Cowichan how about Sib-Still go for B2gold, a 1m gold oz p.a producer operating in Namibia, Mali ,Burkina F, Colombia and the Philippines. Market cap CAN$ 6.25bn. Harmony is a non starter as they operate in S Af.
Do you think Endeavour will be in their sights ? That could give Sawiris a clean exit to be cash ready for his next gold mine move.
Thanks Arfur for an interesting and thought provoking post yourself. I would point out that where it may figure as the worst Q1 for the suppressed paper gold price that was not the case for the physical market.
US Mint best Q1 for gold Eagles coins since 1999, and best Q1 for silver Eagles since 2016.
Perth Mint Q1 best Q on record for gold, 4th highest Q for silver.
Indian gold demand came roaring back in March to a record 471 tonnes
Comex which ideally doesn't want to deliver anything more than the bare minimum is now having to deliver record amounts. Comex has become a delivery vehicle for big investors. For the moment they are managing to scrabble and cope. But the May silver contract is a big one and that could be a real test later this month.
So all of those bombing raids selling huge volume in the lightly traded overnight before Europe opens through March was to keep the pressure on potential gold and silver bargain hunters to keep out. And to allow the bullion banks to take huge profits buying back some of their gold shorts put on since Aug high into the double bottom at $1680 in March. The added bonus of this artificial suppression is that the weaker price then saw GLD ETF etc generate a 107.4 tonne outflow of gold in March. And the bullion banks then picked up the cheap physical. Wash rinse repeat. That is why they hate the Gamestop, Robinhood and Reddit attention because it shone a light on their cosy deals that only benefit them.
The banks problem now is that gold is off 20% from the high and is relatively cheap and bargain hunters are about. At these levels the banks can't dive-bomb the Comex paper market after they have just managed to cut their exposure. Meanwhile the real asset which they have hypothecated to crazy levels has major problems meeting physical demand.
As to silver it's a tiny physical market with enormous industrial and rising investor demand. If the banks try and take silver down to $22-$23 I think they will set off a tidal wave of retail buying which will likely overwhelm their cosy setup.
Like I say I am encouraged by the outlook for Centamin and pm's.
Centamin can't get out of the dark cellar without a change of sentiment to the sector and to the leverage key gold. So gold currently at $1755 the highest since 25/2 is encouraging. Attached to gold the GDX ETF is making a positive patterned at 34.62 is now at highest level intraday for 7 weeks. Centamin will take it's cue from GDX and GDXJ as a constituent of both.
A weekly gold close above $1745 would be highest week close in 6 weeks with next target $1800 last above 7 weeks ago 24/2. GDX first target is to close above 34.50 which starts to make the Feb - Mar trading look like a reverse head and shoulders pattern: Left S. 19/2 32.74 Head 30.90 1/3 Right S. 31.83 30/3. Real resistance for GDX is at 36.00 which we haven't closed above for 10 weeks 20/1/21 when Centamin closed at 123p.
Encouraging signs for a recovery path for gold and gold miners. But with the general US stock market indices at or near all time highs the sentiment is worryingly complacent. The S&P Index sentiment has a reading of 90 (out of 100) and the VIX volatility Index is at 9 suggesting little investor fear right now.
My reading is that the markets calm progress is concealing extreme fragility. The Fed is trying to talk confidently yet is a prisoner in their own trap of more money printing and zero interest rates. Biden's solution of more debt fuelled spending will give a short term sugar rush. Then watch out.
Overall seems like a good time to own contrary hard assets like physical gold, silver,cryptos and quality gold miners.
Holding gold stocks in a price slump is difficult. Adding to holdings is nerve-racking knowing that one will have to wait it out and no guru or technical analysis can forecast it. Marketsniper Francis Hunt on Youtube summed it up well "you are wrong, wrong,wrong,wrong...and then suddenly very right to be invested in quality gold miners".
