Member Info for Cowichan

DASUT, kindly don't misrepresent what was said.
Since Centamin had the infrastructure in place to hire additional Egyptian drivers, train them on equipment they currently use, upkeep the equipment themselves, fuel the equipment themselves, lease more of the same model haul trucks, feed & house the workers themselves on site, monitor the progress in house - basically do everything they have been doing since start-up - in that case it is most definitely cheaper than hiring a 3rd party like Capital - who don't work without a return on their investment.

Obviously there are instances, many many instances where let's say a Canadian based miner wants to operate a mine in West Africa, and guess what, they have no assets in West Africa, so what do they do? They hire a 3rd party already familiar with mining the country. That is not what we are talking about at Sukari - and for you to suggest otherwise is foolish. Period.

March 21, 2023 The Minister of Petroleum ends his visit to "Iqat" and prepares this morning to visit the Sukari mine

El-Molla, Minister of Petroleum and Mineral Resources, announced the commencement of trials of operating commercial gold production from the Iqat mine in southern Egypt

during an inspection of the stages of work and production at the Iqat site, Al-Mulla explained that the site is characterized as a pure Egyptian investment in the field of gold exploration and exploitation through the Egyptian Shalateen Company

by starting commercial production operating experiments, has become the third site in Egypt that extracts gold - the minister also inspected the progress of the works and the progress of the gold production process, starting with drilling operations and transporting rocks with lorry from Mount Iqat to the crushing unit, grinding them and placing them in the basins for extraction, in preparation for the smelting and extraction of gold and the production of ingots

and indicated that initial ingots are being produced that are stamped through the Department of Stamping and Scales with the appropriate caliber for their quality or stamping the gold extracted from the mines and stamping it with the international code “9999”. In preparation for export or using it to increase Egypt's reserves of gold

https://elbarima.com/%D9%83%D9%85%D8%A7-%D8%A7%D9%86%D9%81%D8%B1%D8%AF%D8%AA-%D8%A7%D9%84%D8%A8%D8%B1%D9%8A%D9%85%D8%A9-%D8%AA%D9%81%D8%A7%D8%B5%D9%8A%D9%84-%D8%B2%D9%8A%D8%A7%D8%B1%D8%A9-%D8%A7%D9%84%D9%85%D9%84%D8%A7/

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Above link has quite a few pictures
Weird that the article states the mine site pumps out refined gold - 'stamping it with the international code 9999' as if it's just a UPC symbol! Not likely a qualified refinery would be on site. Or perhaps the Egyptian Central Bank is going to prop up it reserves with quasi pure gold bars from in country? Wouldn't be surprised considering their financial situation.

quickly underperformed expectations at its new owner - both in higher costs and lower production. The wall is a mystery - quickly repaired and mining commenced below soon after the contract was signed, go figure. IMO such a large waste moving contract needed to sound urgent and thus needed a catalyst. If a study had been undertaken (like a mini PEA/PFS) then shareholders would know the pros and cons of moving the waste in 4 years vs 5,6,7, 8 years . No such study was made or published to shareholders. Imagine that omission being done at Doropo - which according to management, will cost around the same as the waste moving contract. Mr Kees has always been right - as far as the comments I've read. Finally regarding the dividend being consistent , Mr Horgan says the company has committed to keep paying it vs utilizing profit to fund Doropo and other expansions. That decision means taking on debt, cutting a streaming deal with the likes of a Wheaton, adding forward gold contracts, etc. I personally prefer growing without debt , it's much safer albeit slower, but that's just me.

