Member Info for candidinvestor

Hey steady on !!
Wanting to be taken over ?. .
I have the opposite view ...Cey have $300 million yes $300 million in the bank with no offsetting debt.
Put this another 30% of Centamin's entire net asset base is lying idle in the bank earning next to know interest
The market value of Capital is £150 million or $210 million .. even a 30 % premium on this would allow Centamin to acquire them , and still have money left over to carry out the exploration work it has already committed to ..
it's important to bear in mind that Centamin will be paying out $105 million in dividends to us this year alone .
The acquisition of Capital would no doubt bring about certain synergies and more importantly , increase its Centamins nfluence in the area Just a thought ..or rather a question, that I put to the Centamin Board ..it won't get raised on Thursday I know that , but it might stimulate some thinking and dialogue within the management team .
By the way if you want a good read , then read the LSE conversation for Capital . Centamin is mentioned quite a lot
There might well be good reasons why Centamin and Capital are not a strategic fit ( tax differences etc )
But I think it would be worthy of consideration

As always , I enjoy reading your comments. .
Can I ask you a question ..if one of your professional peers who wasn't invested in Centamin , but who had access to the same information as you.
Do you think he or she would interpret your comments as being optimistic or as candid or as pessimistic ?

I agree Mr T ..I understood Dasuts comments too. I like simple analogies being used to explain complex issues.

Well read the slides of the presentation but I couldn't glean any more additional information than from what was in the interim accounts ..although I don't think the extra 2 million ounces was mentioned

Mr T .
What was your take on the presentation .
Was it better than you had hoped or did it leave you unimpressed ?
Your views appreciated

What I can't understand is that the life of the nine was already about 10-12 years before this discovery , now it is still 10 years so what has changed ..unless it will result in an uptick in production ? .

Perhaps I am being ignorant or unduly critical but I am underwhelmed by this statement (and so it appears) is the market) although it tends to take several days for the market to fully digest the information and react accordingly
What I am hoping for, is a positive update on Doropo project which has the potential for a further 5 million ounces I think ..the two of them together will amount to some very positive news which will give sufficient time for new resources to be found , although I think it will be quarter 2 of 2022 before we know that ?

I am keen to hear what the geologists on this site think about the news.

Yes I have discovered that .
Will do it today. .my texts were addressed to her
Let's see if my email , condensed into three short paragraphs will provide more success

Can you see a comparison here between the claimed productivity gains of the internet now, and the same productivity gains hailed during the internet bubble of 1999 ? The same arguments were put forward .

The current PE ratio of the S&P is 38...(Tessla's PE ratio is 349 !!).

The current S&P ratio is 90 % above the historical average pe ratio of 19.6
90% is approaching the all time peak of 132% reached at the height of the US bubble. !
The market will ultimately head for a crash , because at some point it will revert to the mean .
Of course , just because it's high , doesn't mean to say it can't get even higher , but that doesn't take anything away from the fact that the S&P is seriously over valued.
So time to avoid I would say , or if you remain invested then fasten your seatbelts is what I am saying to US market bulls.

It would be interesting to see the respective figures for the FTSE.

Gnome ..Wow ! Is my reaction to that letter . I had no idea that things had got so bad ... How did you get hold of the letter ? Is it in the public domain ?

No I haven't plotted the correlation of the price of gold with increases in debt ceilings ..presumably they rise in tandem as a safe haven ?

To put the US current year debt into perspective , their total national debt built up since records began only stands at US$ 19.3 trillion, this equates to 107 % of their GDP ..They are 13th highest on the list ... The highest is Japan with 227% ..triggered mainly by propping up the banks after their stock market crash back in 1992.
Incidentally the UK Stock indices is the same now as it was at the end of 1999...22 years ago..so no nominal capital growth ..just dividends
UK national debt is about 85 %. It is the 30th highest..
Surprising Russia is one of the lowest at around 25%
According to the report Egypt's Debt is just 9% although I don't believe those figures

I think the short term optimism might be in anticipation of the forthcoming geology event . Let's hope it's not a damp squid .or the share price will follow it .

Sorry my original post was too long , I will finish it here .

The other question that I didn't pose but which would emerge naturally from the ten year plan is what is the boards intentions regarding the $300 million cash war chest ...they are portraying it as a badge of honour it isn't ...the company only has a capital base of $1 billion and $300 million or 30% of that remains sat idly in a bank earning zero interest .. it could be put to better use . I am presuming its future use will be identified within the 10 year plan . A small overdraft wouldn't be a disaster if it was to fund future growth

One option for example , could be a decision to buy back some of its shares ...$300 million at the current share price (90 pence ) would enable it to buy back about 20% of its share capital base. This will certainly boost a short term growth in EPS , but it might also signal to the market (rightly or wrongly ) that the company was winding down its operations which would be unwise

Going back to my original point which was the future targeted production levels , This in my view, is the most important question of them all , because it determine everything that follows , but in order to answer it , they need to have a clear strategy for achieving it ..i.e. what proportion of future production will come from the optimal utilisation of their current 3 km footprint surrounding the Sukari operations , and how much beyond that, but within the surrounding larger footprint of their current licence , plus a strategy for the new footprint in the areas covered by the recent granting of new exploration licences
.
For the above reasons I would want to see their future production targets analysed between these separate segments .

I think that will be enough to be getting on with .

I can almost visualise their response...sorry we can't answer that because it's commercially sensitive information, and in a way it is ..but it will send a clear signal to the board that they have their work cut out to satisfy retail investors that they know what they are doing.

Thanks Mr T for this opportunity to father and collect all questions people have of the board .
I only have 3 questions which I sent in to the Board last week .
Goldgnome helpfully posted an email link which I will use to send the questions via email tomorrow .

