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That's giving the gold away for less than it costs to mine. Every month, to the tune of $ 80,000,000 EGP ( could be more volume per month now , those were 2022 figures ) That's heavily subsidized gold purchases to a dictator run country, courtesy of you , the Centamin shareholder. The math:
Egypt's official exchange rate 30.85 EGP = 1 USD
Unofficial exchange rate 60 to 70 EGP = 1 USD
Yes, the agreement states Egypt will pay the international price ( i.e. $2000 USD currently ) BUT since the official exchange rate used to calculate the 'local currency' Centamin gets in return, that works out to just $ 61,693.36 EGP - the CBE's an artificially mandated cap. It should cost the CBE more than twice that to buy Centamin's gold! Egypt can't buy USD on the international market for an exchange rate of 30.85 EGP , it's an absurd, make-believe rate they force only their own population to accept - and most don't. (Siko knows...)
If Centamin had never entered into the agreement to trade its gold for EGP with the Central Bank of Egypt there are MUCH cheaper alternatives to acquire EGP offshore. Specifically, one $2000 USD ounce of gold would fetch between $ 120,000.00 EGP to $140,000.00 EGP . I think every single Centamin shareholder would prefer benefitting from the weak Egyptian pound. Indeed , some think Centamin IS benefitting from the weak Egyptian pound when in fact they are not. Acquiring EGP offshore would practically cut EGP denominated expenses (salaried workers, local contractors) in half.
But, since it is locally unlawful (wink, nod) to trade at a rate other than that which is prescribed by the Central Bank of Egypt , Centamin is S.O.L. If a company is caught trading USD for EGP on the black market, they could have their business halted, their property confiscated and their license to operate in Egypt revoked. Sound familiar?
Should shareholders *hope* Centamin's CEO Martin Horgan & CFO Ross Gerrard acquiesce to losing 50% of the value of the gold they continue to sell to Egypt's Central Bank monthly rather than lose the Sukari mine for breaking the rules? That's a Catch-22.
But somebody asks, 'I'm sure Centamin is secretly getting more than 30.85 EGP as an exchange for their gold sold to Egypt, no?'
As far as Centamin keeps records, they list the CBE sales in EGP on the balance sheet but not the US$ conversion factor nor the total ounces of gold sold to the CBE, making it impossible for shareholders & auditors to confirm or deny - or object to the loss guaranteeing strategy.
CAIRO - 22 February : Engineer Tarek El Molla, Minister of Petroleum and Mineral Resources, witnessed the signing of contracts for the airborne geophysical survey project for gold exploration using helicopter in the Hamsh/Sukari region in the Eastern Desert, in favor of BARRICK GOLD Egypt company.
The agreement was signed between the Petroleum Air Services Company and Geotech, according to a statement from the Ministry of Petroleum, Wednesday.
The project will utilize one of the working models in the company's AS350 aircraft fleet, employing "HELICOPTER-BORNE MAGNETICS (STINGER) and RADIOMETRIC" technology.
This agreement represents a core initiative to introduce modern methods and technology into the field of mineral exploration and extraction in Egypt, according to the statement.
The agreement is part of the efforts by the Ministry of Petroleum and Mineral Resources and the Egyptian Mineral Resources Authority to maximize the benefits from the mining sector's wealth.
https://www.egypttoday.com/Article/3/130550/Egypt-Geotech-sign-agreement-for-gold-exploration-using-helicopter-borne
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times up for Horgan
Over 175 million shares over the last 8 months
August 2023 Top Ten
#1 Van Eck 110,273,580 ; #2 Dimensional 47,425,970 ; #3 Vanguard 41,000,780 ; #4 Hargreaves ; Lansdown 3.386% ; #5 Aberforth 38,141,675 ; #6 Norges Bank 2.811% ; #7 Schroder 31,157,324 ; #8 Ninety One 27,128,540 ; #9 BlackRock 18,356,831 ; #10 Abrdn 18,275,264
February 2024
#1 Van Eck 111,725,659 ; #2 Aberforth 42,223,186 ; #3 Hargreaves 39,227,049 ; #4 Man Group ; 14,318,307 ; #5 abrdn 9,074,566 ; #6 Quantex 7,030,533 ; #7 Crédit Mutuel 6,200,000 ; #8 Dimensional 5,259,977 ; #9 State Street 4,509,613 ; #10 Konwave 3,838,802
Questions for CEO Horgan;
1) Why have the top ten institutional investors sold more than 175 million shares in the last 8 months? Do they have access to insider info retail shareholders do not - like an ongoing audit by Canadian market regulators?