Have we now found a bottom from which buyers will start to outbid the sellers ? Some signs are encouraging. The GDX today is at a 7 week high. GDX is critical to CEY investors as the majority of gold stocks investors just buy the ETF rather than the individual shares . If GDX can breakout above $36 it may well confirm the end of the 8 month pullback and the end of the recent scorn for the sector.
The bullion banks did not waterfall sell gold and silver to close March. The Archgos hedge fund margin call just underlined the inherent risk with all of the derivatives for the large banks. Basel 3 is now only 12 weeks away. April is a key delivery month for silver so it could be another catalyst for investors to get involved in precious metals again.
As one of the ew investment sectors which is cheap gold miners are just waiting to be in demand. Once some buy others will follow. Maybe today is an early indicator of interest.
The attached chart shows that our Cinderella sector actually stacks up as best in class comparing operating margins/PE ratios in 2020. I expect more investors to buy some physical precious metals or some cheap mine stocks in the next few months as hard asset insurance against depreciating fiat currencies and overpriced US general stocks.
A range of opinion is important to get a perspective. I regard this week as a positive step forward for Centamin and it's outlook. The positive viewpoint includes:
CEY best weekly close in 5 weeks
FY results without a new setback. A pleasant change.
Paper gold price into options expiry 25/3 set for a 3 week close higher than 8/3 swing low $1681
Today despite rise in 10Yr T to 1.664 and USDI to 92.71 +0.18 gold held it's own
The squeeze in the physical silver coin/bar market is building and April could surprise us all to the benefit of the whole PM sector.
Have a very good weekend everyone, especially Sotolo. Is it just me or does anyone else read Sotolo's posts and think of Eeyore ? "...don't worry about me. Go and enjoy yourself. I'll stay here and be miserable."
It is good to see co-ordinated Director buying but I am disappointed with the relative purchases of the two most important Directors the CEO and CFO. But the timing of the purchases looks compelling. They have been well advised about Centamin share price cycles.
Statistically over the last 13 years (2009-2021) the year low has been recorded in Qtr1 in 7 years out of 13 and in Qtr4 in 4 years out of 13. So all of us who have been buying since the Nov 2020 price breakdown below 120p are aligned with a good buy price in every year without a production setback RNS (ie May 2018 and Apr 2019).
Are we set fair to now gain from a decent advance that is triggered by a turn in gold or GDX ? Monday's FY results were tidy and well received and took away some nagging doubts about the new team and strategy. Of course there was disappointment that there was no follow through. But the same applied to decent results for Barrick, Endeavour, and others and it's all down to the continued negative sentiment for the sector. But this will end. With the results out of the way Centamin is now well placed for the macro or micro catalysts to trigger the traditional Spring/summer rally. Just like spring 2016 or April-Aug last year.
There is a historic parallel to the Directors buying this week. Back on 21/3/2011 the new Centamin CEO Harry Michael bought 1m shares at 125.85p.
As things stand the CEO and the CFO who run the company have purchased less shares than 3 non execs: Rutherford 250,000 shares; Bankes 220,000 shares, and Dr Fawzy 140,000 shares.
Are Horgan and Jerrard going to buy more or is that it ?
It's good to see some Director buys. I would now like to see Martin Horgan make a meaningful purchase himself. It is odd to talk about the great potential of Centamin but only buy 16,405 of CEY shares. Horgan's holding is the second smallest of all of the directors. Ideally I would like to see our new CEO now demonstrate his optimism in the company and the future share price. Usually an entrepreneurial gold mine company CEO buys more than any other Director. Currently just to match Jim Rutherford and the Finance Director he would need to buy 250,000 +.
Note how industry leaders like Pierre Lassonde, Sean Boyd, Rick Rule and Eric Sprott put great store in backing CEO's who have bought significant shareholding stakes in their own companies. Among the question marks about Andrew Pardey's stewardship was that he did not buy a single share in the company. Directors who rely on share options give the appearance of treating the public limited company as a sinecure with entitlements.
To attract new institutional investors going forward Horgan needs to lead by example and buy a meaningful stake while the price is still cheap.
