Member Info for mrtibbles

Centamin PLC (LON:CEY.L), a gold mining company, delivered a strong performance in Full Year 2023, as discussed by CEO Martin Horgan during their recent earnings call.

Key Takeaways

Centamin achieved 450,000 ounces of gold production in 2023, in line with guidance.

The company reported a 13% increase in revenue and post-tax profits to shareholders of $92 million.

Operational improvements led to a 20% increase in underground ore mined and a 0.5% increase in metallurgical recovery.

The company expects a production increase in 2024 and aims to narrow the cash cost and asset range.

Centamin maintains a strong financial position with $303 million in liquidity and a commitment to dividends.

Plans for 2024 include the final year of significant capital expenditure focused on a grid connection project and continued exploration efforts.

Company Outlook

Centamin plans to increase gold production in 2024 and continue with operational optimizations.

The new life of mine plan for the Sukari Mine aims to return the mine's ounce profile to 500,000 ounces while reducing costs.

The Doropo project in Cote d'Ivoire has transitioned from a cost center to a viable asset, with a feasibility study expected to be completed in mid-2023.

Bearish Highlights

Q1 production may be softer due to lower-grade areas in the open pit and scheduled maintenance.

The company is cautious about the impact of currency devaluation and inflation in Egypt on its operations.

Bullish Highlights

Centamin has identified two interesting targets in the Nugrus area and plans further drilling in 2024.

The company's decarbonization strategy includes solar power and waste reduction, contributing to cost savings.

Centamin's financial strength allows for ongoing investment in exploration and project development.

Misses

Unplanned maintenance during Q3 impacted processing, which remained steady at 12 million tonnes.

https://uk.investing.com/news/stock-market-news/earnings-call-centamin-boasts-robust-2023-results-with-strong-outlook-93CH-3397561

Very good points raised in post from member philandlynne

Centamin Profit Share Comparison July 2019

Price: 113.05

No Opinion

RE: Market 22 Today 10:45

Just looked at a couple of dates to compare where we are.

11th May 18 - before that lovely downgrade

CEY 164.25p Annual Production 560,000 Profit Share 55/45 AISC $884

Gold 1319

560000 * (1319-884) = $243m

55% 243 = $133.65m

3rd July 19

CEY 112.9p Annual Production 505,000 Profit Share 50/50 AISC $920 - taking an average from forecast

Gold 1417

505000 * (1417-920) = $250m

50% 250 = $125m

Cannot see that the so called massive affect of profit share really makes THAT much difference to last year?

So projected profit within $8m of where we were at 164.25p.

Does that really add up to a 51.35p drop?

philandlynne

Hi Sotolo,

You have an excellent memory regarding this very relevant issue

There are many different opinions regarding the terms of the on the profit share , as you will be aware it was the reason most other miners decided against doing business in Egypt and resulted in the recent changes regarding new mining concessions.

How Fair Is Egypt's Profit Share?

"The Australian minerals industry faced an effective tax rate of 54.3% in 2014/15 – the highest burden for nearly a decade, new research by advisory firm Deloitte Access Economics has shown.

The Annual Tax Survey, commissioned by the Minerals Council of Australia (MCA), showed that more than half of the industry’s profits are paid to federal and state government...

The tax ratio has steadily increased since the turn of the decade, from around 40% in 2010/11, to 54% in 2014/15."

So perhaps , Egypt's profit share is neither the bogeyman nor the death knell of gold mining investment when compared to the so called 'safe & modern' mining jurisdiction of Australia. Legalities aside, Egypt also has the benefit of an economical labour force, a desert full of untapped resources and the absence of rigorous environmental liabilities.

http://www.miningweekly.com/article/australian-miners-paid-more-than-half-of-201415-profits-in-tax-2016-12-09

Response from Buchanan on behalf of Centamin Dec 2016

50% is the average – it is the same in the US when you combine VAT, corporation tax, import duties on equipment etc. get much more above 55% and it becomes very difficult.

