Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
The market seems sanguine as cey share proce has recently flattened while rivals have cuaght up falling more with falling gold. So cey’s annual share price fall (14%) is now on a par with rivals and mainly like them becuase of anticipated lower gold price, with rising rates, and rising aisc with mining inflation. So I am not worried a out this quarter’s production, but how much it is costing to get it out and what profit the company is making on each oz. tts not great for imstance digging out 20% more and selling for 30% less. When another post asked for predictions of the gold proce, and the cey share price in a month and a year not a single board member repied, yet these will really affect us. So come on chaps and ladies what do you think the share proce and price of gold will be in a month and on Dec 31st? If you lot answer this I will have a stab at what I consider the less importnat production figures, whcich may be lower than most guess this quarter
ton-fra-cen
As said seems to me both you and Mr Tibbs are right, lower grades becuase of higher proportion of development partly because of failed machine, and on cost side higher costs exacerbated by lower production. So big question whether output and costs will recover next year. You must have sold in low 130’s. With the current price of gold what do consider far value for the cey price now, I think a bit lower, and then much lower if gold continues to fall.....which is on the cards tho it cna confound us and is very jard to read just now, investment demand is way down but sentiment can change.
Then one final question, if stpck marlets tumble and gold stays much the same will goldminers fall more, I am expecting that
I am not sure who you now wish to sod off from this board this time but as far as I am concerned all views are welcomed other than insults, which this board happily has very few of.
Also you do not need to own shares to contribute, I for one value Uncertain’s view although he/she doesnt have any now (I think). Valid reasons for not owning now are just as interesting.
So Mizolgit your views are most welcome but please don’t attack people by suggetsing they dont own shares (especially as they do), or do not believe in conspiracies, or have different views on Brexit Trump etc. We live in a plural democracy still, and this board remains most civilised on the whole. Different views most welcome from all. Tolerance!
Thanks for your view. As far as I can see from the report both you and Mr Tibbles are right. Gold produced is down because of the geology meaning more development ounces in the mix. And this is exacerbated by reduced production ounces from failed machine. The key question is when both are sorted will total ounces sold get back up above previous highs, and will costs be maintained or rise?
The market is not crazy, the point of a market is to bring together people who want to buy and to sell, for every buyer there is a seller, if more want to sell as now the price falls till the number of buyers and sellers equals. The sellers may be selling the holdings they have not to make a fortune but to protect a loss. Or in a belief they can buy back lower. The buyers may believe gold will recover depite the charts and exonomic headwinds. Very lucky there are buyers as well as sellers or the gold market would be tumbling even faster.
As a young man Paul Craig Roberts was briefly almost 40 years ago a civil servant, an assitant secratary at the treasury for economic policy, very different from Regan’s treasury secretary, before becoming a journalist and a blogger. As such he has siad that both 9 11 and Charlie Hebdo were false flag operations.
He may be right , along with all the other pundits quoted, but if so why invest in gold and miners,
There is equally little evidence of 911and Charlie Hebdo being false flag operations, see the BBC conspiracy Road Trips, but then how do I know and maybe we are all just playing a game in some giant’s playting called earth. I favour the simolest explanation, so just fewer people wnat to buy than sell. Also it looks likely contrary to what Ronerts writes that interest rates will turn positive. The market thinks so, hence golds fall imho
Sometimes we seem not just to be returning to the 1930’s, frightneing though that is, but to a medieval world of magic, witchcraft, and a belief in incredible explanations, forsakin the renaissance scientific revolution and rationalism, and if we were to get rid of banks lending 10 times their cash, an end of credit, the economy as we know it and a rturn to the 14th century.
Orban,5 star, Trump, Erdogan, Putin, etc etc....and leaders stiring and being supported by more and more irrational and intolerant beliefs ...aren’t humans amazing.
Sorry I obviously did not express myself clearly enough. I wrote that if you believe comspiracies drive the price of gold i cannot see why you would rationally invest in a gold miner as you would have no way of working out what the proce should be going forward, as dependent on secret whims of the conspirators.
