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From Enterprise
#4 LEGISLATION WATCH -

New and “friendlier” Mineral Resources Act to be introduced to the House in three months:

The Madbouly cabinet will present amendments to the Mineral Resources Act to the House of Representatives within three months to make the industry more attractive to investors, Oil Minister Tarek El Molla said on Thursday.

“We have engaged with everybody so that I think in the coming two or three months maximum we will be able to have a fresh, new-look, appealing law,” El Molla noted, according to Reuters.

Is the mining industry finally getting its wish?

The mining industry believes that the reforms will see Egypt scrap the current oil-and-gas-style production sharing agreement and move to a tax, rent and royalty model — and eliminate the requirement of a 50:50 JV with EMRA.

The move has long been called for by industry players (cf: Aton Resources’ Mark Campbell in an exclusive piece for Enterprise last year: Egypt’s golden opportunity: Mining for the 21st Century).

The bill is also expected to allow exploration companies to acquire exploration ground without first obtaining exploration licenses.

https://enterprise.press/#tldr-story-04

You're right Tibbs, lots of unanswered questions!
But one would hope these coming changes have been vetted by top industry players (or at least the only active producer in the country, namely Centamin!)
I take some comfort in the renewed push to explore beyond Sukari proper. A complete 3D underground survey of the entire 150 sq km is probably not something management would pursue unless they plan to expand production and feel confident of the pending terms and conditions.
For now we must wait!

CAIRO, Oct 25 (Reuters) - Egypt will present mining law amendments to parliament within three months to make the industry more attractive to investors, the country’s minister of petroleum and mineral resources said on Thursday.

The law is of particular interest to investors because of Egypt’s potential gold production, with much of the country’s gold untapped because of restrictive commercial terms.

The minister, Tarek El Molla, said that among the planned changes is a cap on royalties paid by investors.

“It is only changing some of the clauses where we saw that it is a little limiting or restricting investing in the mining sector,” he told a forum for U.S. business people in Cairo.

https://www.reuters.com/article/egypt-mining/update-1-egypt-to-present-mining-law-amendments-within-three-months-minister-idUSL8N1X54SK

Capital Drilling is pleased to announce it has been awarded a renewed five year production drilling contract at Centamin’s Sukari gold mine in Egypt, extending the current contract through to 2023.

Capital Drilling has been active at the Sukari mine since 2005 and currently runs a fleet of 14 rigs, providing Sukari with blast hole and grade control drilling services in the open pit.

Commenting on the contract extension, Jamie Boyton, Chairman said: “Capital Drilling has been working with Centamin for fourteen years and we are delighted to continue this relationship as the demand for our services continues.

This contract extension is a testament to the Group’s solid operational performance and provides stability in operations to support our ongoing investment, in what is one of the highest quality and long-life gold mines globally.”

https://im-mining.com/2018/10/25/capital-drilling-extends-contract-sukari/

CAIRO – 9 October 2018: The Egyptian Mineral Resource Authority (EMRA) received $4.5 million on profit from the Sukari Gold Mine in September 2018, according to General Manager of Centamin Company Youssef el-Raghy.

http://www.egypttoday.com/Article/3/58671/EMRA-proceeds-4-5M-on-profit-account-from-Sukari-mine

(if you remember it was $4.8 million for August as per Siko's post)

Demand for gold may continue to be tempered by the depreciation of EM currencies as in India & China...

"In 2018, the price of gold is almost at the same level in the international market as it was in September 2014, but due to a depreciation in the value of the Indian rupee against the dollar from 61.5/$ to 72.24/$, the price of gold in the domestic market has surged from Rs 26550/10 gm to Rs 31700/10 gm."

https://indianexpress.com/article/business/banking-and-finance/rupee-lowest-gold-5391803/

out of West Africa...

'As we enter the fourth quarter we remain optimistic for a solid performance for the year. Enquiry levels remain
strong and we anticipate further contract wins as we emerge from the wet season in the key growth markets
in West Africa”

http://www.capdrill.com/media/investors/Financial-Results/CAPD-2018-10-Q3-Trading-Update-Website_Final-20181010.pdf

(Perseus Mining provides a glowing example of how quickly studies and assessments can be completed if management is so inclined...)

Independent consultant Lycopodium Minerals started the value engineering assessment and front-end engineering and design (FEED) study in June 2018 and completed on time and on budget on 6 October 2018.

https://www.miningreview.com/perseus-mining-completes-yaoure-feed-study/

Come on team Centamin — let's put all our employees to good use and get something going already!!!!!!!!

LONDON: La Mancha Holding, the mining investment vehicle headed by Naguib Sawiris, is looking at more gold acquisitions in Africa, Arab News can reveal.

The company would look at potential mining targets in west and central Africa but “not southern Africa,” said Nasr.
Andrew Breichmanas, mining analyst at BMO Capital Markets, said that, given Sawiris’ track record in bolstering the value of Endeavour and Evolution, “there is every reason to be bullish about [his] strategy going forward. Sawiris is viewed as a successful operator,” he said.

The market worth of Endeavour and Evolution since he bought into them in 2015 had rocketed by 290 percent and 267 percent respectively, according to a La Mancha presentation on its website.