Thank you El Prof, Dash and Somnamna for good points here this morning.
Centamin isn't at fault today in terms of results or messaging. No, the key to renewed sentiment and enthusiastic momentum buying for the gold co's remains with the paper gold price. Sure enough to start the week gold was smashed very early this morning to maintain the perception that gold is "out of favour" and help the underwater bank shorts. Don't expect Kitco, Bloomberg or Reuters to comment on today's smash.
The bullion banks know that they are trapped. As is the Fed and their perception management of the strong dollar and benign inflation.
Today's Centamin's results were positive but then so were those last week of Barrick, Endeavour and Majestic silver in the last week.
I am encouraged that the GDX ETF is now 10% up from its low of 3/3 when gold hit $1689.8 and bounced. The bank shorts can't sell any more paper contracts and the physical market is tight. In terms of cycles after an 8 month and $400 decline GDX may be signalling that gold is close to a new upswing. Then the gold companies and Centamin will have a another run like H1 2016 or the breakout of April last year. But next time the breakout may have real staying power.
Well said Razors. I could stomach the overgenerous share options granted only two months into his role if he had already made a large personal purchase...just like all the leading gold and silver mine CEO's in US and Canada.
Rick Rule says there are two types of precious metal mine company. The preferred oneType mine gold and nurture their shareholders and shareholder returns. The other type mine the shareholders.
Arguably Centamin has far too many shares in issue and they are far too cheap. What is Horgan going to do about that. A new gold rally will lift all mine stocks but I want to see some genuine progress from management as to where we are going with our collective considerable investment.
They owe it to us.
A well balanced summary of our collective angst as gold mine shareholders not yet at the party. But I do believe Cinderella (Gold,silver and miners) will be off to the ball soon.
We've had a 7 month slump where miners have fallen x2 gold's drop co's like Barrick and the accident prone mid-caps with higher beta and low price high volatility...like CEY,HOC have declined 50% from last August's new ATH. It just rubbed in how out of favour the miners are but that can change very rapidly as April 2020 proved.
As a contrarian trade a long overdue general stock market correction will set off the next gold rally and it will catch many unawares.
But in this cheap price doldrums it is an ideal time to bargain hunt especially if you are a wealthy director who shared $305m from the sale of your last company Toro. There is a Centamin precedent I was a shareholder when the late Harry Michael on his appointment as CEO bought on 21/3/11, 1m shares at 125.85p. An investment of £1.2m which demonstrated commitment to the cause.
That would cheer up holders if Horgan stepped up and shared the angst and the future profits by now matching his share options with his own money. The price is 16% less than Harry Michal paid in 2011. A bargain which will soon be gone.
Is this the bottom ? Has gold has found a tradable floor after a 6 months 15% pullback and consolidation. If yes, expect CEY and miners to start to wake from their 6 month slump and reflect their leveraged 2-3x move of the price of gold.
Between 1/4/20 low 88.04 CEY gained 164% in 4 months to ATH at 233.30p on 6/8 just and gold topped out a day later at $2089. I am looking for a catalyst that sets off the next gold rally to test that $2089 high. As a contrary asset the break out could be very close now.
General US stocks including tech are overvalued and are struggling to push on. It needs at least a pullback to re-vitalise and bring in new buyers. The Fed sends out mixed signals that there is no inflation to worry about yet the 10 yr Treasury confirms investors are getting concerned. The Bloomberg commodity Index has clearly broken into a rally signalling inflation.
Traders have been seeking one final shakeout in gold down to $1700 and a key day reversal but I am not sure that it will happen. Next week's Comex contract expiry on Wed 24/2 especially for silver could be the catalyst for higher pm prices ahead.
Holding physical gold, silver and quality producer miners will be rewarded as true stores of value for those with the patience... an investors greatest asset. Hang in there.
