Member Info for goldgnome

Thanks

It does get a bit hard to stomach the BS that gets served up to us every day, as financial wisdom by financial gurus. The world finance is dominated by non-physical trades done by computers now mostly, which bring no benefit to society as a whole, no benefit to anyone but the owners of the "traders". Bull$hit trades is a term that springs to mind. It s a little like a hybrid of what David Graeber called, Bul$hit jobs. [A bull$hit job or pseudowork is meaningless or unnecessary wage labour which the worker is obliged to pretend to have a purpose.]

We are well past the post on meaningless financial trades of "hybrids and derivative nothings" to stabilise "the system and better manage risk", LOL. It is the biggest lot of *******s one can imagine, and people are given Nobel Prizes for this rubbish. The last bit of "Nobel madness" I read about was the realisation that a bank run occurs due to customer panic rather than actual insolvency on the part of the bank. Give me a break, what world do the economists live on?

I am off to my hut at the end of my world to nowhere to enjoy the sunrise.

best to all

The Gnome.

WELL, WELLL, WELL, HERE WE GO AGAIN. GREED, STUPIDITY, THE MADNESS OF CROWDS, AND PROTECTION FOR THE RICH...AND SO ON AND SO FORTH

With SVB there was the standard “maturity mismatch” in which SVB took short-term deposits and lent those out at longer maturities. Standard fare. THE AUTHORITIES ARE STILL ON THE DISOCVERY ROAD ABOUT THIS CAPER..??!!!

What distinguished SVB was its distinct lack of expertise in finding profitable lending opportunities (GRIEF?) – at least on a risk-adjusted basis. It was very good at cultivating relationships in the Valley (lots of likes, but no margins?)

There was herd behaviour in depositing at SVB – that it was some kind of status symbol to be banked by SVB rather a fusty New York bank...??? HERE COMETH THE HERD AGAIN, AND WE DO WONDER WHY DEMOCRACY DOESNT WORK TOO WELL?!

As Jamie Beaton of Crimson Education told this paper ”Luckily, we saw a news article early on Friday ... we read between the lines and ripped out all our funds 30 minutes before the wires started getting blocked.” GO JAMIE!

And when large, sophisticated customers appear to be acting irrationally and we know it’s going to be hard to let them bear the consequences of their actions, intervention has to happen before there’s a collapse...AND THE SOPHISTICATED INVESTORS IN THE SOPHISTICATED "SYSTEM"ALL SHINE ON?! WHY DONT WE CALL IT AS IT IS. THE SOPHISTICATED SYSTEM IS A FLAKEY SHAM, POORLY ENGINEERED BY PEOPLE WHO GET PAID A FORTUNE, THE SOPHISTICATED INVESTORS ARE ANYTHING BUT, AND ARE EQUALLY CLUELESS.

In the wash up it looks like depositors will be made whole (WHY!!!) in order to protect contagion in the broader financial system (WHICH IS AN UTTER RORTING AND SNORTING MACHINE, DESIGNED TO PROTECT THE RICH AND B@GGER THE POOR) . But depositors with big balances who get their money back should count themselves very lucky (PAMPERED IS AOTHER WORD, AND I WILL RESTRAIN MY VOCABULARY, AS WE ARE PLITE PERSONS HERE?). This was an example of what not to do, AND ONCE AGAIN THEY GOT AWAY WITH GROSS STUPIDITY WITH A DOSE OF GREED!

Well yes it is another bank distaster, in the land of the free and greedy. Next time we will be a whole lot smarter, and there will be less ...waffle, waffle,..nobel prize..more waffle

In my corporate days I would be handing out quite a few PINK slips, for ACTS OF STUPIDTY ABOVE AND BEYOND

GO GOLD, AND CEY!

best
the gnome

Thanks

I think the prediction interms of future value is right, the timing is wrong.

regards
the gnome

Hi Sotolo

You're close.

Mining like any business you have to play a margin +/- volume business. Build brand. So this is what I watch, and CEY has the reserves, the resources and the exploration hectares, and is a 10 year plus comfort position, with pipeline of growth. Mngt has done a good job of building brand

If you go to miners who have small resources, low margins, ..the end is in the volatility of the market and their ability to build a cash reserve or investor buffer. Muical chairs for ambitous Mine Mngrs and future CEO's a cash cgrab and acreer jump/ The short term volatility will on odds, bury them. Lows odds for investors, more pain than gain.

regards
the Gnome

Steve

The oscillations in the gold price, and interest rates can be just noise or can be signal depending on your investment timelines (to perhaps state the obvious).