However I believe in fundamentals, and believe based on current static supply of gold, slightly falling demand and the real interest rate, I expect, cey is priced about right now given the current price of gold and cey’s expected procduction costs and profit. I think that the price of gold is likely to fall further and thus price of cey, (especially with the death cross in dollars that affects sentiment so much) but will then recover, but as a long term holder I do not think I will get the in out timing right (research shows the majority get this wrong) so stick with it. All this may be wrong but at least it is rational.
Do you hold any cey yourself, the article that prompted this said Paulson was overlooing the key fact affecting miners: the future price of gold; how do you work out where the conspirators, if you believe in them, will take it? I entirely respect the opinion of conspiracy believers but just intrigued why you would hold any cey or gold if you thought the proce was a conspiracy of sellers and utterly unpredictable?
I am invested in cey also because, as Paulson points out, most miners burn any profit on unsuccessful exploration, despite some of our calls cey doesnt, and instead returns us the cash, albeit much less this year.
Whether I am ratiinal to hold in the face of a probable further price fall based on fundamentals is another matter. If you hold too would love to know your thinking on why the shares might rise?
All best and you have chosen a brilliant name. Now enough from me
Banks have been able to lend 10 times more money than they have as there will only be a call usually on a small part.
Futures are similar. Most buyers of futures dont want physical gold, most sellers dont have any to sell. This is similar to wheat or coffee, instead they are both taking a view on the future price and will settle financially. They benefit by being able to speculate and the market benefits by haveing far more liqiuidity to find the price. Of course there are sometimes speculative frenzies as with bitcoin or dutch tulipe but in the emd if many speculatos buy trying to push price up then sensible sellers should think the price has gone too high sell and the price will come back. Nelson Bunker Hunt unusually mopped up many of the long silver futures and tried to demand delivery of silver, bu the rules were changed to prevent this.
So my view is wheat coffee or cocoa, in the end the fundamentals affect the price, and the same with gold. However I know many of you think differently but then cannot understnad how you can rationally invest in Centamin.
Two quick questions for you:
A. What is the point of the authorities manipulating the gold price, why should it bother them?
B. Why on earth invets in shares of companies that sell a manipulated product over wich you have no control, and cannot predict based on economic news, sentiment and probability.
I buy and sell gold shares based on what I expect gold to do in the face of expected real interest rates with which there is a strong correlation.
However I do agree with the article that miners spend a fortune trying to find new mines to replace expiring ones, mostly fruitlessly. Therefor why I invest in CEY is just because they spend relative,y little on their fruitless African search and pay out big dividends.
However despite this I still see the gold price lower and hence Cey, and the low demand doesnt help.
The snake oil salesmen twist words as musch as soviet propagandists used to. Read Carney’s Mansion House speech and the reset is about how we trade and finance trade, and the nature of capital. there is no suggetsion that could imply moonetary use of gold again, or rising gold price, rather the opposite:
“The economy is reorganising into a series of distributed peer-to-peer connections across powerful networks – revolutionising how people consume, work and communicate.
The nature of commerce is changing. Sales are increasingly taking place on-line and over platforms, rather than on the high street. Intangible capital is now more important than physical capital. Data is the new oil.
We are entering an age when anyone can produce anything anywhere through 3-D printing, where anyone can broadcast their performance globally via YouTube or sell to China whatever the size of their business via Tmall.
In a hyper-connected, capital-light world, the future may increasingly belong to small and medium-sized firms, with platforms (such as taskrabbit, Amazon, Etsy, Shopify, and SamaHub) giving them direct stakes in local and global markets.
The financial implications of these developments are only beginning to be realised, but they are likely to be immense.
Tibbs hopeful thought but actually oberall Gold demand is DOWN over last 5years not up, and presumably with falling gold price etf’s which have been big buyers are now even bigger sellers too, supply remains about the same, hence lower price:
“LONDON (Reuters) - Gold demand will change little this year from 2017 levels as slim gains in physical investment and jewelry and industrial demand are partially offset by a drop in central bank buying to its lowest since 2010, according to an industry report.