My 3 questions were , which are all related to their ten year plan. (.they will certainly have one if they comply with standard practices of board requirements )

1. Future ambitions for growth.
As all as shareholders know is that they reset (reduced) production levels to between 400-450,000 ounces per year for the next 3 years. ..
What are their ambitions for years 4-10 of the plan regarding annual production levels ..are they planning to grow, remain the same or decline ..
Whenever I was a Finance Director prior to retirement, this was always my first question from day 1. I was always prepared for a fight with the operations director who wanted to keep his or her targets as low as possible to protect their survival .. the worst thing they could do was to make bold claims about what they could achieve ..my job was to press then on it and enlist the support of the CEO to do it.
Remember , my first comment on this board was that Centamin wasn't a growth company ..this will be their opportunity to prove me wrong ...
My approach would be to press for a doubling of current production levels from year 6..how they were going to achieve that would be up to them , but in my experience , once people are set a target , their focus becomes on achieving it. The other members of the board would join in the pressure that me and the CEO would exert. I haven't seen one statement identifying their what their future ambitions are .

2. The second question which would be thrown at their FD is, based on the productions levels contained within the 10 year plan ....
( a ). What is the targeted AISC ...and resulting EPS....this is the ultimate determining factor in whether or not the company is seeking growth. When all costs are added in to the equation , exploration costs , admin, PR, risk and regulatory etc etc ..what is the resulting EPS. yes I know that mining is a cyclical business which is why I would use the ' CAPE ' formula which stands for cyclically adjusted price earnings ratio , but since they obviously can't predict the share price then just stick with earnings. This ratio is calculated on a rolling basis over a 5-7 year period ...obviously what you want to see is this number rising using a steady state 'real value' of gold prices averaged out of the year of the plan ...
It should also include 2 other scenarios of maybe 25% and 50% higher and lower than the current price .

3. The final question is dividend policy ..at the moment the policy is to pay out 30% of operating cash flows in dividends ..how will this policy change with regards to their production targets .

One other question that I would like answered but which I didn't ask , is what is their future inte

Good find . It makes you wonder doesn't it ...certainly a question to put before the board I think , if only to receive confirmation that there is no link regarding the passing up of a serious opportunity.
I am about to post the 3 questions that I put to the board ..I will send them by email tomorrow rather than by text to the mobile number listed on their website.

Cowichan ...can you start a thread headed up Questions for Centamin , so we can all see what the questions we all have are .
I would if I could but for some reason it won't allow me .
I will be asking them 3 questions tomorrow via the email link but it would be good if I can share them with all others on the board and for us all to see each others .
Thanks .

Yes I take your point ..I recognise that certain questions could damage legitimate areas of commercial sensitivity if they were answered , which none of us would want , but maybe they just like to hide behind this .

They are looking for a buyer because the $37 million investment doesn't pass their internal hurdle rate of return .

My problem with it though , was that it was announced as if it was a success, on their 27th May regulatory notice because of its potential , but in the next paragraph it was disclosed that it hadn't met the investment criteria , or put another way ..it wasn't a success. They are hoping to be able to dispose of it for at least the amount they have spent on it which is $37 million . If they can't , then there could be up to $37 million of expenditure which would have to be aborted but that would be the worst case and an unlikely scenario. It is quite possible that some of it might have to be written off though

Cowichan .. I think you can pick up this information in the interim accounts .
The Consolidated statement of Financial position as at 30th June, shows that at the moment there is cumulative exploration and evaluation expenditure incurred Of $76.2million. .. this is held as an asset because it is deemed to be likely to result in additional gold reserves being discovered in the future, resulting from this expenditure .
The amount of this expenditure pertaining to the Burkina Faso project, which is being held for sale is $37 million ..this is shown as a current asset and represents how much has been spent and will (hopefully) be recoverable from its disposal .
You can see a more detailed breakdown in section 2.8 of the notes
Hope this helps .

I totally agree Mr T The market is very unforgiving about under delivering against previous targets , especially where they think there has been dishonesty or incompetence involved.
Everything that I have read about the new CEO although admittedly little suggests that he brings with him a good reputation and also lots of goodwill.
I don't think the market has given him credit for that yet, but hopefully in time it will

A measure which I like to use to decide whether or not I feel the market is under or overvaluing the share is to identify what premium, in terms of share price, is the market putting on the net book value of the company's assets .
The results were striking.
I looked at the 3 big players , Glencore, BHP and Rio Tinto, one medium sized which was Polymetal and 3 smaller companies of Centamin , Ferrexpo and Hoschild.

These are the results of the premiums that the market is making of the net assets of these companies .

1. BHP....137 %
2. Rio Tinto ..107 %
3. Glencore...74 %
4. Polymetal ...331 yes 331%
5. Ferrexpo ...73 %
6. Hoschild ..27 %
7. Centamin ?????

The premium that the market is paying on Centamins net assets is just 8 %. That is a staggering statistic demonstrating just how unloved Centamin is ...and I thought I had no friends. ..just think about poor Centamin !

Joking apart ..that is why I have invested in them .
At the current market price a billionaire could buy the company , and then find £215 million of cash in the bank !! Yes I think it's a bargain whichever way you look at it

This is NOT investment advice DYOR there are lots of other methods being used as you can see from other postings

A key warning to be aware of though is that I am assuming all other things are remaining equal. We only know what the company has told us. . . What worries me on that score , and I am a worrier where my wealth is concerned, is that so far we have only had one piece of bad news which was regarding the reduced production levels , the adage goes that bad news comes in threes , so if that is true , what is next ? A collapsing gold price perhaps .. I try not to think about that.