2) What's your plan to lure new institutional investors and/or keep the few remaining?
3) Is Centamin's board currently looking for a replacement CEO ? Are you shopping for a new job ?
https://www.linkedin.com/posts/don-lawson-98619370_centamin-lse-tsx-activity-7165823285648146432-u5YM
Feb 20,2024 (Bloomberg) -- Egypt is betting that an agreement with the IMF to resolve a foreign currency crisis will help it settle dues it has run up with foreign oil companies.
“They are long term strategic partners. They are coming on a long-term basis,” Minister Tarek el-Molla said in an interview in Cairo, referring to the firms that are owed payment. “I would not tell you that they are happy, but they would accommodate or would understand and would be patient for some time.”
El-Molla didn’t disclose the value of the arrears but said it will be sorted after the Washington-based lender and Egypt sign a deal. “This is something that we are addressing and that has a priority and will definitely be solved after signing with the IMF.”
Egypt has been in a similar crunch before when debt to foreign oil companies piled up after a 2011 uprising, hitting $6.3 billion at one point. It took years for the country to erase that debt.
Separately, the country’s gas production fell to 5.5 billion cubic feet a day, the minister said, citing natural declines at fields. That’s the lowest level in years according to Bloomberg calculations. The country, which exports its spare gas supplies mostly to Europe as LNG, may be forced to suspend shipments again in the summer to meet local demand.
https://www.bnnbloomberg.ca/egypt-bets-on-imf-deal-to-settle-its-dues-to-foreign-oil-firms-1.2036879
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Expect electrical power cuts to continue & grow longer throughout 2024 - better keep the heavy fuel generators in good working order CEO Horgan
Cairo – November 8, 2023:
Egypt will launch its inaugural electronic auction for gold and silver next week, according the Assay and Weights Administration (AWA) on Tuesday.
The event will place 66 gold bars and 41 silver bars for auction next Tuesday, explained Head of the AWA, Ahmed Soliman, enabled by the Egyptian Mercantile Exchange (EME) trading platform.
The auction is part of the government’s overall goal to diversify the ways gold is available to the public, said advisor to the supply minister for gold industry affairs Nagy Farag, adding that the auction aims to open up a new revenue stream to support Egypt's treasury.
https://www.egypttoday.com/Article/3/128334/Inaugural-e-auction-for-gold-and-silver-bars-to-be
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Three very important issues:
1) Where did they source the physical gold ?
2) Is Egypt selling from its 'official gold reserves' - & why bother if the $$ is going back into CBEs treasury anyway? Do they not trust/prefer gold as a reserve holding?
3) Will Egypt use the $$ raised to 'barter' for tea?
Sorry that you're sick , Paul
the reality is there are far more sinister items to post regarding the situation on the ground at Sukari
for example, somebody asked about a 'strike' during the online Investor Forum and Mr Horgan was flummoxed - asking Ross if he'd heard anything about a strike - both denying it
that may be - yet, many Sukari employees on LinkedIn (and by many I mean several dozen +) are outspoken (and maybe rightly so!) about not wanting to support 'Western' companies during this time (read P@listine bomb'ing ) and vowing to boycott US , UK and so forth owned companies - think silent quitting on steroids (google it IYDK)
I know you're sick at the moment, Paul, but can you stomach how this could be a concern for Sukari operations ?
And as for skin in the game - professional analysts , who provide the 'buy' 'hold' 'outperform' ratings - very, very rarely have skin in the game for any of their recommendations - yet , you (or maybe not you, Paul) gladly lap up their glowing reports like a thirsty kitten , meow - meow
Tue, 7 November 2023 at 10:29 am GMT-7·5-min read
- at one point when questioned about the soaring price of okra, an Egyptian staple, Sisi suggested they emulate the followers of the prophet Muhammad and “eat leaves”.
