Member Info for Marmot74

3/9/08 Cey closed for the first time above 85p at 92.36. Gold was trading at $995. On 29/3/10 CEY closed at 125.50p on the day of an RNS announcing the first 1 tonne of gold poured (32,151oz).

That historical data should at least make investors consider Centamin's relative value factoring in every element of a well established miner : 9 years of production growth (now 15.5x more than the first tonne poured); 4 years of rising dividends; the 20 largest mine in the world, increases in reserves and resources; Cleopatra zone on its way; exploration progress of the wider tenement; 4 years of exploration and planning in W.Africa and no debts and cash representing 30% of current market cap.

This downdraft is very unusual in length and ferocity and seems to be solely driven by algos chasing negative sentiment and downward momentum in a feedback loop. Currently we're back in 2009 with no goodwill value for the added value since. If we close down today it will be the 7th day in a row. We haven't had 7 consecutive down days since the turmoil in Egypt in November 2011. The last time we had a 5 day downtrend was May 2016 form which the price rose 50% over the next 5 weeks.

A CEY price consolidation is overdue (gold has been consolidating for a month) and a gold surprise move up may be the catalyst. After all the cartel banks are now net long gold for the first time since 2002. Do you think they will just stand aside and let the record hedge fund shorts take their profits or do you think the bankers will stiff them ?

I remember it was the same gloom as now. The COT data at the time signalled the Commercials (banks)and the large Speculators (hedge funds) positions became square by end Dec after the first Fed rate hike. And then gold took off like a scolded cat +$200 in 6 months and Centamin from 60p to a high of 184p.

The past is no guide is no prelude but... the COT data released on Friday evening shows that the Commercials are now net long Comex paper contracts for the first time since 2002. And 2002 was the start of the gold bull first leg to $850 by 2008, before the second leg from end 2008 to 2011 high $1923.

If there is a lagging effect for the gold miner sell-off it is worth bearing in mind that gold's recent low $1161 was almost a month ago as was the dollar index high. The September Fed rate hike is arguably priced in.

China is not defenceless in the tariff war and the US economy is certainly not immune to blowback from ill-advised policy by the US government.

Centamin and other miners are at their cheapest bargain prices for at least a year. But at some point I expect them to mean revert especially as gold our ultimate value determinant is signalling consolidation. The miners are overdue to take notice.

No traditional post NFP Report paper gold price smack down. Worst was -$5 and it's now -$2.10 and -0.28% for the week.

Silver to gold ratio which was over 85:1 this lunchtime is now 84.2:1 and silver +0.74% today so far. Silver leading gold is a positive indicator.

The ETF's which have monstered CEY this week are up today,GDX +0.48% and GDXJ +0.86% .Notably since the ETF's opened CEY has rallied from the day's low at lunchtime. Note also CEY's low volume.

A bull market train takes the fewest passengers. CEY share price is down 11.5% this week the worst weekly performance since the RNS of 25/5. HOC is indeed down 4.78% today but as of yesterday's close it and 6 other LSE co's were unchanged on the week. Only CEY is down more than 10% . Is GDX telling us that the CEY selling is getting exhausted ?

I agree with your sentiments. Actually gold has rallied 3.5% since Wed 16/8 low $1161 while form that days low of 103.65p CEY has lost a further 13%.
I didn't think we would see a price below 100p and now it's happened people panic sell. But just look at today's volume it's the lowest for months.
US Nonfarm payrolls report is due out at 13.30 UK time and gold is currently $1201 +$1.50. A downside surprise from the +193k jobs expected could give gold a nice nudge.
At some stage the now arguably detached and irrational selling in Centamin will meet bargain hunting demand for a sub 100p bargain.
The silver to gold ratio now at a historic high of 85:1. Normally anything over 80:1 sees silver sentiment rally. Silver leading gold is a sign to look out for.

Typo 3rd para line one should read "whose algos and derivatives..."

Today's 10.8m volume traded was the most in 5 weeks.

One of the dubious benefits ? of the dual listing with Toronto is that CEY then became eligible for a multitude of US based ETF's. These ETF's buy or sell parts of the fund on a pro rata basis. US money managers prefer to put their clients into ETF's and avoid doing individual company research. Likewise the majority of gold miner GDX holders will not know or care about Centamin production or site visits.

That is the harsh reality of modern trading for 96% of investment whose logos and derivatives moves individual share prices...often irrationally. The algos follow sentiment and momentum for the sector. Vanguard closed their gold miner ETF last month citing poor performance and decline in interest. No doubt they have shoved all their passive investors into tech like Amazon at a massive $1trn valuation. I prefer the odds of a scorned sector that is wildly undervalued when most others are overvalued and autumn storms gather.

Today Trump was due to enact a further 25% tariff on another $200bn of Chinese exports. So far today there has been no word and the gold price and Yuan have risen.