Spoonington -
I too am more than disappointed with the cash burn since Mr Horgan took the reigns. I was enthusiastic (nay, excited!) at the start of his tenure, choosing to believe the language of growth and diversification. Fast forward just over 3 years and the cost vs results equation does not compute. It's understandable some items are out of management's control, such as waiting on Egypt to finalize new terms, legal uncertainty re court case, the violence in Burkina Faso raising risks to high, heightened inflation, etc. Strip out those uncontrollable variables and shareholders are still left with an inexplicable lack of oversight and accountability. Like I pointed out earlier in the week, a prime example of cost control ineptitude was paying near a million dollar invoice on the Batie West concession for 2022. Stupidity. Personally I think the same ineptitude runs rampant throughout management. I just watched the full year results recording yesterday and noticed Mr Horgan say that the Doropo deposit had been renewed until mid 2024. While that may be true of 4 concessions surrounding the Doropo deposit it is NOT true yet for the permit holding Doropo , namely PR-559 or the one below PR-778. It may be expected to be renewed, but that's not renewed. Mr Horgan also talked about the delayed PFS and ways they have been pursuing to lower the initial capex on the processing plant. Well of course they need to find cost savings by removing components. The PEA was based on Batie West - and ten years outdated at that. I don't think Mr Horgan should try and squeeze blood out of a stone - because the Doropo project was assessed based on outdated assumptions for a different deposit perhaps creative solutions should be pursued. I believe selling 51% to a partner would reset the clock - allowing a new majority owner more time to explore and possibly drill out a larger resource. As it stands if Doropo gets renewed they are still on a tight schedule to develop a mine ( something like mid 2024) Rushing after delaying would be irresponsible. And concluding the project as 'unprofitable' just to relinquish to the state would be a giant waste of shareholder exploration funds spent over a decade. Finally, the waste clearing contract. We ought to have clear metrics to compare the cost vs accretive value created i.e. how has the open pit plan changed since inception? Are the cutbacks bigger than originally planned - I think they've said as much in previous presentations. What was the additional cost pegged at? What was the additional revenue pegged at? Regardless of that answer, the decision to contract out the work guaranteed it would be >25% more expensive to accomplish.

Paulmetcalfe,
No, I've never been a mining engineer or got my hands dirty in a pit - purely an investor. That said, I've been invested in the mining sector for over thirty years. Mr Horgan's main claim to fame has been as Toro gold's founder then selling to Resolute - although the mine quick

As I said, I am still interested in Egypt's mineral wealth , still interested in greater Sukari , still interested in all of Centamin's , B2Gold , Altus and Barrick's new concessions.

What part of that explanation is difficult for you to understand, exactly ?

I'm still interested in Egypt's mineral wealth and have been for near two decades. As I posted previously I will still invest if the right management team ever comes in place - thru a buyout or otherwise.

The strange thing to me, MrBond, is folks sharing misinformation and blindly supporting unprofitable management decisions. I always post details and real sources with links to the data - you should be required to do the same when sharing opinions.

3bear - the fact that Centamin says a competitive tender was performed doesn't mean it was a cost effective option.

Sadly, as was the business rationale behind Centamin's move to owner operator underground i.e. replacing Barminco - it is never ever cheaper to contract work out - for the simple fact that a profit margin must be maintained for that contractor.

In our case the Capital contract costs upwards of a 25% profit margin. Thus it cost Centamin shareholders an EXTRA >$80 million vs an owner operator model.

I wish people would stop pretending otherwise and thereby deceive Centamin shareholders. It really isn't honest.

I'm replying to MrBond's post only because I don't want shareholders to be misled.

1) there was no emergency to move all this waste within 4 years - but I understand the preference to make up excuses instead of dig into the numbers or even ask questions of management

for those paying attention they would have noticed the area in the pit directly below the 'movement detected' was being mined again only several months after the contract commenced - meaning it wasn't a difficult remedy - if any concern at all

I personally don't trust a BOD blindly for any company. Follow the facts. And the facts state NO economic assessment (PEA/PFS) was made to determine how much extra revenue would be made should this additional waste be moved and expediated. What we do know is that it costs vastly more to hire a 3rd party like Capital ( like >$80 million more !)

