RE: Re Youseg El Raghy6 Jan 2018 17:55
It's wholly unprofessional for the Chairman to provide any outturn and forecast statements 2 days before a formal RNS announcement is made to the LSE.
Not only does the Chairman lose credibility however he could be accused of encouraging front running.
I am expecting next Tuesday a formal announcement on the reserve report and therefore this in itself should be driving a significant increase in the forecast upwards. If his statement holds true a forecast of 560,000 oz would be a disappointment particularly in light of the significant increase in production output in H2 2017. I am expecting a minimum production forecast of 600,000 oz for 2018 (without a reserve report) and possibly as high as 700,000 oz with a new reserve report.
CEY management has consistently been cautious on its outlook and I agree with the sentiment on this bulletin board that it is about time to be on the front foot and be aggressive.
I also think with the growing balance sheet cash pile estimated to be $400M that they should seek out a value enhancing acquisition. Petropovalsk comes to mind with a equity valuation of $250M and a debt pile of $570M with annual production of 400,000 oz would propel CEY in the premier league of gold miners such as Rangold. Petropovalsk has been through a major restructuring and change in management and with a new POX plant due to be commissioned later this year ($250M investment) to increase production from its plant and to provide services to others, the company is ripe for a takeover. Off course there is country risk being Russian however this company was the darling of gold miners a decade ago however due to financial mismanagement it's shareholders have taken a tremendous hit. The share price is trading around 0.078p. It's a lon way off from its highs a decade ago - £9.
An acquisition would take CEY in the 1000,000oz gold production category and allows it to leverage its cash pile and put it to good use. That would be transformational.
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