Member Info for candidinvestor

Thanks. .that on the face of it sounds very promising for gold prices (and in the process CEY share prices) because it appears to leverage itself to the gold price . This is a mixed blessing , because in the absence of any good news stories specific to Cey, the share price could also retreat if the gold price retreats .

What I would like to see is CEY's share price rise, even when the gold price is falling ...I think this would signal a reversal in investors appetite for Centamin shares.

Yes I agree Cowichan , that is a large figure. Not as big as it might seem at first glance though in some respects .

The $11 trillion is cumulative since 2004 which is about $650 billion per year

If timed properly , ( when share price is extremely undervalued ) this can be a shrewd thing to do .. it props up the share price by mopping up all sales , it also returns excess cash to shareholders in lieu of dividends because it reduces the share base and this leads to an increase in EPS for the same revenue ..it is also a way of returning excess cash to shareholders as a business contracts ..which many do over time.

Prior to investing in Centamin , I invested in New River retail and I was keen that they should follow that path when the share price fell to 43p.. less than a year later it was up to 106p. then they announced the sale of Hawthorne pub chain and their business size has now halved ..so has the share price and dividends .

I don't approve of share buy backs when there is already a lot of debt on the balance sheet as it puts too much risk on the company

An important factor that you also need to factor in are new fundraisings by companies , new entrants to the market , and companies experiencing exponential growth , Amazon , Microsoft and Tessla spring to mind but there will be others

It will be interesting to see the net growth v share buyback in the market value of the index as a whole .. in a way we have that , with the growth in market value of the US stockmarket in that time , although I would issue a caveat that it is probably overvalued at this time .

Don't fear Sotolo... Capex doesn't come out of profit and therefore added to AISC in the year of spend ..

It is deprecated over the perceived life of the asset , which in this case will probably be the disclosed life of the mine which is currently 10 years , so only £23 million or about $57 per ounce will be added to AISC for each year , so not a huge amount ..but of course AISC will already include the annual depreciation for all capital expenditure in previous years , which gives a like for like comparison with previous years

It will however , come out of the $300 million cash reserves ..so that would fall temporarily to $70 million but this is where the cash profits from revenue come in.. the depreciation from cumulative previous capex is now non cash , so this is added to the reported statutory profits. Historically these two combined have generated enough cash in total, to finance capex and dividends in that year

If you recall though , rhe presentation predicted that current cash would reduce by circa $100 mullion because this time the cash earned from operating profits (based on reduced production levels ) won't be able to finance the £230 million capex plus the dividends it pays to us and Egyptian government (to the tune of around $100 million .)
I hope this explains it ...very complicated I know , there are other accounting factors in there to but these are the main items...

Sorry , I posted the previous message on the wrong thread .

Regarding the broker ratings ..just ignore them .
Liberum have them as a sell with a target price of 82p whereas Berenberg have them as a buy at £1.38 ..
Berenberg then changed it to £1.37 !!
FFS...I can't believe how anyone pays any attention to them . The price forecasts were calculated by ex public school boys with posh voices who are well overpaid and probably spend their excess earnings visiting Madame Whiplash to have their bottoms spanked !

Well I know what support and resistance is and what it means but I share your scepticism about it .
What I do pay attention to though is direction of travel of the share price over a 6 month time frame .
If you Google Cey share price and click on the chart and then on the 6 month time frame you can see a downward momentum from £1.215 in May. Since then the pattern has consistently headed downwards , like a downward moving escalator , and it still doesn't seem to have broken away from it ...until there is a clear break in the pattern , then it could continue on its cycle downward , past the previous low of 89.9 pence
I don't think it will though ..but I don't know if that is more wishful thinking than anything else
What do others think

95p support level ? Is it not resistance level instead .?
The support level is around 90p

Haha thanks Mr T and any attempted suicides aborted at the last minute can only be a good thing can't it .

No Sotolo .. it doesn't work like that. .Capital expenditure, which includes exploration expenditure isn't treated as a cost in the same year as it is spent..it is gradually released into AISC over several.years , depending on how long the benefits of that expenditure accrue .

If the item of sustainable expenditure is just to put something right or enable production for that current year only, then ALL of it will be be part of AISC in that year .

The waste stripping programme has been deemed as non sustaining expenditure , because the work will provide a material benefit to the mine for several years to come.

It's just a way of smoothing out capital costs over their beneficial lives. If you didn't do that , and wrote all of it off against AISC in the year it was incurred , then you could have years where AISC was say $3000 per ounce , followed by several years of AISC being maybe $700 per ounce. .

Incidentally for Centamin there was other non -sustaining capital expenditure incurred on TSF2, camp upgrades and work commencing on the solar plant , which will likewise only be recognised gradually over several years to come.

Ho

The problem with Hummingbird is that it's very small cap at £60 million and share liquidity low , making it difficult to take larger positions in it

One thing I forgot to add , was the critical figure for AISC which is when the gold price falls below that (in approximate terms) , due to specific accounting judgements in any given situation
For Centamin , if the average gold price had been below c $1186 it would have made a loss . The gold price though averaged nearly $1800 , during the first half year so a large profit was made .

Mr T. The $ 900 AISC you refer to was the figure for Centamin last year ..however that was on higher production .the AISC for the current half year was $1,1186 per ounce due largely to the reduced level of production
The cash cost went up from $ 650 to.$800.
I ignore the cash costs though, because that is just the visible direct cost of extracting and producing the gold
As an example of the irrelevance of cash costs , just think about your car ..people will tell you their car is cheap to run. . but they are only taking into account the visible cost of petrol and their mpg. ..The AISC equivalent would be to add in the cost of tax , insurance, MOT and maintenance , as well.as the depreciation of the car , so the full cost of the car per mile is much higher than the cash cost . Obviously the full cost per mile decreases as mileage increases Likewise a mine, and most other things when you think about it.

