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Tibbs what is more worrying is that I think the BOD at that time believed what Pardey was saying and Youssef was just a political mouth piece he wasn't a qualified mining anything so just read from a script.
Even more worrying is Pardey believed what people on the ground were telling him because that was what he wanted to hear and he knew no better.
I will never forget Pardey's embarrassing presentation in Denver when he was saying something that was already known to be incorrect and Youssef repeated the nonsense a week or so later.
As far as I am concerned it all started to unravel after Trevor Schultz decided to retire, a man highly regarded by me and more importantly the mining community at large. This I think also coincided although earlier with the much too early passing of Harry Michaels who whilst he and I had our differences he was also well respected and a steady guy to have at the helm of the mine.
Listening to Martin Horgan I feel confident in what he says and what he says makes me feel he really does know what is going on at the mine face and also understands what needs to be done to bring success. There is no doubt in my mind that he is the driving force and that he has a team he trusts around him but I am under no illusions that we will see some hurt before the company gets back on track. There will be some in my opinion long overdue borrowing/gearing as the cash gets spent to right the ship and grow the business.
Tibbs unfortunately the 560/600,000 ounces are the reason for where we are today following the higher grades regardless of the repercussions and impact on the plan. It is worth going back to the early years forecasts and if I remember correctly projections were for a high of 500,000 oz's per annum. The resource can only be mined once and this is why I hated the over estimated forecasts because if you take 10% extra out you need to find 20% extra next year just to stay at the same level. Sorry doesn't work. Far rather have a smoothing out with the occasional bonanza than highs followed by crashes and the inevitable lack of trust.
Tibbs thanks the strip ratio question was answered very well I thought but the Batie West question didn't get an answer. Guess Burkina and in particular Batie is a bit of a problem that Martin could have done without.
I have as you may have gathered been able to listen to the presentation with the help of Emilie Hodson of Corporate Management also the lengthy Q&A and found the event enlightening and encouraging, only hope when we get the bad news about BF it is out weighed by good news from elsewhere.
I think Cowichan's question about the seismic study was also answered and justified, a few small curve balls but to be expected for an open forum.
Cowichan glad at least you had replies to a couple of your questions it does at least prove that we can access the board.
Unfortunately I had an appointment at 2pm yesterday so very disappointed that there is no transcript of the Q&A's so no idea whether my questions were asked and answered.
I have registered my disappointment to Centamin so hopefully in the future they will record the presentation.
If you or anyone else did listen in my questions were as follows do you know if they were asked and answered : -
"Since the issue relating to the instability of the west wall we as investors have seen the value of our investment more than halved.
“Exactly” when are we to see a strip ratio in the open pit at Sukari that resembles what is acceptable for a profitable mine?
The resource at Batie West in Burkina Faso said to be non core had an exploitation license valid until November 2021 so does this impact on the value and if so by how much and when are you going to realise a value for this resource? Are you under pressure from the BF Government to develop the resource or pass it back to them for development by another mining company?"
Cowichan the difference with the joint ventures in Nevada and Dominican republic is that they also share the investment costs and operating costs so an OK ROI for both companies.
Problem with EMRA is they are Government not private and at the same time non operational.
These are only my opinion certainly wouldn't guarantee that Newmont aren't a prospective suitor.
Steve, I know Newmont as a company and they are extremely conservative and agree that a 50% share of their net profits after what would be a sizeable purchase price doesn't compute.
To think that it is only now that Newmont is interested in Egypt is way off beam, they will have been monitoring what has been going on for some considerable time. I am not sure that even the new revised terms of business will actually suit their business model. As for how Newmont will if they feel it is of interest enter the Egyptian market it will be on their terms and I have serious doubts they would need to spend millions on buying Sukari. There are a number of junior mining companies with large areas to prospect and Newmont will be closely monitoring developments in these areas.
As for the comment relating to the boards buy in and high salaries I suggest you send a question to the board but this is something they might find difficult to answer in open forum because a negative response could have an adverse impact on the SP and a positive response well could that be bordering on insider trading, not sure.
Cowichan, History can't be changed only learned from and I live in hope that the current new members of the board understand the mistakes made by their predecessors and steer the ship back on course or preferably a better understandable course.