Further evidence that CEY's drawdown has been leveraged more than peers this week because of ETF"s GDX and GDXJ that most peers are not in.
Despite gold +$4.80 right now GDX and GDXJ have traded new 52 wk lows today. GDX 17.80 and GDXJ 26.77

CEY always overdoes it's moves. We got the best x3 up in H1 2016 and now we endure more slide than justified or vs peers.
I expect the fact that the cartel banks are now net long paper Comex gold and silver for the first time since 2001 is very significant. At some point they are going to snap the trap on the managed money hedge funds who are now record short. That is why spot64 point is a valid one. What happens next if gold's 15% pullback from this year's high to $1161 last month was the bottom ?
Why is CEY down more today on it's own when gold is currently $1197.6 +6.5 +0.55% ? I have a theory that Centamin's 1150m shares in issue include a higher proportion of punters who buy high and sell low...and never learn to do the opposite. For the 2nd day in a row 6 other LSE gold miners are going up.

I expect the selling in Centamin to peter out shortly and mean revert with a gold rally.Precious metals are the only major markets at multi year lows when stocks and property are at record highs. There is no absolute that Trump will win on tariffs and the dollar will keep rising and paper gold will keep falling as spot64 notes below. At some point the EM currency crisis will infect major Western markets. After a Fed rate rise later this month we'll soon know if it

Kitco headlines today include :
Bloomberg " a bit of sustained mean reversion in the stock market or dollar should unlock the cage for the well rested gold bull."
Reuters : India's august gold imports double, hits 15 month high.
FCstone & Hubbis : Asian portfolio advisors recommend a 10 % portfolio exposure to gold...up from 3-5% before.
Metals Focus: "world gold mine production is expected to decline 1.3% over next 2 years."

Kitco's in house trader's comment on gold trying to find a bottom:
http://www.kitco.com/commentaries/2018-09-05/Gold-Building-A-Bottom.html

6 other LSE quoted large and mid cap gold miners right now are either up a little or unchanged. Silver and gold producer Fresnillo is the worst at -0.83%. Yet Centamin is -3.4% after yesterday's -4.26%.

All of these companies have had production or debt financing issues within the last year. Centamin's production cut was not isolated. If anything there should be a premium for Centamin with $300m cash and no debts.

This is now the best price in 26 months. A snap back is overdue when Cey is 41% down on the year and gold is down 8.5%. Centamin's sentiment and price are overly negative especially against peers.

I see a lot of towels and blood. A good time to buy.

CEY has dropped twice as far as other LSE peers today because it is both much more liquid and it is a constituent of multiple ETF's where the majority of mine co trading capital goes. As a s mid size co it is in GDX with Rand but also in GDXJ and multiple other leveraged ETF's. ACA, POG,HGM aren't. On downswings this abundance of ETF representation exacerbates the drawdown for CEY vs peers. But the opposite will apply when these ETF's bottom and rally.
CEY's worst 3 days in August 15/8-17/8 co-incided with new 52 week lows for GDX and GDXJ. That pattern has repeated today. GDX new 52 week low 17.97 -3.10% GDXJ 26.88 -2.73%.
Worth bearing in mind the many cogs at play here.

Both GDX and GDXJ ETF's hit 18 month lows yesterday and arguably became technically oversold on a 5 year comparative basis. CEY is a key constituent of both and goes up and down with them.
In the first hour of trading today in NY :
GDX $18.77 +0.61 +3.22%
GDXJ $27.58 +0.77 +2.87%

and not fearful:
Today is US stock options expiry where they will want to maximise general stock gains. Pressure on risk off assets like gold and miners will likely lift next week.
Turkey'd dollar debt is not fixed and capital controls remain a very real possibility. potentially explosively gold positive.
The commercial holders ie the Cartel banks are now slightly net long gold contracts for the first time in 24 years. These guys never lose in their own casino! While the large speculator category - managed money and hedge funds are now holding a record short paper gold position. If the commercials now turn buyers they will front run the specs, many of whom are highly leveraged so it would no take much for a sub $1200 short to become a stop loss panic bid if gold finds a bottom around here.
We are only 2 weeks away from31/8 Centamin interim dividend record date. Thus we are close to shaking out the last of the sellers to be replaced by bargain hunters liking the 25 month bargain price and a dividend in 6 weeks.
August is a terrible month to judge share markets when volume is thin and it is easier to move a price but it is not necessarily meaningful in the medium term. September on the other hand tends to be the best seasonal month for gold and miners.

Rebess Haha I know you love an RNS.

However, in this case I don't think that changes to senior management below Board level require an RNS.
But you'd think that after CEO Pardey stated publicly yesterday that there is a new Sukari General Manager that the new appointed Manager's name would at least be posted on their website. But alas no.

The general manager's responsibility for the LHDR crisis seems to have been accepted judging by Pardey's comment in the conference call yesterday when he said that Sukari has a new General Manager. But no name was given.