Silver is the key. A silver close tonight above $26.40 would be the 2nd highest weekly close in the last 21 weeks, 2nd only to last friday's weekly close. The silver to gold ratio continues to decline and now is at 67.9:1. A clear sign that silver's consolidation is ending and it can lead gold and miners. The Reddit fandango gave some very useful publicity to silver "the most undervalued commodity still only 50% of it's 1980 price".
The Reddit crew chosing to buy SLV ETF (controlled by JPM and Blackstone) shares and options was a poor choice? The only weapon that has any real chance of taking on the bullion banks paper short is in physical market. But other investors piled in to US silver coins and small bars. They are likely to now hold those which is good in a physical market already tight. We will know on first Comex delivery date in 12 days 24/2/20 what affects the Reddit wave has had. What are the big industrial silver buyers like Samsung, Apple thinking ? Will they move to stockpile if silver breaks $30 ? Bad news for the paper silver short banks.
If you look at a 3 year or 10 year weekly bar chart of silver you will see a lovely cup 2011-2020July and a handle Aug 2020-Feb 2021 which could be very close to completing. We will know when silver puts in a weekly close above $30.
First steps are to see if silver can close above $26.40 on the week tonight. That would be only the 2nd week after last week in 21 weeks of weekly close above $26.40 and may tell us that despite Fri-Mon Reddit whipsaw price event silver is ready to rally. The silver to gold ratio is now 67.9:1 at it worst last year it hit 128:1.
Biden's stimulus bill is going to Congress and then his green new deal. All positive for silver as a vital industrial metal and poor man's gold as money that holds it's value. If silver does break out of $30 soon it will likely drag gold up with it. The bullion banks do not want a new precious metals rally to start from here but as of now the 6 month downtrend since August highs is getting very long in the tooth.
A silver rally will wake up their ETF's SLV, SIL,SILJ and then gold and GDX and GDXJ. The ETF's fire up the individual mine shares.
What could hold this up ? An overdue US stock market correction in Feb or March. That could keep miners down for a few more weeks and then be the rally leaders...just like last June-Aug. Remember the algos that do most of the trading don't care about individual company issues - when the trend is "on" the algos pile in to the ETF's which respond in unison. Retail investors who see the trend then buy cash holding, divi paying, no debt miners first.
Or does this small challenge to the hedge fund hegemony represent the start of long term disruption to the plutocracy ? The regulators could easily go after the retail investor but if they do I think that could be fuel on the fire. Just think of all the other manipulated markets which they control. The bullion banks should be worried. I doubt that we will soon be back to business as usual.
"A multibillion-dollar bailout and Wall Street’s swift, subsequent reinstatement of gargantuan bonuses have inspired a narrative of parasitic bankers and other elites rigging the game for their own benefit. And this, in turn, has led to wider—and not unreasonable—fears that we are living in not merely a plutonomy, but a plutocracy, in which the rich display outsize political influence, narrowly self-interested motives, and a casual indifference to anyone outside their own rarefied economic bubble." Chrystia Freeland, The Rise of the New Global Elite, January 2011
Gold stocks remain scorned because they are not needed yet. But real price discovery of gold and silver are coming and when they do the mine stocks will soar if you can hold on. For now silver is getting interesting. Yesterday, I was hoping for a weekly close over $26 for only the second time in 5 months. Now a close over $27 is possible. But what is more important is that it could be signalling the end of silver's 6 month consolidation phase. It is good when the more volatile silver leads because it will pull gold along soon enough too.
Cey price weakness this week is frustrating but silver may be signalling that the clouds are clearing. If I were Martin Horgan I would be taking advantage of these cheap prices and building a sizeable stake in CEY with his own money. It would also help him promote CEY to fund managers if he had a meaningful stake.
A 1998 film staring Jim Carrey "on the air...unaware" the only real person in a fake set populated with actors. Kitco is used by 000's of investors to get gold and silver spot prices and commentary from plausible re-assuring commentators like Bubba Horowitz.
But twice this week their gold market reporting has been worthy of "The Truman Show's climatic moment where the producer/controller of the deception says to Truman "there is no more truth in the real world"...so Truman should stay in the artificial world for their benefit and entertainment.
