Member Info for DASUT

Rebess I didn't lease machines to Centamin but this isn't to say they don't lease these days.
Don't get me wrong I don't think there is a chance of Nationalisation BUT when dealing across borders and as an expat company there is always a threat of such Risks as we have witnessed with the cc and a jealous individual indigenous to Egypt can make life very difficult, just imagine if government wanted to make life difficult.
As I say don't think there is a serious risk of a fall out otherwise I wouldn't be an investor but there is a risk.

Rebess Risk is really high when government is involved in a developing country, if there is a threat of nationalisation at any time what leg does Cey have to stand on?
Pretty much nothing to negotiate with they can't walk off with a fleet of equipment that can be used on another project.
Unfortunately politicians think it is easy to mine and having worked all of my life in developing countries I have seen the outcome of a nationalised mining industry.

Tibbs ownership at the end of the contract makes a lot of sense this is then totally under the control of the investor as I say still a good question to ask otherwise I struggle to see any major benefit to Cey in making major investments over the next 20/30 years and there will certainly be the need for some serious investments and risk falls to Cey.

Rebess sorry for tardy response as had to meet up with some old friends yesterday. The reason I question ownership of the fleet is that underground equipment I would suggest are owned by the contractor and if I was an investor I would look long and hard at fleet ownership if all reverts to the client once investment recovery completed and contract mining would certainly then be my preferred option.
Many mining companies would take advantage of fleet ownership to renew or change up and use older machines at start up time of a new mine saves the onerous exercise of maybe trading in.
Also as a supplier of equipment there is often the need to underwrite equipment values given life cycles and this would prove to be very difficult given possibility of sovereign ownership.
Maybe not so difficult with the desalination plant, Processing Plant (even this I question) but equipment fleets such as trucks and shovels which have a limited life this would become very complicated as the investment never actually stops because over the lifetime of the mine these will be replaced updated and maybe as mentioned above old machines need to be traded in. Good question to ask at next call in.
Interesting who owns the likes of the second LHDR maybe this influenced the decision if had to be an additional investment by the contractor that was outside of their contract.

Rebess I would question ownership of the equipment fleet, processing plant etc as normally this remains with the property of the investor. I haven't read the contract in any detail but would seriously question this point as what happens with new machines, replacement equipment is this then the responsibility of the government? I don't think so as would be far too difficult to manage.
Agreed they don't own the land however.

We have discussed mergers and takeovers many times on this board.
Endeavour is yet another and in my opinion Endeavour have too much on their plate at the moment to get involved in a merger and would be encouraging new entrants into the market.
No dispute regarding synergies but don't think Endeavour has the financial clout at the moment and far too many possible maybes, however nothing but respect for James Askew so who knows.
Maybe a different story when Centamin has a few of their West African mines up and running or more advanced.
Something that also needs to be considered is in the likes of Burkina, Mali, IC, Ghana etc there will be what they call a Chamber of Mines or something similar in French. The Chamber will be made up of Mining Companies, Government Official (s), Contractors and Suppliers as full members and associate members. Ideally there needs to be several different Mining companies as this gives strength in numbers when necessary, hence my mention of encouraging new entrants.
Such a Chamber would I am sure be welcomed by Centamin in Egypt as they seem to be a lone voice BUT Investment Laws/ Mining Laws need to be more favourable to encourage investment/mergers.
Had the investment climate been more favourable and the court case not continued to be an issue, then feel sure Centamin would have had serious takeover interest from the majors a long time ago.

What a difference realistic achievable targets make even though the numbers are only at the best OK. If only the Gold Price was still hovering above 1300.
Disappointing that we aren't closer to a pound but fingers crossed the GP picks up but good that we are seeing something positive at long last.

bardill
I thoroughly agree "High Grading" is a recipe for if not disaster certainly a recipe for future expensive problems. Mining High Grade ore however as dictated by the structure of the ore body isn't bad practice it is what mining is all about as is taking a hit when the ore body due to inconsistency dictates the need for a "cut back" or driving through waste is also what mining is all about.
That is why I am disappointed that last year management reported increases in production based on what I believe was recent history rather than what should have been obvious had they a detailed grade control programme in place.
I am not saying that they don't have an effective grade control programme in place because I don't know, however based on the presentations I find it hard to believe that they have much of a programme in place.