“Sisi says that he is not worried that someone will say that a kilo of okra costs 100 Egyptian pounds because Egyptians are aware that “the Companions of the Prophet [pbuh] were trapped with the Messenger in the outskirts of Makkah for 3 years until they ate leaves. They did not ask the Messenger for food or for the earth to explode from beneath them [with riches].”
The tweet refers to the siege against the Muslim by Quraish, it ended with the Prophet’s first wife Khadijah dying and them losing all their wealth. That year is known as the Year of Sorrow and was the worst in the Prophet (pbuh)’s life.
Al-Sisi went on to say that during this time Muslims didn’t complain, suggesting that Egyptians should be patient and not demand immediate solutions.
He has also asked Egyptians to lose weight to save money after the price of fruit and vegetables skyrocketed after the government’s economic reforms slashed food subsidies.
A member of the Egyptian security services Mohamed Mansour said it was “rude” to complain about rising prices and food shortages and asked Egyptians to “sacrifice their dinner” for the sake of the country.
https://uk.news.yahoo.com/egypts-strongman-president-faces-election-172905803.html
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Does Sisi sound like a credible leader who is fit to navigate an economic catastrophe ? Sounds more like a Saturday Night Live skit...
CAIRO - 7 November 2023: Lieutenant General Engineer Kamel Al-Wazir, Minister of Transport, that the Suez Canal Economic Zone hosts the first real factory for railway industries in partnership with the private sector and the Sovereign Fund of Egypt is a representative of the state.
The minister confirmed that there is no going back from the decision to localize industry in Egypt.
This came during a session on the localization of the transportation industry in Egypt, within the activities of the third day of the International Exhibition and Conference for Smart Transport, Infrastructure and Logistics for the Middle East and Africa TRANSMEA2023.
He added that Egypt strongly focuses on the transportation industries and their localization, pointing out that President Sisi’s directives are clear in this regard, and that Egypt is announced that it will not import buses from abroad and will manufacture them with national companies in cooperation with international companies.
He further explained that at the current stage, Egypt will not contract or import new vehicles. For the railway from abroad, it will be manufactured locally.
He explained that other means of transportation, such as the metro and others, are contracted on the condition of partnership and localization of these industries in Egypt, pointing out that a company such as SEMAF National can, with its capabilities, produce entire metro cars from unassembled black sheet metal and assemble it completely with components from inside and outside Egypt, and there are factories in Europe.
The minister pointed out that there are attempts to manufacture train spark plugs with international companies to manufacture them inside Egypt, and we are also waiting for the manufacture of wheels for wagons, so that we can nationalize all transportation industries in Egypt.
https://www.egypttoday.com/Article/1/128311/Transportation-Minister-No-going-back-from-localizing-industries-in-Egypt
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1) Armed Forces Lieutenant appointed Government Minister in charge of nationalizing Egypt's transportation manufacturing industry - doing the exact opposite of what Sisi declares to the world re: selling assets to the private sector
2) Why is Egypt doing the exact opposite of reforms (or trying to) ? The ain't got no money to buy things internationally - they's broke, with no more countries willing to lend them more
CEO Horgan ain't no fool - why put his own 'hard earned' paycheck into Centamin under this worsening economic reality ?
Nov 06, 2023, 7:00 PM CST
- Iran has urged OPEC members to halt oil exports to countries supporting Israel, echoing the 1973 oil embargo, which dramatically increased oil prices and altered global economies.
-The call for an embargo is a response to the Israel-Hamas conflict, with the potential to significantly disrupt global oil supply and prices.
-As it now stands, there is every chance of a military or diplomatic misstep occurring in the Israel-Hamas War that may see a widening out of the conflict.
https://oilprice.com/Energy/Crude-Oil/Irans-Proposed-Embargo-Could-Cause-Chaos-In-Oil-Markets.html
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if so, cutting off one's nose... yadda yadda
Tibbs,
that is the question -
what can be inferred when neither the CEO or CFO are eager to buy , but at the same time encourage the Market and institutional investors to stay for the good times ahead ?
a) do they expect the share price to get more attractive, and will buy then ?
b) do they foresee slower growth , smaller dividends (than holding cash in the bank offers?)
c) are they weighing Egypt political risks and taking a pass ?
d) do they know Doropo is a no go ?
one can only tout Sukari's 'world class' status for so long. Indeed was Sukari ever world class considering the 'real' LOM waste strip ratio & 'actual' LOM AISC are never factored into the equation - the Capital contract stripped out as if it's somehow unreal ?
