The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Agree with your comments. The 20 year mine life & large resource are not to be underestimated. Plus,we expect other ore on the tenement to be added in due course. A panelist at the Mines and money conference in NY last week said that the last large ( ie > 5m oz inferred discovery) was in 2011, the 7m oz Amaruq discovery by Agnico Eagle in Canada. A reminder of Sukari's scale and value, it is twice the size. Setbacks are inevitable in gold mining a point brought home in the latest 12 page report (attached) from Canadian Co. Maison Placements. They highlight the rise of resource nationalism in Congo, Tanzania, Mauritania, Mongolia and Indonesia. They also underline the importance of getting your new mine plans right : both Detour Gold and New Gold have to revisit their new mine plans. So if either BK or C D'Iv has real promise for Centamin it is probably a good sign that they are not rushing. Finally, note that the much hyped great hope for a second "Witwatersrand" in Pilbara, NW Australia saw gold explorer Novo resources shares drop 29% on 31/5 on poor assays. As we are painfully aware, whether you are an established producer or an explorer it's a tough business indeed. https://gallery.mailchimp.com/de2b777f071a0a47f54ed315e/files/ba008fcd-26a0-4ef3-a939-1c1bcfc63b30/WarDrumsBeating.01.pdf
Thanks firstly to mrtibbles for your heroic work this week, it is much appreciated and reassuring for us long term holders who were around for the 2011 and 2014 production cutbacks. History repeats and I try and learn its lessons. I only buy the CEY dips and just wait for the prices to come to me. I bought some more on Tuesday viewing a 17 month low price as a bargain. One positive of the unexpected prod cutback has been the quality of debate on here has improved dramatically. Angst, fear ,uncertainty and doubt can do that to you. Sotolo, Prof, Cowichan, Market, Siko and Rebess you've all made me think. So here's what I think. The current low share price is transitory. 10-15p either side of 150p is probably our best resting rate in the current gold mine sector "no man's land". In my view we are very close to a sector rerating and new demand led by a price break out by gold. 5 times since Sept gold has been capped at $1365. Our run up from 65p at end of 2015 was thanks to gold's mini craze in h1 2016. Yet all the reasons for owning gold keep rising. Will it be US inflation; Italy; the tariff war; or Deutsche bank that breaks the risk on general market ? The gold sector will not stay the Cinderella - the only scorned and undervalued sector for ever. No Rebess it is not different this time. When perception and sentiment change so will gold mine prices and forecasts. Hell we're at the same price today as on 29/3/10 when CEY completed first tonne of gold and Comex gold traded at $1112. So here we are at the same price after producing 16.9 tonnes in 2017 and gold closing the year at $1305. I suspect that we will see a stampede into quality gold co's when the switch is flicked. All the signs are there that we are close. Commercials have dramatically reduced their Comex short book and the daily sentiment index is back to overbears lows. Gold mining stocks are more undervalued relative to the S&P than any time since 2005. Paper gold prices may remain shackled until the Fed raises rates on 13/6. But don't believe what you read. Gold has risen after 5 of the 6 Fed rate rises since 2015. I expect gold to lead miners after 13/6. The perception and interest in gold shares will return we just have to accumulate cheaply and await the new dawn. It's coming.
What a delightful dilemma. Centamin is in a tiny minority of co's with large free cash flow and NO Debt. Just take a look at the accounting shenanigans with many S&P Co's where the Board have borrowed to buy back stock to boost their wallets It is such a short term gain. With rising interest rates they will regret not investing in capital plant & automation. I actually think that there will come a time when the gold price tether is cut and Centamin management will do both buy backs and fat dividends at the same time. Hold onto a gold cash cow we're close to things getting really interesting.
Cowichan good call. Many of the major PM co's balance sheets are still red from their hubristic late 2000's buys with new issued shares and are now saddled with huge debt and in many cases cancelled projects. CEY's position is very advantageous for when PM miners start getting really sought after by managed money. The subset of midsize PM miners that are debt free, with rising prod, rising divi and poised for geographical diversification is very small. Expand through cash flow or be taken over by a major (at a fair price) - both are good options for investors. These exceptional qualities should ensure outsized performance for the likes of CEY when institutional money managers move back in to miners as a safe haven. The order of investment preference and timing by money managers in PM miners is likely to be : stage 1 : buy up the market leaders and top quality miners with best metrics and lowest risk and hold for capital growth and rising diviidends. stage 2 : Investors who missed the top quality co's at low prices. Now attracted to the rest of the producers including the indebted co's, on a "rising tide lifts all boats theme" stage 3 : Perhaps a year into the move will see managed money take 10%-20% profits from stage 1 and 2 Co's to reinvest in late stage cycle high risk penny share explorers. Arguably stage 1 has started for the smart money investors. Will the new Fed Chairman's first FOMC meeting in mid March or the launch of the Petro/Yuan be the catalyst ?Or will a proper correction in general equities lead investors back to gold ?