Global gold demand is seen at 3,969 tonnes in 2018, up 1 percent from last year’s levels but some 10 percent below the average for the last five years, consultancy Metals Focus said on Wednesday in its Gold Focus 2018 report.
“Physical investment is projected to grow by 4 percent this year. China will account for the largest share of gains, thanks to improving price expectations and a desire for safe-haven assets,” it said.
Central bank buying is expected to slip 6 percent to 350 tonnes, however, an eight-year low.
Investment in gold-backed exchange-traded funds is tipped to fall by a quarter to 150 tonnes this year, its lowest since 2015.
Mine production is forecast to be broadly flat at 3,295 tonnes, Metals Focus said, while supply of recycled gold is expected to edge up 2 percent to 1,185 tonnes.
Well our cey shares have certainly been risky recently - the unexpected often happens with miners from the political to geology, and as to the metal although holding gold itself in the extremely long term is not risky, and a brilliantly consistent hedge against inflation, within our lifetimes it certianly is risky. If you cna make a real rturn with cash why risk it, you havent been able to for the past few years with QE, hence the rise in gold 3year ago, but this has petered out as buyers have seen interest rates rising and qe ending. Another thwack on Fridya with Draghis announcement. For me the only two questions are first if Cey can increase production and reduce costs to increase profits, without politics upsetting the apple cart, and second where is the price of gold going, it seems to mainly be affected by where REAL interest rates are expected to go - politiclal worries also have an affect but seems to be very short term often justifying what the market wnats to do, unless an armageddon war. See the following: “In the second half of the 1970s, both nominal interest rates and inflation rates were high. What is important, is that inflation exceeded the nominal returns on bonds, therefore investors shifted their capital into gold. While real interest rates were negative, the price of gold rose, reaching its ultimate high. However, as soon as Paul Volcker hiked short-term nominal interest rates and real interest rates came back into positive territory, the gold boom ended. Interestingly, the significant downtrend in the gold market continued until 2001, when the Fed, trying to reinflate a stock bubble, cut nominal interest rates so much that real interest rates fell to zero. As we can see in the graph, the consolidation from mid-2006 was caused by the hike in real interest rates. However, in late 2007 the Fed cut nominal rates again, and then real rates plummeted and the gold price simultaneously soared. Chart 1: Real gold prices and real interest rates (as yields on 3-month Treasury bills less CPI inflation) from 1973 to 2013. Gold price and real interest rates Source: gold.org Summing up, changes in real interest rates are crucial to understanding movements in the price of gold.” Us real interest rates are currently very low despite the rises so far, as inflation grows. Now we have been told lots of US interestrate rises over next 3 years, but whta about inflation’s direction with dollars being torn up instead of printed. Hence FT
Mr T What a wonderful sign off! The push me pull you: "when one half wanted to move forward the other half wanted to move backward, causing a lot of confusion and often just standing still"l. Sounds like gold except when it tumble (or soars) The world gold council was run by a friend of mine who was very decent. It is funded by gold miners, with the explicit purpose of increasing demand for gold. I don't think the miners have any reason to say demand is lower than it is reducing the price of gold and hence their profit and shares, as that would just be kicking themselves. So I do believe it when the gold council say v sadly demand for the real stuff, whether for investment or manufacture/ jewellry is down this decade. But really the point is looking forward and I worry that with QE ending, and interest rates rising, gold will fall but I so hope I am wrong and the Maguires of this world who say gold is about to soar year after year will one day be proved right as more people try to buy it for investment, as manufacture is a bit limited So I am as cranky as you totally unsure where gold goes next thinking sadly our shares are a gamble because the market of individuals is impossible to predict,, particularly now with qe ending and rates rising but inflation too, and what if markets tumble sometimes miners do too, and you because a cabal of bankers is sat together rolling over futures selling gold they don't have to lower the price, tho someone must be buying those futures albeit at lower prices and can demand delivery, so in the end as with the Hunts would be caught out? What have we got ourselves into?