Remember with Sukari that the capex has been paid for already. We are now dealing with a free cash flow tax at 40% for 2 years, then 45% for 2 years and then 50% thereafter.

Even at the latter end of this Centamin are getting a fair deal.

Tibbs

Please note HISTORICAL post January 31, 2018 | 5:56 am

Centamin shareholders get bumper divvy, despite 2017 profit fall!

Egypt-focused gold miner Centamin (TSX:CEE) (LON:CEY) delivered good news to its shareholders on Wednesdays, announcing it would pay a final dividend of 10 US cents per share, or a total of $144 million, as it vowed to return all of its excess cash to investors.

The payment, on top of 2.5 cents given at the half-year, follows an $111 million compensation to Egypt in 2017, the first year of Centamin’s profit-sharing deal with the country’s government.

Such agreement, which kicked in when the company finished paying off the capital costs of Sukari, its only producing mine, gives Egypt 40% of profits for the next three years, and 50% after that.

The dividend, which almost double some analyst estimates, came despite a 13% drop in core profit for 2017 due to falling gold production and higher costs.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $326 million in the year ended on Dec. 31, the miner said.

Sukari, which began operations in January 2010, produced 544,658 ounces of gold last year at an all-in sustaining cost (AISC) of $790 an ounce. Set against an average price received of $1,261 per ounce, the mine generated $224 million in pre-tax profits for 2017.

“Sukari has produced every single commercial ounce of gold that Egypt has exported over the past eight years, which by the end of 2017 stood at over 2.9 million ounces,” the company’s chairman, Josef El-Raghy, said in a statement.

Centamin, which has been looking into expanding beyond Egypt by exploring and developing three gold projects in two other African countries, doubled the expected gold resource found at the Ivory Coast asset, and said it had also discovered another “exciting” discovery of a 12km-long “gold bearing structure”.

In Burkina Faso, the company is drilling the targeted resource and reserve expansion near Konkera.

Centamin chief executive, Andrew Pardey, said that despite the initial positive results outside Egypt, the company would not build a mine “for the sake of it.”

“We’d like to have a portfolio of mines, we’d like to have more mines in Egypt as well,” he told investors while delivering full-year results. “But it’s all about efficiencies and making sure those mines generate returns.”

Shares in Centamin jumped almost 2.56% in early trading in Toronto to Cdn$2.82, and were up 1.9% to 162.2 p in London mid-afternoon

https://www.mining.com/centamin-shareholders-get-bumper-divvy-despite-2017-profit-fall/

Hi Sotolo,

I hope that you do well out of your decision, you ceratinly deserve to achieve your goal of building that house!

Ahram Online , Wednesday 28 Feb 2024

Egypt signed seven Memoranda of Understanding (MOUs) on Wednesday in green hydrogen and renewable energy with seven global developers with expected investments worth $41 billion over ten years, the Egyptian Government announced.

https://english.ahram.org.eg/NewsContent/3/16/518563/Business/Energy/Egypt-signs--MoUs-in-green-hydrogen-and-renewable-.aspx

Shifting gears in the fight against climate change

Each truck, capable of carrying 290 tons, currently burns roughly 3,000 litres of diesel fuel and emits eight tons of CO2 emissions each day. The climate change mitigation potential of hydrogen-converted mining trucks is staggering: if the 1,000+ open-pit mines worldwide switched to hydrogen-fuelled trucks, a colossal 120,000 kilotons of emissions would be eliminated from the atmosphere each year.

https://tractebel-engie.com/en/news/2023/world-s-first-hydrogen-powered-mining-truck-to-save-eight-tons-of-co2-per-day

Learn about our nuGen™ hydrogen-powered ultra-class mine haul truck and witness its first motion.

https://www.youtube.com/watch?v=jRDcs3FCvP8

Note -Centamin are aware of this technology in mining trucks and it is an option they are considering adopting as an alternative to diesel.