LONG Time Lines....Gold discoveries are monotonically down in number, down in grade, down in evry way, and there is no way gold will be found at a “sustainable” rate in the future. The new discoveries of size are most likely to be very low grade, and relatively deep, and as such will need a high gold price before they are ever mined. So mine supply is going to be limited in the future, which leaves demand for gold. My guess is demand is going to increase. It has been an asset in human history, it is entrenched in the vernacular, and entrenched in the human psyche. A long standing emotional asset, that has carried far more significant value than the Ponzi schemes of the fiat paper machines.

Interest rates were unsustainably low for an unsustainable time, and now the "engineers" look like they are going to make them unsustainably high for an unsustainable time, and so on it will go. Thde bt loading will see interest rates plummet in the near term, or businesses will wobble.

SHORT time lines: Interest rates up, Gold may go down in fiat pricing, except for the contrarians who have a longer time line who will see it as a (great) buying opportunity and create a buffer to limit the gold price contraction (if there is any). The hot money looks like it has run out of Venture Capitalists (and the new darlings of fintech -low moat high bravado businesses), and is concerned about what WILL BE an economic slowdown, unless there is a big move on developing the undeveloped countries to try and sensibly counter the spread of terrorism (the other way is knives, bombs, wars -big and small and I think everyone is sufficiently unimpressed with the outcomes of these)?

Interesting to watch the quality bitcoin types (again the hot money has gone) as there is real opportunities in the space of quality providers.
But in short I am a long term gold bug. Have been for a long term. The flatulence in the market are my buying opportunities, and I have bught quite a lot. I am a long term CEY share holder of significance. Loved the original story of CEY. The silver spoon child did not do well, and his buddy a very mediocre performance. But it proved to be not what you know, but who! Anyhow, I think CEY is out of the woods, and in great hands.

Sorry for the length of discussion, lots missed ut

The gnome

The trouble in Burkina is related to the trouble in Mali, which sprung to life when the UK, France and the USA "liberated Libya", leaving hords of well trained and equipped mercenaries unemployed. They used their skills to go after and dominate the big cash flow businesses in the region, illicit drug flow and human trafficking through the Sahara. ISIS and AQIM are secondary players, cash is king. The northern parts of Mali and Burkina, are remote, rural, unmanned and little resources and even less support from the central government. They are pathetically poor, devoid almost of education and health infrastructure. It doesnt take much to convert.

Very sad business all round, and it should not be that way.

the Gnome

What would you do if you were a Burkinabie Mr T. Repeat the same strategy that has failed every year for the last 8, or try somethingvdifferent. I think more than 50% of the country is now fairly well at risk, or lawless.

The Gnome

Steve

Its an interesting time, and here is a snippet of just how ridiculous the government in Australia has now got. Clueless is far too kind ... they have engineered a rental crisis and then complain about it...! Just the tip of the iceberg really, the Reserve Bank is firmly in fairy land, and we have the dopes at a State Govt (one level of government too many) level passing around lewd fotos of each other...LOL Leadership?
https://www.abc.net.au/news/2023-02-18/nsw-votes-liberals-suspend-mp-peter-poulos-over-photo-leak/101994444

https://www.news.com.au/finance/economy/australian-economy/real-reason-australias-rental-crisis-is-out-of-control/news-story/d435a7940726955ddff197d5b55a2e02

Statistics by economist Leith van Onselen

the rental crisis is self inflicted by extreme levels of migration

immigration rate up 140% in 30 years

the post-COVID migrant intake is going from 35,000 to 195,000; long term trend has been 100,000

360,000 student visa applications in 2022 ; Chinese government will not allow online study and courses must be face-to-face, so Chinese students are all returning..AND THIS IS HOW THEY GET CITIZENSHIP IN AUSTRALIA, AND THE POLITICIANS GO AND TRY AND BUY NUCLEAR SUMARINES TO KEEP THE CHINESE PERIL AT BAY .... LOL...

record visa applications since mid 2022

visa backlogs are being cleared, so more people are entering

40,000 to 50,000 students due to arrive in next few months

social housing grew 9% when population grew 25%

reducing immigration to sustainable levels is never considered

the Housing Future Fund will deliver 30,000 new houses when the population increases by 1,175,000 over 5 years

This ensures a permanent rental crisis.