We're in a holding pattern. The manipulators bombed the GDX and GDXJ ETF's to keep gold miners from breaking out which had the intended effect of stalling the Dec/Jan momentum. I don't think CEY can go down much (holders for the divi) but it won't break out on the upside until the majority gold scorners finally consider it as a safe haven they need to have. We're still awaiting the fear catalyst that suddenly kicked in in 2008's equities slump. Last week's squall was not sufficiently large to get major investors worried and actively looking for contrarian alternatives like PM's. Next week is Chinese Lunar New Year holiday which always dampens physical gold demand.But if last year is any guide CEY rose 7p +4.43% on the last day of the holiday Thurs 2/2/17. So we should watch the price action on Thurs 22/2. In March we have the first Fed Interest rate decision under the new Chairman and on 23/3 the expected launch of the Petro Yuan. Add in the now constant pressure that the Comex exchange for physical contracts has put on an already very tight LBMA.We might not have long to wait for some fireworks especially as the recent gold and silver action feels to me like a spring coiling. Patience will be rewarded.
Acacia Mining scrapped their FY divi today after profits were hit by the Tanzanian export ban of last year. Centamin and Randgold all round quality and solid dividend yield will likely make them first choice for the sector rotation into PM's when the general equities tremors of last week turns into something more consequential.
Hi Market. I think we're on the same page. It's so difficult to forecast change when we are psychologically programmed to assume past is prologue. Hence all the biggest winners are the contrarians who dared to think of alternative outcomes eg. Soros and GBP; the Big Short hedge fund winners in the 2008 crisis. They took on the consensus and were proved right. Are we now close to a tipping point of gold price control ? Why have the Chines and Russians been buying so much physical gold if they are just going to vault it and accept US paper PM price suppression forever ? That makes no sense. Once they have bought enough at suppressed prices there is likely to be a move to free price discovery whereby the physical market now dominated by China, Russia and India are the price setters. The oil market is the biggest commodity market in the world. The PetroYuan is (possibly) launching on 18/1 and apparently offering a Yuan to gold conversion. That will increase pressure on the all ready v tight physical market. Also at some stage the musical chairs being played by Comex and LBMA with the exchange for physical contracts will come unstuck. Trump is on collision course for a trade war with China. China has many financial weapons to use apart from no longer buying US Treasuries as reported 10/1 by Bloomberg. If China put a bid in of $2000 or more for gold overnight that would end the paper market price rigging at a stroke. It would also give the gold related PetroYuan strength and the PBOC's gold assets would help alleviate their on book liabilities. My guess it will happen it's just a question of when.
Thank you for all of your help over the last 5 years. This blog won't be the same or as good without your input. Best of luck for the future and I hope that you have tucked a few CEY shares away for the investment journey ahead.
Today's 5.7% share price rise was the best in 14 months since 9/11/16. It only managed to close 3 times with rises of 5% or more in the whole of 2017 (+5.07% 13/4/17, +5.23% 13/3 and +5.37% 27/1/17). Let's hope that 2018 shapes up more like 2016 when the share enjoyed 16 trading days with gains of 6% or more. The setup is encouraging : CEY beating forecasts, a solid divi payer with no debts and lots of development potential near and W.Af. The macroeconomics of rising commodity prices signalling rising inflation and gold once again being looked at as a good inflation hedge after 5 years of scorn by herd acting investment managers. Add in the Petro Yuan launch on 18/1 which could give the dollar another nudge down and still very cheap producer gold miners begin to look essential in a debt and risk filled world of today. Oh and there's Trump and rocket boy! Smart money has been buying precious metals and the quality miners through the autumn dip. Let's see what the herd do if the S&P finally has that long overdue 5% or more correction.We're now 387 days since the last S&P 5% correction. The all time record was 396 days...just 9 more to go.
Good news. Progress. I have just had an email reply from Craig at L.S.E. to thank me for "bringing this to our attention and they will request that the site developers update the name from Centamin Egypt to the correct Centamin as quickly as possible.
spot64 it is only a few diehards like this platform which keep the old name, presumably because they didn't see the RNS. I've pointed this out before. Centamin Egypt changed its name to Centamin plc with an RNS on 30/12/11.
