Member Info for 3bear

Joined you Tony - another 20,000 into the pension pot = $1000 divi + min $1000 for 2022 plus expectation of Q2 lower Aisc, higher ounces, higher average realised gold sales. Bing bang kapow.

halfpenny your much-needed optimism is encouraging and in the mid-term I reckon you are spot on. Dasut is trying to prepare us for some disappointing numbers on Wednesday, which we know are coming, and they are likely to duff up the SP in the short term. So I reckon you're both right and have nowt to argue about?

According to the 2021 report (p61) the company valued Batie West as an asset on the balance sheet at US$35.2million. It says there is a development and exploitation licence which lawyers tell them is valid until 4 March 2023. However the military coup and an 'inability to correspond with government' has created 'significant uncertainty' in the company's ability to develop or sell the asset before that date. So Batie West has been 'fully impaired' as an asset on the balance sheet. Which means written off right?

Guys may I just add a few notes of optimism?

1) Horgan is open about the fact they don't know how big the ore deposit at Sukari is. "It is not geologically constrained, it's drill constrained. We haven't found the sides or the bottom yet." Just think about that for a minute. What they do know is Sukari will produce around 500k for 12 years. The only unknown is how much more is to come. This is good.

2) They have been given some of the best prospective ground in the Nubian shield. From what I can see, this is priced into the closing SP today at less than zero.

3) The first analyst on the results call is scratching his head saying, hang on, at these numbers, Doropo's potential is not priced in to the SP at all?

4) I said a few days back that if Cey maintained the divi at 9 for 2022 I would be turning cartwheels of unexpected joy. But this company is where it is because the previous management prioritised dividend over good practice.

5) Yep, if you're sitting on losses, or in any case, a divi cut is a kick in the b*llocks. FWIW I think Horgan is putting together a sensible plan that must result in share price growth. I can't see a better one, but I know nothing about mining. If anyone out there has a better one please can we hear it?

6) I like the fact that Horgan features prominently at every presentation the LTI rate.

7) 90p is a ridiculous price for a company of this quality. But we knew that anyway.

8) Horgan announces a minimum divi of 5c and Alex B-C asks him how will the expected upside on that minimum be paid - special dividend or share buyback? Horgan nearly chokes. This tells me to expect a full year divi for 2022 of exactly 5c. Let us hope that one year from today that equates to a shockingly low yield.

From the December 21 Investor presentation:
Do you have any plans to hedge fuel costs for the longer term to ensure you are not caught out by unexpected, unforeseen rises.
Horgan: I don't think we can.
Ross Jerrard: No
Horgan: We buy from government. There's a centrally mandated price. It's not like it's a commercial provider like Shell or Vivo or Total. We are a price-taker from the government . If we were to try and hedge the fuel price it would have to be some sort of financial instrument where we had some sort of synthetic proxy to the in-country price. I can imagine some rather rapacious banker rubbing his or her hands at the potential to put that programme in place. And it would not be a perfect correlation anyway. The short answer is no.

Think Cey burned around 200 million litres of diesel in 21, can't find the actual figure but it's big. Solar will save c20 million litres. The company must buy diesel from the Egyptian government at a price given to them...

Hi Softrock - so the company has indicated it expects to pay a final dividend of 5c for the year 2021 taking the total dividend for that year to 9c. The cartwheels (or lack of them ) are reserved for the dividend the company will pay for FY 2022. Analysts predict 6.4c next time but that was before WW3 broke out and the oil price went through the roof...

If they hold the divi at 9c for 2022 I'll turn cartwheels of unexpected joy. Analyst consensus is we'll get 6.4c and when you look at the rise in costs Cey is expecting for 2022 that seems to make sense. However, Horgan has described the dividend as 'sacrosanct' in the past and it seems he likes to deliver on his own words, so let us see...

I see your snap and raise you one ditto

Hi Mr T - I agree entirely with you, to the point I was genuinely surprised to learn that such a key operation could be handed off to a third party contractor in the first place. But then I know nowt about mining. The market is impatient - all it sees is the AISC going through the roof. What it doesn't see is Horgan getting all the fundamentals sorted. Pain now will pay out big time in the short to medium term is my belief. This is why I'm overweight. And I'm not talking donuts.

Tony do you think current share price weakness is linked to the decision of taking underground ops in house? Cannot understand why cey so cheap at the minute - if I had any money left I'd buy more and get my average down from 94 which is already super cheap in my view

Gold is a brilliant hedge against very high or hyper-inflation, is my understanding. But single digit inflation and the prospect of higher base rates means investors can get better returns on cash. As there is no yield on gold it can depress the gp.

Gold price up, Cey price down, is it just me...sigh

Hi Kal02,
Centamin is due to present its full year results on March 16 and will announce it's final dividend then. According to their guidance it is likely to be 5 cents US taking the FY21 divi to 9c in total. XD and payment dates will be announced then and if it's the same as last year it will be XD in mid May and payment in June.
Analyst consensus is that the dividend for 2022 is likely to be around 6.4c Hopefully we'll get some guidance about the 2022 divi in March.

it does seem odd that he's considering debt when the company is sitting on such large cash reserves...

In the Q4 results call Martin Horgan was asked:

Is the board considering share buyback?

What he said:
We flagged at the life of asset day back in December that a review of the capital structure of the business would be under way H1 this year, really looking at how we structure the balance sheet going forward. How we think about things like debt funding, certainly for Doropo, but more broadly things like the three capital projects at Sukari with our costs recovery model, how that looks in terms of production profile going forward in free cash flow generation. How that ties in the business as well. So that whole capital piece is ongoing. Once we’ve got that work done, that will allow us to look at what is the optimal capital structure of the business today and on a go forward basis. And the implications of what we can then do in terms of financial flexibility. So I would say no definitive plans at this stage except to say in the context of a full balance sheet capital structure review is under way and over the first half of this year I’m sure that all sorts of options will be on the table for us to consider as we take the business forward.

What I heard:
No share buybacks. I’m going to borrow money and go mining.

Horgan said in the last couple webcasts he is reviewing the capital structure of the business and would be looking at debt to fund construction of the Doropo mining phase and in the January results call said he was looking at the possibility of debt to finance development of Egyptian operations? I may have added 2+2=5 but that says to me he's planning to borrow?

fair enough I'm a newbie to the travails of this company, but I'd still prefer to see its capital spent on developing the business than supporting the share price, isn't that in effect where the last lot went wrong? But I do get your point Mr T, if that development spend is unfocused and wasteful then it's obviously a kick in the head. Mr Horgan is about to start borrowing to fund further development of both the West African and Egyptian operations. I don't think he thinks he's got a spare dollar for buybacks is all?

Share buybacks are just another way of returning cash to shareholders. I think Horgan wants to spend it all drilling. Which is a good thing right, investing in growing the business?

Hi MrTibbles, yes I got that there will be an expected final for 2021 of 5c, taking the 2021 divi total to 9c. But I had not picked up on any commitment to pay 9c again in 2022 - or have I got this wrong?