SO GAME SET AND MATCH DOWN UNDER,

enjoy life
the Gnome

Summers sees risk of Fed hitting the brakes ‘very, very hard’

Former Treasury Secretary Lawrence Summers said that a broadening in US price pressures shows that the Federal Reserve’s monetary tightening to date is having a limited impact, raising the danger of policymakers having to do more than previously envisioned.

“The Fed’s been trying to put the brakes on, and it doesn’t look like the brakes are getting much traction,” Summers told Bloomberg Television. “The risk is that we’re going to hit the brakes very, very hard.”

“The Fed is going to have to view the situation with a lot of humility,” said Summers, a Harvard University professor. (Photo of Fed chairman Jerome Powell.) AP

At the same time, Summers said it’s too soon to advocate for the Fed to re-accelerate its rate hikes to a 0.5 of a percentage point move at the March policy meeting.

He flagged that there’s still a possibility the economy hits a sudden stop, when companies reckon with a build-up of inventories and headcount on their payrolls, and consumers deplete their savings.

“The Fed is going to have to view the situation with a lot of humility,” said Summers, a Harvard University professor. It should “avoid locking itself in with any kind of strong pronouncements”.

and so on ... a worry!

the gnome

Thanks, interesting articles. My take homes

...solid finish to the year was driven by higher open-pit grades with access to higher-grades areas helped by record material movements (~36.4 million tonnes in Q4), and a significant increase in tonnes mined in Sukari Underground (shift to owner-operator vs. contract mining).

underground tonnes processed increased 61% year-over-year with a phenomenal quarter from its new owner-operator underground team (i think there is a tendency to under promise and over deliver, and this will continue to happen in the underground for the forseeable future, until they get more confident of their geological models)

“We have added nearly 2 Moz of gross mineral reserves at Sukari over the last two years, and we remain confident in delivering more growth,” Horgan states.

For now, the project has been confirmed as being fully funded from Sukari’s cashflow. This includes purchasing additional equipment and adding new infrastructure for ventilation and power.

AISC was high, but ... partially because of elevated sustaining capital in the period, and cash operating costs actually held up well, coming in at $997/oz vs. $1,000/oz in Q4 and only up 5% year-over-year ($913/oz) which was a better rate of change than the industry average....will reverse course by FY2024, with costs likely to dip back below the industry average

The switch to this highly reliable renewable energy source has resulted in a reduction in exposure to volatile fuel pricing with commissioning saving up to 70 000 litres of diesel per day and averaging a reduction in diesel consumption of 22 million litres per annum.

This also equates to a potential $20 million in annual cost savings at current diesel prices. Interestingly, when Centamin decided on a solar plant in 2021, it was estimated that payback would take three years. However, given the volatility in oil prices, payback is now expected to be in under two years.

The minimum 30 MW grid power, combined with the existing 30 MW of solar power creates the potential to operate during daylight hours without using any diesel power generation and substantially offsets diesel consumption during night-time hours.

Sukari operates as a concession, meaning that Centamin does not pay taxes. Rather, it splits its free cashflow equally with the government, along with a 3% royalty payment. As such, its underground expansion does not just benefit the company and its shareholders, but also the country.

I see the turnaround thesis intact and the new CEO has done an exceptional job since joining in 2020, the stock would need to decline below US$1.06 to head into a lower-risk buy zone.

I see a path to sub $1,200/oz costs at Sukari long-term, and sub $1,100/oz costs on a consolidated basis if the company green-lights its much higher-margin Doropo Project in West Africa.

Trading at a good entry point right now

cheers
the gnome

I think the Fed and its sycophants will keep the interest rates moving up, although many learned fperson are saying this is unecessary ?!

It is fairly obvious that the ship is rudderless, and debt will balloon, and interest rates are aimed at making it worse? Unemployment has jumed in Oz, and thats when you can find someone to do a job? Strange world we are in. The Reserve Bank of Australia is hierarchical, insular, supercilious, detached, lost, hubristic and exceptionally slow to respond to its own mistakes, and now we have done with the positives lets have a look at the negatives. These gentlemen live in another universe, one of books and theories, and excel spreadsheets, and marvelllous assumptions...none of which relate to the world we live in.

That REAL fight will begin in earnest on Wednesday, when President Biden (if he finds out where he is and where the meeting is to be held LOL) and House Speaker Kevin McCarthy, the California Republican, meet at the White House (clue) to discuss the debt limit and other issues.