I contend that this morning during Globex trading when the US was asleep a paper gold and silver waterfall smash sell order came in to take gold down to below $1850 and silver towards $25. Why ? Because both gold and silver closed last night dangerously close to confirming a weekly outside move with gold needing to close tonight at $1864 or higher and silver $25.90 or higher. As of start of 22/1 silver was above the level and gold was just $4 below.
The USD Index closed last night at 90.09 suggesting that the rally off 2.5 year lows was stalling. There has been no "news" out that justified today's gold and silver dump. It's all about manipulating perception and painting the tape for the prices at the end of the week as low as possible.
Ultimately it's because the bullion cartel know they can't stop the precious metal price rises they can only slow them down using derivatives shorting dumps. They want to try and keep sentiment and interest in pm's as deflated as possible in lead up to Biden $1.9trn stimulus because it's launch will be very positive for gold and silver.
What did Bubba "Trader talk" say about today's smash ? "gold fails to take out resistance. Selling should resume. But here's the peach "we can only use price action to be on the right side of probability. After all the markets are a game of probability."
Are the gold and silver derivatives markets reflecting true price discovery or are they a Truman Show ?
That is why the Fed,IMF and ECB are so concerned about Bitcoin because it's huge price rise is acting as a fire alarm signalling that some investors already see the unsustainable nature of the debt bubble and QE to infinity and are grabbing the few assets without counterparts risk. Centamin's share price has been trapped like all the gold sector but patience will be rewarded. Hang in there.
My explanation is twofold. Firstly, a lot of US and Canadian gold miners pay negligible dividends so traditionally the Directors like to trade their stock purchases on decent moves after holding for at least 12 months.
John Thornton has bought a lot of Barrick stock in large chunks as with the N.Am style of giving confidence to institutional investors and retail buy making large stakes in their own company stock. He bought a significant slug of stock when Mark Bristow was appointed. Over 2018-2019 Barrick stock went sideways. But in 2020 it has doubled. So if you have a holding that was $60m in value that is now $120m + in 2020 it makes a lot of sense to cash some in. I see no mystery, Thornton and the other listed co sellers were just doing the harvesting they tend to do when they get a 100% profit.
Secondly, US mine directors have to hold their acquired stock for at least a year to reduce their tax from 37% to 20%. IN 2020 many family offices of the very rich have been selling some of their high profit holdings before the tax year end of 31/12/20. They were harvesting and anticipating potential capital gains tax changes. There is a distinct possibility that a Biden government will increase US Capital gains taxes. So your list of gold co Directors 2020 sales is consistent with prudent wealth management by gold mine stock directors taking some capital off the table at the current tax rate.
A lesson from this for our CEO is that to be a leading international gold company and attract more global institutional shareholders would be to set an example of confidence in the company and your strategy and buy a significant holding in Centamin shares now while they are still cheap.
To date Martin Horgan has only invested £20,000 for 16,405 CEY shares. As things stand the non exec Chairman Rutherford has risked x12 what Horgan has. I find that troubling and the optics are terrible and reminiscent of Pardey who collected a total of 7m CEY shares options at no personal capital risk.
Ideally, I would like to see Martin Horgan buy 573,595 shares so that his personal investment capital at least matches his share option award (6/6/20 590,000 share options granted). Then I will consider him to be aligned with shareholders. At the very least he should now buy 200,000 shares to at least match Ruthford's commitment.
Right now Martin Horgan has bought the least CEY shares apart from M.Cloete Non-Exec 15,000 shares. Come on Martin prove you are confident in your strategy for Centamin to risk a meaningful sum investing in the shares. That would align you with Eric Sprott, Pierre Lassonde, John Thornton and indeed Naguib Sawiris.
I suspect that the "actor" that smashed the paper gold and silver markets in an instant this morning was the Bank of International Settlements. The normally discreet power behind the world financial system, the central banks central bank. They regularly intervene in the FX, precious metals and bond market.