I'm a bit surprised you didn't start off with 'what is truth?' in your soliloquy
as far as your critique of balanced, i did spend over a decade spreading the gospel of Centamin - and how the business was poised to diversify and grow
but those truths turned out to be false, whether by inadequate data, mismanagement or undeserved reassurances by management -
you know I'm sold out but please remind us of your shareholder status - i believe you owned more than Centamin's CEO & CFO combined , you once commented
is this still true ?
Long term holders -
- ask yourself why one of your fellow LTHs would dismisses Egypt's resorting to bartering for goods as a 'meh, so what'
- then remember Centamin's own CEO & CFO recently poo pooed the idea of themselves buying more shares at this bargain basement 'below value' price
- is the picture getting clear ?
(bloomberg) -- egypt wants to keep buying tea from kenya — it just doesn’t want to use up its stash of us dollars, so the country is offering to barter instead.
with a number of countries around the world facing shortages of greenbacks, the world’s biggest exporter of black tea was asked last week if it could trade tea for anything that egypt produces, according to kenyan treasury secretary njuguna ndung’u. speaking at a panel in nairobi on monday, the kenyan official said the request came from egypt’s ambassador.
“right now we cannot get your tea. it’s lying in mombasa because we have no dollars to pay,” ndung’u reported the ambassador as saying, referring to the major kenyan port city. “we’ll get your tea and you also come and decide what you get from us.”
egypt’s foreign ministry didn’t immediately respond to a request for comment.
egypt is kenya’s second biggest buyer of tea, after ****stan. exports to the two markets in the first eight months of 2023 were down 23% and 13% respectively, according to tea board of kenya data.
read more: ****stan, egypt tea drinkers reduce demand for kenyan exports
president william ruto dispatched his agriculture minister to negotiate a similar barter arrangement with ****stan, ndung’u said.
“we are still in a dollar global shortage and that is why countries like egypt and ****stan want to do barter trade,” he said.
https://www.bnnbloomberg.ca/short-of-dollars-kenya-says-egypt-asks-to-barter-for-tea-1.1994640
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long term shareholders - please don't be lulled into a stupor by the likes of mizolglit - touting egypt joining brics being some sort of solution -
egypt is entering an economic catastrophe the likes they've never experienced , whether this materially impacts sukari operations is yet to be seen , but ignoring a problem doesn't make it go away
November 6, 2023
Gold reserves in Egypt rose to $8.098 billion in October from $7.644 billion in September, according to data released by the Central Bank of Egypt (CBE).
https://www.zawya.com/en/economy/north-africa/egypts-gold-reserves-hit-8bln-in-october-vh2ge4lc
Nov 3 (Reuters) - Ratings agency Fitch downgraded Egypt's long-term foreign-currency issuer default rating (IDR) to 'B-' from 'B', citing increased financial risks and higher government debt.
The downgrade reflects increased risks to Egypt's external financing, macroeconomic stability and the trajectory of already-high government debt, the rating agency said.
Recovery in Egypt's key tourism industry, which had been hammered by the pandemic, has been offset by last year's surge in energy prices and ongoing rise in global borrowing costs. This has added to the country's external loans, which quadrupled to over $160 billion in the seven years
https://www.reuters.com/world/africa/fitch-downgrades-egypt-b-with-stable-outlook-2023-11-03/
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1) in times past buying/owning gold made you a more stable country economically
2) where does Egypt get funds to 'buy' more gold during their economic crisis ?
3) how much does the Central Bank of Egypt still owe Centamin for its monthly gold purchases ?