REVIEW: The United States borrows huge sums of money by selling Treasury bonds to investors across the globe and uses those funds to pay existing financial obligations, including military salaries, safety net benefits and interest on the national debt. Once the United States hits the cap, Treasury begins using “extraordinary measures” — suspending some investments and exchanging different types of debt — to try to stay beneath the cap for as long as possible. But eventually, the United States will need to either borrow more money to pay its bills or stop making good on its financial obligations, including possibly defaulting on its debt.

When the US gets in too much trouble, it just defaults like it did in 1971...

The fiat stuff is blowing in the breeze, so for goodness sake get into real assets ...
best
the Gnome

Tops and bottoms, and trends and mends.

Really, money is for transactions, and this is the purpose of money It is NOT a store of weath ! It is a vehicle of convenience.

The value of money has almost montonically decreased in terms of purchasing power and other metrics, consistently over decades. It is only going to get worse.

DO NOT BE HOLDING TOO MUCH MONEY ABOVE YOUR TRANSACTIONAL NEEDS !!!

Gold will be around far longer than the latest fiat printing efforts

Get wise.

Gold. Gold Producers. Gold Royalties. Gold explorers

goodnight and good luck ....

the gnome

Goodness, that is a touch rash ...

As a general rule, shallow mining has higher margins than deeper (esp for open pits) mining, irrespective of the stupidity of the CEO or mine manager. Simply the strip ratio increases, which means you move more waste to mine than ore, and travel distance you have to drive your trucks increases with vertical depth. So unless grade increases you will have to pay more to get the same return.

If you are not vigilant on pit walls, there is a problem as you go deeper, as you have more vertical meters of walls. The tendency for the greedy and incompetent mine managers and CEOs is to try and increase the angle of the pit walls (move less dirt). Problem is that when you have not done proper geotech, and looked for subvertical structures properly, [rather relied on sub vertical holes to define subvertical fault planes]...then you are exposed... and your profound greed and stupidity is about to be exposed...., and when the wall decides to fall in, it falls in and nothing will stop it. Greed and stupidity exposed, as is suggested by recent history.

Then when the CEO who managed this fiasco has to be replaced (some survive !!!), the new CEO has not only to remove the excess that has fallen in from the last CEO, but has to cope with the high strip ratio, and has probably realised the idiot before him just made everything too steep for stability and sustainability. So rather than maintain the unsustainable pit angle, he has to "stand back", which means more dirt has again to be moved because of the greed of the last CEO, and hence margins further impacted.

Just basic science and engineering, and a good spreadsheet to do the calcs.

I think the Horgan is doing a solid job, underpromising (which always gets the wind bag anaylysts pi$sed off, who get paid on % of selling/buying of shares) and delivering firm but good results. He is positioning the mine in a good operational space, and has a lot of optionality being built into the operation, which is boring to the analysts, but very good management.

So CEY doing well.

The gold price is amazing, as there is no rationality in its behaviour at all in my view. Its monetary value defies logic, as money has been motonically decreasing in purchasing power for decades, and this is what it is designed to do? On the other side the supply of gold is not sustainable, and exploration has not been providing a replacement capacity.

The market is not fair, transparent and unmanipulated obviously.

goodnight all, don't watch the cricket in India please.
and good luck ...
the Gnome

Newmont/Newcrest action will certainly be repeated. Only question who the parties are, and who the winner is in each transaction...

Newmont’s mature portfolio of assets is not entirely devoid of growth options.

But modelling published this week by BMO Capital Markets’ Toronto-based analyst, Jackie Przybylowski, put the growth challenge in stark contrast; Newmont’s production of gold and copper was due to peak at around 7 million “gold equivalent” ounces in 2024 or 2025 and then decline reasonably steeply.

The growth options within Newmont’s portfolio have proven harder to develop than expected.

The best example is in Peru, where the Yanacocha mine has finished digging up all the gold bearing “oxide” ore that inspired its development, leaving Newmont to ponder whether to spend $2 billion retrofitting the processing plant to harvest the remaining, copper-rich “sulfide” ores at the site.

The geological switch has proved difficult and Newmont delayed the project for more studies in September.

They also had their eoxide expansion crimped bysocial license issues

Bank of America’s Lawson Winder reckons deferral of the Yanacocha sulfides project might have been the final straw that convinced Newmont to move on Newcrest.