2) Capital was not in a position to move the waste faster or do the job more efficiently - so NO, it would NOT have 'pushed the waiting time out' to do the same job in-house

Additionally, if Centamin shareholders think Capital can do it better/cheaper/faster what does that say about Mr Horgan's ability to manage a simple load and haul operation at his only operating mine ? Is he incapable? Too lazy? Can't be bothered? Take your pick.

The fact is Capital had to lease/order in the haul trucks and loaders (and wait for them) just like Centamin would have had to - Capital had to hire and train a whole new set of Egyptian haul truck operators and maintenance crew - because they had none of these type of workers previously (only drill/blasters)

Truth be told Centamin was in a better position to get an additional load & haul team up and running as Centamin has actual training capacity for drivers/operators which Capital had to utilize anyways - the same goes for repair crews in all departments (tyres, engine rebuilds, etc)

3) room and board for all the Capital workers (eating & sleeping) is taken care of by Centamin - as Capital doesn't have on-site boarding - what extra cost this is to Centamin shareholders cannot be determined as we are not privy to the minutiae

For these reasons and others I label the Capital deal as unnecessarily expensive - adding an estimated $80 million to the cost of moving the same material in-house

that's money that went to the profit of Capital and their shareholders and can be witnessed by their generous dividend distribution for 2021, 2022 (& coming for 2023)

this while Centamin destroys its own dividend and pats themselves on the back

Check out (what could have been your) Centamin profit, propping up Capital Drilling's 2022 year end results. And guess what, Capital's 2023 revenue is projected to be even better - Yippee!

25.9% Return On Capital Employed ( Up 22.7% on FY 2021 )

Revenue $290.3 million ( Up 28% on FY 2021 $226.8 million )

EBITDA $86.4 million ( Up 19% on FY 2021 $72.4 million )

Cash From Operations $69.8 million ( Up 68% on FY 2021 $41.7 million )

2023 Revenue Guidance $320 - 340 million ( Up 14% on 2022 )

Note : These numbers ( growth in revenue/profit ) are stunning given the relative small size of Capital's business & inflationary pressure every miner/contractor has been facing. How did they do it?

Centamin's board was presented with an 'urgent and dire situation to remedy' shortly after Mr Horgan took the reigns. To fit this narrative 'movement was detected' in the open pit - which quickly transformed itself into a mammoth 4 year sweetheart deal to move a decade's worth of waste - with not even a PEA let alone a PFS to assess the pros/cons of the gargantuan expense.

DYK the Capital contract actually safeguards Capital's profit margins? Yes it does - the Sukari waste moving contract is 'inflation protected' - that means all the upward inflationary pressure on consumables & wages is borne by Centamin shareholders for the contract's duration, think about that!

I'll leave you with a quote from the presentation and some music to enjoy while flipping thru the pages; Capital boats Best In Class Returns and Margins 2022 ROCE >25% and EBITDA margins ~30%

Even Shania agrees https://youtu.be/-FMhUNSIxks

https://www.capdrill.com/media/investors/Presentations/NEW-CAPD-FY22-_160323_Final.pdf

Editor/Analyst at Exploration Insights
March 16, 2023

https://www.linkedin.com/pulse/eastern-desert-egypt-arabian-nubian-shield-site-visit-joe-mazumdar/

Some insights he confirms are the high strip ratios baked into mining Sukari

" A high all-in-sustaining cost (AISC) of US$1,400 per ounce is due in part to the significant diesel exposure from the power plant (>70 MW) and diesel fleet, which must deal with a high strip ratio (8:1 to 11:1) "

The plan to deal with any so called Bonanza grades underground

" The co****-grained nature of the gold mineralization from the higher-grade underground resources has led the company to add a gravity circuit to the 12-million-tonne-per-year plant to raise the metallurgical recovery a couple of percentage points from the high 80% to the low 90% "

Note: Joe got to visit and take pics at Sukari's core shack (see link for pics)

" Core shack at the Sukari mine site [left], co****-grained [top right] and finer-grained (bottom right] gold along the edges of the quartz veins in contact with the sheared sediments. Source: Exploration Insights "

and some other insights about Altus, artisanal mining too

Centamin shareholders should read & understand page 13 of 2022s full year results titled Capital Allocation.

