Member Info for candidinvestor

Thanks Mr T for explaining the background situation .., it's just that I don't like my integrity being questioned, but I agree that it's time to move on .

I must add that your tact and diplomacy skills in handling this situation have been second to none..maybe you are the one that Centamin needs to handle the high level discussions that need to take place to resolve the Batie West situation !

Best
Candid .

I agree with you Mr Bond they should .

Regarding the mechanics of how this might take place in practice , in a country which is 1053rd out of 1085 most difficult countries to do business with ( I think Mr T reported) ..well a route might be as follows

Yes , working in a country such as this, obviously has its hazards , but it also presents opportunities ..
Influence can be bought ..some people refer to it as behind closed doors acts of diplomacy

if they can't secure that influence , or achieve the same outcome in an alternative way, then they shouldn't be operating out there .

Warm words of comfort are cheap ..as shareholders we want results , how they achieve that is down to them .
They are paid big bucks..they need to earn it .

Mr Bond ...

I was not suggesting that EMRA own 50 % of Centamin ..only that they share 50 % of the profits , and that they would be taking a 50 % hit on the $ 36 million already spent on the Batie West project .

Actually , on this point you are right. .they won't ..any hit will be borne solely by Centamin, as the expenditure is not related to Sukari , (which comes under the ring fenced profit share concession agreement).

This only adds weight though against the ' do nothing ' option . The interim accounts stated that they had established a development team to look at potential partners or a buyer. The results of this review have not been published..so we are in the dark as to what the outcome of that review is

My question to you was a simple one ...do you want to walk away from a $ 287 million positive NPV project empty handed ?

Yes or No ?

To put this into perspective ..this amount is the equivalent of approaching 3 years worth of CEY annual profits ..

Let me repeat myself . Yes or No ....a simple question. Just requires a one word answer .

Conspiracy theories relate to me being a paid troll . FFS!!

Mmm...degenerating into personal remarks again . That's very disappointing .

For the record I didn't even know who Cowichan was, until Mr T politely informed me.

I respect your knowledge Mr B but I find your behaviour a tad petulant when challenged. Sadly every chat board has someone like you on it ..good idea to go to bed.. when you get up tomorrow , I suggest you put your big boy underpants on , and please , no more conspiracy theories...

I hear you Mr B and there is merit in what you say ..

Sorry I didn't express myself properly with regard to another party... The message I wanted to convey was ..

" Why would another party want it ? ..because there is an NPV of £282 million available (at consensus gold prices, ) with much preparatory work already done .. that is why another party would be interested .

There is a distinction to be made between Centamin not wanting to allocate it's scarce resources on an asset capable of delivering an NPV of £282 million , when it can allocate them more productively elsewhere ..to them voluntarily handing that asset back for nil value .. That was my point

I recognise and accept that you see things differently , but I am with Cowichan on this one.

If it has so many flaws , why does another party want it?
It doesn't matter which CEO was involved , it has a commercial value , to them at least ..
Don't give it up ..not without a fight at least. It doesn't have to be a legal matter , it could be behind closed doors acts of diplomacy. None of us really know the situation that exists. If I did, I night agree with you , but there is also a point of principle here.

I would like to know what the Egyptian Government's view is of this ..after all , they have a 50 % stake .

Cowichan is right though. This is still a strategic asset of Centamin, and we have spent $36 million exploring and developing it to its current potential .

Calculations show that it has a Net Present value (NPV) of $282 million at consensus gold prices. This is a considerable sum ..

It must NOT be surrendered for free, without putting up any fight , otherwise what would be to stop them from grabbing our other assets .

We must get something back in return, whether this be by monetary compensation, or by the granting of additional exploration licences.

As Gnome says , let's see what happens .

I agree mrtibbles. It is what it is..

Cowichan ..can I ask you what your views are of the new Board ?

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

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 ..

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.

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 .

Cowichan ...are you referring to the gold reserves found of 2.2 million ounces that was mentioned in a previous RNS , earlier in the year ?

My understanding is that it is not economically viable to extract the gold , so it is being held for sale (at its exploration cost of approx $ 36 million ). Obviously if this is the case, then any 3rd party would have to pay for this outright and also be able to extract the gold at a reasonable margin ...a project that Centamin doesn't itself want to do (even at marginal cost )

I am not sure when the deadline that you refer to for forfeiture is , but if it does come to pass then Centamin would have a write off against profits amounting to $ 36 million....ouch !