In my experience Tibbs gold traders, and pundits who also sell the stuff, usually talk the market up, as it is in their interest, but aren’t much good at predicting, you are lucky if you have found one who can predict it right, must be very rich and if you get her tips you too. So lucky you. On another note interesting article in todya’s FT about ending of QE in US and now Europe too, (yeterday’s news of which hit gold) saying this and rising interest rates make cash much more attractive to hold hence risky assets will get hammered which sadly includes gold with reduced investment demand. However to me the big question is whether inflation will rise faster than interest rates, which would be the one saviour for gold other than serious war which hasn’t happened for a long while But the great thing about this board is it has members who think conspiracies move gold and the conspirators make up the figures, and those who look for economic explanations of crowd psychology and market behaviour, Chartists, and those in between. And the more views we have the better we will be at predicting. Tibbs I just so hope you are right and there is some dramatic reset and move up in gold, but looking at the causes of gold demand I fear that may not happen. Fingers crossed I am wrong.
Sadly according to the world gold council, who would have no reason to talk gold down, gold demand last year was its lowest this decade, I think a large part of golds inability to risethrougn1360 and now 1300, is the falling demand including technology, electronics, dentistry, other industrial and investment demand. Central banks have been buying more but not enough to make up for the investment and industrial user fall. So gold is fighting lack of demand in a world where rising interest rates and stocks attract investment money which we hope one day will outweigh fall in industrial use. Lucky central bankers buys are avoiding a complete rout unless they turn down too. Worrying times for us.
Record breaking financial metrics? On the downside? According to Barclays profits were �183m year ending dec 2013, while share price autumn 2103 was around 30p Last year profits down to �109m (presumably after profit share and assuming Barclays printed it right) and will now be down further this year with falling output and rising costs, a double whammy for any company. But shares are 4 times higher? After profit share we are now on a higher pe than the market and that is before the considerable profit fall this coming year. I am not talking this down as I continue to hold for the huge dividend, I like a miner that pays one, the worry with Cey is they pay out all the profit so dividend will be quite a bit down this year plus the court case (that contributed to 2013 share price) is still unresolved In the meantime the price seems about right if you expect a profit recovery and throw in the gamble of one of the new African explorations coming off. If not, or court case is not resolved positively it is too high methinks. I wish the financial metrics were doing record highs, I so do
Thanks Siko, really appreciate the view from someone with knowledge of Egypt. So if I have it right you say qthe company is not entitled to cheaper diesel And they can�t do anything about the. court case without stiring a hornets nest of international law which would be dangerous So we should not bother the management on these as could be counter productive in Egypt? However on the immediate question of why the lower production you say they have hit unexpected poor quality, but what about their reasoning of late machines? And on the higher costs how much of this is from the poor seam too and how much from more permanent causes of mining inflation which would be far more worrying? Siko do you have a view on this and Mr Tibbs we should definitely be asking the management just what unexpected happened in May. Finally Siko what is your view of next year, I worry about all miners with heavy mining inflation, a weak price of gold, and governments demanding more but Cey still seems among the best, if there is a decent explanation of what happened?
I think it is around 15%rise in aisc, partly due to rise in diese pricel, partly fewer ounces throughput, the former will stay unless oil prices fall, miners use loads of the stuff. Equally important is how much the production fall is due to late arrival of equipment, which can be made up, but the management were somewhat unclear if it is just this year that will be bad. I am sorry that I was praising them yesterday, in those situations clarity is king.
Quite agree, I was in in around 55p, the management have done brilliantly managing in a difficult country, pay us huge divi�s unlike many other miners, and I v much appreciate them (and Joseph)
Robbie I for one quite agree which is why I invest in Centamin. Great management who deftly navigate Egyptian politics, and best in sector. Now depends on price of gold which is mainly sentiment driven (apart from jewellery use) so hoping more people will finally think it will go up and buy, thus making it go up and helping us. And if more sell and price falls our management has benn great in keeping lid on costs and not spending too much on new exploration so we should weather this better than most rivals. Thanks Cey management for a lovely share and divis, and hoping you can outfit the politics.