Sawiris told Fox: “I invest in gold mining companies because the cost per ounce has a 30 to 40 percent discount when you mine it yourself versus the international (gold) price, so there is a cushion there.”

http://www.arabnews.com/node/1383951/business-economy

I really hope this deal is challenged by a competitive offer. If nothing else it sets a precedent for future deals at zero gain to shareholders...
From the circular:

Barrick may switch to a Takeover Offer structure (with the consent of the Panel) if:

• Randgold provides its prior written consent;
• a Randgold Board Adverse Recommendation Change occurs;
• a Competing Proposal for Randgold is announced in accordance with Rule 2.7 of the Takeover Code, which is recommended in whole or
in part by Randgold’s board of directors; or
• Randgold announces its intention to proceed with a Competing Proposal for Randgold.

I'm sure Barrick is willing to cough up a billion or two if they are pressed...

(from the Egyptian Press)

On another note, Raghy said that the Egyptian Mineral Resource Authority (EMRA) received $4.5 million on profit from the Sukari Gold Mine in September 2018.

EMRA received $1.1 million on profit from the Sukari Gold Mine in May 2018, according to a previous statement by Raghy.

http://www.egypttoday.com/Article/3/58692/Sukari-Mine-production-increases-27-in-Q3-2018

----> BUT where the h*ll is our new Chairman hiding? So much for an 'orderly' handover...

Let's assume for a moment that Mr Pardey did not have free reign over what he chose to make public or when.

Perhaps the board is equally responsible for delaying or dissuading the act of announcing these lower production figures... we cannot say.

Yes, our CEO lacks a certain charisma in front of the spotlight but so long as he's good at managing and executing in the end who really cares? We must remember setbacks are totally normal. And as a single source producer we have no cushion. But we do have a management that has proven their commitment to pay a healthy dividend and avoid unnecessary expenses.

Surely there is some good news coming, a long awaited next phase of growth which our TBA freshly minted chairman will have the pleasure to deliver.

So, I'm very disappointed with management for not being forthcoming, but I'm happy with the mine.

The underground produced about 60,000 ounces for the third quarter. If Cleopatra can produce at a *similar* rate when it comes online then we'd be looking at tacking on an extra 240,000 ounces per annum. That will drive AISC way down

PS
Andrew Pardey, if you read this please be aware tacking on a 2nd production cut announcement into prelims is no way to run a LSE listed company. And this coming a week after presenting an unaltered forecast at the Denver Forum is very disgraceful, bordering on contempt for shareholders.

Pleasing to see Centamin actually appear in a power point presentation by a rival. According to the latest release by Randgold, the Sukari mine is second only to Barrick's Cortez operations under the following heading:

Top 10 Global Tier One Gold Assets By Total Cash Cost (> 500 koz; > 10 year mine life; bottom half of cost curve)

it's on page five for those who want a look-see
http://www.randgoldresources.com/sites/randgoldresources/files/Barrick%20Randgold%20Investor%20Presentation_0.pdf

LONDON (Reuters) - A tie-up between Randgold Resources and Barrick Gold will leave a void in the London market for investors seeking exposure to gold via companies that produce the precious metal.

“For a London investor in the gold sector, Randgold would be the only real option of a company with a good track record and enough liquidity,” a fund manager at Old Mutual said.

https://www.reuters.com/article/us-randgold-rsrcs-m-a-listing/randgolds-hook-up-with-barrick-to-leave-large-void-in-london-market-idUSKCN1MC11L

Talks gold shorts, interest rates, gold production, options, etc

https://wsw.com/webcast/dgf18/keynote8/?lobby=true&day=2

Another set of charts & graphs to bide your time until Monday...

The accompanying video purported 72% of producers are not making any money at current gold prices when you factor in capital expenditures etc.

Of note, a major issue with poor returns has been company management/boards mismatching the size of processing plants with their respective resources... it is a key factor to get right from the start... thus it will be very interesting to see what the scoping study determines is appropriate for Batie West... might we hear something next week?

https://wsw.com/webcast/dgf18/keynote1/slides.pdf

Endeavour's latest presentation includes a great overview of the gold industry's happenings in West Africa... Who's doing what and where: lots of things I didn't know! with royalty & tax rates compared

Also DYK that eight West African states share a central bank with a common currency... Say what?
https://en.wikipedia.org/wiki/Central_Bank_of_West_African_States

anyways the West Africa overview begins on page 78 of the presentation below...

https://s21.q4cdn.com/954147562/files/doc_presentations/2018/09/180910-Endeavour-Corporate-Presentation-vf.pdf

An extensive and up-to-date look into the gold mining sector.

https://wsw.com/webcast/dgf18/keynote6/slides.pdf

For me three points of interest really stood out:

1) The major's gold reserves have been in a steady decline since 2012... I can hear you all saying 'well, duh...'

2) the major's share of total worldwide gold production has fallen from 50% in 2007 to only 40% in 2018... that's because there are more players in the game

3) if you look at the total aggregate market cap of the top 200 gold companies (now this includes streamer's like wheaton precious metals, etc.) you'll find the industry isn't far off its valuation highs, the investment dollars are just more broadly allocated/less concentrated... probably not what some of us wanted to hear!

Still, I'm in the camp that argues Centamin is vastly undervalued... it has big potential, big reserves & big cash generation... just not a big following

You know it Tibbs.

Market analysts, forecasters, economic soothsayers, chart detectives... what's the point?

If their findings don't contradict each others' they are obsolete the moment the winds change