Member Info for mrtibbles

Sukari is a Tier 1 asset. Centamin operates its sole asset, the
Sukari gold mine, in southern Egypt. The mine is a Tier 1 asset,
in our view, albeit one in a relatively high-risk jurisdiction. The
mine has a c20-year mine life with low costs.
Potential for high-return brownfield growth. Recent
exploration drilling at the Cleopatra target has outlined
potential for a second high-return underground, in our view.
That CEY has already begun a potential 1Mtpa decline there
indicates good potential for production to grow to >700koz pa.
This is not included in our base-case NAV.
Track record on dividends set to continue. CEY has been a
consistent dividend payer for some years. With the group net
cash, management has outlined a minimum cash balance that
needs to be held with FCF above this set to be paid out to
shareholders. This gives CEY a return ahead of most EMEA
peers.
Potential catalysts
• Improved operational momentum at Sukari – 2020
• Ahead of consensus dividend - Q1 2021• Production risk: Post a difficult H1, we think CEY will rebuild
trust in Sukari's ability to deliver. However, a risk is further
under-performance of the underground vs plan impacting
grades and hence ounces.
• Political risk: Whilst we think the profit share with the
Egyptian government insulates CEY from high levels of
political risk, Egypt still has the potential for a volatile
political situation to arise.
• West Africa: We see CEY as not under pressure to pull the
trigger on a new project in West Africa, but if one was
commissioned that had lower quality or returns than Sukari
then we think this would dilute the group's investment case.
• COVID-19: If the pandemic impacts Sukari's operations
either directly through an outbreak on site or indirectly
through limits to contractors and consumables then this
could lead to downgrades to earnings and the group's
dividend.

Mizolgit
An excellent understanding of the situation, the penalties for blowing the whistle can be very severe in local government, the whistle blower's card would be marked and reasons found to blacken their character or curtail their career in some way, in the civil services its even worse, those civil servants that do speak out are brave people indeed, depending on their grade if they speak out then they could find themselves on a disciplinary for breaking the T&C of their contract of employment.

Great find Mr Bond, during my career in local government I have witnessed at first hand and then been required to smooth over the situation,or cover up for the good of the council the drunken excess and even debauchery that takes place amongst some politicians, generally the higher up the political ladder then the more the excesses and abuses of political power.
I won't upset some on here by disclosing the political party ideologies of the very worst offenders, but to witness some of the politicians abuse of the advantages of political office by gorging themselves to excess or into state of stupor on all manner of what they see as the benefits of the job is sickening to say the least!

Hi Siko,
Great to hear from you, thank you for your post!
I hope that you, your family & friends are all safe and well!
Tibbs

P4

While gold prices surged 18% in 1H20, there hasn't been a corresponding expansion in trading multiples. In fact, the cons EV/EBITDA multiples for our basket of UK,
North America and South African gold miners have re-rated by less than half a turn while Australia has actually de-rated by 0.2 turns. Compared to their respective 5-year averages, the four regions are between a 10% discount to 9% premium (+2-14% premium based 2-year averages). Specifically for the UK (our coverage plus HOC), cons multiples are at a 10% premium to its 2-year average (7.0x vs 6.4x) or 0.35 standard deviations.

Company Description
Centamin
Centamin is an Egyptian gold miner with its primary asset, the Sukari Gold Mine, being the first large scale modern gold mine in
the country.
Fresnillo
Fresnillo is a member of the FTSE-100 and the world’s largest silver producer. All current operations are in Mexico and the company
can trace its origins back to the commencement of the Peñoles’ mining operations in 1887.
Polymetal
Polymetal is a gold and silver mining company, operating in Russia and Kazakhstan. It was established in 1998, completing an IPO
in 2007 on the London Stock Exchange (GDR's) and Russia RTS and MICEX exchanges. In 2011, it was admitted to trading on the
official listing of the London Stock Exchange.
Company Valuation/Risks
Centamin
Our price target is based on a 50/50 weighting of P/NPV and EV/EBITDA multiples. Key risks to our PT include sustained gold price
weakness and operational difficulties.
Fresnillo
Our price target is based on a 50/50 weighting of P/NPV and EV/EBITDA multiples. Key risks to our PT include gold price volatility
and operational/development performance.
Polymetal
Our price target is based off a 50/50 weighting of P/NPV and EV/EBITDA multiples. Key risks to our PT include gold price volatility
and operational/development performance.
For Important Disclosure information on companies recommended in this report, please visit our website at https://
javatar.bluematrix.com/sellside/Disclosures.action or call 212.284.2300.
Analyst Certification:
I, Alan Spence, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the
subject security(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly,
related to the specific recommendations or views expressed in this research report.
I, Christopher LaFemina, CFA, certify that all of the views expressed in this research report accurately reflect my personal views
about the subject security(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly
or indirectly, related to the specific recommendations or views expressed in this research report.
I, Patricia Hove, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the
subject security(ie