Confusingly however, the Centamin PLC website still has listed under senior management :
Youssef El-Raghy, General Manager - Egyptian Operations since Jan 2010
Is he still in post, moved or out ???

Alliance news headline at 09.46 "Centamin profit rises in first half on higher gold prices". The setback in production was partially alleviated on a comparable basis as the average realised gold price in H1 2018 was $1316 vs $1235 for H1 2017.
A businesslike, accountant speak from both CEO and CFO conference call. With only one surprise for me. If I heard Pardey correctly Sukari now has a new general manager. That would suggest that Youssef El-Raghy has been removed.
Re Divi policy Centamin will continue paying out excess cash above a float of $250-$300m. A share buy back was debated by the Board but rejected as costly and sub optimal.
Pardey described Doropo project in C. D'Iv as "very exciting for us". But I wonder if Sukari's Cleopatra, which now has its own full time development team and 2 full time drilling rigs may offer the greatest potential in 2019 ?
The Board apologised for the setback in production in Q2 and are determined to recover momentum in H2 to meet revised FY production.
Thankfully in the report no mention of salary review consultants. And instead of once again repeating re court case "with the potential for the legal process in Egypt to be lengthy..." the report used flattery and praised the government for Egyptian reforms...to encourage more. Proactive.

Notably the CEO said nothing about the key determinant: the forward price of gold. Centamin and all gold miners remain the Cinderella sector shunned and derided with the buoyant general stocks, a HY dollar rally and gold down 9% year to date into the summer doldrums. But key gold catalysts may welling up for higher gold prices in H2 which would energise both Centamin and the sector sentiment.

The fact that the latest COT report shows that the Large Speculators (hedge funds) are at their most short paper gold since dec 2015 is encouraging for a contrarian investor because the Commercials (cartel banks) the real power of the paper gold market have cut their shorts to the lowest level in years. When the Commercials start buying back and profit taking the Large Spec's will be forced to scramble to short cover. This could start any time after tomorrow's US non farm payroll report.

I topped up at 110p 3 weeks ago and have no regrets buying low into a quality company where at 113p it has 26p of it's value in cash on the balance sheet and just 87p of value for Sukari's 20 year + mine and exploration elsewhere. A bargain.

A strong bounce off the day's low 108.35p, a close only 0.20p lower than the 21/6 close at 114.10p, the lowest close in 2 years, and a thorough flushing out 20.5m shares volume. I bought this morning at 110p because I like a bargain and I have struggled to answer a question.

Who is going to keep selling CEY at these ridiculously cheap prices ? Was today the final tree shake ? As we enter the seasonal upswing for gold I believe that our fortitude will be rewarded.

Forecast 105,000 oz with the expectation that Q3 and Q4 exceed 137,852 each Qtr and therefore FY exceeds the revised minimum guidance of 505,000 oz.

I bring to your attention that the ranks of the conspiracy theorists now includes President Reagan's former Treasury Sec Paul Craig Roberts. Read the section about the Plunge Protection Team and the section in italics highlighting why they sell gold futures in particular.

https://www.zerohedge.com/news/2018-06-27/paul-craig-roberts-how-long-can-federal-reserve-stave-inevitable

A. As gold is money, not credit or a debt instrument it is used as a currency pair not by "regulators" but by the BIS, and individual central banks to maintain confidence in the dollar and keep investors in the general stock market. The cartel banks are the brokers and they profit enormously.

Why do the cartel banks bother to manipulate the paper gold price ? For enormous super normal profits in the billions per year, knowing that the regulators like the CFTC will do nothing. On 15/6 there was a sudden waterfall plunge in Comex gold on the opening when 260,000 contracts were dumped into the market with a notional value of $34bn. This wasn't a mad collective of gold miners or jewellers throwing in the towel. Who ever heard of a "normal" trader who dumps 260,000 contracts all at once ? It was done to suppress as per every wash and rinse cycle with the Comex paper market.

The cartel banks will no doubt be hoovering up some of these naked shorts now that they have got the price down $45. That's $1.17bn profit if they bought back all 260,000 contracts. Not bad in 10 days !

B. The gold price in dollars and the gold mine shares are suppressed but that will not be permanent. There will be a reversion to the mean and true price discovery probably when the Chinese feel that they have bought enough physical gold "on sale" or gold is included in a new reserve currency. Or will the Chinese play the Comex delivery demand card in the trade war if it gets out of hand ?

Gold and miners do well in stock market corrections, inflation or times of geopolitical uncertainty. All three are developing if you care to look. Patiently holding for our sector to take centre stage again just like in H1 2016 and 2008-2011.

Welcome on board BigBangs. The article was from Zerohedge.com an indep. US based market commentator which is one of a number I scan to try to get a different opinion from the "confirmation bias" of much of the main stream media : FT, Bloomberg, Reuters etc.

Another good indep. site for gold news is 321gold.com.