This p.m. paper dump selling is so brazen on a risk off day it appears to have been forced on them out of desperation on a day when gold and silver would naturally rise as safe haven assets without counter party risk.
Why have they done it ? To slow the inevitable rise of gold and silver with the announcement of the inflationary $900bn new US stimulus. In November and this month it is now clear that the bullion cartel failed to overwhelm the cohort of longs that appear with increasing confidence at each delivery month on Comex since March.
The cartel banks shorting paper gold and silver for enormous profits for many years are now trapped with massive net shorts in a precious metal bull market and rising inflation signals. These banks all have to declare their precious metal position values on a mark to market basis as of 31/12/20.
Today's attack is actually a sign of weakness. All they can do is hamper and slow the inevitable rise. Will today go down as the precious metal market equivalent of the REPO blow up of 16/9/19 ? If the cartel banks can't get prices down they are going to have to start buying back their huge short books. And guess what JPM is no longer net short. Precious metals are starting to get very interesting .
This re-balancing was the first since 2016 when both gold and CEY had a major price change. CEY is down 91.5p since the last re-balancing 18/9 .Therefore the ETF re-balancing was likely to have selling impact today and an exceptionally high volume. We got both. Compare the last 5 re-balancing days :
Date Close Vol
20/12/19 111.65 13.25m
20/3/20 107.2 15.5m
19/6/20 165.3 17m
18/9/20 213.5 13.5m
18/12/20 119.90 25.49m
So while there was some buying this morning it got washed out this afternoon.
Today is the quarterly re-balancing of the two gold mine stock ETF's that CEY is a constituent of. At the last Qtr shuffle 18/9 CEY closed at 213.50. So the re-balancing will see volatility in the price and some price weakness if CEY's relative holdings are reduced.
Today is also Quad witching in the US. Expect volatility.
when CEY does absolutely nothing in a narrow range for days and weeks. That gradual compression squeezing the price range could be setting it up for an explosive breakout to play catch up to a new bull cycle. The catalysts are all there but in a downtrend the negativity and scorn for the gold mine shares usually continues even when the turn has already started. Gold miners have yet to react to catalysts:
Gold braking out above $1840 on Tuesday broke the 4.5month downtrend. First test resistance at $1900
US $ Index below the psychological 90.0 and at lowest level in 2.5 years
US Fed statement signalling acceptance of a weaker dollar & to hold US interest rates down till at least 2023
Potential new stimulus before Congress breaks for holidays
Commodities (copper, steel, cotton, soya beans) starting to respond to inflation, lower dollar. Precious metals to catch up
Bitcoin a complementary store of value but not a physical hard asset is trading $23,000 new ATH
In 2021 new US government will unleash much much more stimulus
Buying CEY price weakness here will likely be temporary opportunity before the next up cycle gets going soon. By any measure the gold shares remain historically cheap and under owned. But when the current general stock bubble in US (not UK Ftse still down 13% YTD) has its next overdue correction I expect CEY and the other debt free producers to do very well.
Thanks mrtibbles I will have look at it. A developer gold mine share that I have bought this year that is coming along nicely is Pure Gold dual listed on Toronto TMX.PGM and LSE as L.PUR.
A Canadian developer with a v. experienced team and mega shareholders in Eric Sprott 10% , Newmont 9% and Anglo Ashanti 15% ,out of total of 394m share in issue. The development has been fully funded to production. But it is their drilling for the next phase which could be the real game changer says management. Phase 1 is to become a 100k oz pa producer but drill results suggest they could have much more going forward.
The only downside is that London is its secondary listing so volumes to date have been averaging only 150k p day and there's a big spread between bid and ask.
After E.Sprott bought 39m Pure shares in June the price has risen in 3 step movements and we now appear to be starting another breakout with a new ATHigh Friday and today in anticipation of inclusion in GDXJ ETF on Friday 18/12 and first gold pour by year end.
Something to ponder while CEY gets its mojo back.