P3
Solar project provides value

The Sukari mine's remote location current leaves it reliant on power from generators
burning heavy fuel oil, consuming 90-100 million litres of diesel per annum. Considering not just Egypt but Sukari specifically, the mine is ideally placed to make use of solar power. The Egyptian government has a target of 20% electricity generation from renewable sources in 2022 and 42% by 2035. Located just 300km away, the Benban Solar Park is one of the world's largest solar parks and was completed in late 2019.
A 2019 preliminary study completed by CEY concluded that the integration of a solar
plant could materially cut consumption of fossil fuels. The project will be situated on the large Sukari tenement and power the site during daylight hours. CEY estimates that the solar plant can meet c.25% of its power needs and the 30MW plant will be constructed such that future expansions will be an option.
At a capex budget of $37m and 12m build time, the project is estimated to reduce fuel by 18-20 million litres per annum and have a payback period of three years. We estimate the project NPV to be $38m or 3p per share.
We estimate the Sukari solar project (in its initial scale) to add 3p of incremental NPV.

P2
With the gold/silver ratio peaking at c.125x in March on peak COVID-19 fears, smashing through prior all-time highs, the ratio fell back below 100x in May. Still, these levels remain far above long-term averages regardless of the time period considered (1970-,2000- or 2010-). Our long-term forecasts (Exhibit 5) assume a gradual return to a 75x ratio, modestly higher than the average from 2010 onwards.

Meaningful Dividends across Selective Names
while gold miners have focused on balance sheet improvement and stronger FCF
generation, a subsequent increase in shareholder returns is yet to be achieved. Very few gold miners* pay what we would consider "meaningful" dividends, a range we would put in the mid-single digit yield. From our UK-coverage, CEY and POLY sit at the high end of dividend yields and both, we believe, have the capacity to pay higher dividends especially in light of currently robust spot gold prices
• Upside from brownfield exploration on large tenement
• Clean balance sheet
• Capacity for material upgrades to already sector-leading shareholder returns
With solid FCF, we forecast CEY to continue building upon an already strong cash
balance (no debt). From YE20 to YE21, expect the cash balance will grow by $63m
(+18%) to $410m. This should leave ample financial capacity for CEY to further improve on already stand-out shareholder returns vs peers.
To demonstrate, we provide two scenarios; a top-up of dividends to drive the YE21 cash balance to $275m ($250-300m range has been communicated as an ideal through-cycle
balance) and another top-up to drive the balance down to the $100m cash reserve level.
While the latter scenario is unlikely, it serves as a useful frame for the $275m scenario where CEY has the capacity to pay an 11% divi yield in 2021 just to leave the cash balance in line with its rolling five-year, year-end average. Note the yields below are based on dividends paid in 2021, rather than declared, to control for the YE21 cash balances.

P1
JEFFERIES Metals & Mining
Upgrading Precious Metal Forecasts; Meaningful
Spot Upgrades
8 July 2020
Key Takeaway
We upgrade near- and long-term precious metal price forecasts, seeing support
from monetary policy and balance sheet expansion. Strong moves in metal prices
YTD leave us in clear spot upgrade territory (Exh 1) with CEY est +16% on average
2020/21. CEY and POLY remain standouts in shareholder returns (6%-7% yields) vs
sector averages of just 2%. On average, our new EBITDA estimates are +17% and
+20% ahead of 2020 and 2021 cons.
Increasing Precious Metal Price Forecasts. We increase near- and long-term gold
price forecasts by 12% and 7%, and see medium-term support above the $1,750/oz
level. Silver price forecasts are increased by 10% and 5%. In the last three months,
silver has outperformed gold by 16%, as global markets are becoming more confident
on the industrial outlook (silver 50% industrial vs 10% for gold). These forecast
changes drive material increases in our EBITDA estimates, on average +17% and
+27% in 2020 and 2021. Our new EBITDA estimates are +17% and +20% ahead of
cons in 2020 and 2021 respectively
Elusive Dividends. The last several years have seen significant progress on balance
sheet reduction and consolidation across the sector. Shareholder returns is another
focus of the industry to attract the generalist investor but at this point remains just
around a 2% yield. CEY and POLY stand out as leaders with mid-single digit yields
and upside risk given the stronger metal prices. We stress the financial capacity at
CEY to pay a >10% yield in 2021 just to leave YE21 cash in-line with 5-yr average.
Only a Modest Re-Rating YTD. Strong performance for the gold equities YTD has
been primarily driven by underlying metal prices rather than multiple expansion.
Cons EV/EBITDA multiples across regions have re-rated by less than a half-turn and
UK names are now at just a 10% premium to historical average. We have rolled
forward our valuations to 2021 and continue to use a 50/50 weighting of P/NPV and
EV/EBITDA multiples, with no material adjustment to multiples. CEY (Buy, 220p PT) remains our preferred name among our UK precious metals coverage