So my questions are related to when will Sukari be back to normal production close to or above the 500,000 oz p.a. Not projections finger in the air hopes and wishes, but realistic targets and something that gives shareholders and new investors confidence,
Also we need to know what is going on at Batie West and the impact of an exploitation license that expired November last year. This would normally mean either an application for an extension or reverts back to the Government so what is the impact on the value of the resource and is there a time when any sale or joint venture needs to be completed? A resource can't just be sat on it needs to be developed or relinquished.
I have always been a fan of a focus on relatively small number of achievable targets rather than the confusions of a large number of projects /targets and none being achieved.
One of the reasons why I like the contractor focusing on the additional waste removal and the Cey fleet concentrating on the mining which will also involve waste removal. This however can't go on indefinitely there needs to be a cut off date or a plan that is known and shared with us.
Cowichan,
The only reason questions won't be answered is if the answers will directly effect the SP so expect answers that are guarded but experience of the last few phone ins is that answers are normally provided.
If you have already submitted your questions then they will at the very least have time to carefully word responses and or maybe incorporate in their presentation.
Darren I think you will find the majority of the costs relate to a major waste management muck shifting contract. Double the waste is double the cost and some.
We aren't going to see true mining numbers until this contract ends and they move away from building an additional mountain of waste.
Just a reminder to everyone who wants to direct pertinent questions at Martin Horgan and his team the opportunity exists for 23rd March when there will be a presentation to retail investors.
One question is "exactly" when are we going to see strip ratios that are realistic to the running of a profitable mine.
BOD visiting mines is highly recommended if they involve and listen to local management. Also excellent if the BOD understand more than just the fundamentals as the answer to success is in the details. Unfortunately BOD's are comprised of financial corporate types "Gucci miners" not too many hands on grassroot types.
Examples Geologists aren't mining engineers and mining engineers aren't muck shifters and muck shifters aren't mining engineers, accountants, political appointees aren't any of these. Would any of these understand that there has been high grading practices I very much doubt it until it became obvious.
I have in the past had detailed discussions with Mining General Managers who are excellent in MIning technologies much of which I hadn't a clue and often needed my own mining engineer on the team to explain acting as an interpreter. Much of the problems being communication and open pit mining as an example isn't that difficult providing the guy on the digger understands where to dig and the truck driver knows where to go. OK very basic because considerably more required such as maintaining haul roads, compacting waste dumps, pit layout etc. Where it goes wrong is prior to the the guy on the digger being told where to dig.
So on the surface it all looks good until you are backed into a corner which is where Centamin found themselves and now having to dig themselves out of the hole.
So at the end of the day it needs someone who understands Mining engineering, geology and material movement and from what I hear Martin Horgan has a team around him that understands all of the nuances. So would suggest he has individuals targeting the weaknesses getting back to the basics.
Cowichan am I worried about the seismic report yes would be great to get a response from someone in authority even though the information might be difficult to understand, is this a priority I am not sure, as I would prefer the management concentrate on getting the major asset back on track.
Won't be long now until you can phone in your question(s) to the board.
Tibbs You are preaching to the converted and I thoroughly agree that the old guard were way short in too many areas but there is nothing you or I can do about history. As I say we now need to have trust in the new team and keep asking pertinent questions when the opportunity arises such as the phone ins, and doesn't have to be a phone call as they take questions in writing during the presentations.
As a bogger flogger of mining equipment I would have loved for the customers to double up on equipment but it was never ever the case and as I say to predict everything by way of parts that are going to fail over the life of a machine is only possible to a certain extent. I do have first hand experience of a mining company that did over spend on parts and components so much so they had more parts in their stock by value than the local dealer who were supporting numerous mines. The mining company unfortunately actually went bankrupt and the new owners a major mining house chose to go the contract mining route and it is still operating 20 years on with good profits.
I don't have any specifics as to Barminco's short comings during their contract so can't comment on your criticism of them.
I am not sure what hands on experience Centamin on site team has in working the Sukari underground resource, why should they as they have had a contractor doing the mining?
I have seen contractors actually make more money through efficiencies for the mining company than the mining company was able to achieve when previously doing the mining themselves. It isn't just contractor mining being changed to owner mining it works the other way around.
I can't comment on Egyptian tax laws as it relates to depreciation.
The NHS heaven forbid Tibbs this can't be compared with a mine and I was once a member of a trust and goodness inefficiencies and down right incompetence was enough to tear your hair out. I only refer to management not the medical teams who I have the utmost respect.