“Uncertainty around the timeline to develop the Yanacocha Sulphides, and the gap that an extended delay would leave in the [Newmont] gold production profile, likely serves as part of the motivation for this more transformative M&A,” he said.

Negative cash flow
On Przybylowski’s modelling, acquisition of Newcrest would boost Newmont’s production in 2025 by 30 to 40 per cent to about 10 million ounces; thanks largely to existing Newcrest mines like Cadia in NSW and Lihir in Papua New Guinea.

It would be 2034 before the combined group’s production falls back to the 7 million ounces mark that shaped as Newmont’s peak production under a stand-alone scenario.

Newcrest meanwhile is arguably filled with too many growth options for its own good.

If Canada’s Red Chris, Western Australia’s Havieron, Ecuador’s SolGold and PNG’s Wafi-Golpu were to all proceed to plan, their development would be almost simultaneous, putting a big strain on Newcrest’s cash flows.

Barrenjoey analyst Dan Morgan estimates Newcrest would need to spend $US8.5 billion building its growth projects over the next five years and the big spend would leave the company with negative cashflow in the 2024 and 2025 financial years.

I do think we need to get a wriggle ON, so to speak

Fabulous to look back, but when you do so continuously, it gets boring...

Lets not be boring, lets be ... predictive

good night from the penal colony in the south

the Gnome

Indeed.

Very predictable. You grow to a size where you cannot rePlace your ounces mined, especially when you are mining 1-1.5 million ounces per QUARTER, You simply cannot find that unless you find a large tier one, deposit and the discovery of these has been dropping for a decade or more.
https://minexconsulting.com/wp-content/uploads/2019/12/Gold-exploration-trends-NewGenGold-2019-TEXT.pdf

So if you cannot replace your ounces mined with exploration, you can either let your resource and reserve base dwindle (and so will your share price), or you go out and buy some.

I expect the MandA will be active this year.

No LARGE TIER ONE DISCOVERIES.

Good luck, CEY could be of interest

best
the Gnome

It is a growing concern in Australia. Inflation unchecked. Unfunded social policies..etc..etc, but we see from afar .... we are not alone

Britain is caught in a paralyzing “winter of discontent” as rail workers, nurses, airport immigration officers, school teachers, mail carriers, bus drivers, university professors, highway officers and ambulance drivers go on strike. Britain has not seen so much labor unrest since the 1970s, when garbage collectors stayed home and grave diggers refused to bury the dead. Conditions were so dire in those years that the country had to be bailed out by a loan from the International Monetary Fund, and there was talk that Britain would end up the “East Germany of the Western world.”

That paralyzing turmoil set the stage for the Thatcher Revolution, which over several years reduced government domination of Britain’s economy and got it working again.

There has to be some interesting socuial revolutions coming up soon, and lets hope they accomodate those that have worked and saved hard.

Then there is the USA .... good grief ....

I fear

best
the Gnome

Back in the real world, we have an online local community, which tries to keep tabs on what is going on...some recent blogs

"Hi, I've just recieved my new house and contents insurance premium and its gone up $89 per month! "
"I have just recieved my new interenet bill, and last month it has gone from $65/month to $95/month, bit more than 10% !!!"
and on it goes.

The pollies must know this , but of course they cannot speak about it. It just adds to the total lack of trust in a group of people who do not tell it as it is. Just appalling.

And the only thing propping up the local fiat currency, is trust in the pollies and "the system". Well trust must be very close to walking out the door is all I can say. Walked out the door a long time ago for me

Go gold, and bitcoin ( I am not into the crypto space!?)

good luck all

the Gnome

Yes, amazing how we have been recession accodring tot he politicians. Its only all he people and many companies who do not believe it. Citi Australia’s chief economist Josh Williams said while it agreed with the RBA that headline inflation had peaked at 7.8 per cent in the December quarter, it would stay above existing forecasts through to 2024....We have 800,000 people converting their ultra low loans, to variable and are they in for shock. Its obvious the government will engineer a definition of inflation to meet the prediction of the govt economists, LOL.

We now have govt handouts for the mistakes the govt made in energy policies. Thats after the handouts by the govt for the mess they caused with covid lockups/lockouts (etc), and there are handouts for flood relief, and now the govt is looking at taxing the family home? Wacky stuff at best.

More seriously, unfortunately a vast % of Australians have given up on the Political rhetoric. Certainly a lot of the young dont listen to it, don't listen to the main stream media, and just go about their lives.

Lots of strange things happening ... where lives safety aymore?

best

The Gnome