? Our view: Our focus on Chaarat is increasingly on upside potential from the 5.4Moz
at 3.75g/t Kyzyltash sulphide Resource that underlies the Tulkubash oxide
Resource. With higher gold prices, proven success at refractory operations in Turkey
(Copler) and Russia (Polymetal and Petropavlosk) and an increased amount of
available third-party POX capacity in Russia, we believe that this has the potential to
become a company-builder of an asset. We have increased our valuation for
Kyzyltash to US$30/oz from US$20/oz reflecting our increasingly positive outlook on
the asset. In the near term, the deliverables are continued operational improvement
and cash flow improvement at Kapan, to maintain a healthy balance sheet as it
progresses project development in Kyrgyzstan.
Endeavour (EDV.TO BUY C$40.00)
? Guidance: Full year guidance is 680-740koz at AISC of US$845-895/oz. Semafo’s
guidance is 315-355koz at US$895-960/oz.
? Q1 results: EDV produced 172koz at AISC of US$899/oz in Q1 while Semafo
produced 82koz at AISC of US$888/oz. EDV reported EBITDA of US$130m for a
48% margin, with Adj net income of US$43m or 39cps. Pro forma Q1 had EBITDA of
US$195m (50% margin) with net income of US$64m or 40cps.

Q2 forecasts: For Q2 we forecast 149koz at AISC of US$1,157/oz as both Ity and
Hounde go through a period of lower grades. We estimate Q2 EBITDA of US$108m
for a 44% margin with adj net income of US$21m or 18cps. For Semafo, we expect
net profit of US$15m (excluded from our EDV estimates above).
? Our view: As we have detailed in several recent notes, we believe that EDV should re-rate strongly with added scale and production from the Semafo transaction, which is accretive on key value, balance sheet and per share profitability metrics. Updated
guidance is expected in early August and there are a number of catalysts for Q3
including new mine plans for Hounde and Ity, and an updated Resource for Fetekro.
H2 should be stronger with higher production expected at Ity and Hounde. Mining
commenced at the higher grade Kari Pump deposit in early Q3 and we forecast
production of 250koz for the full year at Hounde, towards the top half of 235-255koz
guidance.

P3
? Chaarat Gold: Increase price target to 55p/sh on increased valuation for Kyzyltash to
US$30/oz from US$20/oz, maintain Buy rating.
? Fresnillo: Increase price target to 750p on increased 2021 price deck impacting
CFPS valuation. Decrease rating to Reduce from Hold as there is 10-20% downside
to our price target.
? Hochschild: Lower rating to Hold from Add, maintain 190p price target. This is in line
with Numis rating policy as the price is within 10% of our price target,
? Golden Star: Increase price target to C$5.25/sh on increased price deck, maintain
Buy rating.
? Pretium Resources: Maintain C$13.50 price target, rating moves to Add from Buy in
line with Numis rating policy as there is 10-20% upside to our price target.
? Shanta Gold: Increase price target to 22p from 20p, maintain Buy rating.
A full summary of price and estimate changes is below. On average the changes
increase NAVPS by +2.2%, 2020 FCFPS by +1.5% and 2021 FCFPS by +9%