Are you talking about something completely different ?

The $ 60 million half year profit can be seen in the interim half year accounts.

Sotolo. The half year showed net profit of approx $60 million , which equates to 5.16 cents...if you simply double up then it will be approx 10 cents .. not unreasonable assumption, production should be up slightly in second half of year and gold price stable .

I don't understand your comments about earlier years .

I am pointing out that EPS this year of 10 cents with a current share price of £0.94 is an extremely low share price in comparison to years 2017 to 2019 when EPS only averaged 7 cents per year ..but the share price during those years averaged much higher than the current share price of £0.94

Hope that clarifies things

I over ran on my previous message ...the point I was making was that once the new year commences , the honeymoon period for the current management team will be over , and it will be solely on them to deliver .

I am reserving my judgement on them until they do

Just a few comments on the fundamentals
1. People including myself pay attention to absoloute dividends , because once they are given , they cannot be taken away , unlike the whim of a companies share price which can take it away in less than a day, albeit on paper only, if the share is held .
2. It does, however , need to be borne in mind that there is an opportunity cost of dividends paid out , in that the amount paid ..(in this year's case $105 million planned) is now unavailable to fund future capex. I think from memory , this amounts to $230 million in the next 12 months , which can be funded more or less out of cash profits, but that means that the cash dividend ($ 105 million) will have to come out of the $ 300 million cash held in the bank , these are only approx figures as I haven't gone through the numbers in detail, but the principle remains . I do though seem to remember the FD saying at the capital events briefing , that their estimates assume that the cash held will fall by approx $100 million ..which equates to the amount of the dividend proposed .
3. Yes the CEO did acknowledge the importance of dividends for shareholders, but that isn't the same as saying that they will be held at their current level , so don't get too carried away .
4. When I talk about the fundamentals being strong , that is on the basis that I estimate EPS for the current year will be around 10 cents ..it has to be pointed out that in the 3 years from 2017 to 2019 the EPS was only 8 cents , 6 cents and 7 cents , so this year will still be better than those by some margin , yet the share price in those years averaged more than what it is now.
Last year when the EPS was 15 cents for example , the share price leapt up to £2.29 very quickly , so once they can get back to the previous production levels and assuming that the gold price holds good , then there is no reason why the share price shouldn't move up significantly from here ..
Furthermore when you add in future gold finds , which based on the judgements of the geologists on this site is highly likely , then the outlook for future share prices is looking very favourable indeed .
5. A key point which might have gone unnoticed, is that the quarter on quarter unfavourable production comparisons to previous year has now gone through its full course .. From herein the comparisons with the prior year should now all be positive . In the final quarter of last year for example , the production was only 70,000 ounces, even using a conservative estimate for this current quarter production , will show a 50% improvement on the equivalent quarter for last year ..think how that will go down in the markets when that is announced ..it should though also be pointed out that the full year comparison will still be unfavourable , which might cast a shadow over the 4th quarter result.

One final point , when the new year begins, the honeymoon period for the new senior management team will be over, and they must del

I think we all suffer a little from impatience at wanting the share price to increase dramatically, on the back of no news . We tend to monitor the share price on a real time basis throughout the day and then be flustered when the price often falls instead

What I have found, and with this share in particular, is that it languishes along , for several months at a time, on a low valuation , and often , as at present falls even further..this in my view, is an ongoing over reaction to previous bad news and a serious loss of confidence in the company

Then a sudden piece of good news is released , or a batch of good news items and the price rockets up in just a couple of months maybe by 50% and more.

I think the wise thing to do, is to just sit and wait patiently for the re-rating to take place ..and when it does happen , ( and it will ) the move will be dramatic and sudden , however it might, as at present take a scenic route to get there .

For me it's a HOLD...the fundamentals are too compelling

Best Regards and as always DYOR

Thank you DJ. The point I was making, was that the multiplier effect will move up and down during the day, based on accompanying factors included in the commentary ....of course there will be other ones too , a key one being unexplained shifts in market sentiment .