US December non farm payrolls release today at 13.30 UK time. I expect they will smack gold and silver on the announcement "comme d'habitude". But $1300 for gold and $17 for silver are increasingly looking like support lines. NFP forecast +190k jobs vs +228k previous month
A good sign that over the last two weeks since the -3.5% YTD close 133.5p on Wed 6/12 when gold closed $1266 +9.9% YTD the minimum mean reversion I was looking for by year end of CEY at least matching gold's YTD rise has almost been confirmed with the share price rise today. CEY at 150.50p +13p YTD +9.39% Gold $1265.30 +$113.30 YTD +9.835% Of course it would be naive not to expect a cartel hit on Comex over the quiet holiday period but the double bottom pattern for CEY suggests it is well set for the traditional Jan-Mar seasonal rally. Happy Christmas and a prosperous New Year to everyone.
In September I pondered on here whether we were putting in the right shoulder of a reverse head and shoulder pattern where the left shoulder is designated as the Sept 2016 low; the (inverse) head the Dec 2016 lows; and the right shoulder the Sept 2017 lows. The problem has been the failed breakout in October at 150p and the retest lower into this December. Was this a right shoulder with a chip on it or something else ? As an alternative I now suggest that the monthly bar chart now shows a powerful double bottom confirmation:Sept-Dec 2016 and Sept- Dec 2017. As we close out the year Centamin's share price might yet mean revert to at least the gold price gain for the year and be set up well for the a repeat of last year's Jan-April rally. Some of our forecasts and hopes for Centamin seem to have been dimmed by the grinding nature of the five year gold bear market 2011-2015. But realistically gold and silver remain way undervalued compared to all other financial assets and Centamin's record high of 203p remains a modest peak for a company of such potential. The now 6 year sideways coiling price action is going to release latent torque at some stage for the share price. Why not 2018 ?
Today is quarterly ETF re-balancing which affects CEY as a constituent of GDX and GDXJ and their 3x leveraged subsets. In terms of impact on CEY's share price range, volatility and volume yesterday and today has been unusually tranquil. This time last year saw volume on Thurs 15/12 of 19.19m and a trading range of 12.7p. Followed up by Fri 16/12 trading 23.33m shares. In the last 4 quarters there has tended volatility on the Thursday. Not this time. This Qtr re-balancing is placid in comparison. Yesterday's volume was just 5.6m shares with a range of 3.4p. With just two hours trading remaining for Friday the range is less than 4p and the volume is way below an average normal day of 5.1m shares traded. What might this be indicating ? As the CEY share price is so close to the 3rd Qtr re-balancing close of 141.6p it is likely being treated as a "hold" in all the ETF's. Gold has come through the Fed rate rise and CEY has broken above some key moving averages like the 100DMA and the downtrend resistance line in place since April. I get the impression there are many firm hands now sitting patiently waiting for the seasonal January uplift to mean revert. CEY is only +4.5% YTD right now vs +8.5% for gold. At the minimum CEY should be up with gold. When gold stocks are re-discovered by the herd the traditional x2 to x3 uplift for quality miner stocks to gold should re-assert itself.
I like the share price action so far in December. With the Fed almost certain to raise US Int rates by 0.25% this evening is it a question of "sell the rumour, buy the news" with quality PM miners? The cartel have managed to push gold and silver down and buy back a lot of their shorts in December, but for the last few days quality gold co's including CEY have been holding or rising. Centamin's share price at 141.65 on the daily bar chart is now right up against the descending resistance line in place since the year high 193.90 on 13/4. It touched the line on 3/8 at 170p and twice in Nov 27-28/11 at 145p. In January the new year gold rally saw the share price break through it's 100DMA at 144p on 11/1 and then go on to add 50p in the Spring run up. Are investors quietly picking up some cheap Centamin shares here in anticipation that we may once again be about to start a new upleg signalled by a decisive break above the 100DMA (currently 145p) ? Over to you Mrs Yellen.
Wed 13/12 with a 95% expectation of a 0.25% rise. It's baked in say the analysts. The only surprise now would be if they chickened out (which would be bullish for gold). Yet if history repeats last December's rate rise action then gold and CEY price will likely bottom the following day and lay the groundwork for the move up in the seasonal Jan-Feb rally. Interesting to note that the Globex gold futures price was not bombed overnight Sunday/Monday Asian market. They religiously knock gold then so why not last night? Were they worried that if they did that the launch of CBOE futures in Bitcoin last night might have got out of hand ? Friday 15th Dec quarterly ETF re-balancing which is important for CEY as a constituent of a number of ETF's. But as we are only 2.15p below the close at the last re-balancing 15/9 perhaps it will be less volatile. Plus we are very close to CEY FY figures and the seasonal Jan-Feb precious metal rally period. Of course bankers and investment managers want to maximise their year end bonuses but trying to squeeze more downside profits by additional shorting here in PM's and their miners now feels more like Russian roulette. Which will only end badly for them. Fund managers are herd animals but where will they re-allocate profits from overvalued tech holdings or find a safe haven today in bubble land ? How about long ignored PM's ?