Guidance: Full year guidance is 510-540koz at AISC of US$870-920/oz, 55% H2-
weighted.
? Q1 production: Q1 production of 125koz at AISC of US$902/oz beat our forecast of
113koz at AISC of US$1,058/oz, with better grades from the OP and UG.
? Q2 forecasts: We forecast Q2 production of 115koz, in line with guidance of
115koz, as grades are forecast to moderate in Q2 before increasing in Q3. We
forecast Q2 AISC of US$1,026/oz. For H1 we forecast production of 240koz AISC of
US$962/oz, with EBITDA of US$223m (53% mgn), net profit of US$95m or 8cps and
net cash of US$300m.
? Our view: Our overall outlook on Centamin is positive as the company retains a
strong balance sheet and dividend yield. After a difficult 2018 and 2019, the
company has refreshed management and communicated a more dynamic growth
ambition, though whether this takes the organic or acquisitive form has yet to
become clear. Q2 has been guided to be weaker than Q1 at 115koz, which while a
step down, has at least been flagged ahead of time to avoid surprises. With that
said, shares have had a strong run in early Q2 and along with the other caps, may
trade in line with the gold price until we get numbers from what we expect should be
a strong operational H2.
Chaarat Gold (CGH.L BUY 55p)
? Guidance: Full year guidance is 55koz
? Q1 production: Kapan produced 13koz AuEq in Q1.
? Q2 forecasts: For Q2 we forecast production of 13.7koz AuEq.
We forecast H1net profit of US$5.7m or 1.2cps with EBITDA of US$31m for an EBITDA margin of 31%.

P2
For overseas producers our top pick is EDV, which offers scale and FCF yield which could soon translate to a significant dividend yield.

We have updated the producers for our updated price deck. We have not made any
company level target multiple changes in this document. The newly updated ratings and
targets are:
? Centamin: Increase price target to 200p on higher price deck for 2021 impacting
CFPS valuation, maintain Add rating.
? Chaarat Gold: Increase price target to 55p/sh on increased valuation for Kyzyltash to
US$30/oz from US$20/oz, maintain Buy rating.
? Fresnillo: Increase price target to 750p on increased 2021 price deck impacting
CFPS valuation. Decrease rating to Reduce from Hold as there is 10-20% downside
to our price target.
? Hochschild: Lower rating to Hold from Add, maintain 190p price target. This is in line
with Numis rating policy as the price is within 10% of our price target,
? Golden Star: Increase price target to C$5.25/sh on increased price deck, maintain
Buy rating.
? Pretium Resources: Maintain C$13.50 price target, rating moves to Add from Buy in
line with Numis rating policy as there is 10-20% upside to our price target.
? Shanta Gold: Increase price target to 22p from 20p, maintain Buy rating.
A full summary of price and estimate changes is below. On average the changes
increase NAVPS by +2.2%, 2020 FCFPS by +1.5% and 2021 FCFPS by +9%

Guidance: Full year guidance is 510-540koz at AISC of US$870-920/oz, 55% H2-
weighted.
? Q1 production: Q1 production of 125koz at AISC of US$902/oz beat our forecast of
113koz at AISC of US$1,058/oz, with better grades from the OP and UG.
? Q2 forecasts: We forecast Q2 production of 115koz, in line with guidance of
115koz, as grades are forecast to moderate in Q2 before increasing in Q3. We
forecast Q2 AISC of US$1,026/oz. For H1 we forecast production of 240koz AISC of
US$962/oz, with EBITDA of US$223m (53% mgn), net profit of US$95m or 8cps and
net cash of US$300m.
? Our view: Our overall outlook on Centamin is positive as the company retains a
strong balance sheet and dividend yield. After a difficult 2018 and 2019, the
company has refreshed management and communicated a more dynamic growth
ambition, though whether this takes the organic or acquisitive form has yet to
become clear. Q2 has been guided to be weaker than Q1 at 115koz, which while a
step down, has at least been flagged ahead of time to avoid surprises. With that
said, shares have had a strong run in early Q2 and along with the other caps, may
trade in line with the gold price until we get numbers from what we expect should be
a strong operational H2.
Chaarat Gold (CGH.L BUY 55p)
? Guidance: Full year guidance is 55koz
? Q1 production: Kapan produced 13koz AuEq in Q1.
? Q2 forecasts: For Q2 we forecast production of 13.7koz AuEq.
We forecast H1net profit of US$5.7m or 1.2cps with EBITDA of US$31m for an EBITDA margin of 31%.