Ahram Online , Friday 22 Mar 2024

Egyptian governorates announced rising fares for public transportation and taxis, effective Friday, following an overnight hike in gasoline and diesel prices.

https://english.ahram.org.eg/NewsContent/1/1235/519800/Egypt/Urban--Transport/Egypt-raises-transportation-fares-after-hikes-in-f.aspx

Note Centamin's diesel prices are agreed in advance at a contract rate usually over six months or more.

Dear Steve Jones,

Be honest you are ust hoping to trade out of some spike in the share price based on as yet undelivered predictions from the CEO until reality kicks in and the share price crashes back down again so that you can do more of the same.

The reality is that the share price movement is constipated and the divi is now little more than table scraps and anyone considering investing in the company need to be aware before making a decision to invest of why the company is in the present situation and aware of effects on the bottom line by the very large brick of a 50% profit share on Centamin's tail.

It was the El Raghy family who were the main instigators of the creation of what some thought to be an over generous dividend policy, which is quite understandable considering the millions of shares they acquired from the early days of the company, they were raking it in!

That said so were long term share holders, although likely after the narrowly avoided implosion of the open pit and and realising the gigantean costs of the clear up what was considered by some as an overgenerous divided policy is something that the present management would have preferred to have gotten out of, but they realised that just to stop paying the divi would be impossible so they seem instead to have adopted a policy of eroding the dividend by a thousand whilst diverting the sheeple's by making predictions of "Good times coming"

It is a mistake to assume that everyone is aware of the issues with the Egyptian economy, I come across people everyday who aren't .

The article from Investing.com is the journalists present opinion on the latest results and so relevant to anyone who is already invested in Egypt and also to anyone who may be considering investing into Centamin.

If you don't like Andrew Maguire or his pretensions for whatever reasons then that's your opinion, viewing is optional!

Tibbs

Despite Centamin’s success story, it’s essential to acknowledge Egypt’s broader economic challenges. The country is grappling with high inflation, a heavy debt burden, trade deficits and other pressing issues threatening stability.

While recent geopolitical instability pushed the price of gold higher, such disruptions threaten global markets. For Egypt, they also cause revenue losses from the Suez Canal, further exacerbating economic woes and calling for careful evaluations of firms with key assets in such regions.

https://tinyurl.com/5n86j7j4

Hi Tornado,

Although there are those who attempt to deny all that you have explained because they have vested interests in keeping the manipulation going you are absolutely correct, Andrew Maguire has covered this subject/skulduggery in many of his presentations over the years.

Tibbs

Hi Rebess,

Many a true word

A slick, albeit rushed presentation of a jumble of as yet undelivered predictions and the enthusiastic proposed spending on new projects that may have contributed to a spike up in the share price, although that was most likely more related to the POG at that time.

But this presentation was a opportunity for the company whilst the share holders were still trying to comprehend the the finer details of it to slip in yet another cut in the dividend, possibly so it becomes accepted custom and practice until it eventually ceases to be!

Although I wasn't wearing the rose coloured glasses I was really hoping that this time my loss of confidence in the BOD was going to be unjustified and that this time was going to be different , even that a goodwill gesture of increase in the dividend would have been a start, but more of the same really , albeit in a slick presentation

"They giveth and they take it away"

Please be aware Historical post's of "Softness!"

The company also warned that production for the first nine months of 2019 is expected to be between 331,000 and 332,000 ounces. While lower than what originally expected, the company said the lower end of its full-year guidance range of 490,000 ounces of gold remains “achievable.”

https://www.mining.com/centamins-ceo-to-leave-after-challenging-year-for-the-miner/

The miner’s shares were down 12% by mid-afternoon in London at 110p, leaving it with a market capitalisation of £1.28 billion. The price drop is the highest since July, and takes the stock dangerously near to their second worst performance this year.

In February 2019, the stock price hit the lowest in six years after Centamin

https://otp.tools.investis.com/clients/uk/centamin_plc/rns/regulatory-story.aspx?cid=1756&newsid=1235519

That doesn't have any detrimental effect on the dividend, its the management that decided that!