Tibbs not at all it is all about mining which is why I invest in Centamin it is something that interests me and having had an involvement at the outset of the mine and meeting Sami years before the mine developed and Josef later, I have maintained interest.

bardill I still don't understand because if Sukari has run out of underground ore of nothing higher than 6 - 9 grams a ton it is all over and the mine is finished once the open pit is depleted.
However Cey are saying something quite different: -
"This year 2018 we grew our global resource by 5% to 15.7Moz, predominantly driven by increased contribution from our Côte d’Ivoire assets. Sukari underground reserves were replaced in excess of mining depletion, delivering on our primary underground exploration objective. We remain confident in delivering further Group reserve and resource growth supported by consistent investment into exploration, potentially shaping future development prospects outside of Egypt as well as defining additional sources of high-grade tonnes at Sukari.
Good deal more details in the Hermes presentation.
If you look at earlier presentations the open pit ore Hapi Zone we are looking at in excess of 1 gram per ton dare I say over 2 grams a ton "heady thoughts".

bardill not sure I understand what ran out?
Yes underground ounces are the icing on the cake but low grades in the open pit is the impact on the bread and butter that really hurt us in middle of 2018 plus obviously the LHDR falling over at the same time.

Tibbs I want to come back to your mention of high grading as this isn't necessarily a bad practice it is a nature of the ore body and how the ore body has formed.
I am going to try to put this in very basic layman terms any geo's out there I apologies in advance for a lack of technical accuracy.
When the ore body forms it is like an explosion eruption and the molten lava follows the direction of least resistance through rock fissures. The stuff that clears the crust is basically the material that oxides through weathering over centuries and this is the ore that can be declared as easier to process because it isn't locked into the ore/rock or as tightly as the sulphide ore which has maybe still cleared the earth crust but hasn't weathered maybe because over the centuries it has become covered by the sands of time.
I said I would be basic and one of the critical points is the fissures as this is what makes the ore body inconsistent.
The oxide ore can be said to be high grade because whilst pretty much invisible to the naked eye like grains of sand there is or can be more to the tonne of ore and can often be free dig and far less waste. The first transition into sulphides where the ore is locked in the rock particles can still be of a high grade. However non of this is consistent.
I am finding it difficult to explain in any depth because there are many types of ore body which can contradict, suffice to say it ain't easy. The ore body dictates the grades and the mining practices from open pit to underground to heap leach to the more sophisticated processing plants.
I once had dealings with a small mining company and the early findings were incredible because they were finding nugget size gold samples in what was an old dried out river bed. Reminded me of the old Westerns panning for gold. They had a successful little mine for a short period of time, but the gold dried up. It was a small mine in basically what was an old dried up bend in a river where gold had been washed down river (weathering) and caught up over time in the bend.
The mother load is what everyone is looking for as this is where the ore originated from, this is the underground ore in the case of Sukari.
Hopefully this helps maybe explain that what Cey have been doing isn't bad practice but normal practice. High grading as a "short cut" is seen as a bad practice and don't see this as a practice at Sukari.

Tibbs yes people like those you mention all hyped up by what was then recent history rather than having hard facts of the near future characteristics of the ore body and it's impact on production.
I like you read those articles and the one Pardey made in Denver would have been extremely embarrassing given the audience he was addressing. How credible will his next presentation be to to the same audience?
Suggest delays in providing numbers etc is because there is considerable proof reading taking place.

