Calamari - thanks, second largest short win this year after NOG from 90p. TLW almost required perfection from it's assets to deal with it's grossly overgeared balance sheet. The other point in question and the reason for the short was the valuation. I've covered at 69p purely because the likelihood is that the largest shareholders will step forward.
the question is could Barrick do a better job of Sukari. Of that, i'm sure they could! Bristow is a massive fan and has called it one of the best assets in the world.
Either way, this is the time when gold players are starting to consolidate in the space. As stated on Friday, bought on Friday at 1.15 as being under the offer price is daft. Given that EDV have already started courting the shareholders that demonstrates how badly they want the business. I therefore expect them to be told in no uncertain terms that their offer is totally speculative - it's a mere premium to where the price was trading prior to the rns. More importantly though, EPS , FCF upgrades are anticipated in 2020
Perhaps it’s not surprising that gold miner Centamin’s board tuned out when rival Endeavour Mining came a-wooing. Pessimists complain about the noise when opportunity knocks, quipped Oscar Wilde. And Centamin’s bosses are right to be pessimistic about their pay and provisions if the two groups are smashed together, as Endeavour of Canada would like.
This autumn the Shareholders’ Gold Council, whose members include billionaire Naguib Sawiris, moaned about gold groups’ profligate spending on salaries and administration compared with miners of less shiny metals. The Sawiris family, a prominent Egyptian dynasty, is Endeavour’s biggest shareholder. And Endeavour, which has mines in Mali, Burkina Faso and Côte d’Ivoire, targets all-in production costs below $850/oz. Centamin’s have risen above $900/oz.
Once, Centamin was a byword for quality among gold bugs — it had a top-class, low-cost, long-lived asset in Sukari, its open cast mine in Egypt. It had no debt, generated cash and paid a dividend. But ore-production peaked three years ago at about 551,000 ounces. And, while the rise in the gold price above $1,480 has lifted all gold miners’ shares, it has done little to prop up Centamin’s slipping profitability.
Yes, Endeavour — which will gain a London listing — is being opportunistic. Centamin’s board says its offer — which represents a 13 per cent premium to Centamin’s price on Monday and would give Endeavour 53 per cent of the merged company — tilts too much towards Endeavour’s shareholders.
However, Centamin shareholders have reasons for optimism. It has been a single-asset business with persistent production problems. Merging the two groups would bring diversity to both, boost their share of a consolidating market and plug a management void at Centamin. And Endeavour says it could sweeten its offer if Centamin’s board agree to take tea and talk.
The pessimists at Centamin will still rail about the noise of Endeavour rapping on the door. But they should resist the urge to block their ears and hope the problem goes away. If Endeavour loses interest, rivals — including Mark Bristow, swashbuckling boss of Barrick, the world’s second-biggest gold company — may come a-calling. And like the postman, callers in the mining sector can knock twice.