than expected. ie, less than 25% of annual guidance.
Horgan says this is because of maintenance issues in Q1 and the rest of the year will be better. Many on here suspect it's because he somehow grabbed a few thousand Q1 ounces to help him meet the FY23 production guidance of 450,000oz which he met by a very narrow margin indeed (58oz.) (Yep 58. Count 'em)
No Cowichan you are wrong. Capital have done a superb job at a reasonable price. It made financial sense to contract out this work because buying the 17 trucks and three excavators to do the work in house and then have to write them off was financial nonsense and you know it. Also a healthy competition has grown between the two fleets Cey and Capital as they vie with each other to to prove which is the best maintained and most efficient at moving tonnes. Picking a good contractor that delivers excellent results ahead of time and budget and sticking with them is good business, good practice and good for the shareholders.