Tibbs Josef is "one" guy who was taking a back seat role and maybe get back to what he was doing before he took over from his dad, having he thought brought in a good team of qualified professional mining guys to run the mine.
I have no idea why he wanted to move on and sell his shares maybe he felt he had reached his limit given that he isn't a mining guy himself? As I say I have no idea but as Chairman he isn't the MD or CEO and the latter are supposed to run the business and also get the big bucks.
What is done is done as far as the 2nd Qtr 2018 disaster and this can't be changed, but there are people who are no longer in a job at Sukari so I hope there have been serious lessons learned particularly by the CEO.
I have answered the issue as far as I understand the situation regarding underground access and the LHDR was more than unfortunate given the lower grades issue happening at the same time.
I would be interested to know whether the back up LHDR is sitting moth balled waiting for another breakdown? If I know production guys they will have every piece of equipment out working and it then becomes a production tool in it's own right. If one breaks down I ask the question do they bring in another back up or do they take the so called back up machine off what it is doing to replace the broken down machine. OK I fully agree that it was a major mistake BUT having a standby machine is also a major financial call if it is to be moth balled for the just in case scenario.As I say it has happened mistakes hopefully learned and well past the time for moving on.
Let's see what Josef can do to settle the ship and I am not giving the board or Josef the benefit of the doubt I am trying to provide my views in a factual way without the emotions.

Tibbs what do you understand as high grading and how does a mine that is lucky to get 1 gram a tonne actually mine high grade? When I look at the photos of the mine I don't see large areas that have been mined and other areas that haven't been mined it all looks pretty uniform.

Rebess I am not as pessimistic and given the equipment fleet I see no major issues moving the tonnage although looking at the photo of the pit they could do with more loading tools as too many trucks standing waiting to be loaded. If they are waiting the ain't producing. Tibbs you would never see this photo if a contractor is responsible for producing the tonnage.
I hope the photo is a "shift change" because otherwise it is inefficient use of very expensive kit.
What I don't know is how they are dividing the fleet to open up transition 5 (moving waste cut back) all we know is that they are going through a higher strip ratio and also don't know how the grades are holding up so as we can see plenty of questions.
However as I say moving the tonnage shouldn't be an issue and tonnage should mean ounces.
Not providing prelims is disappointing but lets hope no news is good news.

Not sure how you report that the last 24 months are a bonus but the next 12 months are more likely to be back to earlier forecasts of 450/500,000 ounces without the share price taking a hit as it did.
However it would have been worth a try and no idea if Josef vets the CEO's presentations such as the presentation made at the Denver conference only weeks before the 2nd Quarter results.

Rebess I attended Indaba 2013 and sat through Josef's presentation and I had previously asked him whether he felt the mine could produce in excess of 500,000 ounces a year and he said a mine producing 450 to 500 for 20 years in his presentation. He didn't want to make any commitment above 500 which is interesting because his conservative approach worked.
Seems when he relied on others to run the company they got carried away with their own success and believed that the over 500,000 ounces was a norm and made the mistake of reporting that this would be the norm.

Tibbs It is common place for start up mines to use contractors primarily because up front capital investment of trucks, shovels,drill rigs, etc, and availability of equipment, operators, supervisors and the list goes on. I like contractor mining because you buy in expertise and the owner miner can get on and manage the gold processing and marketing. Companies like Ausdrill, AMS have been working in West Africa for many years in f'act I was involved with first introduction of contractor miners in Ghana. In a very short time the Ghana mining industry was dragged up by it's boot straps with highly efficient professional operators as it is their business to mine efficiently and are judged by their cost per tonne rates so the client knows what their costs are up front.

It does look serious and suggest the "half of Australia" comment is pretty good news and interesting that Ausdrill, AMS part of the same company. MAXAM will give advice pricing etc on Blasting suggest in conjunction with Ausdrill and AMS so does look very much like they are intending to go down the contract mining route. BCM will likely also be bidding for the contract so there will be competitive comparisons.
All of the names have considerable experience in West Africa.