Centamin's dividend policy is now legally subject to additional fiscal hurdles to safeguard the line of credit from the banksters , the most obvious of which is holding a minimum $100 million cash in the bank. And that caveat applies whether or not any credit has even been withdrawn. The cash flow 'available for dividends' will be greatly constrained by the new flowchart.

IMO finding ways to lower the bar is one of Mr Horgan's greatest talents.

https://www.investis-live.com/centamin/63eb959d33aa1a120095c6ee/gqruu

And for those who still doubt, notice Centamin's IRR threshold has been reduced to 15% , in anticipation of Doropo's actual capex requirements. The outdated Batie West PEA (circa 2013) which was copied & pasted onto Doropo's PEA should never have been used and management are forced by the banksters to own it.

** Status as of October 21st, 2022 **
PR-334 RENEWAL IN PROGRESS
PR-335 RENEWAL IN PROGRESS
PR-535 ASSET
PR-536 ASSET
PR-559 RENEWAL IN PROGRESS
PR-778 RENEWAL IN PROGRESS

** Status as of March 16th, 2023 **
PR-334 ASSET (expires 06/11/2024)
PR-335 ASSET (expires 06/11/2024)
PR-535 ASSET (expires 03/06/2024)
PR-536 ASSET (expires 02/28/2024)
PR-559 RENEWAL IN PROGRESS (expired 06/08/2022)
PR-778 RENEWAL IN PROGRESS (expired 05/14/2022)

Of course the most important permit is still in limbo, that being permit PR-559 (240km2) which contains all the Doropo gold deposits...

taken from this mornings notice
RNS Number : 1158T
Centamin PLC
16 March 2023

PAYMENTS SPLIT BY PAYEE - Payments to Government
during the year ended 31 December 2022 in USD

BURKINA FASO: Konkera Project (iv) Ministry of Mines
$ 668,282 Burkina Faso Tax Office
Other payees $ 1,099

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I think shareholders might want to question Centamin's 'cost control' oversight.

Seriously, who authorized a payment of darn near a million dollars in 2022 when the company told me explicitly on several occasions the Konkera project was LONG relinquished to back to the Burkina ministry of mines ?

If they sent you a bill in the mail why not return to sender? What's the worst that would happen?

The Egyptian family is, above all, the start and end of everything. It is the first economy; the foundation for true progress.

I am very pleased to sign a cooperation protocol with #Egypt’s Ministry of Finance under the National Project for Development of the Egyptian Family (NPDEF) to provide EGP 1,000 for each married woman with two children, cumulated annually and disbursed at age 45.

Our strategy is twofold: first, to provide financial incentives for Egyptian women to curb population growth, and second, to ensure that every woman and every child receives a comprehensive package of health, education and economic services to promote growth and human dignity.

We continue building for tomorrow, today.

https://www.linkedin.com/posts/hala-h-elsaid-308599a_egypt-activity-7041407937902174208--anz?

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To what end - poverty stricken kids growing up in squalor ? Egypt's policy rollouts continue to amaze.

Since Centamin announced they were undertaking a capital review in early 2022 (aka shopping around for a credit facility) the BOE raised interest rates from .25% to 4%

Given global interest rates are expected to rise further, and Centamin has no immediate plans to use the revolving line of credit, the final rate would be expected to rise as well

the terms as of late 2022

- US$150 million RCF agreement has been entered into with a syndicate of four international banks, taking equal tranches, including BMO Capital Markets, HSBC Bank plc (Jersey), ING Bank, and Nedbank Limited

- Uncommitted accordion provision allowing the Company to request an increase, subject to the Lenders' approval, of up to US$50 million to the Facility, for a total potential RCF of US$200 million