Tibbs,
There are many schools of thought when it comes to contractor or owner mining no such thing as one case fits all. Much too large a subject to go into in any detail but there are many very successful, experienced and highly professional contract mining companies that provide excellent work for mining companies of all sizes including the majors.
As I said earlier it isn't just about the mining but I do agree that mining is the core activity of a mining company or if it isn't it should be but as I say it isn't always that simple.
There again what is mining is it digging ore and loading trucks and driving trucks to the hopper or is it who owns the equipment and employs the operators/drivers, or is mining telling the operators and drivers where to dig and dump? With mining being processing the ore and selling the mineral. Is it employing people or bringing in self employed do you maintain your own equipment or do you contract out to someone to do this for you? Just a couple of questions and these will all need to be taken into account as getting rid of a contractor will add additional responsibilities, personnel, activities, knowledge and the list goes on so as I say not clear cut.
In the case of Sukari underground one of the issues I have is taking ownership of a used fleet of underground machines that may or may not be reliable. Something else that worries me is continuity of knowledge and experience, with the contractors leaving with considerable knowledge and experience and trust me Barminco have considerable experience. However, it is relatively early days in the development of the underground so whilst a gutsy decision we will have to put our trust in the new team.
Tibbs you need to forget about the LHDR as this is well in the past and unfortunately mechanical equipment breaks, it is the nature of the beast and without knowing what part broke it is difficult to understand whether the part should have been in stock. The mistake was maybe they should have had a standby machine but there again underground production is and always has been a low percentage of the overall business and you can't have standby machines for every piece of equipment, just not practical and extremely expensive. A **** up but needs to be put down to experience as hindsight is so very precise.
I know you might not agree with the above but I have in the past had responsibility for stocking parts to cover fleets of equipment and it is impossible to have everything available in stock at the drop of a hat especially when so far away from the manufacturers or their parts warehouses.
Also why Capital are getting the blame for blowing up the rig I don't understand as why would someone park an underground machine in the blast zone of the open pit. Sorry no logic whatsoever unless even more worrying a blast in the above ground open pit caused a cave in or some such thing underground.
When there is an in pit blast everything stops, everyone on the mine including visitors knows when and where the blast will be taking place, the blast team pretty much take total control of the mine during this period of time there will be sweeps of the blast area made by the blast team all will be in radio contact and all clear from each member of the team prior to anyone hitting the button.
All blasts are treated very seriously and to think an underground piece of equipment would be left sitting in the blast zone just wouldn't be allowed. When I say the blast team it won't just be Capital people it will be senior supervisors, managers including the pit boss of Centamin who will be involved in the sweep.
Gnome interesting most definitely will test the CEO and his team. A major decision and not without considerable risk. Yes it is good in many ways to go it alone but it isn't just "the mining" part of the decision as maintaining, servicing and repairing underground machines and equipment ain't easy, let alone taking over a fleet of used kit. I hope the contractor has maintained detailed records for each piece of kit.
Also the underground gear isn't manufactured and supported by the same team as the open pit equipment.
Interesting times but they aren't reliant on the underground performance as much as they are the open pit and will have time to adapt before the demands become far greater. Guess they will be taking on a good number of the contractors people even if only for short term.
Very interesting times and a gutsy decision.
gnome I agree seismic is more specific but you initially need to know where to be more specific so both survey types will be extremely beneficial. Must also admit my knowledge of seismic surveys is way out of date and was quite hit and miss literally whacking a metal plate with a big hammer. OK joking because did see results prior to retirement of some advances but not as reliable as in the petroleum sector. So I bow to yours and Cowichan's greater knowledge.
Cowichan, I am not disagreeing with you I am just pointing you to the shared information that is currently known by the company. I would suggest the seismic survey along with the drilling that they have undertaken has enabled the new guys to push for more such as the air surveys.
I do think that the reports and presentations we have seen over the last 12 months have been far more professional and enlightening but I agree we do need to be brought more into the fold.
We also need to do our bit by asking questions when we get the opportunity during the phone ins.
Cowichan you may need to have a read of the company presentation relating to the resource geology back in September last year as whilst not specifically mentioning the seismic survey the report goes into far more detail than would be gained from a stand alone seismic survey.
Not sure what more we can be told about the porphyry?
Paul No worries it gave me a chance to show off a little and yes I would agree when done right it is a very good thing and Caterpillar are a good group to get on board to finesse areas such as this and great that people at Centamin understand and listen because can look to be expensive in the short term but long term very profitable.