P1
Numis Note 8th July 2020 Cey highlights & Other producers

Gold has continued to run, a combination of negative real rates, Fed stimulus, and
a general asset price rally have seen gold challenge US$1,800/oz. The rally in gold
equities has moved rapidly with a significant appreciation in mid and small cap
producers since our last price deck and sector update in May. We believe the key
factors for a prolonged gold market remain in place including negative and falling
real rates, a large US monetary expansion, and the prospect for further stimulus as
we approach US elections and with the rate of the economy recovery still uncertain.
We have made moderate updates to our price deck including increasing our 2H20
gold price estimate to US$1,700/oz (from US$1,600/oz) and our 2021 gold price
estimate to US$1,600/oz from US$1,550/oz. Our LT price estimates remain US
$1,500/oz Au and US$16/oz Ag. At these levels, our forecasts are now conservative
relative to consensus, but we believe this is prudent to generate life of asset
valuations on equities. In reality, we are significantly more bullish on the long term
prospect for precious metals.
? We expect significant year over year results improvement for H1 interims:
Weighted by market cap, our average 1H20 EPS estimate is +79% year over year
driven by higher average gold prices. On costs, we expect the tailwind of weaker EM
currencies to be offset by higher local currency costs due to COVID precautions.
? We have included scenario analysis on US$2,000/oz Au: This would increase
average NAVPS by 39% from a flat US$1,700/oz scenario and increase 2021 FCF
yield to a weighted average 12.6% for the sector from 8.4% at US$1,700/oz. With ND/
EBITDA well below two for nearly the entire producer coverage list, we believe that the
sector is well-placed to pay significant dividends going forward.
? The market continues to be price in a higher silver price but gold valuations
remain attractive relative to spot: At a 5% discount rate, FRES and HOC imply a
weighted average silver price of US$22.40/oz while the gold producers (ex FRES and
HOC) imply a gold price of US$1,646/oz. Including the entire coverage list, the implied
gold price (assuming a flat Au-Ag ratio) is US$1,796/oz and the implied DR is 8.2%.
? Our top picks: For UK large caps we favour POLY and CEY, which both offer
attractive dividend yields and in POLY's case, production growth, while valuation is
more attractive for CEY. For UK mid caps we prefer HGM for its growth profile and
dividend yield, which is the most compelling in the sector in our view. For small caps,
we find valuation compelling across the board but our top pick is currently PAF for
its combination of attractive entry multiples, re-established dividend, and yield growth
potential.

Hi Goldgnome,
Really interesting update with lots of reasons justifying why the whole system needs changing instead of printing more fiat money and kicking the can down the road so those that control and created the mess can carry on in just the same fashion!

Thanks for posting link Hedgehogg!

Thanks Dasut, I remain optimistic that Centamin won't disappoint on Monday.

Hi Mr Gnome,
Your posts are always informative not only about gold and mining, but also on so many other topics, including the state of things down under that we wouldn't normally hear about, the way you report the political shenanigans of your government always reminds of the late Clive James, informative , entertaining with a dash of humour and twist of cynicism at the same time!
Some of Aus ruling politicians sound as self serving, inept and incompetent as some of ours!
Looking forward to your next update.
Cheers!

Hi Dasut,
Through your past professional activities at Sukari and your relationship with Centamin the company over the years you have always been a great source of technical information and honest facts, certainly when some of us felt so angry ,let down and hurt by sudden disclosures early in 2018 your knowledgable voice of moderation encouraged us to put the 2018 events in perspective and to consider the true future potential of our Centamin investment before making any hasty or rash decisions that we would later come to regret.
So thank you Dasut for all your input into our forum which helped us to remain strong!

Hi Dasut,
Through your past professional activities at Sukari and your relationship with Centamin the company over the years you have always been a great source of technical information and honest facts, certainly when some of us felt so angry ,let down and hurt by sudden disclosures early in 2018 your knowledgable voice of moderation encouraged us to put the 2018 events in perspective and to consider the true future potential of our Centamin investment before making any hasty or rash decisions that we would later come to regret.
So thank you Dasut for all your input into our forum which helped us to remain strong!

The state of politics today
https://www.electoral-reform.org.uk/who-we-are/

https://www.electoral-reform.org.uk/ministers-are-off-the-mark-when-it-comes-to-trust-in-politics/?utm_medium=email&utm_source=ers-email&utm_campaign=ers+news&utm_content=21st+june+blog+jm

You may well be right about Cey Dansul, a quality stock to invest in.
But then junk stocks like Aton & EDV are only fit for day trading!