Dasut..could the answer be that the plant capacity can't be expanded on a marginal basis but that it needs another plant once a certain productive capacity has been reached , and to do this would incur substantial extra costs , which could remain idle depending on the prevailing gold price. Goes back to your point about optimising rate of return
Or doesn't it work like that ?

What the accounts do tell us is that the value of inventory at $200 million means that there are currently approx 200,000 equivalent ounces of gold currently in the cycle of production ( based on approx AISC per ounce of $1,000 )

I think you will find that this level of gold within the production c to cycle remains fairly constant as gold sold is replaced by gold entering the cycle. I have made this assumption on the basis that the values of gold inventory remain very similar at the half year and end of year for the past few years that I can see.

Bob

Inventories whether they be gold or anything else eg carpets , are all valued at the lower of cost or net realisable value .

Naturally, assessing the inventory value of carpets eg will be much easier than assessing the inventory values for gold .

There are rules governing how this is done known as International Financial Reporting Standards (IFRS for short ) but of course how these guidelines are applied is open to interpretation , and for that matter, manipulation , which is why all accounts have to be professionally audited.

With gold mining there are 3 separate stages at which inventory values are measured ..these are :

1. Run of the mill ore
2. Work in progress, ..crushed ore and ore in circuit
3. Finished product ..gold concentrate ready for sale

In simple terms, run of the mill ore will be recognised in inventory once it has been extracted , reliable assessment of gold content is possible , and the future costs of production, can be reliably determined. The value placed at this stage will usually be cost

The work in progress stage is much more difficult to measure , because of the complicated stages of production , but estimates have to be made using established valuation methods .

Finished products of gold concentrate is relatively easier to measure , and it will still follow the same accounting principle of the lower of cost or net realisable value .

The accounts will not recognise the saleable value of gold ( and thus the profits ) until it has actually been sold and shipped out . It's essentially ensuring that you don't count your chickens until they are hatched, accountants refer to it as prudence , one of the governing principles in the field of financial reporting

For Centamin, the accumulated value of all of these 3 stages was approx $ 200 million ..of this $ 113 million was shown in the Statement of Financial position as at 30 June 2021 as a current asset , meaning that the ultimate sale will take within the next 12 months and $88 million is shown as inventory stock piles as a non current asset , meaning that the inventory won't be sold until at least 12 months into the future .

I hope this sheds some light on the answer to your question

It is like someone said though , the delay in the payment of the dividend , isn't a problem, given that the share price continues to march down the hill again , which for people who are intending to reinvest the proceeds to buy more shares, is actually a blessing in disguise.

In fact if you look at a chart of the share price on a 6 month chart , you can see it resembles a downward moving escalator , since May,when it was at £1.215

Unfortunately the trend is still downwards, with a pattern of lower highs and lower lows, and with no visible signs of reversing .

We really need to see the 3rd quarter release, due later in the month, to contain positive news in terms of production, or the trend will continue downwards ?

As worrying , is the gold price . My concern is that , as someone said on here , they fear that the price of gold could be on a multi year downwards price trend ..if so , that would be a disaster for current share holders

I would like to hear from long term share-holders of Centamin ; when did they enter the share and at what price, and how long they are intending to hold the share for. Do they have an exit share price in mind, or are they planning on holding the shares forever, because they believe that in the longer term the share will continue to rise .. If so , why do you think that ?

If the gold price falls below the AISC, ( currently about $1150 - $1200 ) the company will be making a loss

Views please ?

I still haven't received divi yet either.
I am going to ask them for an official audit trail from when they received the dividend , when they exchanged my money into £ and when they intend to pay it into my account .

That's brilliant tornado and excellent reading.
Can you remember that Dickens character Mr Dick who appeared stupid but the old ladies always listened to him and good things followed .

I also heard the following question

What happens when you mix a stupid person with lots of money, with a wise person who is poor ?
Answer. The wise person ends up with all the money , and the stupid person becomes poor but wise ..

I am sure there is a link there somewhere .

Thank you Mr Tibbs . Very much appreciated . Now I have some avenue to.pursue if I get any further grief from them

Unfortunately for them and fortunately for me , they sent me a "request for feedback form" ( after your link was posted ) based on my last communication with them ..they got it quadruple barrels ..

Believe it or not , even the feedback form was defective ..you couldn't enter space bars properly between words in your reply ..so I had to press the key bar repeatedly ( on each occasion ) before it worked ..
I complained about that as well , and posed the question as to how they can get EVERYTHING so universally wrong at each stage of their service ,

They finalized the review form by asking for any suggestions I could make, as to how they could improve their service, so I told them to acknowledge they were incapable of running a Sipp platform and transfer the business to a provider who WAS capable of doing so , like Lloyds or the Halifax instead .. Let's see if they get back to me on my feedback .

Dharmendra, I will challenge them all the way if they tell me they can't transfer individual shares over to my new provider

I seem to remember threatening to transfer my Sipp account to.another provider before , and their policy then, was that they froze the share price on a certain date and transferred it over on that date
I didn't carry through with my threat last time , but this time I will
Regards

Thanks Mr T. This is excellent . Just the kind of 3rd party research I was looking for
I will be switching to AJ Bell after the dividend (finally) comes in
Cheers and thanks again

'Where it stops only stupidity knows '. another pearl of wisdom ..I have never heard of that before ...I will store that and use it at one of those ' maximum effect ' times
Cheers !

Yes I can imagine that gnome.

Sotolo....you have found what much better than Barclays ?