- Four-year term

- Interest margin ranges between 3.50% and 4.50% per annum with a margin rachet mechanism based on Total Net Debt to EBITDA

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Notes: It would be helpful for shareholders to know if Centamin must maintain a minimum cash balance under the above agreement ( i.e. if the approx. $157 million in Centamin's bank account must stay unallocated ) as it's likely no coincidence the amount approved to borrow is the same value as Centamin's liquid assets

If so, funding Doropo (or whatever's next in the growth pipeline) may require issuance of fresh shares, more expensive bank funding , or cooperation with another gold miner - or an asset sale - and what's available to sell other than the Doropo deposit itself?

An excerpt:

"TCE (tangible common equity) is declining industrywide because of the negative effect of rising rates on the market value of bank holdings of AFS securities. The number of banks with ratios of TCE to average tangible assets of less than 5% jumped markedly in 2022, with some banks posting negative TCE. Banks in this position largely got there because of an aggressive earnings strategy based on longer-term securities holdings when interest rates were low.

Banks with very low or negative TCE may face funding challenges. Federal Home Loan Banks (FHLBs), for example, are not permitted to extend new loans (called advances) to banks with negative TCE, and existing FHLB loans may not be renewed beyond 30 days unless waivers are obtained by borrowers’ primary regulators. That could be problematic for banks facing a runoff in deposits or other liquidity concerns; in a worse-case scenario, a bank might have to sell “underwater” bonds to raise cash, thus realizing losses and reducing regulatory capital.

Read the rest of the Fed's blog post in light of Silicon Valley Bank's lightning quick failure (<3 days!)

https://www.stlouisfed.org/on-the-economy/2023/feb/rising-rates-complicate-banks-investment-portfolios

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https://www.bloomberg.com/news/articles/2023-03-10/what-is-happening-to-svb-bank-run-fear-spreads-as-stock-tumbles

According to page 23 of the last site visit presentation, here:

https://www.centamin.com/media/2873/cey_sukari-site-visit_presentation_011122_final.pdf

Centamin's LOM strip ratio (historical + future) is 8:1

Additionally the graph on page 23 for 2022 and onward doesn't show lower ratio's for the open pit (which is where the vast volume comes from) so I would think 6:1 is impossible

Indeed it looks more like a strip ratio of 8:1 to 10:1 is in Sukari's future judging by the chart

Furthermore the graph on page 23 shows the average grade for 2023 will be significantly LOWER than 2022 both in the underground and open pit - so then how is the expectation of higher production in 2023? Will this expectation see a revision?

Maybe the Bonanza zone will change production & grade forecasts to the upside? But haven't seen it appear in presentations lately...

All excellent points Somnamna.

I suspect part of the trouble in diversification will be deciding how to best spend Centamin's severely limited exploration budget. Although until the EMRA finalizes the royalty rate for gold exploitation Centamin isn't likely to spend much on drilling beyond the greater Sukari tenement. And given the negotiation process has already dragged on far beyond the one year timeline perhaps the Egyptian government isn't keen to be as competitive as once believed.

I do not envy Mr Horgan in choosing a path forward - with inflation and rising interest rates finding profit will be tough

I'm completely sold out of Centamin - but I could be persuaded to reinvest in Egypt at some point if conditions improve - although I am not holding my breath.

Also, what were the previous share positions of the 'now increased' ?

Or was that an assumption because these three simply moved up the list to top ten as bigger positions sold down?

Share count as of late 2022
Schroders 76,271,857 6.72%
abrdn plc 69,673,637 6.02%

Share count at present
Schroders 45,208,584 3.91%
abrdn plc 59,896,169 5.18%

link to late 2022 data
https://web.archive.org/web/20221003041548/https://www.centamin.com/investors/shares-dividends/shareholder-information/
link to now data
https://www.centamin.com/investors/shares-dividends/shareholder-information/