Doaa A.Moneim , Wednesday 1 Nov 2023
"Other factors include the surge in Egypt's one-year Credit Default Swap (CDS) to 2,013 bps from 1,230 in mid-September, widening the gap between the parallel and official FX rates to as much as 50 percent and 30 percent between the Real Exchange Rate (RER) and Real Effective Exchange Rate (REER) models.
https://english.ahram.org.eg/News/511406.aspx
November 1, 2023 12:00AM EDT
The Egyptian authorities have arbitrarily detained and prosecuted dozens of peaceful protesters in demonstrations since the beginning of October 2023, Human Rights Watch said today. The authorities should remove overwhelming restrictions on the right to peaceful assembly, release all those detained solely for joining or calling for peaceful protests, and drop charges against them.
She said that when the protesters arrived at Tahrir Square, security forces and men in civilian clothes pushed them out of the square, chased protesters through the surrounding streets, and randomly arrested people.
Security agencies also arrested several activists they believed were connected to the protests at their homes.
the Supreme State Security Prosecution (SSSP), which ordered all of them to be kept in pretrial detention. They faced charges of “joining a terrorist group,” participating in “illegal assembly,” “committing a terror act,” and vandalism.
authorities presented no evidence of a criminal offense in any of the cases. Human Rights Watch found no allegation of violence in government-affiliated or independent media reports.
Throughout October, security forces have violently dispersed and detained protesters at other separate anti-government peaceful gatherings.
Human Rights Watch has documented that the Egyptian military has unlawfully evicted tens of thousands of North Sinai residents since 2013 under the pretext of battling an Islamic State-affiliated armed group.
On October 15, security forces detained at least 10 men and 3 women after dispersing hundreds of teachers who gathered in front of the Education Ministry in the new administrative capital east of Cairo to protest the mass disqualification of thousands of teachers who applied for public school jobs, according to social media videos and media reports. The reports said that security forces beat protesters, used water cannons to disperse them, and forced female teachers into buses to remove them from the protest.
https://www.hrw.org/news/2023/11/01/egypt-dozens-peaceful-protesters-detained
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Truth be told Sisi cares nothing for either - dictators treasure 1 thing & 1 thing only - power
Tuesday 31 Oct 2023
Egypt lowers natural gas supply to fertilizer companies amid severe shortage.
The news came amid media reports that gas supplies to fertilizer companies had been cut by 30 percent. The news led to a sharp decline in the stocks of petrochemicals companies including Kima, Misr Fertilizers Production Co (Mopco), and Abu Qir Fertilizers (ABUK), which dropped 11.82 percent, 13.11 percent, and 11.49 percent, respectively.
El-Mahdy said there is no cause for alarm, suggesting the market will self-regulate.
“Affected petrochemical companies might have backup plans for such shortage. Also, the lower supply of fertilizers will result in higher prices so the profitability of these companies will likely double,” El-Mahdy added.
Egypt is suffering a severe shortage of natural gas supplies after Israel’s war on Gaza led to the suspension of gas supplies from Israel, down from 800 million cubic feet per day.
As a result, Egypt extended the duration of gas-saving daily power cuts -
many Egyptians complained on social media that power cuts are exceeding four hours -
Other users have complained of twice-daily blackouts lasting nearly two hours each.
https://english.ahram.org.eg/NewsContent/3/12/511318/Business/Economy/Egypt-lowers-gas-supply-to-fertilizer-companies-am.aspx
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Let's see, major Egyptian manufacturers given the middle finger from government in the midst of a growing energy shortage - and saying to those companies they might have back-up plans? and if that fails 'be happy, you'll make double when there is a shortage of fertilizer to sell' is just ignorance on top of insult
CEO Horgan would be wise to read these tea leaves before trusting in Egypt's energy grid
2023-10-31 | 05:58
In a resolute statement from Sinai, Egypt's Prime Minister, Mostafa Madbouly, affirmed the nation's unwavering commitment to protecting its land and sovereignty.
He declared, "We are prepared to sacrifice millions of lives to ensure that no one encroaches upon our territory."
The Prime Minister reaffirmed that Egypt will never allow any imposed situation or the settlement of regional issues at its expense.
https://www.lbcgroup.tv/news/middleeastnews/731828/egypts-prime-minister-from-sinai-we-are-ready-to-s/en
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Egyptians, ever the masters of hyperbole.
However, the important question is, whose millions of lives are they willing to sacrifice? Palestinians, Jews or Egyptians? An aptly creepy statement for Hallowe'en -