Member Info for ElProfessor

“There is an old saying in trading markets that when times get really dire and anxiety is high, you don’t sell what you want, you sell what you can. Such is likely part of the reason safe-haven gold has seen downside price pressure this week,” wrote Jim Wyckoff, senior analyst at Kitco.com

Tibbs, Thanks for posting. A good article - clear, non-sensationalist, helpful and short. Prof

I know many on here have reservations about KWN News and its tendency to be over sensationalist which I share. The following interview with James Turk has just been posted and I would say this is worth listening to.
https://kingworldnews.com/james-turk-2-22-2020/
He is even more bullish on silver than gold but also focuses on the extent to which junior miners are undervalued.
Best wishes,
Prof

Tiger,

Thanks for your thoughts. Agree £3 may be a bit high but would not be displeased with the £2-£2.20 that you are quoting.

Best wishes,
Prof

Apologies for typing £ instead of dollars a few times. It should be:
para 1: $115M
para 2: $1600
para 3: $197M

In 2019 CEY produced 480k ounces at an AISC of $943 and an average POG of $1400. They paid out a dividend per share of 10c which cost them £115M.

Assuming for 2020 an average POG of £1600, AISC of $900 and production of 525k (both mid points of guidance) then CEY will clear $394M which leaves $197M after profit share at 50/50.

£197M is 171% of $115M so if CEY paid this all out it would mean a dividend per share of 17c. This equates to 13p so, with the current share price of £1.50 is a yield of 8.6%.

In the current market a yield of 4.3% is pretty tasty which is what CEY would be delivering if the SP double to £3.00. We would still have $350M in cash in the bank/ liquid assets and no debt.

I may have made some mistakes in my assumption above so would be grateful, as always, for corrections/ comments.

Best wishes to all,
Prof

Tornadotony,
In a rational market perhaps; but since when has the market been rational. It goes from undervaluing based on fundamentals to overvaluing. We might just been in a phase of overvaluing!
Best wishes,
Prof

'big' not 'bit'

Bob,
Not sure if sage or just hopeful.
Impressed you are doing dry January. I thought about doing it and then decided I would just focus on sticking to my 14 units per week for Jan. An interesting experiment as when I have done dry January before, like you now I have got the end of the month ready to drink aftershave if that is all that is available on 01 Feb. This time I am getting to the end of the month thinking I might try sticking to 14 Units for longer, or at least the old 21 allowance. Not a bit spirit drinker which makes it easier but do love wine!
Best wishes,
Prof

Bob,
Having to pay an extra 3-4p is always frustrating but I suspect will quickly feel irrelevant as I am confident this will move up significantly over the coming months.
Like you have increased holdings. Bought in another 12,500 for each of my children yesterday for their junior ISAs. 3% return in a day is not bad but looking for a lot more.
Best wishes,
Prof

... to close above 130 today. Looking good so far with current SP at 130.65 to sell and 130.75 to buy.

Feeling confident for Thursday. If memory serves me correctly at the begin of last year the assumption for CEY forecast was a realised price of gold of $1250. at $1575 we are 25% above that and currently POG is $1580. Plus of course the additional 25% is all profit!

Best wishes,
Prof

Rebess,

I agree completely.

I anticipate that we will see a far smoother quarter on quarter distribution although it could be that Q1 is a little lighter than other quarter is they have had to raid good grades in Q419 in order to get the 480k that they did. If Q1 is on par with the rest of the year then I really think we are in for a good time. I am also hoping that, after all the last few years' disappointments that the new senior team will now have wanted to repeat these errors and will have low balled it in terms of their production estimates - they could after all, as happens so often, have blamed the previous regime. Here's hoping!

Best wishes,
Prof

SP now above 20 day moving average (MA) which is above 50 day MA and 100 day MA. 50 day MA is however below 100 day MA.

Can't help but think we are on a good upswing in SP.

Hi Elonex,
I very much agree with Bob.
Good luck and best wishes,
Prof

Thanks Marmot.

Best wishes,
Prof

Cowichan,
I particularly like the slide which show CEY dividend yield vs other goodies. What is more that data for calculating CEY yield was taken on 10 Jan when SP was significantly higher than it is now. It really makes the point that, provided people believe the CEY dividend is maintainable, then we should get a significant rerating to bring us closer in line with the others, accepting of course that the one mine risk and the court case, to a lesser extent I suspect, will continue to adversely impact our valuation.

Best wishes,
Prof

Hi Marmot,

A good point and indeed a risk.

I agree that in a major market correction CEY is unlikely to escape unscathed initially, however I would anticipate that, after the mad scramble to cash as leveraged positions have to be closed, that people will be looking for homes for the cash from their liquidated positions. I would anticipate that this would lead to gold surging and with it gold miners.
How would you see it playing out?
Best wishes,
Prof

At 10c the dividend in pence is 7.6p.

This means at a SP of £2 the yield would be 3.8%. In todays' environment that is a cracking return. In other words if people were confident that the next few years would be paying dividends at the current level then £2 would be an entirely logical price to pay for pay of the shares.

Remember CEY are paying 10c/ 7.6p despite the shocking early 3rd quarter. 510 to 540k is being called as the production for next year. As I have said before that gives the double bonus of both more gold to be sold and a lower AISC. Provided gold does not fall back too much then the average gold price for sales will also be a lot higher this year. In a year's time we could well be looking at an even better dividend.

A strong case for share price appreciation?

Best wishes,
Prof

What I have found interesting since the initial Endeavour offer is how unanimous this board has been, as well as the Board, in saying it was not worth doing at the price offered. In fact most on this board suggested that the price would need to be north of £2 for them to feel they were getting value. The biggest fear of the past week has been that the deal would go ahead.
Well we are now once again free. Interestingly the SP dipped at one point to 115 so pretty much where it was when Endeavour came a begging (word chosen advisedly). And yet since then:
-gold has consolidated above 1540 having even broken through 1600 for a heartbeat
-Cey confirmed that it had done the unthinkable and increased Quarter on Quarter production by over 50% to increase yearly production by 2% on last year and come in at 482k
-Cey confirmed a whopper of an interim dividend of 6c taking the full year to 10c
Should we worry about today's market price? Well not unless you were thinking of selling today which most of us aren't. Will the SP be a bit weird for a few days? Yes of course it will as some people, who didn't understand the dynamics of the deal, see it being off the table and so sell, and some who had acquired for the deal do the same. All in all however life is looking pretty good for our darling CEY. Even today's statement had a panache that had been lacking of late. I like the dignified tone with regards to the relations with Endeavour, notably lacking in the Endeavour statement, but also the confident tone.
How fast will be the SP climb? I don't know but, as always with the proviso that gold stays strong, which is looking good, then climb we will. 30 Jan will be the next key statement. I suspect we will move up to the high 120s ahead of then and the high 130s/ 140s after that. For the next leg up a strong Q1 is required which I am confident we will get. I am pretty sure we will get back to at least 160 this year and could well go higher with production beating expectations, even stronger gold and some good Chair and CEO appointments.
What's not to like?
Best wishes,
Prof

A badly written article but that articles are being published with this kind of headline is encouraging:

https://www.kitco.com/news/2020-01-10/Junior-mining-s-lost-year-gives-way-to-a-brighter-2020.html