Promises all very well, its the delivery on them that's lacking!

Hi Mr Henderson,

Just had a look at my emails, just as I thought really another divi cut, another softer quarter, what a surprise, just as Rebess suspected more excuses, the Cleopatra hill has always been problematic and likely always will, slightly softer at 25% of the annual target, that a good one, a quarter less !

I wonder just what decade Martin is planning to ever deliver, four years on many millions spent clearing Pardey crap and still its going to take a bit longer but never mind these things take time , like a thousand years at this rate.

Although they are consistent in cutting the divi, spending millions and making excuses that the good times are just a few more quarters on!

This report is pants!, ust excuses or a cover up of problems that will become apparent as the quarters roll by!

Mind you Dasut they did chuck rather a lot of money down the lavatory on projects they have since walked away from, although granted t was just as well they had some spare cash considering the clear up costs of Pardey and Co's mess!

I take your point Dasut, but those in the industry can be communicated with on their level at any another time during the course of business, these presentations are an opportunity for the CEO to inform share holders and excite potential investor's of a much wider audience.

There inst anything wrong in fact its it's preferable rather like "BBC Any questions" to have an experienced chairperson/journalist /CEO /PR Officer to conduct the meeting and direct the questions those with the relevant expertise and understanding to answer them.

It's restoration of confidence in the company now that is paramount and that is best achieved by excellent communication catering for all levels of understanding of a much wider audience than just those in the mining industry.

H Spot,

Yes that's right , although with the "caveat" when the contract is finished, although I understand from someone on the inside that an extension of the contract in some form may well be likely, hence my reservations about getting too excited about the imminent update.

Well said Paul,

i do apologise I misspelt your name in my previous reply to you!

Tibbs

Hi Dasut,

I fully appreciate that in effect over the past 4 years we have been paying a heavy price the processes the previous management should have been doing out as a matter of course, although unless i misunderstand had the these waste clearance procedures been carried out as part of the day to day operation as they should have been it would have been much easier at that time and far less expensive than doing it over the past four years.

Paul is correct I did post that Martin Horgan really had only one option to do whatever needed to be done it the objective was to make the Sukari operation safe and commercially viable.

Martin Horgan hasn't upset me, although his presentations irritate me, he is is obviously highly experienced and competent in running a commercial mine, however that said unfortunately his presentations are always far to rushed, Martin rattles through a huge range of issues at such speed that their is'nt enough time for the audience to adsorb the facts and so the presentation loses much of its intended purpose.

If only Martin would just slow down and pause at times, he would be far more convincing, pauses serve critical functions for both the speaker and the audience during a presentation

For the speaker, a brief pauses allow time to breathe, to emphasize key points, transition between ideas which can prevent rambling and importantly for the audience the pauses provide time to digest information and understand non verbal cues from the speaker.

If only Martin would get into the habit of slowing down a little and making some pauses his presentations would be more convincing and have far more impact!

You did quote 2.3 year pay back, I just though it wise to allow for any unforeseen expenditure etc.

I really do hope that Martin Horgan and his team prove that they are in a different league to the Pardey & Co, lets hope they prove it and deliver

hi pal

good suggestion, i usually put the dates on my posts and the links, but your suggestion is excellent.

i don't plan listening in to the march 21st results but will await and see the media and market reaction over the following few days and then decide whether or not to listen to the actual recording.

like a number of other investors i see on a regular basis i remain cautiously optimistic about the approaching update, although i have a niggling feeling that it will more likely be a case of martin horgan running through a well rehe****d piece of sales spin of good times coming, but not quite yet for whatever reason, hope i'm mistaken of course!

i have long given up any hope of wearing the golden flip flops, most likely it's aldi plastic flip flops for now!

tibbs

off topic paul, but i thought but this may interest you, hope you are still enjoying your smallholding!

https://home.38degrees.org.uk/2023/02/07/seeds-for-bees-frequently-asked-questions/

https://justbeehoney.co.uk/products/free-bee-saving-seeds